$43K for NJ Teacher Health Care Costs?

The number came into question at last week’s town hall meeting:
.

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The Path to Progress report does not have the number. So where could it have come from?

On the horizonblue website:

NJ DIRECT10 and NJ DIRECT15 offer care in network or out of network in New Jersey, nationwide and abroad. NJ DIRECT10 has a $10 copayment for an eligible office visit; NJ DIRECT15 has $15 copayment for an eligible office visit. Other copayment plans may be available. If you use out-of-network professionals or facilities, your out-of-pocket costs may be higher. Preventive services are only eligible in network.

There are links to a chart and a handbook describing plan features but costs you have to figure out yourself. For family coverage with an $120,000 annual salary I get:

Based on the selection of: Aetna Freedom10 with Family Coverage and Employee Prescription Drug Plan #201 with Family Coverage

The Full Required Health Care Contribution is $533.95 per bi-weekly pay period. The minimum contribution based on 1.5% of salary is $69.23 per bi-weekly pay period.

Employees must pay the larger of either the required percentage of premium or 1.5% of salary.

This Aetna Plan being the highest I could find at a $533.95 bi-weekly payment comes to an annual cost to the employee of $13,883 and, assuming that the chart below is still relevant, that would bring the total premium to $39,665.

Next stop is the Percentage of Premium Calculation Chart where the highest monthly premium I could find was $3,158.72 for Aetna Freedom 10 plus $543.25 for Prescription Drug Plan #201 which comes to an annual premium of $44,424.

As for the $42,718 number – still searching.

20 responses to this post.

  1. Posted by Tough Love on February 18, 2019 at 10:08 pm

    There is a lots of misleading statements coming from Public Sector workers complaining about how much they “pay” for health coverage.

    While I agree that what some (those with the higher incomes and hence paying a higher % of the total Plan premium) “pay” is high, and may be even higher than what comparable Private Sector workers typically pay for family coverage, their complaints are STILL misleading …………. because they aren’t factoring in that their healthcare benefits are typically MUCH more generous than those granted Private Sector workers in 2 ways:

    (1) the coverage itself is more generous and more inclusive, and
    (2) they pay lower deductibles, copays, and coinsurance %s.

    The underlying basis for my saying that their complaints are misleading is rooted in the reasonable assumption that the Taxpayers should provide it’s Public Sector workers a healthcare subsidy COMPARABLE to what THEY typically get from their employers….. but no more.

    Lets look at an example:

    In Private Sector Plans, the TOTAL cost of family coverage is now about $25K/annually and the workers pays 25% to 35% of the total cost (so we’ll use 30%). That means that the employer is paying 70% x $25,000 = $17,500 and the employee pays 30% x $25,000 = $7,500.

    Assuming the $42.718 figure quoted by Sweeney as the AVERAGE cost for Family coverage is accurate, the HIGHEST income group of Public Sector workers (i.e., those with incomes over $110K and paying 35% of Plan costs) would be paying $42,718 * 35% = $14,951 and the Taxpayers would be paying 65% x $42,718 = $27,767.

    So this is what we hear …………..

    Complaints that they (the Public Sector workers) are paying MORE that their Private Sector counterparts. Well yes, at least for the higher income groups, this would be correct, they paying (in my above example) $14,951 vs $7,500 for the Private Sector worker.

    The trouble is that they STOP the discussion and the comparison at that point. Again, using my above example ……… what you never hear from them is that while the Private Sector worker is only receives a $17,500 subsidy from their employer, The subsidy that the Public Sector worker receives from the Taxpayers is $27,767 or over $10,000 MORE.

    There is simply ZERO justification for this. If Public Sector workers want VERY rich Plans with VERY low cost-sharing elements, then THEY (NOT the Taxpayers) should pay for the FULL incremental cost of those richer Plans.

    Reply

  2. Posted by Anonymous on February 19, 2019 at 2:29 am

    TL conjecture be thy name, always has and always will be.

