HEALTH BENEFITS REPORT
Revised rates for the 2019
State Health Benefits Plan
Last month, we received the rate renewal
reports as presented by AON, the State of New
Jersey’s actuary. The rates presented had local
government actives ranging from 7.4 percent
to 9.5 percent, early retirees flat and Medicare
retirees with a 12.7 percent reduction. On the
state employee side, actives were slated for a
5.4 percent increase, early retirees an 8.2 per-
cent increase and Medicare retirees a 14.8 per-
cent decrease.
In reading the reports, something just didn’t make sense.
The utilization for the beginning of 2018 was down, we land-
ed a Medicare Advantage contract that saved millions and our
Claims Stabilization Reserve (CSR) was once again growing.
After participating with other labor organizations in hours
of conferences and conversations that also included state
representatives and representatives from AON, we were able
to come to a resolution on rates that were more reflective of
the current status of the State Health Benefits Plan.
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Above is the matrix for the local government portion of the State
Health Benefits Plan. The design committee’s efforts had the effect
of smoothing out the rate increases (or decreases) equally across
the tiers, instead of the rates fluctuating from tier to tier. As you
review this chart, the retiree numbers are correct. Their rates are
dropping from 36.9 percent to 37.1 percent.
It is important to remember that these rates are a result of events
that are one-time occurrences and, without design changes, are
unsustainable. The assignment of excess funds from the CSR and
the lowered experience (which may or may not continue) gave us
an adjustment for 2019. National trends range from 4 percent to 10
percent increases, and the local government portion of the SHBP
has averaged just over a 0.5 percent increase for the last three plan
years.
Members who do not use the SHBP prescription plan will still see
a 6.5 percent increase, as the only savings in the “actives” risk pool
was prescription.
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20
Local Government
■ SEPTEMBER 2018
As you can see, state actives will be reduced by 0.6 percent,
which is lower than for local government. Since all state employees
and retirees are enrolled in the prescription plan, all enrollee rate
changes are reflected in the above chart.
Please continue to be conscious consumers with regards to your
healthcare needs, and keep up the good work. d