$70M in health benefits savings anticipated, governor’s office says

TRENTON  – In the wake of the pension and benefits reform enacted over the summer, the Christie administration reported today that local and state governments will see an estimated $70 million in savings regarding health benefits.

The new structures for health benefits plans in 2012 were approved by the committees for the State Health Benefits Program and the School Employees Health Benefits Program. These committees came into existence as a result of the reform.

Gov. Christie’s office reported that the expected savings will occur, in part, because employees will have more health care plans from which to choose.

“The health benefit reforms now being implemented will achieve $70 million in savings this year, joined with even greater savings as implementation continues over the next three years,” Christie said in a release, “making a significant, long-term lowering of costs for New Jersey taxpayers a reality.”

The $70 million in savings will be realized by having both the State and School Employees Health Benefits Programs offer Employer Group Waiver Plans that will take advantage of enhanced support provided by pharmaceutical companies for prescription drug benefits for Medicare eligible retirees, the administration said.

As full health benefits reform implementation progresses, including plan design changes increasing employee choice and a gradual phase-in of employee premium sharing, there should be greater savings for state and local governments, Christie’s office stated.

The Design Committees are composed of equal numbers of employer and employee representatives and were charged with fulfilling the new law’s requirement that at least three different coverage options along with a high-deductible plan option be made available to all four categories of public employees – singles, couples, families and parents with children.

On Wednesday, the governor’s office reported that pension reform will cut taxpayers’ pension contributions next year by $267 million.

Previous coverage:

Administration cites $267M in FY12 savings due to pension/benefits reform