NJ Public Employees, Cities Push Big Changes to Avoid Big Health Insurance Rate Increases

After months of lobbying, Gov. Phil Murphy Management, local government leaders and labor unions are now turning to the state legislature for relief from double-digit increases in state health benefits.

Premiums for local government workers are set to increase by 20% on Jan. 1 after the state board of health voted in September. Approve increments. Union leaders and local governments have warned for months that the rate hikes could lead to layoffs and property tax hikes.

“The positive work done by the Legislature over the past several years to stabilize property taxes will be negated if nothing is done to increase the high cost of local government health care insurance,” NJ State AFL-CIO President Charles Woukanech said in a statement. “Unions and local government don’t often see eye to eye on the same issue, but we are united on this issue.”

A coalition of labor representatives and local government leaders unveiled a policy proposal that includes cost-cutting measures and a one-time $350 million allocation to offset raises for local governments and their workers.

Millstone Borough Mayor Raymond Heck on Monday urged the Murphy administration and state lawmakers to “consider this solution and benefit our public employees and property taxpayers.”

“Today we have an unprecedented coalition, representing both labor and management, speaking with one voice and delivering solutions that will increase health care contributions for local governments, local workers and property taxpayers like never before.” said Heck, president of the New Jersey League of Municipalities.

$350 million from the state’s general fund will be allocated to the Department of Local Government Services, which leaders say will result in at least $100 million in annual savings starting in the 2024 plan year.

Those savings, according to the proposal, would come from measures to reduce costs for local governments’ state health benefit plans, including prescription drugs, without shifting costs to workers or employers.

The plan would give New Jersey’s state treasurer the power to unilaterally implement cost savings if the state’s formal plan design process fails.

“This unprecedented alliance between management and labor is providing common-sense solutions to avoid significant negative consequences for taxpayers and public employees,” said Steve Tully, executive director of the American Council of State, County and Municipal Employees 63.

“These recommendations will provide local governments with sufficient funding to offset significant premium increases for public employees, and will also address issues that are driving up health care costs,” Tully said. “This is a fair solution for taxpayers, local governments and public employees.”

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Derek Hall can be reached dhall@njadvancemedia.com. Follow him on Twitter. @dereknhall.

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