Rates expected to go up at least 10%, actuarial report says, as local districts pull their employees from system in search of lower premiums
| March 25, 2026 | Health Care, Education
Teachers and other public school employees as well as retirees face another round of steep increases for coverage by New Jersey’s health benefits plan, according to a report for the state Treasury Department.
Rates will go up at least 10% as costs outpace revenues, according to the analysis by Aon, the actuary for the School Employees Health Benefit Plan. The system has lost $333 million in two years.
“Although the report does not predict forthcoming rates, the information it presents strongly indicates a likely rate increase when the actuary makes its rate recommendations for the upcoming plan year in July,” the Treasurer’s Office said in a statement Tuesday.
Though the program’s crisis isn’t as dire as the state’s insurance plan for local government workers, “it faces similar structural challenges that could throw it into an actuarial ‘death spiral’ if significant reforms to contain spending and cost growth are not implemented soon,” Treasury wrote.
A chief driver of the cost increases is a trend of local districts “with healthier employee populations” that left the state system for lower-cost private market plans, the report found. The departures “leave the districts with less healthy, and thus more costly” employees and a smaller membership base to share costs. In all, the system has about 294,000 members, about 16,000 fewer than analysts had projected.
For active members, medical claims have increased 12% and prescription drug claims, 24%. Such claims were 11.5% and 22% higher for early retirees who aren’t yet eligible for Medicare.
GLP-1 drugs, for weight loss, are a particular burden, with costs higher by 95% to 126%. The plan also has logged higher spending for inpatient and outpatient treatment, behavioral health services and specialist doctors.
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