NJ Pension and Benefit Reform:: Health Benefits Reform

HEALTH BENEFITS REFORM

The recently-enacted 1.5 percent of salary contribution -- achieved through bipartisan compromise -- was a significant step in the right direction. However, this represents just a small fraction of the actual cost of health insurance for the average New Jersey public employee with family coverage and leaves taxpayers with an untenable burden.

The current model has recently run up hundreds of millions of dollars in true underwriting losses. Change is coming. The Sweeney Plan represents the long term solution that is needed to address the problems with the current system, while ensuring fairness for employees and their families. It will ensure hundreds of millions of dollars in savings to New Jersey taxpayers, help local officials rein in property taxes and will be fair to middle and lower income workers. The Governor's original plan would have unfairly targeted middle and lower income workers by having them pay a disproportionate amount of their salaries towards health benefits.

Compromise Legislation	Christie Proposal	Original Sweeney Proposal
Health premium share phased in over four years.	No phase in – employees immediately pay 30 percent of premiums.	Health premium share phased in over seven years (four for single coverage).
Health plan design done by joint employer-employee board.	Increased copays and deductibles with no employee input.	No increase to copays and deductibles.
Premium share smoothed based upon income.	Premium share not smoothed – all employees would pay 30 percent of premiums, regardless of income.	Premium share smoothed based upon income.
Employers and employee reps at local level can agree to a different premium grid and plan design if it saves the same amount of money.	No local option to use a different premium grid.	No local option to use a different premium grid.
Current retirees not affected.	All current retirees would pay 30 percent of premium.	Current retirees not affected.
Lowest income employees would pay 3 percent of premium.	Lowest income employees would pay 30 percent of premium.	Lowest income employees would pay 12 percent of premium.
Contains a four year “sunset” on the statutory premium share requirement.	Premium shares would go on in perpetuity.	Premium shares would go on in perpetuity.