The State Health Benefits Program Plan Design Committee (SHBP PDC) has submitted recurring cost savings proposals for the New Jersey State Health Benefits Program to Aon, the actuary contracted by the state. This action is in line with requirements set by the Fiscal Year 2026 Appropriations Act.
Both state and labor representatives on the SHBP PDC provided their own sets of proposals to Aon. The committee’s objective is to achieve $100 million in verified state fund savings during the first six months of Plan Year 2026.
According to Aon, the most subscribed Preferred Provider Organization (PPO) plans under SHBP currently have actuarial values exceeding 97%, making them higher than typical health care plans offered in other states. The actuarial value indicates what percentage of average costs for covered benefits are paid by the plan.
The proposed changes from state representatives vary but aim to address rising benefit costs. Over the past five years, these costs have steadily increased, leading to double-digit recommended rate hikes for all three major state-administered health benefits plans projected for Plan Year 2026.
This trend prompted an agreement between the Governor and Legislature to implement a process targeting recurring cost reductions within a defined period. Under this process, proposals must be submitted by July 31, after which Aon will evaluate whether they yield verifiable savings within six months. Proposals that do not meet verification standards or fall short of targeted savings will be adjusted or removed from consideration.
If neither set of proposals from labor nor administration meets or exceeds $100 million in verifiable recurring savings as determined by Aon, additional submissions will be required before September 30, 2025. Verified proposals will then proceed to a vote among SHBP PDC members.
“The first part of the legislatively-mandated process is the submission of these proposals to the plan actuary, Aon, by July 31, 2025.”
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