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N.J. agrees to ‘more affordable’ healthcare premium hike

New Jersey Statehouse

 A New Jersey commission and a union coalition representing thousands of public employees reached an agreement Wednesday afternoon that union representatives said would result in a “more affordable option” for health benefit premiums. 

Previously, the State Health Benefits Commission considered a more than 20% rate increase in health benefit premiums for state workers. 

Joshua Henne, a spokesperson for the union coalition, which includes local chapters of the American Federation of State, County, and Municipal Employees; Communication Workers of America; Council of New Jersey State College Locals; and The International Brotherhood of Electrical Workers, said both sides agreed to “reduce the increases in employee healthcare contributions from 18% to 3% this year.” 

Some municipalities, like Trenton, also share some of the benefit costs. 

“The unions, together with the governor, whose engagement on this issue was vital to the successful conclusion of negotiations, have forged an agreement on healthcare that benefits union members and their families by avoiding unaffordable cost increases,” Henne said in an email. 

The agreement came behind closed doors after a nearly three-hour long public meeting Wednesday morning. 

During the meeting, union members of the commission had hoped to vote on major overhauls to the state’s insurance system. However, many members of the commission representing the state said those proposed changes were outside the commission’s “purview.” 

State Senate President Nick Scutari (D-Union) and General Assembly Speaker Craig Coughlin (D-Middlesex) released a joint statement Wednesday afternoon praising the agreement: 

“We applaud the agreement with the state worker unions to help offset the drastic cost increases in health benefits for this year in a fiscally responsible way. But we are extremely disappointed that no meaningful action has been taken by the Plan Design Committees or the Health Benefits Commissions to prevent what are unaffordable rate hikes for counties and municipalities. Ignoring municipalities will inevitably result in higher costs for taxpayers and workers.

“It is imperative that the Health Benefits Commissions and Plan Design Committees immediately start working on effective ways to stop this and future exorbitant increases. They should examine all possible options and consider any responsible alternative. Any solutions need to prevent the imminent rate hike and ensure that increases of this magnitude do not happen again.”

The vote follows a rally held outside of the New Jersey Statehouse Tuesday, urging the state to reconsider the premium hike for health workers.

“We sacrificed a lot during the COVID pandemic as state health care workers,” said Kimberly Chambers, a Cherry Hill resident who works at a state-run psychiatric hospital. “The message from our governor was to keep moving, keep pushing. We're holding the state forward. So it's kind of like a kick in the face to be given a health care increase. After we're coming out of the trenches for our state.”

Union representatives have said that the recommended increase is based on the ongoing coronavirus pandemic, deferred services, increased utilization, inflation costs, and other factors.

The crowd chanted “healthcare for all” at the rally and “put the people first.”

Lead organizers implored people to call Gov. Phil Murphy’s office to demand that negotiations continue.

“There's a lot of funding out there. There are other ways to offset whatever it is they're trying to accomplish right now,” said George Brown, leader of the Willingboro chapter of the American Federation of State, County, and Municipal Employees.

“The workers need to be encouraged to work. They need to stay motivated to work. They need to stay strong. And they need to know that the government believes in them,” Brown said.

Several state legislators have expressed concerns over the proposed benefits rate hike, including General Assembly Speaker Craig Coughlin (D-Middlesex), Republican Senate Budget Officer Sen. Declan O’Scanlon (R-Monmouth), and Senate majority leader Teresa Ruiz (D-Essex).

“While nationwide health benefits rate trends have increased roughly 10%, New Jersey’s increase, absent any solution, could ultimately lead to higher property taxes,” Ruiz said in a statement Tuesday morning.

O’Scanlon and other Senate GOP leaders want to create a special committee to investigate the matter.

Trenton Mayor Reed Gusciora, who spoke in solidarity with the unionized workers at Tuesday’s rally, echoed Ruiz’s claims about property taxes.

“We just negotiated a contract with AFSME Local, and their pay increase is going to go for more health benefits,” Gusciora told WHYY News. “But the city pays 70% of their health premiums, so our bottom line will go up as well.”

“The only way we can take care of that is by increasing property taxes to the same people who are working for us. So not only are you going to get a pay cut, but they're going to have increased property taxes,” Gusciora said.

Last month, State Office of the Treasurer communications director, Jennifer Sciortino, said her office “shares the concern regarding recommended rate increases.”

Sciortino said her office did not have the power to “unilaterally” alter benefit rate levels.

A 2021 Society For Human Relations Management report states that U.S. employers expected health care premium rates to jump nearly 5% this year.