    Reply

    • Posted by Tough Love on February 19, 2019 at 8:21 am

      Lets take out any aspect of conjecture………..

      Googling for any updates to my understanding of the cost of employer-provided Family coverage in the Private Sector, I did find that the average total cost of a Family Plans is a bit higher than the$25K I used in my above example. Specifically, it has risen to $28,166 per the Milliman Medical Index which can be found here:

      http://www.milliman.com/mmi/

      Re-doing (i.e., replacing my $25,000 with $28,166) the figures in my above example change the results only modestly. The Private Sector cost-splitting is now;

      Employee = 30% x $28,166 = $8,450
      Employer = 70% x $28,166 = $19,616

      The Public Sector Plan Taxpayer subsidy remains (from the example in my above comment) $27,767.

      Therefore, the amount by which Taxpayers subsidize Public Sector Plans IN EXCESS OF what THEY typically get from their employers is:

      $27,767 – $19,616 = $8,151

      Hence the conclusion in my above comment stands:

      “There is simply ZERO justification for this. If Public Sector workers want VERY rich Plans with VERY low cost-sharing elements, then THEY (NOT the Taxpayers) should pay for the FULL incremental cost of those richer Plans.”

      Reply

      • Posted by Tough Love on February 19, 2019 at 8:35 am

        And so as to not miss an important point, In my above example I based the Public Sector employee cost-share on the HIGHEST-PAID employee category ……. those paying 35% of their total Plan cost. If I had used (as would be MORE representative) something closer to the AVERAGE wage category (say $75,000), the Public Sector employee cost-share would drop to 27% and the results would change as follows:

        Public Sector cost split:

        Employee = 27% x $42,718 = $11,534
        Taxpayer = 73% x $42,718 = $31,184

        Private Sector cost split (no change from above):

        Employee = 30% x $28,166 = $8,450
        Employer = 70% x $28,166 = $19,616

        And the amount by which Taxpayers subsidize Public Sector Plans IN EXCESS OF what THEY typically get from their employers is:

        $31,184 – $19,616 = $11,568 ……………. and even greater (than the $8,151 shown above) PUBLIC Sector advantage. And again, there is ZERO justification for this.

        Reply

  3. Posted by geo8rge on February 19, 2019 at 4:35 pm

    “As for the $42,718 number – still searching.”

    You could contact Sweeney at:
    https://www.njleg.state.nj.us/members/BIO.asp?Leg=216

    Reply

  4. $42,718 per year for a family health plan even with all the bells and whistles sounds like a load of BS. What could a plan possibly offer for that amount of money that a 20K plan a year wouldn’t offer??

    Where is that number coming from?

    Reply

  5. Posted by Tough Love on February 20, 2019 at 3:15 pm

    Quoting ……………

    “Next stop is the Percentage of Premium Calculation Chart where the highest monthly premium I could find was $3,158.72 for Aetna Freedom 10 plus $543.25 for Prescription Drug Plan #201 which comes to an annual premium of $44,424.

    As for the $42,718 number – still searching.”

    ———————————

    John,

    Your above figures are for the “highest” Plan combination, while Sweeney states that his figure of $2,718 is the “average”.

    I looked at the charts too, and can easily come up with a Total Family cost (Medical + Drugs + Dental) on the underside of $40K annually, but I can’t get to Sweeney’s $42.7K

    Reply

    • It was likely something Sweeney misinterpreted when somebody threw out a number to him. It might be a combined cost of health and pensions.

      Reply

    • Posted by Anonymous on February 21, 2019 at 1:43 pm

      TL, Ok…….if you throw in family dental, prescriptions, eye care, major medical, etc I can maybe see it costing 42k for a family plan

      Do you know if the public plans have deductibles? co-insurance, etc? I know the co-pays are low….

