As we have for the past several years, we are providing you with an update that may help you with anticipating rates for the next plan year. Please note that these rates have yet to be adopted by the Commission.
Over the past two years, we have worked to keep the rates at an effective 0% increase which has been unheard of in the health insurance realm. Unfortunately, this year there would be plan design changes that would compromise the quality of the plans thus leaving us with increases that frankly are in line with national averages.
Below you will find the proposed increases for the different plans for state employees and local government (county and municipal) employees. These are two different risk pools and rates are computed independently due to the funding sources. You will see that State employees have a substantially lower rate increase this year.
In, order to apply these rates you must take the 2018 rates and apply the appropriate increase to the current plan rate, for instance if you are a local government employee in a family plan with direct 15 you must apply an increase of 7.3% to $2,104.28 (monthly) for medical and 14.3% to $547.94 (monthly) for prescription (if you are in the state prescription plan).
If you notice, the Employee (Ee) and child and family have substantially higher increases then employee (single) this is due to a shift in the ratio that Aon uses to assign risk to the different tiers of coverage. All of the rates are based off of the single rate which has a value of 1. Aon has proposed that Employee plus children be adjusted from 1.79 to 1.825 and families from 2.79 to 2.825.
Early retirees have an 8.2% increase and medicare retirees have a 14.8% decrease.
If you would like to review the complete renewal reports they are available at: https://www.nj.gov/treasury/pensions/rate-renewal.shtml.
Finally, as many locals enter into negotiations, the yearly misinformation is being spewed by unscrupulous municipal representatives. Please note the following:
- No unit that relinquishes health benefits in retirement is eligible for Chapter 330 health benefits.
- There have been no discussions on the design committee to eliminate the PPO 10 or 15 plans.
As always, please contact your attorney or the State office before making any major decisions regarding health benefits.