In a 3-2 vote, with the state government representatives voting in favor and the local labor representatives voting in opposition, the State Health Benefits Commission (SHBC) voted to accept the Plan Year 2025 Rate Renewal recommendations.
As reported in July, rates for the State Health Benefits Program (SHBP) Local Government Employer Group will increase by 17.2%. That includes a 16.3% increase for Local Government Actives; 17.9% increase for the Local Government Early Retirees group; and a 22.8% increase for Medicare Retirees, though that number is likely to decrease based on a larger Direct Subsidy Payment from Medicare that was underestimated in the Plan Year 2025 design. It is also likely that the overall 17.2% will decrease as well. We will share that information when it becomes available on the Division’s website.
The proposed rate increase for Plan Year 2025 for the State Employee Group is 11% and the Local Education School Education Health Program is 14.9%. At this time, it is not clear what the Direct Subsidy Payment from Medicare does to these overall rates.
Included in the 17.2% increase for the Local Government Employer Group is a 3% surcharge to replenish the claims stabilization fund. There is also a 2.5% adverse selection charge to mitigate the fact that local governments have left the SHBP over the past few years. These are policy choices that the SHBC and the state have chosen to implement on local governments and could have been adjusted downward.
While the Plan Design Committee adopted a new resolution in July for a 5-year Centers of Excellence Pilot Program, there was no discussion by the SHBC about how the implementation of this program would affect rates for Plan Year 2025.
As open enrollment approaches, we encourage you to review the report and, given the 7% increase in Plan Year 2024 and the 22% increase in Plan Year 2023, encourage you to review your municipal health benefits plan and consider your options. If your municipality chooses to stay in the SHBP, we encourage you to look at all plan and provider options and consider the cost impacts. As a reminder, there was a special open enrollment earlier in 2024 with a new provider that has similar plans available.
We will alert you as further details emerge and information about open enrollment becomes available.
Contact: Paul Penna, Senior Legislative Analyst, ppenna@njlm.org, 609-695-3481, x110.