SEHBP and Ch. 78 Relief

What is changing?

On Jan. 1, 2021, the School Employees’ Health Benefits Plan (SEHBP) will begin its new plan year offering only the following options:

  • Horizon Direct 10
  • Horizon Direct 15
  • A NEW PLAN, the Horizon NJ Educators Health Plan (NJEHP)

 

Another new plan, the Garden State Health Plan (GSHP), will be developed and will be available July 1, 2021. That plan is entirely voluntary. No employee will be required to take it, but those who do will see a premium sharing reduction of up to 50% from the NJEHP.

What plans will be available to me as of Jan. 1, 2021?

All new employees hired on or after July 1, 2020 must take the NJEHP as of Jan. 1, 2021. All employees hired prior to July 1, 2020 will be given the opportunity to select the NJEHP starting Jan. 1, 2021 during an open enrollment period prior to that date. Regardless of what premium sharing is required in a local contract, employees selecting the NJEHP will pay only the premium sharing required for that plan.

When the voluntary GSHP is offered, all employees, may opt to choose it and pay only the lower premium sharing required by that plan.

If your contract currently offers the Direct 10 and/or Direct 15, you will continue to have access to those.

All other plans currently offered by the SEHBP (e.g. 15/25, 20/30, Direct 0, etc.) will no longer be offered by the SEHBP.

What will the premium sharing be for these plans?

Premium sharing for the Direct 10 and Direct 15 plans will continue to be calculated at Ch. 78, Tier 4 levels or at whatever other contribution arrangement has been negotiated in your contract. That premium sharing remains negotiable.

Premium sharing for the NJEHP will be based on a percentage of salary set out in the law. For full details, please review the charts at njea.org/jobjustice.

When it is offered, premium sharing for the GSHP will be up to 50% less than the NJEHP.

What if my district offers an SEHBP plan other than the Direct 10 or Direct 15?

Your local association should work with your NJEA UniServ field representative to review your contract language and determine whether to bargain over the impact of the other plans being eliminated.

How is the new NJEHP different from Direct 10 and Direct 15?

The new plan is still valued at a platinum level plan and is similar to Direct 10 and Direct 15. The notable changes are an increase in copayment for the emergency room visits that do not result in a hospital admission, the out-of-network deductible and coinsurance, and a different reimbursement schedule for out-of-network providers. For prescription drugs, there is an increase in most copayments as well as mandatory use of generic drugs when they are available. For full details, please review the charts at njea.org/jobjustice.

What happens to my health benefits on Jan. 1, 2028?

All SEHBP plans and premium sharing arrangements become fully negotiable for all employees.

NON-SEHBP DISTRICTS/EMPLOYERS

What is changing?

On Jan. 1, 2021, your employer will offer a new plan called the NJ Educators Health Plan (NJEHP) in addition to all other plans currently offered under your collective bargaining agreement.

On July 1, 2021, your district must also offer another plan, the GSHP. That plan is entirely voluntary. No employee will be required to take it, but those who do will see a premium sharing reduction of up to 50% from the NJEHP.

What plans will be available to me as of Jan. 1, 2021?

All new employees hired on or after July 1, 2020 must take the NJEHP as of Jan. 1, 2021. All employees hired prior to July 1, 2020 will be given the opportunity to select the NJEHP starting Jan. 1, 2021 during an enrollment period prior to that date. Regardless of what premium sharing is required in a local contract, employees selecting the NJEHP will pay only the premium sharing required for that plan.

Those plans that have been collectively negotiated in your district will continue to be offered.

When the voluntary GSHP is offered, all employees, may opt to choose it and pay only the lower premium sharing required by that plan.

What will the premium sharing be for my health insurance?

Those plans that have been collectively negotiated in your district will continue to be offered. The premium sharing for these plans will be based on what Ch. 78, Tier 4 levels or whatever other rate has been negotiated in your contract. The premium sharing for those plans remains negotiable.

Premium sharing for the NJEHP will be based on a percentage of salary set in the law. For full details, please review the charts at njea.org/justice.

When it is offered, premium sharing for the GSHP will be up to 50% less than the NJEHP.

How is the NJEHP different from my current plans?

The NJEHP is valued as a platinum level. While it is easy to compare this plan to the SEHBP program, it is not easy for the approximately 400 districts that do not participate in the SEHBP. Each non-SEHBP plan has a unique set of benefits. You should work with your local president and your NJEA UniServ field representative to determine how the NJEHP compares to your current plan or plans.

What happens to my health benefits on Jan. 1, 2028?

