State, teachers’ union quarrel over steep increase in health insurance premiums

UNION COUNTY, NJ — The state teachers’ union and officials in Trenton are making accusations at one another after the revelation that insurance premiums for public education employees will jump 13 percent next year, making for a 21-percent increase in two years.
“Teachers, most of whom are also New Jersey taxpayers, can avoid these unnecessary premium increases through the adoption of reasonable reforms,” state Treasurer Ford Scudder wrote in an open letter to teachers dated Oct. 16.

Scudder accused the New Jersey Education Association union, through its influence on the School Employees’ Health Benefits Program, or SEHBP, of making choices that increased the premiums far in excess for other public sector unions.

“Last year the State Health Benefits Program Plan Design Committee elected to move forward with a reform package including minor changes to the prescription drug plan and reduced reimbursement for certain out-of-network services,” Scudder wrote in the letter.
“As a result of those reforms, there was a zero percent increase for active local government employees and a only three percent growth for active state employees.”

The SEHBP, which works under the guidance of NJEA, includes representatives who are both retired and active teachers; it is charged with electing insurance plans on behalf of teachers each year.

Scudder argued that the SEHBP, at the direction of the NJEA, refused any changes to its health plan, while changes were agreed to by all other unions.

“This is an increase of over $1,400 for the average school teacher in the most popular plan with family coverage, while the premiums for their colleagues in municipal government will not have increased by one penny for the same plan,” Scudder said.
The state treasurer’s letter followed an Oct. 11 statement from the NJEA that also outlined the increases, but accused the state of trying to shift “health care costs to employees to save money on premium costs.”

On Oct. 27, NJEA spokesman Steve Baker called Scudder’s letter a political use of propaganda ushering false and misleading statements.
“This is an egregious use of tax money and political power,” Baker told LocalSource.

According to the NJEA, the state’s recommendations included replacing the current in-network system with a tiered network structure, which threatened to reduce members’ access to their doctors or make visiting those doctors much more expensive.

“The state under Christie refused to reveal the impacts of said proposed plan, and withheld information to allow us to measure the full impact of recommendations,” Baker said.

The state also proposed increasing the emergency room copayment, mandating generic prescriptions, eliminating certain brand name prescriptions and limiting out-of-network benefits for chiropractic/acupuncture treatment and physical therapy, according to the Oct. 11 NJEA statement.

“The changes that the state suggested would have lowered premiums slightly by requiring members pay more for their health care in the form of higher copayments, higher co-insurances, and increased deductibles,” the NJEA said.

“This is referred to as cost-shifting and has long been opposed by NJEA because it hurts members and does nothing to deal with the underlying problem of skyrocketing health care costs.”

Scudder’s letter further infuriated union officials by referencing the salary figures of certain NJEA executives. According to the letter from Scudder, in 2015 the union paid its president $659,000; paid its business director $671,000; and paid its executive director $1,212,000. Baker said it was disingenuous to knowingly print incorrect NJEA employee salaries in the letter.

However, when asked by LocalSource to disclose the union executives’ salaries, Baker did not respond to the question.