8 I Summer 2019 www.anjc.info Senate President Steve Sweeney intro- duced a sweeping package of more than two dozen bills aimed at slashing the high cost of government in New Jersey. Sweeney’s signature proposals, from his Path to Progress report, would reduce the costs associated with pensions and health care for government workers. These reforms, for which the South Jersey Democrat has long advocated, have already been met with fierce resistance from the Communications Workers of America, which represents tens of thousands of state workers, as well as from Governor Murphy, who is closely aligned with labor and has little political incentive to sign these proposals. Sweeney introduced 27 bills in all and said he would put those involving pensions and health care before voters as constitutional amendments if the Legis- lature and governor don’t act on them. Other bills in the package target issues like school regionalization and increasing efficiency for municipal services. The proposals all originated from the Path to Progress report that was released in August. Sweeney commissioned a 25-member panel of economic and fiscal policy experts to write the report, and has been discussing it at a series of town halls across the state. One of the cornerstones of the bill package is senate bill 3754, which terminates the School Employees’ Health Benefits Program (SEHBP) as of January 1, 2020, and permits coverage for partici- pants therein in the State Health Benefits Program (SHBP). Boards of education and other educational employers who have chosen to participate in SEHBP before that date will become participating employers in the SHBP. The State Health Benefits Commission and the Division of Pensions and Benefits in the Department of the Treasury will provide for the transition required by the bill and ensure that healthcare coverage for eligible employees, retirees, and dependents under the SEHBP, whose benefits will now be provided through SHBP, is continued without interruption. Prior to the creation of SEHBP in 2008, boards of education and other educational employers could participate in SHBP. The bill modifies the membership of the State Health Benefits Commission to include representation for certain local and educational employees and increases the number of members on the committee who represent public employers in a reciprocal manner. The bill adds a member to the commission with expertise in actuarial science and a member qualified by experience, educa- tion, or training in the review, admin- istration, or design of health insurance plans for self-insured employers. The bill also eliminates the State Health Benefits Plan Design Committee and transfers the committee’s responsibility for plan design to the commission. It also provides that healthcare benefits plans provided by the state, a county, a municipality, or a school district as an employer to its employees and retirees cannot exceed an actuarial value of 80 percent. This limit will apply to the contracts providing such plans entered into after the bill’s effective date. The bill requires that all public employers offer to employees and retirees a plan with an actuarial value of at least 60 but not greater than 62 percent, and, if an employee or retiree selects that plan, the bill bars the public employer from requiring the employee or retiree to make any contribution toward the annual cost of the plan. “Actuarial value” means a percentage of medical expenses paid by a specific healthcare benefit plan for a standard population. The actuarial value for each healthcare benefit plan must be certified by an actuary as having been calculated in accordance with generally accepted actuarial principles and methodologies. These provisions apply to the SHBP and all plans offered by a state authority, a county, a municipality, or a school district outside of those programs, including through self-insurance, the purchase of commercial insurance or reinsurance, an insurance fund or joint insurance fund, or in any other manner, or any combination thereof. The legislation prohibits a local government or school district that is not participating in the State Health Benefits Program from entering into a contract that provides health care benefits that exceed the highest level of benefits provided under the State Health Benefits Program. Lastly, the legislation specifies that the bill may not be construed to prohibit a local public entity from renegotiating the terms and conditions of employment in a collective bargaining agreement in order to account for any modification thereof attributable to the bill. Finally, the bill requires the savings realized by a local government or school district as a result of this bill to be used solely and exclusively for the purpose of reducing the amount that is required to be raised by the local property tax levy for the local government or school district. These proposals will certainly face resistance from Governor Murphy and the unions, and whether the Democrats in the Assembly will want to take them on prior to an election year or wait until after, during lame duck session, is yet to be known. Jon Bombardieri and his firm, CLB Partners, serve as the Government Affairs Counsel to the ANJC. Update Legislative Update TECHNIQUE Council OUR HEALTH By Jon Bombardieri ANJC Government Affairs Counsel