The Hole Gets Bigger: Treasury Expands New Jersey’s Health Benefits Alarm

The NJ Dept of Treasury put out another release earlier this week that widened the picture on the state’s health benefit plan woes.  Last week, the Treasury announced the NJ School Employees Health Benefit Plan suffered ~126M in losses for 2024, another 207M in 2025 with a projected negative 32.3M claims stabilization reserve by the end of 2026.

This week, the picture gets uglier as other plans show the same fracturing.

In its March 31st release, the Treasury pointed to two recent actuarial reports projecting double-digit increases in ’27 for the State Health Benefits Plan and Local Government Plan for many of the same reasons blowing school employee plans up.

The local government plan covers a different set of public employees and runs through a different structure from the school employee plan we covered last week and shows a much bigger hole – a negative $209 million claims stabilization reserve in 2026.

Different plans, different pools, same basic problem.

The factors driving the problem in the local government plan are the same as those causing problems in the school plan. Lower-cost members moving to private options, migration into lower-premium plans that bring in less revenue, rising medical and prescription costs, higher utilization of specialty and behavioral health services, and major growth in GLP-1 drug use.

The state expects final actuarial rate recommendations in July.

Also Read – The $333 Million Hole: Why NJ School Health Premiums are Set to Explode