Ocean City Leaves State Employee Health Plan

OCEAN CITY – In September 2022, the State Health Benefits Commission (SHBC) approved a significant increase in the employee health premiums for those using the state health benefits program. Now, some municipalities are opting out of the state plan rather than deal with the increase in their budgets. 
Ocean City made its decision to terminate participation with the state health plan back in November 2022.
At the Nov. 17, 2022, Ocean City Council meeting, the council passed a resolution ending the relationship with the state health benefits for active and retired employees. 
The next day, a notice was sent to SHBC, ending participation in all plans, including prescription drug and dental for 484 employees. The city cited cost as the primary reason for the action.
It is still early enough in the municipal budget process that many towns have not yet revealed their initial 2023 budgets. Many of those that have are indicating that tax increases are on the horizon, and the major culprit in the increases is the employee health plan hikes.
Upper Township has indicated that taxpayers will see an increase this year, and a primary contributing factor for that increase is the rise in health care benefit premiums. Likewise, North Wildwood’s budget for 2023 will contain a $0.038 increase in the tax rate, which was largely driven by the state health premium spike.
In September 2022, Gov. Phil Murphy cut a deal with the major unions representing state employees, removing the sting of the 21% premium hike for state workers. No deal was made for municipal workers, leaving the burden of the hike to rest on local property owners.  
Ocean City is the only county municipality that has said it will leave the state plan and go to a private insurer. In taking the action, the city joins a number of state public school districts, at least one state county college, nearby Egg Harbor Township and other municipalities, and even the state’s own capital city, Trenton.