No rescue: NJ teachers slammed with huge health insurance hike

💸 Health insurance premiums for active New Jersey school employees will rise by an average of roughly 34% in 2027.

🏫 The increase was approved after months of warnings, delays and deadlocked votes over the troubled state health plan.

⚠️ Officials warn the massive increase may drive more school districts from the plan, further threatening its financial future.

Their worst fears have been realized.

After months of warnings about a potential massive increase in health insurance costs, active New Jersey teachers and other school employees now have an answer.

And it is a painful one.

The School Employees’ Health Benefits Commission voted 4-2 Friday to approve premium increases of roughly 34% for active workers enrolled in the state-run School Employees’ Health Benefits Program in 2027.

The vote came after repeated delays and deadlocks failed to produce an alternative that would significantly reduce the increase.

New Jersey's state health plan for active school employees is facing a staggering 34.4% premium increase in 2027. (Canva/TSQ illustration)

NJ teacher health insurance premiums surge

State actuaries had warned in July that premiums for active school employees would need to rise by an average of 34.4%. The increase was calculated to cover projected claims, rebuild reserves and repay $90 million in loans the program is expected to owe the state next year.

The increase applies to the overall premiums charged by the program. What individual employees pay depends on factors including salary, coverage and the plan in which they are enrolled.

The commission initially balked at approving the increases, deadlocking repeatedly as union representatives pushed for alternatives. But the clock was running out.

Earlier this month, state officials warned school districts that the state might be unable to offer coverage beginning in January if 2027 rates were not approved.

No last-minute rescue for NJ school employees

Unlike state workers, who reached an agreement with Gov. Mikie Sherrill's administration that waived higher employee health-benefit contribution rates for 2027, no similar rescue emerged for school employees before Friday's vote.

Unlike state workers, who reached an agreement with Gov. Mikie Sherrill's administration that waived higher employee health-benefit contribution rates for 2027, no similar rescue emerged for school employees (AP Photos/Townsquare Media illustration)

Legislation has been introduced that would make broader changes to the way the school health plan operates, but lawmakers did not enact a fix before the commission approved the 2027 rates.

Future of NJ school health plan remains uncertain

Perhaps more troubling is what happens next.

Treasury officials have warned that New Jersey's public employee health programs face serious structural problems as rising premiums encourage healthier and less expensive groups to leave for private coverage. That leaves behind a smaller and more costly pool — creating pressure for still higher premiums.

The options for immediately redesigning the school plans are also limited. Current law generally keeps the existing plan designs unchanged through the end of 2027.

That means Friday's vote settles what the rates will be for 2027.

It does not settle whether the system that produced them can survive without major changes.

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