Massive Increases in Cost of Health Care Coverage in NJ

Morristown Minute

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A 21% increase in the cost of health care coverage for government employees and 15% for school employees.Photo byMorristown Minute

An expected 21% increase in the cost of health care coverage for government employees and 15% for school employees.

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As the pandemic and global inflation continue to wreak havoc on municipal budgets, a bipartisan group of Morris County mayors assembled at Morris Township Town Hall last week to call on State lawmakers to soften the latest fiscal crisis: a 21% increase in the cost of health care coverage for government employees and 15% for school employees.

The substantial premium increases of over 20 percent proposed for State Health Benefits Program participants is yet another burden taxpayers and public employees will be left to carry and will leave many towns grappling with the potential for layoffs, the cancelation of important public projects, and/or tax increases,” said Mayors Mark Gyorfy (Morris Township), Bob Conley (Madison), Thad Kobylarz (Chatham Borough), Ashley Felice (Chatham Township), Tim Dougherty (Morristown), Jason Karr (Morris Plains) in a joint statement.With a record $6.8 billion surplus in this year’s state budget, we, as representatives of over 80,000 southeast Morris residents and 700 public employees, call upon lawmakers in Trenton to provide stability and relief by a reducing the proposed premium increases to our public health benefits.”

The bipartisan group of mayors included Bob Conley of Madison, Thad Kobylarz of Chatham borough, Ashley Felice of Chatham Township, Tim Dougherty of Morristown, Jason Karr of Morris Plains, and Carolyn Blackman of Dover.

With a record $6.8 billion surplus in this year’s state budget, we, as representatives of over 80,000 southeast Morris residents and 700 public employees, call upon lawmakers in Trenton to provide stability and relief by a reducing the proposed premium increases to our public health benefits,” The statement continued.

New Jersey public employees – members of the State Health Benefits Program and School Employees Health Benefits Program – are the largest insurance group in the state with 816k active and retired members and their dependents.

Five unions of state government employees made deals with the Murphy Administration in September requiring them to only pay a 3% increase, with taxpayers covering the remaining 18%. However, it is currently unclear how local and county governments will split the rate hike between taxpayers and eligible employees.

Mayor Ashley Felice of Chatham Township estimated that municipal employees and retirees in Chatham Township will see premiums increase by 19.7%.

"I feel for our employees, who are impacted the most," Mayor Felice said. "Increases of this size are not something people typically anticipate or plan for. And when you couple this with the already out of control inflationary environment impacting them at the grocery store, gas station, etc. it has a snowball effect."

Multiple Morris County Mayors reported that due to union contracts, the taxpayers will bear the brunt of the cost increase. The taxpayer tab in Morris Township, according to Morris Township Mayor Mark Gyorfy, will be $794k in 2023 – coupled with a $215k increase for public employees.

"If we were to raise property taxes next year to the 2% tax cap imposed by the state, it would net us a little over $450,000," Morris Township Mayor Mark Gyorfy said. "That's less than half of our shortfall. Towns like Morris Township aren't going to have many options and they'll be forced to consider hiring freezes, pauses on public investments, layoffs and tax increases."
"It really resonated to me that I'm going to give my employees a raise, but they're going to take home less money," Dougherty of Morristown said.

Mayor Thad Kobylarz of Chatham borough said Chatham Borough has already taken steps toward reducing costs, including a program that offers a cash incentive to employees who switch to lower-cost health plans.

This would not eliminate the overall cost increase, but would at least mitigate the heavy impact to Chatham Borough,” Mayor Kobylarz said.

The mostly part-time Morris County mayors usually rely on the New Jersey League of Municipalities and the New Jersey Conference of Mayors to engage directly with lawmakers and the Murphy administration.

Mayor Bob Conley of Madison, also a member of the NJ Conference of Mayors executive board, said it’s “a number 1 priority” for the organization “every day in Trenton.”

"When they worked out a deal with the state employees, we were hoping to hear shortly after 'here's what we can do for the municipalities,'" Mayor Conley said. "That's what we're looking for now."

While Morris County has made a voice for itself in fighting these increases in the cost of health plans, the problem is not just local, “it’s a statewide problem,” said Mayor Gyorfy.

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