Health Insurance Premiums for School Employees to Soar
Health insurance premiums for school district employees covered by a state benefits plan should rise by 34% for next year under an actuary's recommendation. The actuary, the Aon company, told the State Health. . .
Health insurance premiums for school district employees covered by a state benefits plan should rise by 34% for next year under an actuary's recommendation. The actuary, the Aon company, told the State Health Benefits Commission last week that along with the 34% increase for active education workers, early retirees, those not yet at Medicare age, should see an increase of 11%, and Medicare retiree rates should rise by 6%. After Aon's recommendations were made at the July 15 meeting, the New Jersey Education Association issued a statement saying, “Public schools and public school employees cannot continue absorbing annual increases of this magnitude without consequences. The statement called for immediate legislative action “to address the rapidly escalating cost of health insurance for public school employees and school districts across New Jersey. "“The rates proposed this week should remove any doubt that New Jersey faces a healthcare cost crisis that demands immediate attention,” the statement said. The recommended rises in the premiums for school district employees add to steep health insurance premium increases under the state plan in recent years and raise the question of whether the plan can survive. The state plan for municipal workers has similarly seen sharp jumps in premiums in the last few years. A 2025 report from the state Treasury Department said the local government workers health plan (SHBP-LG) was entering a “death spiral,” threatening the state plan options for municipalities across the state. At the time, the Treasury report warned that the plan for education workers (SEHBP) might not be far behind. “The SEHBP now faces significant financial and actuarial risks and may be on a similar trajectory as SHBP-LG - potentially entering a death spiral in the medium term or experiencing serious affordability issues for its members,” the report said. Both the local government plan and the education workers plan have seen significant numbers of municipalities and school districts leave them due to the premium hikes. Defections to private plans by those municipal and educational entities with the healthiest employee groups have placed added pressure on the plans, further increasing premiums. Some municipalities and school boards have formed joint insurance funds, pooling their resources for what is essentially self-insurance for healthcare. Others have sought private coverage. All are seeing significant premium hikes, although most report premium levels that are still less than they would have paid if they remained in the state plans. Those still in the state plan for education workers have not left the plan because, in many cases, they have loss ratios that make them unattractive to private insurers. The pool of workers remaining in the state plan are often the most expensive to insure. AON said last week that the plan’s claims stabilization reserve, essentially its surplus, is expected to finish 2026 with a negative balance of $56 million. AON also noted that the public plan for school workers paid 88% more per employee than plans in New Jersey’s health insurance marketplace. In part this is because the public plans offer significantly more generous benefits. Contact the reporter, Vince Conti, atvconti@cmcherald. com. Story Tags