CWA UPDATE ON STATE HEALTH BENEFITS PREMIUMS FOR 2025

State Favors Insurance Carriers Over Working Families and Taxpayers

September 5, 2024

Today, despite strong opposition from public employee unions and proposals from the unions that would have achieved significant savings through better plan management, the State Health Benefits Commission approved rate increases for the State Health Benefits Plan for Plan Year 2025 as follows: 

State Group – Active employees: 10.6%

Local Government Group – Active employees: 16.3% 

The vote was passed 3-2 with all three state appointees voting in favor and two union representatives voting against. The rate increases for local government Medicare retirees were reduced because of the federal government repricing Medicare retiree prescription plans and subsidies. (Thank you to the federal government for negotiating much lower drug prices for retirees which helps all states, including NJ.)

For our CWA Local Government members, the State’s failure to adopt reasonable cost controls on hospital and Horizon prices has caused an increase to local government employers, employees, and taxpayers, of over 55% compounded since 2022. The increase for 2025 is another attack on our paychecks and we will continue to fight for solutions that reduce costs and protect quality benefits. We will be fighting at the bargaining table as employers in the SHBP may look to leave and in continued discussions with the State to better manage the plan without cost-shifting to workers.  

For our CWA State members, our contract sets our employee contributions and limits the impact of an annual premium increase. Locals will address this with members in membership meetings – contact your Local for more information and meeting schedule. 

Our Coalition of Public Employee Unions representing both state and local government members, including CWA, civilian unions, and law enforcement, had submitted many  governance and cost containment proposals to the Governor’s Office and have been urging negotiations since July. The State did not approve any of these at the Commission meeting today. 

Unfortunately, the State refused these proposals, shifted their own internal cost analysis multiple times, and provided no ideas of their own other than making members pay higher costs for services. 

For example:

  • Expand claims reviews to ensure the State claws back overpayment to Horizon and service providers. We have seen bills where the State pays has paid 700% of actual claims cost and these claims must be reviewed. We proposed expanding claims review and including high-cost out of state and specialty care. Claims review is good government – it does not increase costs on members and it ensures accurate payment to providers. 
  • The State’s assumed cost trends are much higher than other states and other national projections. Reports show we are actually using 1% less healthcare overall but costs are rising more than 12% for less services. We challenged this analysis and provided our own.
  • Enforce price guarantees from insurance carriers, and enforce our contracts when their costs exceed these guarantees

CWA will be sharing more information about SHBP plans and our healthcare campaign during open enrollment. Stay informed and stay in contact with your Local.