Spiking Healthcare Premiums Addressed By Chatham Mayors

CHATHAM, NJ — Mayors Thad Kobylarz and Ashley Felice, spoke at a press conference yesterday to address how residents of Chatham Township and Chatham Borough will be impacted by upcoming increases in health insurance premiums.

The event, held on the front steps of the Morris Township Municipal Building, served as an informational discussion as well as a call to action and a plea for change to the elected officials in Trenton.

The state surprised all New Jersey municipalities, including the Chathams, with a 20% increase in healthcare insurance rates earlier this fall, prompting local governments to pass resolutions opposing the increase in an effort to fight back.

Read More: State Healthcare Insurance Spike Challenged By Chatham Council

The conference was attended by all mayors and elected officials from Southeast Morris towns, including Madison, Morris Township, Morristown and Morris Plains.

"The substantial premium increases of over 20% proposed for State Health Benefits Program participants is yet another burden taxpayers and public employees will be left to carry and will leave many towns grappling with the potential for layoffs, the cancelation of important public projects, and/or tax increases," said Mayor Mark Gyorfy, Morris Township Mayor.

Hundreds of thousands of New Jersey public employees, early retirees, and school employees could face rate increases of up to 20% for health benefits under the new healthcare proposals.

Locally, Chatham residents may experience budget constraints and higher property taxes as a result of the significant increases in health insurance premiums.

According to officials, municipalities across the county have faced daunting challenges in recent years to keep public finances in order, ranging from the unanticipated and complex effects of the COVID-19 pandemic to subsequent cost increases for basic services due to inflation.

"Chatham Township's healthcare costs account for 10% of our operating budget. The planned increases for 2023 will be a large burden on both Chatham Township's tax paying base as well as our municipal employees," Felice said.

Felice estimates that premium contributions for the 49 municipal employees and 62 retirees in Chatham Township will rise by 19.7% in the upcoming year.

"I feel for our employees, who are impacted the most. Increases of this size are not something people typically anticipate or plan for," Felice said. "When you couple this with the already out of control inflationary environment impacting them at the grocery store, gas station, etc. it has a snowball effect which forces them to make hard decisions on what they can and can't afford."

Chatham Borough has recently taken proactive steps to reduce costs, according to Mayor Kobylarz, including a program that offers a cash incentive to employees who switch to lower-cost health plans.

The new plan, which was presented at a recent council meeting, will cost the borough $150,000 more. To help offset the additional funds that would be added to the borough budget, the council unanimously approved a resolution that would provide employees with a 40% cash incentive for choosing lower-cost plans for two years.

"This State Health Benefits Program 20 plus percent rate hike is definitely going to hurt us in Chatham Borough. There is little doubt that, like the municipalities all across the state, the increase will trigger property tax increases for our residents," Kobylarz said.

Senator Anthony M. Bucco stated following the press conference that the mayors of Morris County were correct to be concerned about the impending impact of massive health insurance premium increases.

“It’s clear, however, that Governor Murphy knew this was coming as early as February, months before the increases were announced. Had the governor shared that knowledge with the rest of us this spring, we could have worked on a solution with mayors, local governments, and the administration as part of the State Budget adopted in June. Unfortunately, that never happened because the administration wasn’t transparent about what it knew.”

During the conference, Kobylarz explained that the taxpayers within each municipality will end up bearing the brunt of the premium hike, saying that "the money has to come from somewhere."

The anticipated cost of healthcare in Chatham Borough for the upcoming fiscal year is $145,000, which equates to a budget appropriations increase of 12% to 15%.

"The bottom line here, is that the cost impact of the State Health Benefits Program dramatically steep and burdensome 20 plus percent rate hike has all the hallmarks of an unfunded mandate on local governments. One that will be borne on local taxpayers at a time when the rate of inflation has reached levels not seem in decades," Kobylarz said.