Nicholas C. Yovnello (from May 07 Voice of NJ Higher Ed. Labor)

I have taken the unusual step of devoting this editorial to an important topic that is still a central subject of our ongoing negotiations with the State. That topic is the State’s proposal to eliminate the Traditional health care plan and replace it and NJPLUS with a new PPO (preferred provider organization). Given the significance of this topic and what has already transpired with other public employee unions’ negotiations, I believe that we should share as many facts as we currently know about these proposed changes and closely compare the proposed new plan with the Traditional Plan.

The State has presented the Council’s bargaining team with the same health benefit package that CWA ratified and AFSCME has recently agreed to. IFPTE is also expected to shortly follow suit. Your Council negotiating team has been asking the State’s bargaining team and SHBP representatives many questions about this package as well as asking for modifications to the planned implementation dates. So far, the State has indicated that there will be no changes to their proposals.

Since the two largest public employee unions have already settled their contracts, it is unlikely that the State will make further modifications to its proposals. This makes it extremely important that we all understand what these proposals contain as we continue with our negotiations.

Under the State’s proposal, beginning July 1, 2007, all employees will pay 1.5% of their base salary as a payroll deduction for health insurance — regardless of the plan. The 1.5% deduction will not be required if you opt out of the State Health Benefits Program and elect health care coverage from another source. In this event, the State would require you to provide proof of alternate coverage.

NJ PLUS as we know it will be eliminated and replaced with a new PPO with potential nationwide coverage. Since the State owns the name NJ PLUS it may use this label for the new PPO. A PPO provides greater flexibility in choosing doctors and seeing specialists than does an HMO.

In addition, the Traditional Plan will be eliminated for employees once the new PPO is created. The target date for implementation of the new PPO and the simultaneous elimination of NJ PLUS and the Traditional Plan is January 1, 2008. The State is also planning to consolidate the number of HMO’s it currently offers, but has no definite details about this process. By January 1, 2008, all employees will have to choose between the new PPO or one of the remaining HMOs. We have been assured that the State will provide ample notice and time to make an informed decision about choosing a medical carrier.

The State intends to honor existing contract language concerning employees who have already accrued 25 or more years of service (see pages 126-127 of our current Agreement). The State indicated that for those categories of employees, one of the options for medical coverage in retirement will be the Traditional or an equivalent Traditional type plan. This also applies to current retirees in the Traditional Plan, which is currently administered by Horizon Blue Cross/Blue Shield. However, the State may change to another plan administrator as has been the case in the past. The State is self insured for all the health plans it offers.Click here to see the replacement for the current Traditional Plan.

The State provided a comparison spreadsheet of the Traditional Plan vs. the new PPO and NJ PLUS. You may view this directly clicking here. All of the benefit elements of the current NJ PLUS will remain in the new PPO with the addition that no referrals will be required (sometimes referred to as a "gate keeper") to see a specialist and that the new PPO is intended to have a nationwide service/provider area.

When comparing the proposed PPO with the Traditional Plan in the chart on our web site, most of the benefits are identical. However, some benefits in the new PPO are better than those in the Traditional Plan. For example, in the proposed PPO, an in-network physician office visit pays 100% after a $15 co-pay; the Traditional Plan pays 80% of the reasonable and customary fees after deductibles with no coverage for wellness care. If a Traditional Plan physician charges more than the reasonable and customary fees, the member is 100% responsible for the balance, which is not the case in the PPO for in-network services. Physical exams are not covered in the Traditional Plan but in the new PPO they are paid at 100% after the $15 co-pay provided the member stays in-network. Chiropractic care in-network pays 100% after a $15 deductible with a maximum of 30 visits per year in the new PPO while in the Traditional Plan the same 30 maximum visits are paid at 80% after the deductible. In-network out- patient radiation/chemotherapy is paid at 100% in the new PPO while in the Traditional Plan it is paid at 80% after the deductible. There are no deductibles in the new PPO for in-network services while the Traditional Plan has a deductible of $250 per covered employee and for each dependent maxing out at $500 per family. You can make a more detailed comparison of details that will affect your personal circumstances by looking closely at the member handbooks for NJ PLUS and the Traditional Plan on the State Health Benefits web site at http://www.state.nj.us/treasury/pensions/shbp.htm.

A primary question about the elimination of the Traditional Plan for active employees is how large will the network of physicians, hospitals and labs be? Also, will all network providers accept new patients? There have been problems (mainly in southern NJ) with in-network physicians not accepting new patients in NJ PLUS.

Members currently enrolled in the Traditional Plan pay the following: $2,094 for single coverage; $4,483 for member, spouse/domestic partner; $5,335 for family; and $3,094 for parent & child. In all cases these employee contributions amount to much more than the proposed 1.5% salary deduction for medical benefits. If an employee’s physician, hospital and lab are in-network there will most likely be a savings for members and their families who are currently enrolled in the Traditional Plan.

If an employee goes out-of-network in the new PPO, the primary difference will be 30% co-pay as opposed to the Traditional Plan’s 20% - based on the reasonable and customary fees charged for various visits and procedures. There is no gate keeper in the PPO. In the Traditional Plan, members pay a deductible and 100% for anything the physician charges above the reasonable and customary fees. In the proposed PPO in-network and remaining HMO’s that would not be the case.

Additionally, effective July 1, 2007, there will be $15 co-pay for a doctor’s visit instead of $10 co-pay. If you go to the Emergency Room, the co-pay will be $50 instead of $25 or $35 unless you are admitted, in which case there will be no co-pay.

Also effective July 1, 2007, your prescription drug coverage under the new proposal will remain $3 for a generic at the pharmacy, $10 for a brand name at the pharmacy, $5 for a 90-day mail order generic and $15 for a 90 day mail order brand name. The State has proposed that if your physician prescribes a brand name where there is a generic available, you will have to pay $25 retail or $40 mail order if you opt for the brand name. However, if your physician certifies and receives an approved, "no substitute allowed" for medical reasons, you may receive the brand name at the $10 co-pay rate.

Lastly, it should be noted that the wage increases that CWA and AFSCME have agreed to will provide an 11.94% increase over the term of the new contract for employees in their top step AFTER the 1.5% health benefit salary deduction. This percentage AFTER the health benefit deduction increases for those employees who move up steps in their salary guide.