NJ Leaders Propose $350M Subsidy To Avoid Mass Health Insurance Hikes

NEW JERSEY - Local government leaders in New Jersey, including members of the NJ League of Municipalities, NJ Association of Counties, NJ Urban Mayors Association and NJ Conference of Mayors, banded together Monday to ask the state for a solution to massive state healthcare premium increases starting Jan. 1.

Premiums for municipal workers are set to increase by 20%, plus an 18% pension increase, local leaders said in a statement Monday. Local governments and union representatives are now warning that both changes may lead to layoff and property tax spikes.

“Much of the positive work the legislature has done to stabilize property taxes over the last several years is going to be marginalized if nothing is done to address this massive cost increase in local government health care insurance,” said Charles Wowkanech, NJ State AFL-CIO President. “It is clear to all stakeholders that if nothing is done, not only will our members and taxpayers see a financial hardship, but ‘kicking the can’ down the road on controlling health care costs will continue to plague taxpayers, towns and counties each and every year to come.”

As one potential solution, local government leaders and union representatives revealed a legislative policy proposal Monday aimed at offsetting the state health benefits plan increases with a one-time $350 million appropriation to the Division of Local Government Services from the General Fund, which would guarantee annual savings of a minimum $100 million starting in 2024, local leaders said.

Should the $100 million not materialize, local leaders propose the New Jersey state treasurer to implement savings unilaterally. The funds would then be used to establish a premium increase mitigation program and provide grants proportionally allocated to local government employers.

The proposal also advises that employee contributions to the cost of health care should increase by the same percentage as the employer’s increase in healthcare costs after grant funds are allocated.

“Today we have an unprecedented coalition, representing both labor and management, speaking with one voice and offering a solution to an unprecedented and devastating increase in health care contribution for local governments, local employees and property taxpayers,” said Millstone Borough Mayor Raymond Heck, President of NJ League of Municipalities. “We urge the Administration and Legislature to engage with this group of partners, consider and advance this solution to benefit our public servants and our property taxpayers.”