How Much Do NJ Teachers Pay For Health Insurance?

School districts and their employees pay significant sums in health benefit costs, which vary from district to district. Premiums enrolled in the State Health Benefit Program are expected to increase significantly by 2023.

On Wednesday, Gov. Phil Murphy signed into law a bill designed to reduce teachers’ premiums and undo unpopular health care changes that were part of the 2011 Chapter 78 deal.

Cost of Coverage

As part of their compensation package, teachers need access to quality health care at an affordable cost in order to protect both themselves and the students they teach from illness. Unfortunately, though, costs associated with providing these benefits have been rising rapidly – leading many schools with large student populations struggling to keep premiums under control.

The new law seeks to help schools save millions annually by lowering health insurance premiums for teachers and eliminating out-of-network reimbursements, with estimates showing it will save $640 million over seven years for school districts – these cost savings will ultimately be passed along to taxpayers through lower property tax bills.

Under the previous law, teachers contributed a percentage of their salary toward health benefits – an unnecessary burden especially for teachers earning high salaries. Therefore, the new legislation negotiated between Senate President Stephen Sweeney and New Jersey Education Association proved so popular among educators.

This new law will enable teachers to pay a fixed percentage of their salary for health benefits and require them to cover an out-of-pocket expense before insurance kicks in. The goal of this deductible is to lower overall costs by encouraging preventative care and prompt treatment as soon as possible.

Another key change under the new law is that schools will now need to offer employees two distinct health plans: NJEHP for current and retired teachers as well as their spouses; and Garden State Health Plan (GSHP), available only to those not eligible for Medicare.

Before now, school districts had to negotiate with unions over health benefits for teachers and staff members, an unpopular process which drove up administrative expenses while diminishing schools’ abilities to make improvements to classroom instruction. Furthermore, rising benefit costs were being passed along to local governments which tax public school students.


New Jersey teachers and other public employees are facing rising health care costs, prompting Governor Phil Murphy to sign into law a bill that overhauls its health insurance system – potentially saving school districts and taxpayers millions of dollars in savings. It reduces choices to two plans while offering employees lower cost options; additionally it aims to cut drug costs by prohibiting rebates and mandating generic drugs.

Chapter 78 was passed in 2011, mandating that schools make their employees pay part of their health insurance premiums. The exact amount varies depending on your district and plan selection; it could even reach as high as 35 percent of an employee’s salary! With healthcare costs on the rise and high premiums becoming unsustainable for schools districts, numerous districts have closed due to being unable to cover these expenses for teachers.

The new legislation would repeal two popular options in the School Employees Health Benefits Program, NJ Direct 10 and NJ Direct 15, in favor of an “educators” plan with $10 copays for primary care physicians and specialists, capped out-of-pocket at $500 annually – an effort estimated by state officials as saving teachers, their employers and the state $100 million each year.

According to Affordable Care Act standards, this plan will still be generous, and actuaries predict it could even be cheaper than comparable private plans offered by other employers. Critics argue, however, that such new plans shift health care costs onto teachers and other public employees while decreasing salaries and providing them with less benefits.

The new plan won’t affect all New Jersey teachers. Most districts utilize the state plan; however, some opt for private insurance or negotiate contracts directly with the state. Essex County officials expect their total bill for next year to top over $105 million with annual increases expected of approximately $2 million; other counties could see similar costs rise and put an added strain on local taxpayers in addition to property taxes and general fund expenses.


A deductible is an annual sum that policy-holders must pay before their insurance company begins covering expenses. To maximize savings and understand how this affects premiums, it’s crucial to fully grasp how deductibles work; high deductibles may significantly raise them.

Of course, having to pay more out-of-pocket can also increase your health care costs; but there are ways you can lower your deductible and save on health care expenses – we have some suggestions here to help make that possible!

Deductibles can be an enormous financial drain for teachers. For instance, if your plan requires payment of $500 deductible before coverage kicks in. This becomes even more crucial if taking multiple prescriptions as multiple deductibles quickly add up.

Your deductible’s worth depends on a few variables, including the cost and frequency of prescription payments. Furthermore, type and length of drug prescription could play an integral part in whether or not it justifies its cost.

New Jersey teachers have seen their health insurance costs skyrocket over the last three years, and this week the School Employees Health Benefits Commission approved double-digit rate hikes for 2023 calendar year due to rising healthcare costs and an uncertain economy.

While this rate increase may not seem significant for the state government, it will have an enormously detrimental impact on local districts. Taxpayers could end up paying more and possibly increasing property taxes or seeing reductions in programs and staff.

Gov. Phil Murphy reached an agreement with public-sector unions regarding increased rates for state employees as part of a larger budget deal that also increased pension contribution amounts and revamped the retirement system.

This agreement includes a plan that reduces the number of health care options available to teachers, which is expected to save both teachers and the state millions over time. All districts will also be required to offer either New Jersey Educators’ Health Plan (NJEHP) or its equivalent GSHIP plan; employees who do not enroll during open enrollment periods will automatically enroll into either plan (NJEHP or GSHIP, as appropriate).

Out-of-Pocket Expenses

Teachers incur numerous out-of-pocket expenses, such as classroom supplies, technology equipment and school uniforms. They must also cover textbook costs and school field trips – often tax-deductible expenses that they can deduct from their income tax returns. According to estimates by the National Education Association, teachers spend an estimated average annual expenditure of between $1,000-1,200 on supplies annually depending on district; some districts allow teachers to request specific items from administrators while in others teachers must purchase supplies themselves – in such instances teachers can utilize the Educator Expense Deduction that lets them deduct up to $1,000 of qualifying expenses from their income tax returns.

Teachers enrolled in New Jersey’s School Employees Health Benefit Program will experience double-digit increases to their premium rates due to an agreement reached between Gov. Phil Murphy’s administration and union leaders. State workers will also incur higher copays when seeing specialists or visiting urgent care.

School boards have voiced concerns that insurance costs have been eating away at their budgets and forcing them to reduce programs or lay off staff. On average in New Jersey teachers currently pay anywhere between 3%-35% of their salary in premiums depending on their plan or salary – forcing many teachers to quit, while school boards look for ways to cut spending.

A group representing teachers is seeking a compromise solution to address rising healthcare costs, suggesting teachers be allowed to choose less costly plans and push for legislation giving student teachers up to $7,200 for two semesters of teaching experience.

Before becoming licensed teachers in New Jersey, students are currently required to complete an education preparation program and pass the Praxis tests. These exams evaluate whether candidates are suitable to teach their chosen subject area; accordingly, test requirements depend on grade level, subject area and specialization preferences of teachers who wish to teach in these subjects. Teachers wishing to work as elementary or secondary school educators require an instructional certificate while counselors/speech-language pathologists require additional certification.