Quality Public Education for All New Jersey Students

 

 
     Property Tax Reform, Special Legislative Session & School Funding
10-12-06 GSCS Testimony in Trenton - health benefits
This week, in addition to continuing to meet with key legislators and members of the administration, GSCS was invited to testify in a rountable before the Joint Committee on Public Employee Benefits Reform. GSCS focused on health benefits and cost savings...Senator Wm Gormley and Assemblyman Kevin O'Toole, committee members, announced that they would be introducing a bill this Monday to offer more flexibility within the State Health Benefits Plan

GARDEN STATE COALITION OF SCHOOLS/GSCS

 

Dr. Marjorie Heller, President

Lynne Strickland, Executive Director

Betsy Ginsburg, Parent Network Representative

 

Phone 609 394 2828  Fax 609 396 7620                   Website ‘gscschools.org’                    Email ‘gscs@gmail.com

 

Testimony before

The Joint Committee on Public Employee Benefits Reform

Statehouse Annex, Committee Room11

October 12, 2006

 

Good morning Senator Scutari and Assemblywoman Pou, members of the Joint Committee. The Garden State Coalition of Schools (GSCS), representing 350,000 public school students in 110 school communities across the state of New Jersey, appreciates your invitation to speak to the Committee today.

 

As you know, GSCS presented to the Committee on September19 at the public hearing in Clifton regarding health benefits - one of the biggest cost drivers in school budgets - and the cost savings districts are experiencing by contracting with private carriers, as opposed to the State Health Benefits Plan (SHBP). It is important to reemphasize that:

 

1)   nearly 60% of all school district are now participating in private carrier plans –   the statistical message here is loud: districts are achieving substantial cost savings           in private plans compared to the SHBP, and

 

2)      GSCS member districts (your mission as well) focus on the local property taxpayer’s burden when building their school budgets. The reality is that local costs are driven higher due to lack of flexibility in the SHBP, compared with options available to districts that participate in private carrier plans.

 

GSCS testimony on the 19th, backed up by specific savings and suggestions from member districts, noted certain issues within the SHBP that prompted district management to seek cost efficiencies outside the state plan.

 

Today we continue to emphasize these issues,  with suggestions that deal with certain unnecessary costs and lack of flexibility in the Plan.  As legislators, you have the legal discretion to amend the SHBP to allow for:

 

  • Opt out provisions for district employees that already have coverage via their spouse’s policy.

 

                         

 

ü      In allowing for opt-out  provisions and waiver incentives, a disconcerting exception would be eliminated: schools would be given the same cost-saving tool that municipalities, municipal authorities and county colleges are already permitted within the same plan.

 

  • Districts to negotiate with individual bargaining units regarding premiums.

     

 

  • Districts to offer a variety of health insurance options, such as PPO, POS, Traditional.

 

ü      A Bergen County member district that offers PPO plans to new employees, relates that the number of those employees choosing to stay in the PPO after attaining tenure, when they can switch to Traditional plans, is growing.

 

FYI:

 

There are twelve Abbott districts that participate in the SHBP. Approximately 30,000+ staff members are provided coverage under the Plan. Given the savings noted by so many districts in the state it would be worthwhile investigating how much savings those twelve districts might achieve if they were to go outside the SHBP. All three state-operated districts are in the SHBP.

 

Examples of reported member district savings that participate in private carrier plans:

Monmouth County district: first year savings in premiums - $100K; additional savings anticipated due to flexibility offerings, such as opt-out waiver incentive program.

 

Essex County districts:

 

1)      First year savings = $250K; co-pay and opt-out clauses available – the opt-out provisions saves $10K per employee if they choose to exercise the clause.

2)      Smaller district: $100K savings via opt-out provision; and additional $200K projected via program, premium and flexibility in plan offerings.

 

Bergen County district: $250K per year due to opt-out provision.

 

Morris County district: estimated cost to district if required to return to SHBP: $500K.

 

Somerset County district: Opt-out  savings $1.1M (100 employees chose option); recently negotiated PPO with a 6% discount, netting $178K savings; increased prescription co-pays providing $200K savings.

 

Union County district: “It is true we have a better rate going for private benefits.”