TRENTON, N.J. — State representatives of the New Jersey State Health Benefits Program Plan Design Committee (SHBP PDC) submitted proposals on July 31 aimed at reducing costs in the State Health Benefits Program by $100 million in the first half of Plan Year 2026, as required by the Fiscal Year 2026 Appropriations Act.
The submissions, which were sent to Aon, the state’s contracted actuary, include recurring plan design changes intended to produce savings mandated under the FY2026 budget law (P.L. 2025, c. 74). Labor representatives on the committee also submitted their own proposals.
New Jersey’s SHBP plans currently feature some of the highest actuarial values (AVs) in the nation, with the most popular preferred provider organization (PPO) plans exceeding 97% AV, according to Aon. The AV reflects the percentage of total covered healthcare expenses paid by the plan.
Key elements of the proposals include:
- Adjusting co-pays and co-insurance to create greater cost differences between higher- and lower-priced services and prescriptions.
- Reducing the number of available plan options to simplify choices and cut administrative costs.
- Increasing deductibles and annual maximums for out-of-pocket expenses and co-insurance, while maintaining plan affordability.
These design changes are the first step in a multi-phase process to meet the recurring cost-saving target set by the Legislature. If the proposals do not collectively reach $100 million in savings during the first six months of Plan Year 2026, additional changes will be proposed by labor and administration representatives before the September 30 deadline.
Aon will now review the proposals to determine which changes yield verifiable savings. Any measures that fail to meet actuarial standards or fall short of projected savings will be revised or discarded.
The submission process stems from an effort by the Murphy administration and Legislature to address growing costs in New Jersey’s health benefit plans. The state has experienced rising plan costs for five consecutive years, with double-digit rate increases projected for the coming plan year.
The SHBP PDC will vote on Aon-verified proposals in the coming months.
