SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

SENATE, No. 4999

with committee amendments

STATE OF NEW JERSEY

DATED:  JANUARY 8, 2026

      The Senate Budget and Appropriations Committee reports favorably and with committee amendments Senate Bill No. 4999.

      As amended, this bill amends the language provisions in the annual appropriations act for Fiscal Year 2026 to remove the existing language requiring the achievement of cost savings in State funds appropriated for the Employee Benefits program classification, and to add new language concerning cost savings.

      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 FY2026.

      This bill removes these language provisions.

      The bill, instead requires any cost savings proposals submitted by the SHBPDC that the plan actuary determines will not result in recurring and actuarially verifiable cost savings, or less cost savings than proposed, to be adjusted to reflect the actuarially verified cost savings or eliminated from further consideration if no savings are actuarially verified or if the proposal would increase the total costs of the plans. 

      Under the bill, the State is required to reimburse costs incurred by an insurance carrier for the development, implementation, administration, or compliance requirements associated with any cost savings proposals approved by the SHBPDC.  The carrier is required to submit documentation of the projected and actual costs to the Division of Pensions and Benefits or another State agency as may be designated in a manner and form prescribed by the division.

As amended and reported by the committee, Senate Bill No. 4999 is identical to Assembly Bill No. 6201, which was also amended and reported by the committee on this date.

COMMITTEE AMENDMENTS:

      The committee amended the bill to require any cost savings proposals submitted by the SHBPDC that the plan actuary determines will not result in recurring and actuarially verifiable cost savings, or less cost savings than proposed, to be adjusted to reflect the actuarially verified cost savings or eliminated from further consideration if no savings are actuarially verified or if the proposal would increase the total costs of the plans.

      The committee also amended the bill to require the State to reimburse costs incurred by an insurance carrier for the development, implementation, administration, or compliance requirements associated with any cost savings proposals approved by the SHBPDC, of which the carrier will submit documentation to the Division of Pensions and Benefits or a designated agency in a manner and form prescribed by the division.

FISCAL IMPACT:

      The Office of Legislative Services (OLS) determines that removing the language provisions in the FY 2026 Appropriations Act that require the achievement of $100 million in cost savings in State funds appropriated for the State Health Benefits Program may result in a State expenditure increase of up to $25 million.

      The OLS also estimates that the State will experience an annual indeterminate increase in expenditures due to requiring the State to reimburse costs incurred by an insurance carrier for the development, implementation, administration, or compliance requirements associated with any cost savings proposals approved by the State Health Benefits Plan Design Committee.