Unions prepare advocacy push ahead of expected health premiums vote
Union workers intend to rally as a state panel prepares to vote on sizable rate hikes spurred by inflation and the pandemic. (Getty Images)
Labor officials are preparing a final advocacy push to head off a massive increase to health benefit premiums for government workers that a state commission could approve as early as next week.
On Tuesday, members from a coalition of unions will gather outside the Statehouse in Trenton to demonstrate against the proposed premium increases — costs could rise 20% or more — that they say would amount to a sizable pay cut for public workers and a tax increase for residents. The State Health Benefits Commission is meeting Wednesday and could vote on the rate hikes then.
Jim McAsey, a Communication Workers of America representative, said there is “time for the parties to come together and do the right thing for workers for taxpayers, so we’re eager to find a solution.” The CWA represents nearly half of all state workers.
State actuaries from AON Hewitt last month said inflation, a surge in utilization after a pandemic lull, and Horizon’s failure to deliver promised savings required the state to move forward with large increases to premiums.
McAsey said the hikes would amount to a pay cut of between half a percent and 1.5% for public workers, depending on their pay and level of coverage.
Michael Zanyor, co-chair of the Plan Design Committee, said the hikes would cost State Troopers Fraternal Association Members with a family plan between $1,500 and $1,800 more annually. He also warned that cost-sharing provisions for local government workers could see expenses passed onto residents.
The Plan Design Committee oversees some aspects of public worker health plans, but the State Health Benefits Plan Design Commission and its schools counterpart are responsible for setting rates.
“The rule of thumb we’ve been using is whatever the employee pays, the town’s probably paying double that because of the way the cost sharing’s structured,” Zanyor said. “That can be a significant burden on the local employers, which then can be potentially passed along in tax increases.”
Union officials on Friday suggested the state could partially offset the need for rate hikes by creating a reserve fund that could carry over surplus premiums in years during which premiums paid exceed costs. Such a fund exists for local government but not for state workers.
They also urged the state to adopt a system that ties service prices to Medicare rates, noting Montana’s flagging health benefits system was revived by a turn to reference pricing.
“It could be a percentage of Medicare, say 175% of what Medicare would pay for a procedure,” McAsey said. “Right now, we’re paying way more than that.”
The State Health Benefits Commission has not set a hard date for the vote, but administration officials have signaled the enrollment period for state plans set to open in October would require the plan to be finalized by mid-September. Union officials claimed paperwork processing time meant the true deadline is further in the future.
Union officials have so far avoided escalating the fight in hopes of reaching a compromise with Gov. Phil Murphy’s administration. Murphy has largely aligned with public sector unions throughout his tenure, sometimes against the wishes of other Democratic officials.
Still, union members who sit on the commission, where administration officials have a statutorily set majority, had not received agendas for its Wednesday meeting by Friday afternoon and were still hoping to see a vote on rates postponed.
Whether the vote will go ahead Wednesday will “depends entirely on what happens in negotiations” between union and state officials, said Dudley Burdge, the commission’s ALF-CIO representative for local government employees. Those talks were still ongoing Friday, and a deal might not solve the problem entirely.
“If they’re able to come to some kind of deal, that’s still problematic because the negotiations are just for the state workers,” Burdge said. “What’s decided there may not be able to apply that to local government.”
The New Jersey Education Association, perhaps Murphy’s biggest labor booster, has largely stayed out of the back-and-forth over premiums while they await more information behind the proposed rate hikes, said NJEA communications director Steve Baker.
The School Employees’ Health Benefits Plan faces smaller proposed increases than the plan for state workers.
The proposed hikes come after two years of solid performance, where rates either stayed level or decreased slightly. The school plan was flush enough to offer a one-month rate holiday in February, effectively reducing premium costs by about 8%.
“No one wants to see a 15% increase. But, in the context of two previous years of rate decreases, we also want to keep perspective on what the overall trend has been,” Baker said, adding, “We are advocating for our members to have access to their health insurance at the best possible rates, but there is more to doing that that just demanding a lower rate.”
The School Employees’ Health Benefits Commission’s next meeting is slated for Sept. 19.
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