Trenton – Landmark legislation to implement a new health benefits plan designed to produce more than $1 billion in annual savings for property taxpayers and educators gained the approval of the Senate today. Sponsored by Senate President Steve Sweeney and Senator Joe Cryan, the plan is the result of an agreement by the Senate President and Marie Blistan, President of the New Jersey Education Association.

“At a time of ever-increasing health care expenses, this plan will provide shared savings at the same time that it preserves quality care,” said Senator Sweeney (D-Gloucester/Salem/Cumberland). “This agreement will produce meaningful and lasting financial benefits for taxpayers and educators. While we focus on the immediate threat to public health and economic stability brought on by the global pandemic, it’s important that government continues to work to find cost savings for taxpayers and public workers.”

The bill, S-2273, was approved with a Senate vote of 34-0.

“This plan is good for teachers and other educators who perform such an important role in educating and guiding students throughout the state,” said Senator Cryan (D-Union). “This will make health care more affordable for them at a time when they are experiencing higher costs for medical services. They deserve quality care that they can afford.”

The plan will address the healthcare issues of cost, quality and wellness simultaneously. The new deal will deliver estimated combined annual savings of more than $1 billion over the course of the seven-year agreement. The annual savings are expected to be $670 million for local governments and $403 million for NJEA members.

 The legislation will require school districts spending above the state Department of Education’s “adequacy” level to return savings directly to property taxpayers. The information on savings and property tax relief would have to be tracked and made publicly available.

Effective July 1, 2020, with the creation of the NJ Educators Health Plan, all new NJEA members shall be enrolled in the new NJEHP. The new plan will be tied to a new salary-based contribution schedule, which will deliver unprecedented savings back to NJEA members who today contribute a percentage of healthcare premiums that costs much more. Those electing to stay in SEHBP’s more traditional plans will be required to pay for their healthcare based on a percentage of their premium, as determined under Chapter 78 requirements and current contracts.

The specifics of the plan will be developed by the Plan Design Committee of the School Employees Health Benefits Plan and made available to all its members.

The agreement also calls for the creation in 2021 of the new Garden State Health Plan, which will offer NJEA members the voluntary option of a plan that produces even more savings with a network of New Jersey-only healthcare providers. The plan will generate additional annual savings of $100 million, shared by employees and employers.

The level of benefits in the New Jersey-focused plan will match those of the NJEHP and it will provide exceptions for out-of-state care not available in the state. Estimates suggest care delivered outside of New Jersey is 50 percent to 100 percent more expensive than the same services available in New Jersey for the same or better quality.

Prior to July 1, 2020, a special open enrollment will be held at which time every education employee enrolled in employer-provided health insurance must either select a plan or be placed in a plan by default. At open enrollment, and at time of hire, any employee who does not choose a health plan shall be placed in the NJ Educator Health Plan for a period of three years.

The agreement was the result of several months of intense negotiations and is the productive culmination of several years of efforts to identify opportunities to provide quality healthcare while dealing with the reality of its skyrocketing costs, Senator Sweeney said.