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Workers can now choose from 15 health coverage options
Making New Jersey public employees pay more for their health benefits will lead to an estimated $70 million in savings for the state and local governments, Gov. Chris Christie announced Thursday.
The announcement follows a similar one on Wednesday when the governor said property taxpayers and local governments will save an estimated $267 million in fiscal year 2011-12 as a result of the bipartisan public employee pension reforms he and the Legislature approved on June 28.
Christie said Thursday the savings in health benefits’ costs will be achieved as a result of public employees being able to choose from a wider array of health care plans under the 2012 benefit structures for state-managed health plans approved this week and changes to Medicare Part D that reduce retiree prescription drug benefit costs.
The health plan benefit structures were approved in separate actions by the Design Committees for the State Health Benefits Program (SHBP) and the School Employees Health Benefits Program (SEHBP) this week.
“Taxpayers are seeing immediate benefits from our bipartisan effort to reform our state’s pension and health benefits systems,” Christie said. “Yesterday, we notified local governments that pension changes resulting from our bipartisan reforms will reduce local taxpayer pension contributions for 2012 by $267 million.“In addition, the health benefit reforms now being implemented will achieve $70 million in savings this year, joined with even greater savings as implementation continues over the next three years, is making a significant, long-term lowering of costs for New Jersey taxpayers a reality,” the governor said. “At the same time, by expanding to 15 health care options employees are finally being provided the power to choose the plan that fits their health and financial needs. We are delivering on our promise to provide relief to taxpayers, greater choice and flexibility to public employees to choose the plan that fits their needs, and a reformed health benefits system that is fair, affordable and sustainable.”
Senate President Stephen M. Sweeney (D-Gloucester) said of the new benefit plans, "One of the major components of the benefits reform legislation was the implementation of a variety of plans that are better suited to individual needs. The more affordable plans offered, while still providing quality benefits, will be a crucial component in lowering the cost of health care for workers. The deal reached by the committees is a highly encouraging sign of positive cooperation. I want to thank the unions for working on these important changes. The end result will be reducing the burden middle class folks will have to shoulder for their health care costs and saving taxpayers money.”
The governor’s office said the $70 million in savings will be realized by having both the State and School Employees Health Benefits Programs offer Employer Group Waiver Plans that will take advantage of enhanced support provided by pharmaceutical companies for prescription drug benefits for Medicare eligible retirees. As full health benefits reform implementation progresses, including plan design changes increasing employee choice and a gradual phase-in of employee premium sharing, the changes are expected to generate greater savings for state and local governments.
The Design Committees are composed of equal numbers of employer and employee representatives and were charged with fulfilling the new law’s requirement that at least three different coverage options along with a high-deductible plan option be made available to all four categories of public employees – singles, couples, families and parents with children.
