We need your help to urge the Governor to make an appropriate appointment to the School Employees Health Benefits Commission AND not bypass the critical work of the School Employees’ Health Benefit Plan Design Committee for changes to health benefits.
P.L. 2011 Chapter 78 made significant changes to school employees’ pensions and health benefits. One of the protections for members under this law was the creation of the School Employees’ Health Benefit Plan Design Committee. This Committee took over the role of benefit review for ALL plans offered in the SEHBP from the School Employees Health Benefits Commission. The law included a requirement of equal representation of labor and management on the committee (3 union representatives and 3 state/management representatives). A similar provision has long been in place for the commission (4 union representatives and four state/management representatives) with a chairperson selected by both groups.
After the passage of Chapter 78, any benefit modification would have to be approved by the Committee. The six members of the Committee meet approximately once a month to discuss proposals. The role of the Committee, according to P.L. 2011 Chapter 78, is as follows:
“The committee shall have the responsibility for and authority over the various plans and components of those plans, including for medical benefits, prescription benefits, dental, vision, and any other health care benefits, offered and administered by the program. The committee shall have the authority to create, modify, or terminate any plan or component, at its sole discretion. Any reference in law to the School Employees’ Health Benefits Commission in the context of the creation, modification, or termination of a plan or plan component shall be deemed to apply to the committee.”
Recently, the state representatives proposed moving any eligible retired members receiving healthcare from the SEHBP from their current retiree health benefit program to a Medicare Advantage program.
Currently 12% of retired members already selected a Medicare Advantage program through Aetna so they would see little to no change in their benefit. But the 88% that chose Medicare as their primary insurance (with Horizon supplementing that coverage) would be forced into a Medicare Advantage program.
According to The Henry J. Kaiser Family Foundation, the percentage of former State of New Jersey enrollees in Medicare Advantage (as part of the total Medicare population) is around 15%. The three union representatives have declined to accept this proposal until they have the ability to do a thorough analysis of the plan and determine if such a change would be in the best interests of retired members.
Since the Plan Design Committee needs a majority of its members to implement any change, at least one union representative would have to vote with the state representatives to mandate this change. That’s why the Administration is seeking to bypass the Committee and force a Medicare Advantage vote through the School Employees Health Benefit Commission.
The Governor is calling on the Commission to force a vote because he currently holds a majority there. The seat of the chairperson is vacant due to a resignation and one of the union representatives passed away unexpectedly – over a year ago!
The only way to fill the union representative seat is through the Office of Appointments in the Governor’s office. Names have been provided but no action has been forthcoming from the Administration.
Continued Unlawful Action
And, while this was allowable in the past, today such action is a violation of the law – P.L. 2011 Chapter 78.
Unfortunately, this is not the first time the State has tried to bypass the design committee. In 2015, the State unilaterally imposed higher retiree prescription co-pays when an agreement could not be reached at the Design Committee level. Ultimately the New Jersey Superior Court Appellate Division ruled in favor of the unions and said that the State had no authority to impose higher co-pays and the matter should be addressed by the Design Committee. The same thing would happen here AND the matter is so easily resolved by just acting within the confines of the law!
Contact the Governor’s Office at 609-292-6000 and urge the Governor to:
- Utilize the correct process to enact changes to the plan – have the School Employees’ Health Benefit Plan Design Committee vet the plan and make an informed decision; and
- Fill the vacant seat on the Commission!