This article was updated with comment from Alyana Alfaro at 1:46 p.m.
Senate President Steve Sweeney and New Jersey Education Association President Marie Blistan announced a health care reform plan they say would save the state more than $1 billion annually while reducing costs for residents and NJEA members.
“Marie has been a tough negotiator and coming to an agreement that benefits educators and taxpayers is what we always wanted. The agreement is the result of several months of intense negotiations and represents a culmination of several years of efforts to identify opportunities to address the quality of healthcare while dealing with the reality of its skyrocketing costs,” Sweeney said. “This agreement is a win-win for New Jersey taxpayers and educators that will deliver estimated savings totaling more than $1 billion annually.”
The New Jersey Educators Health Plan would replace the existing healthcare plans for NJEA members.
The state would also offer a Garden State Health Plan, which would cost less but restrict workers to in-state health care providers, though Sweeney said that plan would include provisions for out-of-state care not available in New Jersey.
“This is the culmination of a very long process. It was not easy, but the work we have done together is a major victory for both our members and all the other taxpayers of New Jersey,” Blistan said.
“It is no secret that our members have suffered a great deal under Ch. 78, which imposed unsustainable and ever-growing health care costs on them,” she said. “With this creative, collaborative approach, that burden is greatly reduced, and our members no longer need to fear that their take-home pay will decrease year after year as a result of those imposed contributions.”
Though details about the plans are still scarce — Sweeney said that would remain the case until the bill drafting process concluded — the deal likely represents a coup for Sweeney, who has long sought to cut costs associated with public employee health plans.
It’s also the result of an unlikely alliance between two long-standing political enemies.
Sweeney and former Gov. Chris Christie were instrumental in passing chapter 78, which required school employees to pay between 3% and 35% of their health care premiums, based on plan and salary.
The new plans peg employee contributions to salaries.
Chapter 78 put Sweeney opposite the powerful teachers’ union, which spent $5 million in an attempt to oust the Senate president in 2017.
Relations between the two have remained frosty ever since.
It’s not clear if the deal represents an armistice or a thaw in those tensions.
“As you can see right now, we’re standing side by side, and we’re both smiling,” Blistan said. “And we both have the same message — that we are committed to bringing quality affordable health care to our members and also providing relief to the taxpayers in this state.”
The NJEA has been at the back of Gov. Phil Murphy since he entered office in 2017, providing the governor with a powerful political allegiance and an obligation to pursue their interests.
Murphy has yet to review the proposal, though his office suggested it would see a fond reception.
“Governor Murphy has long believed that good-faith negotiations with our workforce are the best strategy for reducing health care costs without sacrificing quality. The Murphy Administration and Assembly Speaker Coughlin long ago adopted this approach by encouraging collaboration with our union partners to save taxpayers dollars and ease the health care cost burden on our workers,” Murphy Press Secretary Alyana Alfaro said. “The Governor looks forward to reviewing the proposal put forward today and working together to finally give our educators the long-overdue Chapter 78 relief they deserve.”
Murphy last year backed a plan proposed by Assembly Speaker Craig Coughlin and the NJEA that would have ended with about half of the savings from the Sweeney plan.
“Whenever this bill passes the legislature, the governor will sign it, and the way it works, it will be the governor’s billion-dollar savings, because it’s not about credit,” Sweeney said. “It’s about getting the job done.”
Sweeney said the speaker had not yet been briefed on the agreement, though he said that was just a matter of the parties coming to an agreement within the last days.
“He will be, he absolutely will be. This isn’t — there is no anti-anything here. I’ve been working on this for months with Marie,” Sweeney said. “The speaker knows I’ve been working on the bill. He knows it because I’ve told him I’ve been working on a bill, and I’ll share the bill with him. We just finally got to an agreement this weekend.”
Senate officials said they expect the bill to be finalized by the end of the month.
If passed, the school’s teachers and community college professors would be able to sign up during a special enrollment period starting July 1.
The plan would go into effect on Sept. 1.
Senate officials said most of the plan’s savings, between three-quarters and five-sixths, would be realized in the coming budget.
Most of the new plan’s projected savings, $670 million, would go to local school districts. The remaining $403 million would come from reductions to NJEA member premiums.
The measure would have some impact on the state budget, though the majority of the savings would not be found there.