NJEA calls for transparency in benefit law

Published on Wednesday, June 15, 2011

“Derail the fast-track express,” says Keshishian

NJEA President Barbara Keshishian today called for total transparency in the bidding and awarding of health insurance contracts, and full disclosure of costly insurance broker fees that are costing taxpayers millions of dollars.

Speaking at a news conference at NJEA headquarters in Trenton, Keshishian told reporters that the June 16 hearing on legislation being pushed by Senate President Steve Sweeney and Governor Chris Christie is “an insult to NJEA members, and an abuse of the public trust.”




Keshishian insisted that the Legislature should require open public bidding on all health insurance contracts.

“If school districts have to put #2 pencils out to bid, why shouldn’t they have to bid out multi-million dollar health insurance contracts?” she asked.

She also called for “total transparency regarding all broker’s fees, and the removal of brokers’ fees from all premium totals before calculating employee contributions.

“Why should teachers and other school employees have to pay a percentage of their salary based on premiums that may be too high, and broker’s fees that are not necessary?”

An op-ed by Keshishian in today’s Newark Star-Ledger echoed the theme, adding that the relationship between Sweeney and South Jersey Democrat Party boss George Norcross was at the center of Sweeney’s proposal.  Norcross heads Conner Strong, a major insurance brokerage firm based in Mount Laurel, NJ.

She cited a March 19 New York Times article exposing language in an earlier draft of the legislation that sought to impose a moratorium on any additional school districts moving into the School Employees Health Benefit Program (SEHBP), which costs far less than the private plans sold by brokers like Norcross, who earn about 4 percent in fees on total premium costs.

After the article was published, Sweeney pulled the controversial proposal from his bill.

Keshishian gave as an example the 2009 decision by Gloucester Township to drop Conner Strong and enroll in the SEHBP – saving its taxpayers $5 million on a $15 million policy.  Conner Strong lost out on a fee of over $600,000 a year.

“Apparently, Steve Sweeney is more interested in protecting the interests of George Norcross than the interests of taxpayers,” Keshishian said.

She also rebutted a claim by Sweeney in the Philadelphia Inquirer that NJEA had not offered a health insurance proposal of its own.

In fact, Keshishian said, “more than a month ago, we submitted a thoughtful proposal on health care reform to Senator Sweeney.  It called for the kind of transparency we’re calling for today.  We never even had the courtesy of a response.”

“NJEA is not saying ‘no’ to pension and benefit reform,” she said.  “We just want any reforms to be thoughtful, fair-minded, and in the best interests of all parties, including the taxpayers of New Jersey. This legislation meets none of those requirements, and we call on the Senate Budget Committee to derail the fast-track express before it makes a bad situation even worse.”

She shared a chart with reporters showing the impact of the Sweeney/Christie proposal on the average teacher.

“This proposal would double the out-of-pocket payments for pension and health benefits for the average teacher – from $4,600 to $9,100,” Keshishian said.


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