All plans offered under your collective bargaining agreement, the NJEHP, and the GSHP become fully negotiable.

What other health insurance plans can my local bargain besides the ones currently offered in our contract, the NJEHP and the GSHP?

Only those plans required by the law or offered through your collective bargaining agreement prior to Jan, 1, 2021, can be offered through Dec. 31, 2027 unless the new plan results in a lower cost to your employer than the NJEHP.

On January 1, 2028, the NJEHP and its premium sharing chart become the new status quo and can be bargained like the rest of the plans offered under your collective bargaining agreement.

Employees hired on or after July 1, 2020 who were limited to the NJEHP will be free to select any plan that is allowed under their collective bargaining agreement.

As always, your local association should work with your NJEA UniServ field representative to review what is permissible to bargain.

GENERAL INFORMATION FOR ALL DISTRICTS/EMPLOYERS OPEN ENROLLMENT

If I am hired prior to Jan. 1, 2021, what insurance do I receive.

All new employees hired after on or after July 1, 2020 must take the NJEHP as of Jan. 1, 2021. If you are hired after July 1, 2020, but prior to December 31, 2020, you will receive the health benefits that a new employee is entitle to under the collective bargaining agreement. When Jan. 1, 2021 comes, you will be enrolled in the NJEHP.

How will I know which plan is right for me?

The law requires the SEHBP to develop a guidance tool to provide employees and retirees with confidential consultations about the employee’s or retiree’s decision to select a plan during open enrollment.

Districts that do not participate in the SEHBP are not required to offer a guidance tool to their employees. NJEA will provide extensive materials and guidance to help members make the appropriate selection.

How should I choose a plan?

Based on your medical needs, there are two primary factors that you should consider:

  1. Compare the plan design of your current health insurance against the benefits offered in the NJEHP.
  2. Calculate the percentage of salary that you would pay if enrolled in the NJEHP, then compare that to your current premium sharing.

Can my employer still enter and leave the SEHBP with the proper notification to its current provider?

 Yes. Nothing in the law changes the ability for an employer to select the carrier. Employers must continue to honor the terms and conditions in the collective bargaining agreement.

Will there be an open enrollment period?

Yes. The law mandates that all school employers, whether participating in the SEHBP or not, must offer an open enrollment prior to Jan. 1, 2021.

Should I participate in open enrollment?

Open enrollment provides you with a better understanding of your benefits and the cost for those benefits. If you do not participate in the open enrollment, you will be automatically enrolled in the NJEHP.

Can I try the NJEHP for a year?

It depends. All new employees hired on or after July 1, 2020 must participate in the NJEHP or the GSHP. Employees hired prior to July 1, 2020 have the right to move between the NJEHP and their collectively bargained insurance plans during open enrollments offered at least once a year by their employer.

When the GSHP is available, can I try it for a year?

Yes. All new employees hired on or after July 1, 2020 must participate in the NJEHP or the GSHP. Employees hired prior to July 1, 2020 have the right to move between the NJEHP, GSHP and their collectively bargained insurance plans during open enrollments offered at least once a year by their employer.

My employer doesn’t currently offer certain plans to certain employees. Will I have those plans as an option in open enrollment?

No. The law does not override what your association has collectively bargained regarding who is covered, as long as it does not conflict with this law. If a local has grandfathered certain members in certain plans, that will continue. However, all employees will be eligible to select either the NJEHP or GSHP, even if they are currently restricted from selecting other plans offered by their employer.

Will this law affect my ability to select a benefits waiver instead of insurance?

No. The new law does not modify the payment for those that select a waiver over health insurance.

If I take an unpaid leave of absence, will I be a “new” employee when I return?

No, only employees with a break in service would be considered new employees.

 

How much money will I save if I participate in the NJEHP?

The law guarantees your contribution in the NJEHP will be less than or equal to what you would have paid under P.L. 2011, Ch. 78. In most cases, even where a local has negotiated a reduced premium sharing for another plan, a member will save a significant amount of money if they select the NJEHP. Examples of savings are posted on njea.org/jobjustice. You may reach out to your local president or UniServ field representative for help calculating what you can save by switching to a new plan.

 

NJEHP PLAN DESIGN

What if my district currently offers a plan to a group of members that costs less than the NJEHP. Do they still have to offer the NJEHP?

If a negotiated agreement in effect on the effective date of the legislation is found to have a net cost to the employer that is lower than the cost to the employer under the New Jersey Educators Health Plan, the employer and the majority representative are required to engage in collective negotiations over the financial impact of the difference.

Can I still see my doctor in the NJEHP?

