Fight Brewing Over New Jersey Budget S Quest For State Health Benefit

Assembly Speaker Craig Coughlin on the Assembly floor on June 30, 2025 (Dana DiFilippo | New Jersey Monitor) Another fight is brewing over New Jersey’s already beleaguered public worker health plans. A provision in the $58.8 billion budget Gov. Phil Murphy signed into law Monday night calls for the state or its unions to identify $100 million of savings within the state part of the State Health Benefits Program for the first half... It spurred alarm among public-sector unions and a promised fix from Assembly Democrats, all of whom are on the ballot this fall. “It’s clear that there is no immediate need to require state workers to pay more for their health benefits,” said Assembly Majority Leader Lou Greenwald (D-Camden).

New Jersey’s public health plans are in distress amid rising health care costs, spiking prescription drug utilization, frequent deadlocks in Plan Design Committees that set coverage rules, and soaring premiums spurred by — and... The State Health Benefits Program that insures nearly 150,000 county and municipal employees in New Jersey is broke and headed for collapse next year, unless members agree to pay thousands of dollars more for... Phil Murphy announced Thursday. The Democratic governor proposed spending $260 million in state funds to rescue the program by paying off its debt and creating a reserve fund to pay unforeseen excessive claims. But workers would have to pay much more in premiums and out-of-pocket costs. They will also see their choice of plans reduced from 50 to six, according to the governor’s office.

Premiums have risen 59% over the last three years, causing dozens of the largest counties and municipalities to flee for cheaper insurance options. That’s left behind a weaker, sicker pool of members and a program that is headed for disaster, state officials have said. Murphy outlined the proposal in a speech at the New Jersey League of Municipalities’ annual conference in Atlantic City, which is heavily attended by members of the state Legislature, labor leaders and local government... A majority of the 40-member state Senate and 80-member state Assembly would have to approve a bill containing his proposed changes — and fast. Murphy leaves office after eight years on Jan. 20, when Gov.-elect Mikie Sherrill becomes New Jersey’s chief executive and inherits this problem.

In one of his final major acts as governor, Phil Murphy is asking New Jersey to swallow a bitter pill: pay far more for public-sector health insurance or watch the State Health Benefits Program... The program covers nearly 150,000 workers but is mired in debt, drained by exploding premiums and mass municipal exits that have left a smaller, sicker pool behind. Murphy’s proposed fix — a $260 million state bailout paired with sweeping premium hikes and drastically fewer plan choices — is the kind of tough medicine he says “good government” demands. But to workers long accustomed to gold-plated benefits, the sticker shock is staggering. Copays would triple — from $10 to $30 for a primary-care visit, from $75 to $300 for an ER trip. Deductibles, once negligible, would spike to $2,500 in-network and $5,000 out-of-network under the new PPO.

Plan options would shrink from more than 50 to six. Labor leaders wasted no time scorching the proposal. AFSCME’s Steve Tully told NJ.com the plan was “a joke” and “an insurance executive’s dream,” blasting the administration for demanding sacrifices without tackling hospital costs. CWA’s Tonya Hodges said the state should be moving toward more oversight, not less — especially after Horizon agreed to a $100 million settlement for overbilling the plan. Murphy leaves office Jan. 20, when Gov.-elect Mikie Sherrill inherits the mess.

Lawmakers must move quickly if they want to pass the reforms before then — a tall order when police, firefighter, teacher and engineer unions are united in opposition. Senate President Nicholas Scutari says compromise is possible, but Assembly Speaker Craig Coughlin is staying noncommittal. Murphy wants policy changes to manage costs, prevent ‘death spiral’ John Reitmeyer, Budget/Finance Writer | November 24, 2025 | Health Care, Politics In the final lame duck legislative session of his two terms in office, Gov. Phil Murphy wants lawmakers to pass an ambitious plan to rewrite state policies governing health benefits offered to many government workers in New Jersey.

Murphy’s plan — unveiled during a speech delivered at the state League of Municipalities conference in Atlantic City last week — would revise health plans for thousands of county and local government workers whose... The plan also calls for reforming the governance structure of the local section of the benefits program itself, as well as requiring the government employers that join the program to remain in it for... State and union officials must find $200 million in annual cuts to state employee plans By Zach Blackburn, August 20 2025 6:30 pm State and union officials have to find major cuts to New Jersey’s public employee health program, and analyses released Wednesday from the state’s actuary found that increasing the portion of costs shouldered by workers... The Legislature required the cut as state health plans face increases in premiums, inflation, and uncertainty.

