As reported by, public employees, from state workers to local school teachers, may now choose from a wider range of health plans that include low-cost options and some with narrower coverage as they start paying more for their benefits. The signature benefit reform enacted by Governor Chris Christie calls for cheaper plans while demanding higher contributions from workers. 

The state hopes to save $10 million this year through those changes alone. The future savings will grow because as workers pay a greater share of their health plan costs they may select cheaper options, lowering the expense to the state, officials said. But New Jersey is also asking for help from the federal government. The state applied for a $90 million federal program, which will cover part of the state’s bill for retiree prescription plans.

Two state panels created to review health benefits voted this week to approve a raft of new health plans, amounting to 15 choices for public employees. The rates are not fixed until they get approved by a permanent state commission, which is scheduled to act next week.

In building the health insurance plans, Treasury officials anticipate using a new federal Employee Group Waiver plan to save around $90 million in the state’s obligation for retiree prescriptions. The waiver plan is available through President Obama’s health care reform, which allows employers and states to benefit from changes to Medicare. State Treasury officials confirmed the state would file an application to the federal government, through insurance provider Medco. Part of that savings, $20 million, will be used this year to offset rises in health care costs for retired workers. The amount ensures a cap on certain co-pays for retirees in plans at 2011 levels.

The new health plans are part of a shift away from what Christie has called “Cadillac” health care coverage offered to state workers and largely paid for by the state. State employers and local governments could pay $2,000 more for an employee’s family coverage annually than current plans, according to summaries provided by state officials. But at the lower end of the scale, the cheapest plans would be an estimated $7,000 lower than the current affordable options. Workers will pay a fraction of that total premium, but that fraction will increase in July over the next three years.

In late June, Christie ordered a 12-member panel to devise the new plans as part of a controversial law to make public workers contribute more for their health care. The panel missed an August deadline, raising questions over whether Christie’s signature policy would be implemented smoothly.