New Jersey State Educators Benefit from Over $462.7 Million in Savings Thanks to “Chapter 44” Law

In a three-year triumph for the State Educators Health Benefit Plan, schools, employees, and taxpayers realize significant savings, far exceeding legal requirements.

TLDR: A recent report revealed that New Jersey's State Educators Health Benefit Plan (SEHBP) has saved $462.7 million, a result of the Chapter 44 law signed by Governor Murphy in 2020. This achievement surpasses the $300 million in net savings that the law required, highlighting a substantial victory for educators and taxpayers in the state.

TRENTON – The success of Chapter 44 law, implemented three years ago, has been marked by the tremendous savings achieved in the State Educators Health Benefit Plan. The state's actuary, AON, calculated these net savings, and the report was released earlier this week.

Who Benefits, and How?

The savings directly benefit school employees, their employers, and New Jersey taxpayers, offering a testament to the power of collaboration and creative solutions. 

Governor Phil Murphy stated, “This is a testament to the power of collaboration and proof positive that there are savings to be had through creative solutions that prioritize both quality health benefits and greater affordability.”

State Treasurer Elizabeth Maher Muoio added, “This truly represents a win for both employees and employers in our state.” 

Muoio emphasized that Chapter 44 was delivering savings and ensuring access to high-quality health benefits.

Details of Chapter 44 Law

The Chapter 44 law was signed in July 2020 and included several impactful changes, affecting active employees and retirees not yet eligible for Medicare. The changes included new plan designs in the SEHBP, the requirement for all school districts to offer two additional plans, and modifications to participant contributions for specific plan options.

Had the savings fallen short of the $300 million threshold, further changes to the plan design would have been mandated.

Reactions and Looking Forward

NJEA President Sean M. Spiller expressed pride in the results, stating, “When NJEA first started pushing for this law more than four years ago, we promised a win-win-win solution where school employees, school districts, and the state would all save money. This report proves that we have more than delivered on that promise.”

Spiller further shared the association's eagerness to continue collaboration with the Legislature and Governor Murphy on innovative ways to support school employees and maintain the status of New Jersey schools as the best in the nation.

The savings achieved through the implementation of the Chapter 44 law demonstrate a significant victory for New Jersey's educational community. The success of this collaboration between legislators, educators, and stakeholders reaffirms the potential for creative and effective solutions that cater to the well-being and financial sustainability of the state’s education system.