This year’s state budget requires a $100 million cut in the first six months of 2026; state government and labor officials submitted their proposals for cuts at the end of last month. Aon, the firm serving as the State Health Benefit Program’s actuary, released its analyses of the proposals on Wednesday. The state’s most significant proposals would have state workers pay more out of pocket. Under existing plans, state employees pay between 2% and 7% of medical spending; the new proposals would bump those figures up to between 6% and 12%. NJ state workers could see major changes to their health benefits under a tentative deal announced Thursday by Gov. Phil Murphy and 17 public sector unions.

The plan could save the state about $75 million in the final six months of Fiscal Year 2026, but it still requires approval from the State Health Benefits Plan Design Committee later this month. If approved, the proposal would mark the most significant update to state health benefits in more than a decade. It includes higher deductibles and out-of-pocket limits for in-network and out-of-network care, new co-pays for prescriptions, lab work, and imaging, limits on out-of-network physical therapy, and incentives to use in-network surgical centers. Officials say the changes aim to curb costs while maintaining access to care. The state also agreed to waive premium escalator increases this year, giving employees immediate relief. Union leaders, who have historically clashed with past administrations over health benefits, called the deal a collaborative approach that balances savings with protections for workers.

The agreement includes a plan to produce a transition report for the next governor and legislature, identifying longer-term strategies to manage health care costs. While the projected $75 million in savings falls short of the $100 million target outlined in the current state budget, Murphy’s office said it would support repealing that budget language if the committee approves... A vote by the Plan Design Committee is expected later this month. If the proposal passes, the changes would take effect Jan. 1, 2026. Until then, it remains a plan — one that could reshape how tens of thousands of state workers and their families pay for health care.

​CWA members and retirees in New Jersey have continued to build on a massive campaign this year to put a stop to skyrocketing healthcare costs for State and Local Government workers, reaching a pressure... CWA led a mass mobilization at the state capitol in opposition to Governor Phil Murphy's budget, which would deepen the already crisis-level situation for 90,000 public sector workers throughout the state with roughly $200... ​In addition to packing the room during Senate and Assembly budget hearings, CWA members made roughly 700 calls and sent nearly 1,500 emails to their legislators, and sent over 3,100 emails to Governor Murphy... Despite these efforts, lawmakers voted the budget into law, and the governor has signed it. But the budget doesn’t take effect until January 2026, and CWA is keeping up the fight on multiple fronts. In addition to the cuts in the budget being made on the backs of workers, the State Health Benefits Commission, which maintains the healthcare plan for our members working for the State of NJ,...

“Let me be clear,” said Billy Gallagher, CWA District 1 Assistant to the Vice President, during a Member Town Hall last week. “This is a crisis, and CWA is not standing by. We’ve spent the past several months organizing our members, lobbying legislators, and building a broad coalition with a dozen other public worker unions to demand a solution to these unsustainable healthcare cost increases. And while the Governor has refused to negotiate or include us in the process, we have legislative allies who are standing with us, and a plan to fix this.” Hundreds of union workers rallied outside the Statehouse in Trenton on Sept. 13, 2022, to protest healthcare premium increases.

The State Health Benefits Commission approved the increases on Sept. 14, 2022, despite the protest. (Dana DiFilippo | New Jersey Monitor) State and labor officials have reached an agreement to cut costs for New Jersey’s distressed state worker health plan after months of protests and negotiations, officials announced Thursday. The two sides had been arguing over a $100 million cut state lawmakers signed off on when they passed a new $58.8 billion state budget in June, which would have been borne by state... Gov.

Phil Murphy said the deal reached Thursday would lead to savings of $75 million over the first six months of 2026. While workers still will see their out-of-pocket costs rise, those increases will be “modest,” and the agreement bars any increases in member contributions next year, according to Communications Workers of America District 1, which... It also requires reforms intended to identify the root causes of runaway medical costs and contain costs going forward, and urges state legislators to ensure future budgets respect existing health care agreements, union officials... Missed opportunity to raise state revenue leaves families vulnerable to massive reductions in health care and food assistance Published on Jul 1, 2025 in Tax and Budget Governor Murphy signed the Fiscal Year 2026 Appropriations Act today, approving funding levels for the next twelve months, but the state still faces a financial cliff.

The approved budget includes modest revenue increases, though not enough to cover the full cost of the state’s spending. This leaves the state with a nearly $1.5 billion gap that must be filled from its cash reserves, which have dwindled to $6.7 billion. Cash reserves that once provided a safety net now cover barely one month of operations. Making matters worse, the state faces additional funding threats from federal actions. With New Jersey receiving nearly $30.8 billion in federal funds in fiscal year 2024, Congress’s expected vote on massive cuts to Medicaid and food assistance programs could devastate both the state’s finances and the... In response, NJPP issues the following statement.

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