Murphy, unions reach deal on state health benefits, saving $274M this year

By Anjalee Khemlani
Trenton | Sep 17, 2018 at 2:12 pm

Gov. Phil Murphy announced the savings reached with state labor groups tied to New Jersey’s employee health benefits plans.

Agreements with unions, including the New Jersey Education Association, resulted in $274 million in savings for the upcoming plan year, and potential savings of $222 million in 2020, according to a statement Monday.

“I thank New Jersey’s educators and public employees for coming to the table in good faith to negotiate ways to provide high-quality health care at the lowest possible cost, leading to improved delivery of health care for beneficiaries and significant cost savings for the state, local governments and New Jersey taxpayers,” Murphy said. “As I’ve said from Day One, I believe in the power of collective bargaining and negotiating in good faith with our workforce. Today’s agreement is a testament that this approach works — for the state of New Jersey, for workers and for our taxpayers.’

Despite the savings found, state Sen. Tom Kean Jr. (R-Westfield) criticized the administration, saying more could be done to follow corporate efforts of reducing benefit levels — in the case of public employees, that would push levels down from platinum to gold.

Some of the savings the administration highlighted include migrating Medicare-eligible retirees off the state plans and into Medicare Advantage plans. In addition, active and early retirees will have the opportunity to enroll in a new plan, through either Horizon Blue Cross Blue Shield of New Jersey or Aetna — both of which are contracted to manage health insurance for the state — which focus on in-network visits and wellness programs.

“Encouraging in network utilization alone will result in a plan premium that is 14.5 percent lower than the legacy plan through a focus on in-network utilization,” according to a statement from the administration.

“The administration is committed to implementing smart strategies to lower health care costs for our public employees,” said Treasurer Elizabeth Muoio. “By making these changes, state and local governments will realize significant savings to the benefit of New Jersey taxpayers. This is a tremendous step in the right direction and we look forward to continuing to work with our partners in labor to find ways to provide health care in the most effective, comprehensive, and cost-efficient way possible.”

Anjalee Khemlani | akhemlani@roi-nj.com | AnjKhem