Madison Drops State Public Worker Health Plan Following Price Hike

MADISON, NJ — In the face of intense cost increases, the Borough of Madison officially made the decision to drop the state health benefits plan for its public employees in favor of a private insurer.

Last year, the state surprised all New Jersey municipalities, including Madison Borough, with a 20 percent increase in healthcare insurance rates, prompting local governments to pass resolutions opposing the increase in an effort to fight back.

Under the proposed rates, the health insurance costs for Madison Borough were estimated to go up to $2.4 million this year.

"To put it in perspective, our 2022 operating budget was $33 million, with a line item of $1.9 million for health insurance. That's six percent of our overall budget. The math does not work without reducing services or increasing taxes," Mayor Bob Conley said.

However, on Jan. 23, 2023, the borough's governing body voted to modify the health benefits carrier for the employees of the Borough of Madison, with plans to officially withdraw from the New Jersey State Health Benefits Plan on Mar. 31, 2023.

All employee health benefits will be provided by the North Jersey Municipal Employee Benefits Fund (HIF), which will be administered by Aetna, beginning Apr. 1, 2023.

"NJSHBP announced late last year that insurance costs would be going up over 20 percent for 2023. Since then, the administration has been working to find ways that we can provide the health care benefits to the employees at a lower cost. Moving to the HIF will reduce the cost increase for each employee," the borough said.

Senator Anthony M. Bucco stated in November that the mayors of Morris County should all 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."