News


This week, Rob Nixon, Director of Government Affairs and I met with Executives from Horizon to discuss the implementation of the Medicare advantage program. We were once again assured that there will be no modification to current coverage under this new model.

Horizon also has stated that they will be holding over 200 instructional sessions on the new process throughout the State.

Please also note that there is no modification to current prescription plans. They will be status quo.

Please keep check on this web site and PBA outlets for more information.

View Additional Information Here

Unfortunately and once again, uninformed and consistently incorrect self-appointed experts are spreading misinformation regarding a recent vote made by Kevin Lyons, our representative on the State Health Benefits Plan Design Committee.

Kevin’s vote was responsible, logical, and consistent with the direction he and the State PBA has been working towards, which is to lower the cost of our members’ contributions while avoiding any negative impact on the level of benefits they currently receive. Without this vote, a PFRS member in Direct 10 would see his or her contribution increase an additional $695.00 per year and a total contribution of $12,290.00.

Both Active and Retired members in the Police and Fire community will benefit from the results of his vote.  This is a victory for all of our members and was authorized by me after months of research and discussion.

The State PBA spends untold hours and funds on training, preparing and lobbying for positive change for our members regarding pension and benefits.  Other sources of information have been consistently incorrect in their assessment of issues and all of their actions have failed to bring about any change that they have predicted or sought.

Please take this information and contact your Union representatives with any questions.  We are in Unions to do better collectively than we can as individuals.  Let’s support the effort and get better results and send the out-of-state and out-of-touch keyboard commentators packing.

Pat Colligan, State President


From Kevin Lyons:

On August 29, 2016, the State Health Benefits Design Committee adopted plan changes to be implemented in the coming months.  As we have said all along, we would not endorse any changes that would shift more costs on to our members.  After 5 months of negotiations with the state representatives, we were able to produce a package that would change some of the processes that would create a rate reduction for local actives and an approximate 3.5% increase for state actives.  If action were not taken, our members would have been facing 6% and 9% rate increases respectively.  Currently local actives pay 9.4% more than State actives, and shifting costs from one plan to another is not allowable.

Below are the seven changes that were acted upon and a very brief description of each explaining the reason that the PBA chose to support the resolution.  It is important to remember that these changes only apply to those in the State Health Benefits Plan.

  1. We voted on a resolution that would ensure equal benefits and create prescription drug savings for all post-65 retirees who are being switched to a Medicare Advantage Plan as a contract change already implemented by the State Health Benefits Commission.  If a level of savings is reached of 20% the member will save on lowered copays.  The plans are actually stronger and the network is larger.  This will have a positive effect on the Chapter 330 rates as well, decreasing costs for those retirees.  There will be no immediate impact on current prescription copays.
  2. Mandatory use of generic drugs in certain situations:  The SHBP generic utilization rate is at approximately 75% instead of at the 85% it should be.  This will require that a generic be dispensed first (providing lower copays for our members) and if the member can demonstrate a medical necessity, they will receive the name brand.
  3. Formulary management:  With the skyrocketing cost of prescription drugs, the Pharmacy Benefit Manager has created a list of drugs that they have chosen to discontinue unless the drug is proven to be medically necessary.

    Both prescription drug changes are good for one year and will be discontinued without an affirmative vote of the committee.  This will not apply to Medicare retirees.
     
  4. Prescription Drug Step therapy:  Our members have had this for years, there are no changes for any of our members.
  5. Restructure Physical Therapy out-of-network payments:  Some physical therapists were taking advantage of the payment structure.  After extensive research it was determined that there were over 1,400 physical therapists in New Jersey and the only State employees that lived outside of a few miles to a provider were those that lived far out of state.
  6. Support to extend the pharmacy benefit manager contract and add an auditor for 100% of the claims.  We project that this will save us millions in the future until we can implement a reverse auction.
  7. Incentives for switching to the tiered network:  Any State employee that switches to the tiered network for two years will receive $1,000 for single coverage, $1,250 for member and spouse and member and child, and $2,000 for family.

Another of the benefits that came out of the passage of the resolution is the release of transitional aid that will help our brothers and sisters, mostly PBA members, in distressed cities keep working.  So this was a win for our members all the way around.

We did not take the approval of this package lightly and the labor side of the commission got almost everything they asked for in the package while keeping rates and benefits in check with ironclad safeguards.  We will not risk the wellbeing of our members to pacify the agendas of other organizations.  Our members pay more both in premium share and premium, we are different and will continue to look out for the best interests of all of our members, both active and retired.

On July 6th, the State Health Benefits Plan Design Committee approved a series of plans that will significantly change the way that health benefits are delivered to our members.