      Reply

      • Posted by Tough Love on February 21, 2019 at 8:03 pm

        The “Direct 10” Plan that Sweeney mentioned has a $10 Doctor copay.

        I know that their prescription copays are VERY VERY low. I recall paying a $100+ copay for a Brand name (out of formulary) drug and half-kidingly said to the clerk ….. “I bet it would be $50 if I was a teacher”. She responded …… Oh no, it would be a lot less”.

        The generous (all encompassing coverage) combined with very low empoyee “cost-sharing (via deductibles, coinsurance, and copays) is what makes Public Sector Plans so expensive.

        Reply

  6. Posted by Tough Love on February 22, 2019 at 1:49 pm

    Want to know why Teachers’ Healthcare Ins is SOOOOOO expensive?

    Just look at the Medical & Prescription copays (by category on 2 separate pages) below. In the Private Sector, one would have to go back to the late 60s/early 70s to find copays this low.

    Click to access ha0897.pdf

    —————————————-

    What Taxpayers should demand ………… is that the taxpayers’ SUBSIDY towards the cost of Public Sector worker healthcare benefits be no greater than the AVERAGE such subsidy granted Private Sector workers by their employers.

    Doing so would mean that if Public Sector workers want richer (and hence more costly) coverage, THEY (NOT the Taxpayers) would be paying for it ……….. and that’s the way it SHOULD BE .

    Reply

    • Posted by Tough Love on February 22, 2019 at 1:57 pm

      And HERE is the Plan that Sweeney stated that Teachers take ….NJ Direct 10:

      Click to access sbc004.pdf

      Take a look, either a $10 copay or “No Charge” for just about everything. NOBODY in the Private Sector gets a medical Plan with such low “cost-sharing” features ……… and hence such a VERY high Premium.

      Reply

      • Posted by Kim Waters on February 22, 2020 at 2:38 pm

        1199 hospital and pension fund employees have zero contributions and zero co-pay. Did you hear me? ZERO out of pocket. ZERRRROOOOO and it is private sector.

        Reply

  7. […] for teachers: . . Yet last Thursday Sweeney pushed through a law that will make those costs (whatever they may be) as well as profits for his own producers (whoever they may be) that much […]

    Reply

  8. […] now believes there were two separate benefit improvements (for all participants). . . This number goes down each time they have one of these get-togethers. . . Full video: […]

    Reply

  9. Posted by Frank on February 4, 2020 at 5:21 pm

    Hi! Teacher here 0f 20 years. Our pay tops out around 100k despite the fact we have ongoing education costs on our dime, zero budget for our classroom supplies (not even a tax break for what we buy for our classrooms now!), and spend more time with your kids than you do every day. Hire a babysitter for 8 hours a day and do the math- and then add on what you’d pay daily for a tutor and a trip to the therapist.
    You are getting a bargain.
    But being a well-educated, realistic taxpayer myself, I see an unsustainable system that became that way because YOU didn’t keep your promises to fund our pensions. In NJ your bill is now in the billions that we have let slide because we love your kids and have no way of screwing you over without compromising our students’ education.
    I planned my life around certain variables – bought my house, had my family, etc. with modest expectations and after 20 years in the profession the public spit in our faces without grandfathering those who were already in the system with low pay evened out by great benefits.
    You reneged on our deal.
    If new teachers coming into the profession are willing to accept your new terms then that’s different, but you changed the rules on me 3/4 of the way through my career.
    I could have been making 3X as much in the private sector Now not only do we struggle with paying our bills but since we aren;t allowed to have 401k’s I worry about my “golden years” too.
    Shame on you.
    We made a deal, you broke every last one of your promises. I’d love to see how you would fare hiring private tutors, coaches, and babysitters for 8-10 hours a day.
    You’d be begging us to come back in a week.

    Reply

  10. […] an average salary of about $80,000 (which doesn’t include benefits plans that cost as much as $40,000 per teacher per year and pensions that are tax-free up to $100,000 per […]

    Reply

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