Healthcare Premium Deal Rescues State Workers but Local Public Workers not Included

 

 

 

HEALTHCARE PREMIUM DEAL RESCUES STATE

WORKERS BUT LOCAL PUBLIC WORKERS NOT INCLUDED

By Bob Hennelly

Gov. Murphy and the unions that represent the state’s unionized workforce have reached an agreement which will reduce a double-digit healthcare premium rate hike effective in January, down to a low single digit bump below the rate of inflation.

“By engaging in the collective negotiations process, the Unions and the State have successfully
reduced the increases in employee healthcare contributions from 18 percent to 3 percent this year, coupled
with certain modest changes in the design of the State’s healthcare plans, resulting in a more
affordable option,” read the joint statement issued by the coalition of state unions. “The Unions, together with the Governor, whose engagement on this issue was vital to the successful conclusion of negotiations, have forged an agreement on healthcare that benefits union members and their families by avoiding unaffordable cost increases.”

The unions covered by the deal include AFSCME Council 63, CWA, IFPTE Local 195, the New Jersey Council of State College Locals, AFT, and IBEW Local 33.

 

STILL LOOKING FOR RELIEF

Meanwhile, the news was not great for the tens of thousands of the state’s public workers at the municipal and county level who are still slated to be hit by the 20 percent hike approved earlier today by the State Health Benefits Commission. These workers are not covered by the state’s collective bargaining agreement it has with the state workers’ locals. The Commission rebuffed requests from the unions and their allies in the legislature to hold off on the historically large price hike.

The flurry of activity today came a day after several hundred New Jersey public workers from over a dozen unions converged is the Annex of the State Capitol for a very boisterous noon rally at which attendees chanted “all day, all night, health care is a right”. Reported estimates for the premium increases ranged from 20 to 24 percent.

In a statement to his members Patrick Colligan, the president of the New Jersey State Policemen’s Benevolent Association, expressed frustration that his members still faced the hefty premium hikes and that the state rebuffed several possible money saving ideas offered by labor’s representatives on the State Benefits Plan Design Committee. It has six union representatives and an equal number from management.

“The State members believe that all of these are outside the scope of the plan design committee, a statement that is false,” wrote Colligan. “We will continue to work on a plan for our members going forward to try to mitigate the drastic increases our members will face in 2023. We will keep you advised of any new developments and a plan of action before open enrollment. It is obvious that through their actions that the state thinks more about their relationships with their vendors than they do with public workers.”

 

A PAY CUT

At yesterday’s rally, Collegian told InsiderNJ that without some kind on intervention, the health premium hike would translate to a 1.5 percent pay cut for his members.

In a joint statement, Senate President Nick Scutari and Assembly Speaker Craig Coughlin welcomed the news about the state’s deal with its unions but expressed concern about the consequences for local governments and their workers still facing the massive spike in premiums.

“We applaud the agreement with the state worker unions to help offset the drastic cost increases in health benefits for this year in a fiscally responsible way,” Scutari and Coughlin wrote. “But we are extremely disappointed that no meaningful action has been taken by the Plan Design Committees or the Health Benefits Commissions to prevent what are unaffordable rate hikes for counties and municipalities. Ignoring municipalities will inevitably result in higher costs for taxpayers and workers.”

The Democratic legislative leaders continued. “It is imperative that the Health Benefits Commissions and Plan Design Committees immediately start working on effective ways to stop this and future exorbitant increases. They should examine all possible options and consider any responsible alternative. Any solutions need to prevent the imminent rate hike and ensure that increases of this magnitude do not happen again.”

 

NOT DONE

“From our perspective we are going to try and engage the legislature and the Governor’s office in try

Ing to do something at the municipal level in order to have a similar result,” Fran Ehret, executive director of CWA NJ executive director. “It’s different at the municipal level because we don’t have the same contract that puts us in the position to be able to bargain an issue like this.”

When the scale of the health insurance premium increases leaked out back in July, the Murphy administration cited the findings by state consultants that the increase was attributable to a combination of inflation and a greater utilization of health services

by the health plans participants during the pandemic.

At yesterday’s rally, the irony of the state’s public workers, who worked throughout the pandemic, were now being penalized for seeking healthcare during COVID was not lost on Michael Jackson, with AFSCME Council 52 Local 2272.

“All public employers made it mandatory for us to be tested weekly and that’s where these costs came from. New Jersey received billions of dollars [for COVID relief from Washington] and not one cent was allocated to help negate the rise in healthcare costs,” Jackson said. “Doesn’t this sound like an economic impact of COVID? That’s what the American Rescue Plan was made for, correct?”

State Senator Shirley K. Turner (D-15th) has introduced legislation that would permit some of the state’s American Rescue Plan surplus to be used to insulate public workers from the healthcare premium rate shock

The projected premium hikes for New Jersey’s public sector workforce caught Trenton totally by surprise and did appear to be out of line with what was being predicted nationwide for employers.

“Employers in the U.S. expect health plan costs per employee to rise 5.6 percent on average in 2023,” reported the Society for Human Resources Management. “While significantly higher than the premium increase of 4.4 percent projected for 2022, the 2023 increase lags overall inflation, which is currently running at about 8.5 percent year-over-year.”

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