Yes. The SEHBP NJEHP will use the same network of doctors in the state and outside of the state as the Direct 10 and Direct 15 plans. If you receive your benefits from a carrier outside the SEHBP, the network must be nationally established and substantially equivalent to the SEHBP network.

 

What is a closed formulary?

When there are multiple medications available to treat the same medical condition, a prescription company creates a closed formulary list, which directs prescriptions to more cost-effective, clinically equivalent medications. The medications are determined by a team of physicians and pharmacists who review all medications on a regular basis.

What if I can’t take the generic medication?

If you have tried using generic medication without success, there is an appeal process. You should contact your provider’s office to discuss it. If your appeal is approved, you will not pay the difference.

What is the out-of-network reimbursement rate in the NJEHP?

Network providers have agreed to a certain fee schedule. If you use out-of-network providers, they can charge whatever they want. The plan sets an out-of-network reimbursement rate of 200% of the Medicare reimbursement for covered services. If a provider’s charge is more than the plan allowance, this is called a “balance bill.” The difference between what the plan allows and the out-of-network provider charges is the responsibility of the patient if the provider chooses to bill the patient.

What is an out-of-pocket maximum?

The out-of-pocket maximum refers to the most you will pay in copayments and coinsurance before the plan will pay 100%. This does not include any balance billing that the out-of-network provider may charge.

Does the new law require all districts to offer a wellness program?

Yes. The law requires the SEHBP to offer a comprehensive health and wellness program to its members that deals with issues such as chronic condition coaching and smoking cessation services. The law requires the SEHBP to allow districts that do not participate in the SEHBP to access the program at the same cost as districts that do participate in the SEHBP. It is not mandatory that a non-SEHBP district participate in this program.

SAVINGS

How much is the law supposed to save?

To ensure savings, state actuaries are required to validate a net annualized savings from the implementation of the NJEHP and the GSHP of at least $300 million comparing plan years 2020, 2021, and 2022. This savings includes money saved by school districts and county colleges that participate and those that do not participate in the SEHBP, pre-Medicare retirees paid for by the state and from the value of early plan design changes implemented in Fiscal Year 2020 by the SEHBP.

Are there any restrictions on how the employer can spend the saving resulting from members enrolled in the NJEHP or GSHP?

Yes, districts that are spending “over adequacy” as determined by the NJDOE must use all savings realized from this statute for tax relief. This will be done by reducing their maximum tax levy increase as calculated by the NJDOE. Your local association should work with your NJEA UniServ office to determine how this may affect your district.

What if a minimum of $300 million is not saved by Dec. 31, 2023?

If the annualized net savings is less than $300 million, the SEHBP is required to make plan design changes, or adjustments to employee contributions, or a combination of both, to make up the estimated shortfall before Dec. 31, 2027. The SEHBP Commission, which includes NJEA representation, will have the opportunity to determine what those changes, if any, are.

How will the state track the savings?

To enable tracking of health care cost savings by employer, each employer is required to submit annual data to the state. This data will be used to determine the savings statewide.

RETIREES – NON-MEDICARE

If I retire now, can I still get Direct 10 or Direct 15 in retirement?

No. All retirees who are currently retired or who retire after the effective date of the legislation, and who are not eligible for Medicare, will be placed into the NJEHP.

I am/will be paying toward the retiree health benefit premium. If I am not on Medicare, but my spouse/partner is, am I paying a percent of premium or a percent of salary?

If the retiree is not on Medicare and in the NJEHP, they will be paying on the percent of salary chart unless they would pay less on the Ch. 78 chart. Once the retiree becomes Medicare eligible, they will pay a percent of premium in accordance with the Ch. 78 chart.

Will retirees enrolled in the SEHBP have to enroll in the NJEHP?

On Jan. 1, 2021, retirees who are not on Medicare with health benefits in retirement will be automatically enrolled in the NJEHP. Retirees who are on Medicare will not see a change in their benefits. Retirees who become Medicare eligible will continue to move to the plan offered to Medicare retirees.

Why are retiree benefits being changed?

SEHBP retiree health benefits are funded from the state’s annual budget on a pay-as-you-go-basis. While these benefits are considered an earned benefit, the benefit level is not protected under state law. Benefit modifications can be made through legislation or the SEHBP Design Committee. No major changes to the non-Medicare benefit plans have been made in over 13 years. This new plan secures this new high level of benefits by law until Dec. 31, 2027.

I have spouse/partner coverage, but one of us is not Medicare-eligible. What happens to our coverage?

All members and spouses that are not Medicare-eligible will be transferred to the NJEHP.

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Olivia Haas

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