S4999

An Act amending P.L.2025, c.74, the Fiscal Year 2026 annual appropriations act, to remove language requiring the achievement of cost savings for the State Health Benefits Program.

Be It Enacted by the Senate and the General Assembly of the State of New Jersey:

1. The following language provisions in section 1 of P.L.2025, c.74, the annual appropriations act for State Fiscal Year 2026, are amended to read as follows:

94 INTERDEPARTMENTAL ACCOUNTS

70 Government Direction, Management, and Control

74 General Government Services

9410 Employee Benefits

DIRECT STATE SERVICES

[Notwithstanding the provisions of any law or regulation to the contrary, the appropriations for the Employee Benefits program classification shall be subject to the following conditions: (1) in a good faith effort to agree on proposals to save a total of $100 million in State funds during the first six months of Plan Year (PY) 2026, the State and public employees’ representatives on the State Health Benefits Plan Design Committee (SHBPDC) shall separately submit cost savings proposals to the plan actuary by July 31, 2025 and the plan actuary shall review the proposals to determine whether the plan design proposals will result in recurring and actuarially verifiable cost savings, noting whether they will be achieved in the first six months of PY 2026 in the amount of $100 million. Any proposal that the plan actuary determines will not result in recurring and actuarially verifiable cost savings, or less cost savings than proposed, in the first six months of PY 2026 shall be adjusted to reflect actuarially verified cost savings or eliminated from further consideration if no savings are actuarially verified. The SHBPDC shall then meet and vote on each of the verified proposals before September 30, 2025; (2) if the plan actuary determines that the cost savings proposals submitted by the labor and administration representatives will not result in recurring and verifiable total savings of at least $100 million during the first six months of PY 2026, the labor and administration representatives on the SHBPDC shall submit additional proposals to the plan actuary in an effort to achieve the $100 million savings target before September 30, 2025; (3) if the SHBPDC is unable to reach agreement on the actuarially verified proposals totaling $100 million in cost savings before September 30, 2025, the SHBPDC shall immediately commence the existing statutorily prescribed mediation and conciliation procedure set forth in P.L.2011, c.78, and that process shall be concluded by October 31, 2025; (4) if the SHBPDC is unable to reach agreement on cost savings proposals totaling $100 million in actuarially verified savings following the existing statutorily prescribed mediation and conciliation procedure set forth in P.L.2011, c.78, the Legislature shall revise the statutory framework set forth in P.L.2011, c.78 to determine a process by which $100 million in actuarially verifiable cost savings shall be achieved for PY 2026 before December 1, 2025; (5) if the Legislature does not pass a bill revising the statutory framework before December 1, 2025, then a representative of the State selected by the Governor and a public employees’ representative selected by the State employees’ and local employees’ representatives on the SHBPDC shall jointly select cost-saving changes to achieve $100 million in actuarially verifiable cost savings. In the event that the State representative and the public employees’ representative are unable to reach agreement, then the Executive Director of the Office of Legislative Services shall designate an additional representative and the three representatives shall meet and vote to select cost-saving changes to achieve $100 million in actuarially verifiable cost savings for the first six months of PY 2026 before December 15, 2025.]

GRANTS-IN-AID

2. This act shall take effect immediately.

STATEMENT

This bill amends the language provisions in the annual appropriations act for Fiscal Year 2026 to remove language requiring the achievement of cost savings in State funds appropriated for the Employee Benefits program classification.

In its current form, the annual appropriations act for Fiscal Year 2026 provides that $100 million in actuarially verifiable cost savings must be achieved in the first six months of Plan Year 2026 through a series of submissions of cost savings proposals by representatives on the State Health Benefits Plan Design Committee (SHBPDC), which are to be verified by the State actuary. If the SHBPDC fails to pass the proposals necessary to achieve the required cost savings, then the Legislature is required to revise the statutory framework set forth in P.L.2011, c.78 to achieve such savings. Should the Legislature fail to pass a bill revising the statutory framework, then a representative of the State selected by the Governor and a public employees’ representative selected by the State employees’ and local employees’ representatives on the SHBPDC are required to select cost-saving changes to achieve the $100 million in actuarially verifiable cost savings. If the two representatives cannot reach an agreement to achieve such savings, the Executive Director of the Office of Legislative Services is required to designate an additional representative. The three representatives are then required to meet and vote to select cost-saving changes to achieve the $100 million in actuarially verifiable cost savings for the first six months of PY 2026.

This bill removes the language provisions requiring the achievement of cost savings for the SHBP and outlining the process for the achievement of such cost savings.