Vote delayed on school employee health plan NJ school employees' health care plan vote delayed amid 34% rate hike

On July 27, the New Jersey School Employees' Health Benefits Program commission approved the fiscal year 2027 health premium rate increases for retirees, but tabled the vote for active employees until Aug. 19, a treasury spokesperson confirmed.

For retired school employees, the approval of the vote increases premiums by 11.3% once January hits, or 6.2% for retirees on Medicare.

This comes after actuaries proposed 2027 rates for health insurance July 15, where the plan included average rate increases at 34% for active employees. The plan's rate was scheduled to be approved at the meeting July 27.

The commission uses the plan analysis, developed by AON, the actuary for state health benefits, to determine the health care rates for school employees under the State Health Educators' Benefits Program.

The treasury's presentation earlier in July outlined the reason for the increases, including reserving funds to pay the money from the relief bill back, increases in drug prices and decreased enrollment in the program.

The New Jersey Educators' Association, which has been advocating for lower premiums all year, released a statement concerning the delay of the vote. The prominent teacher union took partial credit for the delay of the vote.

"Thanks to the advocacy of NJEA members, the SEHBP Commission voted to wait another month before approving the 2027 health insurance rates for school employees," the union said on Facebook.

"This allows the state more time to look for ways to lower the cost. We're fighting for short-term fixes and long-term solutions."

A law named Chapter 44, passed and signed into law in 2020, removed the authority the plan design committee had to make design changes to plans until Jan. 1, 2028.

"Therefore only the Legislature can enact plan reforms that will bring down costs for members and school districts," a NJ treasury spokesperson said.

This means that the committee, generally, cannot lower costs by redesigning benefits, such as raising copays or narrowing coverage before 2028. But this doesn't mean the premiums can't go down.

"The Division [New Jersey Division of Pensions and Benefits] will share with the Commission a list of plan reform initiatives that had been previously shared with the SEHBP Plan Design Committee that, if enacted by legislation, could result in cost savings for the SEHBP," the spokesperson said, meaning changes can only come if the Legislature approves them.

In May 2025, the treasury said the school health care benefit plan was in a financial "death-spiral." Earlier this year, the state stepped in with Gov. Mikie Sherrill passing a short-term relief bill to half a midyear shortfall for the benefit plan.

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