In an effort to contain costs and provide a higher standard of care, the Design Committee passed the following modifications to the State Health Benefits Plan for the plan year 2016. The modifications on the Hepatitis C medications and the changes in compounded medicines will take place within 90 days of notification of the members of the State health Benefits Plan who are affected.

The State Health Benefits Plan will initiate a pilot program that involves Direct Primary Care Medical Homes. The nature of this pilot will allow you to go to a primary care physician who will manage your health care needs for no copay and hopefully detect chronic diseases that ultimately drive the cost of care downstream. There is a detailed description of the pilot in the July issue of COPS. While the public safety representatives abstained on the motion for this model, it was not because they did not support the concept. There was a genuine movement to create competition to drive down costs.

Compounded drugs will only be issued on a basis of medical necessity. This is due to an abuse of the plan that allows compound pharmacies to solicit patient and charge thousands of dollars for compounds that only cost pennies.

Hepatitis C medications that cost hundreds of thousands of dollars will be issued on a step therapy basis that will begin with Viekera Pack, and if that is unsuccessful, will move to the other drugs developed for this purpose. The reason for this is that Express Scripts negotiated a lower rate for those drugs.

Horizon will be offering a new plan that will replace the HMO 1525, 2030 and 2035 plans for active members only. This Tiered network will offer reduced copays for in network, but a higher deductible out of network. A detailed description will be disseminated to your delegates in the coming days. This plan will be between 20-25% less than the Direct and freedom plans.

There will be a new fee structure for in network payments to practitioners in the fields of chiropractic care and acupuncture. The out of network benefits will be reduced in order to encourage them back into the network.

Emergency room copays will be increased by $25 for each plan under $100. These are waived for pediatric and physician referrals. The copay will stay at that level if Emergency room utilization is decreased by 35% in 2016.

Finally there will be a wellness initiative at Rutgers University to study the benefits of such a plan. This will be cone in cooperation with Robert Wood Johnson hospital.

The committee designed these changes to attempt to reduce premium costs going forward and will continue to strive to improve the health of our members.

The Design Committee is truly working as a team to develop plans that will benefit our members and the PBA appreciates everyone on the committee for their hard work, both labor and management.

Today, President Colligan attended a joint meeting of the labor members of the State Health Benefits Design Committee and the State Education Health Benefits Design Committee along with Senate President Steven Sweeney to discuss a new concept in health care delivery for SHBP members.

At the meeting, a concept in health care delivery, direct primary care medical homes, was discussed. In this model, members would be able to utilize a cadre of doctors and would be centered around the whole health of the patient.

The SHBPDC labor side agreed to endorse a concept and attempt to develop a plan contingent on agreement of the labor and management side. It is important to know that the committee has not agreed to any specifics and a majority of the committee is required to design any plan.

At a subsequent press conference, President Colligan stood shoulder to shoulder with the members of the design committees and other public sector leaders to introduce the concept. We will keep you informed and will have a full description of the optional pilot concept in the near future

Yesterday, the Superior Court of New Jersey Appellate Division issued a unanimous decision with regards to the retiree prescription copay lawsuit that was filed by members of the State Health Benefits Design Committee, Hetty Rosenstein, Chair and Charlie Wowkanech President of the AFL-CIO on behalf of the Committee.

I am ecstatic to report that the court has vacated the implementation of the indexing of retiree co-pays going back to 2013, which will roll back co-pays to the levels agreed upon by the committee for the 2012 plan year.
 
A short history on the issue is as follows:
When Chapter 78 was adopted, the legislature gave express authority to the State Health Benefits Design Committee to develop health and prescription plans.
 
This Committee is comprised of 12 members, six from labor and six Governor’s appointees. The law required that in order to implement a plan or make changes changes to an existing one, a majority of the committee (seven) was required to vote in the affirmative.
 
Early on, the Committee was presented with an alternate source of funding for medicare retirees  that would net the State Health Benefits Plans almost $100 Million dollars a year in additional funding. As an incentive and compromise, in turn, the Committee voted to freeze retiree prescription co-pays at the 2011 rates and lower generic mail order to $5 for up to a 90 day supply. This was done with the original plan designs under Chapter 78.
 
When creating plan designs in late 2012 for 2013, when the Committee did not pass a motion presented by management to index co-pays. The Division of Pensions and Benefits unilaterally invoked a regulation under the State Health Benefits Code that would automatically index co-pays based on medical inflation for retirees. This indexing would have tripled some co-pays by 2015 and increase them all substantially.
 
The Court ruled that the actions by the Division were not authorized by law and that the power to adjust co-pays is vested in the Design Committee. Outside of an affirmative action of the committee, status quo should have been maintained.
 
We do not know if the State will appeal the decision at this time but we will keep you advised through all of our communication outlets.
 
Please read the January issue of NJ COPS for a complete update and have a Safe, Happy and Healthy New Year!

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