As reported by nj.com on January 13, 2011, Governor Chris Christie proposed significantly higher health insurance premiums for hundreds of thousands of public workers in New Jersey, saying overly generous benefits are threatening to bankrupt the system.
Christie told a town hall audience in Bergen County that state and local workers, teachers, police, and firefighters must begin paying more for their medical and dental benefits if the system is to remain afloat. The health benefits fund is $67 billion shy of meeting its eventual obligations.
Christie wants benefits changes that make the health insurance system more like the private sector or the federal government, with employees paying about one-third of the costs of whatever benefits plan they choose. The government picks up the other two-thirds. That would amount to a significant increase from the 1.5 percent of salary employees now pay. A teacher earning $60,000 now pays $900 a year toward a plan that costs $22,000, Christie said. Under his new proposal, that teacher would contribute $7,333 a year for an identical plan. The changes also could result in inferior benefits, as some workers would be forced to accept plans with higher deductibles and co-pays or limited choice of doctors, to keep down costs.
Christie said health benefits for current workers and retirees cost New Jersey taxpayers $4.3 billion a year and growing. He said the State cannot afford to have worker benefits eating a larger and larger portion of state, local and school budgets. The Governor also renewed his call for changes to the pension system which include: raising the retirement age to 65, from 62, rolling back a 9 percent pension increase granted a decade ago and requiring all workers to contribute 8.5 percent of their salaries toward retirement, a higher portion than all but police and firefighters pay now. He said adopting major changes to the pension system this year would cut the funds’ $34 billion unfunded liability in half in 30 years.
As one can see, Governor Christie’s looming healthcare proposals will have a significant impact on New Jersey public safety employees going forward. The contributions that members currently pay could become significantly higher, while the level of benefits they currently receive could drastically decrease. Please continue to check this blog periodically to ascertain updates regarding the impending proposals.