BY CATHERINE CARRERA
NJ Spotlight
The staffs of roughly 200 New Jersey school systems may not know their 2027 health benefits premium costs when open enrollment starts next month as a result of a bureaucratic stalemate.
A proposed 34% rate increase in the School Employees’ Health Benefits Program would “bankrupt” small districts and interfere with the “thorough and efficient” education mandated by the state constitution, teachers union leaders argue. Governor appointees to the School Employees’ Health Benefits Commission, which governs the program, say state statutes restrict drastic changes to the benefits, which cover 98% of average medical costs. That’s an obstacle to lowering the proposed increase, they say.
The commission met Thursday and deadlocked on a rate renewal increase, which was recommended by Aon, the actuary contracted by the state to evaluate the public health benefit plans. Though the commission should have nine members, according to state law, it has only eight, which has created a consistent deadlock on key votes.
Four trustees are union representatives, two governor-appointed trustees represent state agencies, one is a governor-appointed resident and one other represents the state school boards association. The four union representatives and four others have had consistently opposing votes.
The commission reached an impasse on five votes at the meeting this week, including one that would have allowed public comments. The four union representatives voted in favor of public comments as about a dozen members from the New Jersey Education Association showed up to the meeting. Unlike some other governing bodies, the commission isn’t required to solicit public input.
The commission also reached a stalemate on proposals, which were made by commissioners who represent the teachers union, that aimed to mitigate the rate increase without making changes to the plan design. On the 34% rate renewal increase, the commission voted 4-4, with the governor-appointed trustees voting in favor.
Fiduciary duty
Due to a 2020 state law, the proposed historic spike in premium costs would be felt most by taxpayers, and less by school staffers — though they would see cost increases. That law, referred to as Chapter 44, also restricted changes to the plans’ designs, which involve cost-sharing breakdowns and covered benefits, until Jan. 1, 2028.
The three proposals made by the teachers union representatives included one that called on Gov. Mikie Sherrill and the state Legislature to “provide immediate financial relief” to school districts.
“The state of New Jersey has a constitutional obligation to provide a thorough and efficient education to the students of this state,” said trustee Daniel Holub, the teachers union research and economic services director. “This motion calls upon the governor to intervene, to provide resources to school districts who will no longer be able to provide a thorough and efficient education if these rate premium increases pass.”
Sherrill this week announced she had reached an agreement with 17 state employee unions to waive an increase for their own public health benefit program. Holub referenced that agreement as an alternative to rubber-stamping the proposed rate increase for school staffs.
Trustee Sergio Arvizu, who represents state Treasurer Aaron Binder, said asking the governor to intervene falls beyond the commission’s duties.
“No matter how well-intentioned this might be, it is our fiduciary duty to act within the scope of our authority,” Arvizu said.Open enrollment
Arvizu repeatedly said it’s the commission’s responsibility to approve the rate plan increase.
“If we are late, it could be a disruption to members,” he said. “Our goal is to provide members and their families who have been on these programs with appropriate time to make elections and select a plan they need for their health care.”
Exact costs for plans may not be readily available when open enrollment starts on Oct. 1, he said.
“These rates are going to bankrupt the districts — it’s not just the people in the plan,” said trustee Michael Salerno, the teachers union associate director. “The idea of what this will do to education in New Jersey is a catastrophe,” said Salerno, noting that more money will be spent to cover health care costs than classroom resources. “The idea that our job is just to approve the rates is abhorrent.”
The next commission meeting is on Sept. 28.
