Organizations that represent county and municipal leaders in New Jersey are urging Gov. Phil Murphy to provide immediate financial relief for the estimated $350 million in local health benefit cost increases recently approved by the State Health Benefits Commission (SHBC).
The coalition of 11 local government organizations said Thursday that without financial help to cushion the blow, county and municipal governments will have to pass on the higher health plan costs they pay for public employees. They warned of “certain property tax rate hikes, cuts in essential services, and the furlough or layoff of employees.”
“The administration and public sector labor unions representing most State employees reached an agreement whereby state employees will see health benefit rate increases of only 3% with the state to absorb the additional costs,” the statement said. “Unfortunately, the agreement does not include counties and municipalities participating in the State Health Benefits Program (SHBP) nor has the state changed the plan design to achieve any savings at the local level.”
Similarly, the New Jersey Council of Community Colleges reiterated its call for the Murphy administration to provide financial relief to offset a 15.1% premium increase for the School Employees Health Benefits Plan (SEHBP) that affects the state’s 18 community colleges.
NJCCC President Aaron Fichtner, Ph.D., said the $14 million health benefits premium increase will cost community colleges $12 million, and community college employees $2 million.
“We call on Governor Murphy and the Legislature to use stimulus funding or other revenue sources to offset this mid-year increase so our colleges can continue to focus on helping students improve their lives and the lives of their families,” Fichtner said.
The NJCCC is also pressing for other reforms to be enacted to make the health benefits process more inclusive and transparent in the future, including passage of legislation expanding the School Employees Health Benefits Commission to include a member nominated by NJCCC.
The coalition of county and municipal government officials also said it wants structural reforms and membership changes made to the State Health Benefits Commission.
“Any immediate relief must be accompanied by long-term structural reforms enacted by the state Legislature, such as adopting referenced based pricing to effectively manage costs, incentivizing employees to select lower cost plan designs, modifying co-pays for specialists and urgent care to further reduce long-term expenses, and implementing other innovative cost containment measures,” the coalition statement said.
“Given this year’s rate approval process, the Legislature must also provide local governments with a voice on the SHBC as it would undoubtedly improve the Commission’s responsibility to report annual rate hikes to all stakeholders in a more accurate, transparent, and timely manner,” the coalition said.
The members of the local government organizations coalition include:
- New Jersey Association of Counties (NJAC)
- New Jersey State League of Municipalities (NJLM)
- New Jersey Conference of Mayors (NJCM)
- New Jersey Urban Mayors Association (NJUMA)
- New Jersey Municipal Management Association (NJMMA)
- Government Finance Officers Association of New Jersey (GFOA)
- New Jersey Association of County Finance Officers (NJACFO)
- New Jersey Association of County Administrators (NJACA)
- New Jersey Association of County and City Health Officials (NJACCHO)
- Southern New Jersey County Commissioners Association (SNJCCA)
- Constitutional Officers Association of New Jersey (COANJ)
