Deadlock on steep health insurance cost increases for school staffs

The New Jersey commission that oversees health benefits for school employees hit an impasse on a proposed 34% insurance rate increase for 2027, shelving the matter until next month.

Almost a dozen union educators urged the School Employees' Health Benefits Commission at its meeting on Aug. 19 to postpone or reject the proposal. School workers' livelihoods, teacher recruitment and retention and programs and resources for students are at stake, the educators said.

The eight members of the commission, which has a vacant seat, reached a 4-4 stalemate. They plan to return to the rate increase proposal at a meeting planned for Sept. 3.

"Behind every additional dollar a school district is forced to spend on skyrocketing health care costs is a dollar that cannot be spent where it belongs — in our classrooms supporting our students," said Steve Beatty, president of the New Jersey Education Association, the state's largest teachers union, at the meeting in Trenton.

Commission members who voted in favor of the increases acknowledged the educators' pleas and also cautioned that delays could negatively affect open enrollment in October, as detailed rate and other information may not be available.

"Last year, we were in the same spot — double-digit increases," said Daniel Holub, a commission member who voted against the increase. "If we pass this, we're going to be right back here in a few months dealing with another crisis. I just can't in good conscience as fiduciaries support that."

Holub is also an NJEA member, where he's the research and economic services director.

'Serious affordability issues'

Last month, Aon, the actuary contracted by the state to evaluate the public health benefit plans, made recommendations including an 11% premium rate increase for early retirees enrolled in the program and a 6% increase for Medicare retirees, both starting in January. The commission approved those two recommendations at a meeting on July 27, and delayed a vote for the steeper 34% premium rate increase for active employees that would also start in January.

School districts have been hit with public health care insurance rate increases in recent years, seeing back-to-back surges of at least 10% that have led to strained budgets and cuts to programs, resources and staff.

A state Treasury report in 2025 noted that the school employees' health insurance program has structural issues that require urgent policy reform to prevent a "death spiral" that could raise "serious affordability issues" for enrollees, the report said.

In an effort to save school staffers from more costly increases, a 2020 law — referred to as Chapter 44 — shifted premium costs to school districts and taxpayers and specified that the plans' designs should stay intact until Jan. 1, 2028. The state Treasury report said that legislation provided temporary stabilization without resolving underlying issues.

Systemic problem

"Our educators already sacrifice enough," Beatty said. "Many already pay thousands of additional dollars every year for their health care and asking them to absorb another massive increase simply is not sustainable. It's cruel."

Teachers union members support a bill, S-4438, sponsored by Sen. Vin Gopal (D-Monmouth) and Sen. Joseph Vitale (D-Middlesex) that would establish a public school employees' health benefits trust fund and an accompanying board. That panel would, among other responsibilities, provide affordable medical, pharmacy, dental, and vision benefits, and set and revise contribution rates and premium amounts.

"It's clear that a systemic problem exists and it needs to be examined, reevaluated and changed to keep our best educators in the classrooms and in our profession," said Gene Woods, a Bayonne High School social studies teacher.

After the meeting, Beatty said he was both "disappointed and optimistic" about the final vote. He said that he hopes the commission will meet with union members and other stakeholders to work on long-term solutions.