Hawthorne School Budget Faces New Pressure As Health Insurance Costs Jump Nearly 34%

HAWTHORNE, NJ — Hawthorne schools are facing a nearly 34% increase in employee health insurance premiums, creating another financial challenge for the district as officials prepare next year's budget and look for ways to keep costs down.

The issue drew concern during the Board of Education's Tuesday, Oct. 13, 2026, meeting, when board President Marco Totaro discussed the state's approval of a 34.4% premium increase for active employees participating in New Jersey's School Employees' Health Benefits Program in 2027.

According to the New Jersey Treasury, these are the main drivers of the plan increases:

* Higher medical prices, increased use of services and more expensive care.

* Rising prescription costs, including GLP-1 medications.

* Premium revenue falling short of claims and expenses.

* Rebuilding depleted reserves.

* Employers with lower-cost members leaving the local-government and school programs, increasing costs for those remaining. nj.gov

For the state health plan, according to the New Jersey Treasury, the increase for 2024 was 6.3%, for 2025 it was 14% and for 2026 it is 31.9%. These are averages statewide for school districts.

"I find this deeply troubling," Totaro said. He warned that increases of this size are difficult for school districts, employees and taxpayers to absorb, particularly as schools try to balance educational needs with rising expenses.

The School Employees' Health Benefits Commission approved the increase Sept. 25 after several unsuccessful attempts to adopt the new rates. Although the statewide increase is 34.4%, the financial impact on individual school districts can vary depending on their coverage and enrollment.

Board member Alex Clavijo, chairman of Hawthorne's Finance and Administration Committee, reported that the district is facing an increase of approximately 33.7%. He said administrators have requested insurance data from the state to determine whether other coverage options could save money.

"Our superintendent and our BA are exploring all options available to us to see if there's an improvement as it relates to the health insurance cost," Clavijo said. The district expects to have a clearer picture of its expenses following the employee open enrollment period, scheduled for Oct. 26 through Oct. 31.

Gov. Mikie Sherrill has also begun addressing rising health insurance costs, announcing a health benefits reform working group Oct. 1. The group will examine insurance costs, provider networks, coverage options and other potential changes intended to make New Jersey's public employee health benefits more affordable.

"For too long, New Jersey has responded one rate cycle at a time," Sherrill said in the announcement. Her administration also reached an agreement with 17 state employee unions in September to waive increases in employee contribution rates for 2027, although that agreement does not automatically apply to school employees or reverse the approved premium increases.

The governor's working group will coordinate with separate efforts addressing school employee health benefits, with further planning expected in 2027. Meanwhile, Hawthorne officials are reviewing potential savings as they prepare the district's 2027-28 budget.

The board has not announced how much the increase will add to the district's overall expenses or whether it will affect school programs, staffing or property taxes. Officials are continuing to review available options before making budget decisions.

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