The basics:
- Gov. Murphy and 16 unions agree on $75M in health benefit savings
- Changes include new deductibles, co-pays and out-of-network limits
- Plan Design Committee will review the agreement later this month
- GOP leaders criticize deal, citing tax and premium concerns
Gov. Phil Murphy and 16 public sector unions representing state workers struck a deal Sept. 4 over health care benefit savings.
State health worker benefits became a flashpoint during the budget process as leaders called for more savings to support the program, which has been strained. The issue has become a major political issue – one over which Republicans have criticized Democrats for their management of the program. The subject also led to rare summer committee hearings.
Murphy said the agreement reached with the unions is designed to achieve nearly $75 million in recurring health savings for the final months of FY 2026.
Under the agreement, the governor’s office has agreed to send a letter to the Legislature expressing its willingness to sign legislation that repeals FY 2026 budget language that had called for finding $100 million in recurring health care benefit savings through the Plan Design Committee.
“Today we are making responsible and reasonable changes to the state’s health plans – broad changes which have not been made in nearly 15 years,” said Murphy in a Sept. 4 press release.
What’s in the deal
The changes need to be voted on by the State Health Benefits Plan Design Committee later this month.
Key things to know:
- $110 in-network deductible for individuals and $220 in-network deductible for families for all plans that currently have lower deductibles
- $750 out-of-network deductible for individuals and $1,500 out-of-network deductible for families for all plans that currently have lower deductibles
- A $2,500 out-of-network, out-of-pocket maximum for individuals – and $6,000 out-of-network, out-of-pocket maximum for families for all plans that currently have lower out-of-network, out-of-pocket maximums
- New co-pays on GLP-1, generic, brand, non-preferred brand and specialty medications across all plans; new co-pays on lab visits and imaging across all plans
- Incentivizes use of in-network ambulatory surgical centers for certain procedures
- Limits on out-of-network physical therapy visits
- Expansion of the forthcoming Centers of Excellence pilot program
Read more
A copy of the Memorandum of Agreement can be found here.
Murphy also said the state agreed to try to identify “longer-term, significant cost containment strategies.”
“I am committed to working with the unions until the end of my administration to provide solid recommendations to future state leaders on how the state can adopt best practices and get the best deals in the health care market on medical care and drug pricing,” said Murphy.
Legislative reaction
Following the announcement, Assembly Speaker Craig Coughlin, D-19th District, released a statement:
“We have always believed that the best way to make public health benefits affordable for taxpayers and public employees is by working collaboratively with workers and their unions. We are pleased that the agreement includes ideas which have been advanced legislatively. We look forward to reviewing the agreement and continuing our efforts to protect taxpayers from rising costs while providing affordable health care options to public workers.”
In response, Senate Republican Leader Anthony Bucco, R-25th District, and Budget Officer Declan O’Scanlon, R-13th District, said, “Despite the lack of transparency or details from the Murphy administration, it’s clear the Democrats’ health insurance plan means increased property taxes and big premium increase for public employees. Meanwhile the local benefits death spiral is being left to the next governor to fix.”
