NJEA: SEHBP preliminary rates show Ch. 44 is working

Today, the School Employees Health Benefits Commission (SEHBP) released preliminary rates for the 2024 plan year, and the numbers are very encouraging for a new plan created three years ago to help control health insurance costs for school employees. The New Jersey Educator Health Plan (NJEHP), which currently covers 52% of active employees and all retirees not yet in Medicare, is projected to cost 3.8 percent less in 2024 than it does this year. Compared to the older Direct 10 and Direct 15 legacy plans, which are projected to increase by 26.8%, that result is even more stunning.

In an environment where double-digit premium increases are unfortunately common across the industry, a decrease is nearly unheard of.  But this new plan, proposed and advocated for by NJEA as part of the Ch. 44 law passed and signed in 2020, is breaking that trend. That law – which made health insurance much less expensive for school employees – also promised at least $300 million in savings to the state and local employers over three years. The statement at today’s public meeting from the state’s actuary AON makes is clear that the state is very optimistic that we have exceeded that target. That will be confirmed in the final report, which is due by the end of July

Because the difference in rates between the NJEHP and the Direct 10 and Direct 15 legacy plans is so great, and because of the price shock that would come for districts and individuals still using the legacy plans, the actuary presented the Commission three options for how to set rates next year. NJEA supports the option to partially blend the rates for at least two years, to ease the transition to fully separate rates and to give more time for employers and individuals to better understand the advantages of the NJEHP.

NJEA’s officers, President Sean M. Spiller, Vice President Steve Beatty and Secretary-Treasurer Petal Robertson released this statement:

“Three years ago, when NJEA promised that Ch. 44 would be a win-win-win outcome for New Jersey, we meant it. We spent more than two years researching the root causes of high health insurance costs for our members, then creating and fighting for a solution that eventually became law. Our plan has brought major savings to our members, to districts and to the state. We are confident, based on the actuary’s public statement today, that we have exceeded the $300 million in savings promised by the law.

“It’s equally clear that the plan we helped create is helping to bend the health insurance cost curve down over the long term. In addition to the hundreds of millions it has saved the state and local employers, which directly benefits all taxpayers, it has put thousands of dollars back in the pockets of individual school employees, while continuing to ensure access to high-quality, affordable medical care.

“We have proved with this plan that when educators lead on matters that affect our profession, we make progress. At a time when our profession faces so many challenges, from an educator shortage, to high levels of stress and burnout, to an inadequate pension system, we are ready to work with willing partners in government to achieve more win-win-win solutions that benefit our members, our communities and the students we educate.”