Grinspec - Employee Benefits Consulting in NJ

	Our Expertise
Employee Benefits:
	Special Involvement
	A-4 Surcharge
	SHBP Updates
Medical Insurance:
	Carriers in the Marketplace
	Self Insurance & HIFs
	Fully Insured Trusts
	How to Obtain a Quote
Property & Casualty:
	Coverage Needs Analysis
	Info Needed to Obtain Quotation

New Jersey State Health Benefits Program (SHBP)

The New Jersey State Health Benefits Program (SHBP) insures the group medical insurance benefits of approximately 40% of New Jersey's 593 public school districts, down from over 70% in the early 1980s. The SHBP is sponsored by the New Jersey Department of the Treasury's Division of Pension and Benefits. Horizon Blue Cross Blue Shield of New Jersey administers the Traditional Medical, NJ Plus POS, and Prescription Drug components of the SHBP. The SHBP also offers member groups a menu of five HMO programs.

In 1999 the SHBP decided to switch from a fiscal period of July through June to a calendar fiscal year: January through December. The SHBP has committed to announce each year's rate changes by the preceding June, six months in advance of the January anniversary. Nevertheless, the change to a calendar fiscal year has resulted in a permanent planning "black hole" for public school districts.

The SHBP offers member school districts very little in the way of flexibility when it comes to making negotiated changes to group medical insurance programs. The following approaches are not permitted in the SHBP:

Changes to deductibles, maximums, limitations, or exclusions
Payments to employees as part of a Section 125 Benefits Waiver Plan
Offering future employees different levels of benefits or dependent coverage
Requiring different premium contributions from different classes of employees
Offering Flexible Spending Accounts

The SHBP also faces a looming financial crisis. Due to what can only be described as short-sighted rate reductions in 1997, combined with a breakneck increase in health care costs over the past few years, the SHBP budget surplus of over $200,000,000 (as of 1997) is projected by the SHBP's own actuaries to dwindle to a deficit of approximately - $50,000,000 by the end of 2003. The SHBP also implemented rate increases in excess of 20% in 2002 and 2003.

For 2004, the SHBP rate increases for boards of education range from 3% to 10%, depending on product and prescription drug benefit structure. Many analysts expected much higher numbers, given the SHBP's deficit position. It is likely that these "lower-than-trend" rate increases will only further compound future SHBP deficits. All New Jersey public employers who are members of, or considering joining, the SHBP should seriously consider the SHBP's limitations in the areas of budget planning, negotiations, and financial stability.

Click the charts below for larger views...