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The Sweeney/Beck bill (S2718) to switch costs to New Jersey public workers is exactly what Hetty Rosenstein calls it – a back door to making collective bargaining illegal.
The Sweeney bill would also have the impact of …
The Sweeney bill would also have the impact of lowering total compensation for New Jersey public workers, especially for the professionals who dominate state government employment, significantly below their private sector counterparts.
Governor Christie couldn’t be more pleased with the Sweeney/Beck bill. But there is another group that will be, if anything, more pleased with the bill – health insurance brokers who sell their services to New Jersey local governments and school districts.
Brokers Lose Business while Local Governments Save –
It’s a tough time for health insurance brokers as many local governments and school districts are joining the two state sponsored health plans — the State Health Benefit Plan (SHBP) and the School Employees Health Benefit Plan (SEHBP) to take advantage of the low rates (for New Jersey) that the state plans offer. This is a big problem for the brokers since the state plans see no need for health insurance brokers and prohibit health brokers from charging their fees of 2-5% of premiums to any public employer who’s part of the state plans.
Even worse for the brokers, the trend towards local governments joining the state plans is accelerating. Since June 2010, 26 local governments with 5131 employees have switched to the State Health Benefit Plan while only 3 public employers have left. Since 2008, 100 to 120 school districts have joined the School Employees plan.
By joining the state plans, local governments and school districts achieved significant savings which also greatly helped resolve many collective bargaining agreements, but health insurance brokers lost fees.
What’s a broker to do? — Get the legislature to End the Low Cost Health Care Alternative
The Sweeney/Beck bill prohibits any additional local governments or school districts from joining the state plans. If that means that local governments don’t get the best rates and are forced to pay broker fees — oh well!
Who are the Brokers?
Connor Strong describes itself as the biggest broker in New Jersey and its focus is on public employers. It claims to provide services to 110 New Jersey local governments.
The principle officers of Connor Strong are South Jersey Democratic leader George Norcross and, from the shore, Ocean County Republican leader Joseph Buckelew. Is it a mere coincidence that the bill’s sponsors reflect the same geographic split?
The Sweeney/Beck bill moves away from shared services and using the massive bargaining clout of the state plans to achieve savings and encourages individual purchase
of health coverage by each municipality.
Even More Costs for Local Governments
The Sweeney/Beck bill seeks to address health quality and cost issues but instead of doing this regionally or state wide on an efficient, shared service basis, the bills mandates that each and every local government and school district set up a Employee Benefits Quality, Cost and Delivery Committee. Naturally, it should be expected that these committees will require advisors adding even more costs for property taxpayers but providing nice fees for health brokers and advisors like Connor Strong.
Dudley Burdge is a CWA local employee and member of the New Jersey State Health Benefit Commission representing local government employees. His opinions expressed above don’t necessarily reflect the position of the State Health Benefit Commission.