NJEA and Sweeney announce plan to cut $1B in health care costs for teachers, districts
Below is an article written by Sam Marcus and published by NJ Advance Media on March 9, 2020.
New Jersey’s powerful teachers union has struck a deal with one of its fiercest political rivals to lower school district and employee health care costs.
The New Jersey Education Association and state Senate President Stephen Sweeney on Monday set aside their bitter grudge to announce plans to overhaul health benefits for school employees, which they estimate will cut the cost by more than $1 billion a year for teachers and school districts.
“This is a pretty huge announcement today that we’re coming up with over a billion dollars in savings,” Sweeney, D-Gloucester, said of the deal, which was first reported by NJ Advance Media. “This has been a long, long journey.”
The announcement marks a surprise twist in the long-running feud and a major leap forward in the state’s efforts to rein in employee benefit costs. With both Sweeney and the NJEA on board, the deal represents perhaps the clearest path yet to achieving a goal that’s vexed state leaders.
The Senate hopes to put the reform legislation on the governor’s desk by the end of the month, according to Senate officials.
At a Statehouse news conference, officials praised the deal for meeting the demands of both sides: reduced costs for taxpayers and lower premiums for teachers.
Under the proposal, the state would eliminate some existing health care plans currently available to teachers and introduce two lower-cost alternatives, called the New Jersey Educators Health Plan and the Garden State Health Plan.
The terms of the deal answer the NJEA’s call for relief from a state law that required its members pay anywhere from 3 percent to 35 percent of their health insurance premiums, depending on their salary and plan.
Teachers have decried those reforms passed under Sweeney and former Republican Gov. Chris Christie, saying they are taking home less money from their paychecks each year.
Sweeney and the NJEA are hoping the new plans’ cheaper premiums will motivate teachers to switch.
If the deal is approved by Gov. Phil Murphy and the state Legislature, it could save combined $1.05 billion a year, with $650 million in lower costs for districts and the state and $400 million in savings for employees, the Senate president said.
And, at least temporarily, the compromise brought Sweeney together with the very group that previously tried to oust him from office.
“It wasn’t easy, but the work we’ve done has been a major victory,” NJEA President Marie Blistan said alongside Sweeney. “With this agreement, we are restoring economic stability to this great profession.”
Under the proposal, some of the existing health care plans will remain — officials did not immediately say which ones— and workers already enrolled in those will be able to keep their plan, but they will continue to pay the higher premiums.
The majority of teachers are in the NJ Direct 10 and NJ Direct 15 plans, names that reflect their $10 and $15 respective copays.
Employees who opt for one of the two new, lower-cost plans will get the benefit of paying a premium determined by a percentage of their pay. New hires would have to enroll in one of the new plans.
Sweeney and the NJEA did not provide details on either the Educators plan or the Garden State plan, but the Senate president did say the creation of the Educators plan will account for much of the projected savings.
The Garden State plan, meanwhile, would restrict teachers to only New Jersey health care providers but cost teachers less.
The announcement and deal are a coup for Sweeney, who previously has offered plans to cut employee health benefits that went nowhere.
The estimated savings to the state and school districts are more than double those under a proposal made by Assembly Speaker Craig Coughlin, D-Middlesex, and the NJEA last year and embraced by Murphy in his budget proposal for the coming fiscal year.
Sweeney declared that plan dead on arrival at that time, but applauded the NJEA for coming to the table.
The proposal appears more generous than one Sweeney put forth last year to move workers from plans rated platinum under the Affordable Care Act to those rated no higher than gold.
The teachers union had been more resistant than the largest state workers unions, the Communications Workers of America, to agree to major plan changes, like slashing reimbursements to out-of-network providers.
Murphy, who allied himself with the NJEA, managed to break through with his vows to stick to collectively bargaining benefits.
But Sweeney wanted more cost cutting and recommended a dramatic reduction in benefits.
The Senate president had even made threats over the past year to put public employee health care reforms before the voters, but working together over the past few months appears to have been more productive for Sweeney and the NJEA than continuing the political war that divided them.
There’s been bad blood since Sweeney teamed up with Christie in 2011 to overhaul pensions and health benefits that the NJEA said “devastated” its members. And in 2016 the teachers union blasted Sweeney for breaking a promise to pursue a constitutional amendment guaranteeing contributions to the pension system. He later accused the NJEA of extortion when it threatened to withhold campaign contributions from elected officials if the amendment didn’t get on the ballot.
That all came to a head two years ago, when the union spent $5 million to unseat Sweeney, backing instead a Republican candidate who supported President Donald Trump. At that time, Blistan accused Sweeney of “serial dishonesty” and “frequent betrayals.”
On Monday, Blistan and Sweeney tried to leave those disagreements in the past.
“We’re talking again and we’re trying to work to reduce cost again,” Sweeney said.
“We are standing side by side and we’re both smiling,” Blistan added.
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