Counties, cities consider opting out of state health plans.

Counties and cities are considering opting out of state health benefits programs after state commissions. Acceptable speed increases More than 20% last month, an exodus that could further undermine the public benefits plan.

The size of the increases and the pace of their passage have angered some local officials, like Essex County Executive Joe DiVincenzo, who must now decide whether their employees and taxpayers would be better served by a different plan.

DiVincenzo said: “They did their best in the beginning to get more districts. “But there’s no question: If people decide to relocate, the number of people coming in will drop. It may cost more. Those are things we have to weigh.”

Counties and some cities move in and out of the state plan. Middlesex County insures its employees through the Middlesex County Mutual Health Insurance Fund and has done so for years.

It’s not yet clear how much local and county governments will withdraw from the state’s plan in response to the surge — blamed on inflation and changes in the way workers use benefits during the pandemic — but a sharp drop in participation could drive public employee health plan premiums higher.

The state health benefits program is a self-insured plan, meaning that employee contributions are used to pay for employee health claims. If the amount of claims exceeds premiums, prices will increase, and if governments cut back, the pool of workers paying premiums will decrease. All of this could spell trouble for Gov. Phil Murphy’s administration.

“They have a problem with the local public sector unions. They have a problem with the local elected officials, and they have a problem with the state health benefits program going forward because if you have members — especially well-seasoned members — leave, that hurts the long-term viability of the program,” New Jersey said. said John Donadio, executive director of the Association of Counties.

Michael Cerra, CEO of the New Jersey Municipal Corporation, said local officials are still researching the options to see if they are preferable, and that process alone could take months. Open enrollment for the state health benefits program began in early October and is set to end at the end of the month, leaving a short runway for any decisions.

“It can’t be done this year because we have less than two months, and then we have to present our budget. And we have 26 associations, so you have to get everyone involved in the same thing, so it’s not going to be as easy as people think,” DiVincenzo said. “There’s no question,” Essex said. He weighs his departure. Insurer.

The timing means Essex will have to find a way to pay for the $21 million price increase he expects this year. DiVincenzo said that could mean service cuts, tax increases or — as a last resort — layoffs. Essex, the most populous in the state, has about 3,600 employees and an $865 million annual budget, according to budget documents.

Although opting out makes sense for counties and larger municipalities, smaller cities with smaller staffs may have trouble finding insurers who can offer them better deals.

“With 35 employees, no one is watching us. It’s not that they don’t want it — it’s cost-prohibitive in many ways, said Clinton Mayor Janice Kovach.

No adjustment for local residents.

Although similarly large raises were approved for state employees, the deal between public sector unions and the Murphy administration would see those raises locked in at just 3% this year, from 18%.

It is not clear how this agreement works or how it will be paid. The governor’s office referred the investigation into the mechanics to the state Treasury, which forwarded the inquiry to the governor’s office.

Similar relief has not been available for local and county employees, and local officials have sought relief from the USA’s Rescue Plan Act funds to offset rate hikes.

In the absence of assistance, the New Jersey Association of Counties advised its members to opt out of the state’s plan if possible. The New Jersey City Hall did not make any calls, although it did provide members with information on how to conduct an evacuation.

“At the county level, they’re definitely exploring their options,” Donadio said.

Assembly Speaker Craig Coughlin (D-Middlesex) previously told POLITICO New Jersey that he would be “reluctant” to invest money to offset the increase in funding for local and county government employees out of concern that such a provision could increase costs in future years. Actually solving the rising rates.

The likelihood of direct funding without legislative approval is slim, but other reforms seem to have a better chance of coming to fruition.

Several lawmakers from both parties have introduced bills to give county and local players seats on the state health benefits commission and the schools’ counterpart, the school employee health benefits commission. County and local governments currently have no representation on either body.

“We are not at this table. We’re at the door yelling at us,” Sierra said.