The NJ School Employees’ Health Benefits Commission (SEHBC) meeting on August 19^th brought no final resolution for the School Employees’ Health Benefits Program (SEHBP), which remains under significant financial strain amid a proposed 32.4% increase in medical premiums and a 45.5% increase in prescription drug premiums for active employees.

The only update stems from the NJ School Employees’ Health Benefits Commission approving revised retiree rate recommendations, but those recommendations have not been advertised or finalized as of yet. Meanwhile, the Commission remains deadlocked on a 4-4 vote to finalize the 2027 active population premium increases. This vote came four weeks after the commission failed to finalize the active population premium increases on July 27^th, citing the need to review cost saving options. Aon presented several cost saving considerations for both the medical and prescription plans, but the NJ State Plan Design Committee (PDC), not the SEHBC, is responsible for plan changes. It was further noted that Chapter 44, which relates to the NJ Educators Health Plan (EHP) and Garden State Health Plan (GSHP), bars any changes until 2028.

The SEHBC will reconvene on September 3^rd for another vote, though it’s unclear what, if anything, will have changed by then. Benecard is keeping a close eye on this subject and will continue to update you as new information becomes available.

In the meantime, plan sponsors enrolled in either the SEHBP or SHBP, can be proactive by starting to look into alternative options. Contact Richard Van Noord, our Vice President of Sales, at Richard.VanNoord@benecard.com or (609) 651-5412 to learn how Benecard’s fixed-rate prescription benefit model can offer greater predictability and stability.

Sources:

NJ Teachers Face a Health Insurance Nightmare – And No One Can Stop It
https://nj1015.com/nj-teachers-health-insurance-increase

NJ SHBP & SEHBP 2027 Rate Recommendations Released – What You Should Know
https://www.benecard.com/nj-shbp-sehbp-2027-rate-recommendations-released-what-you-should-know/

Plan Year 2027 Rate Renewal Reports (recommendations):                                
https://www.nj.gov/treasury/pensions/rate-renewal.shtml

Aon’s SHBP “Plan Year 2027 Rate Setting Recommendation Analysis” Local Government draft report:
https://www.nj.gov/treasury/pensions/documents/hb/rate-renewal/py2027-rate-setting-analysis-local.pdf

Aon’s “2027 SHBP Rate Setting Analysis” draft report presentation:
https://www.nj.gov/treasury/pensions/documents/hb/rate-renewal/shbp-2027-rate-setting-analysis.pdf

View Aon’s SEHBP “Plan Year 2027 Rate Setting Recommendation Analysis” Education draft report:
https://www.nj.gov/treasury/pensions/documents/hb/rate-renewal/py2027-rate-setting-analysis-education.pdf

Aon’s “2027 SEHBP Rate Setting Analysis” draft report presentation:
https://www.nj.gov/treasury/pensions/documents/hb/rate-renewal/sehbp-2027-rate-setting-analysis.pdf

Last week, AON presented its recommended 2027 premium increases to the State Health Benefits Commission (SHBC) and the School Employees’ Health Benefits Commission (SEHBC) — and the numbers are substantial for both medical and Rx premiums:

• SHBP – Local Government (Active Populations):
  • +16.7% medical
  • +20% prescription
• SHBP – Local Government (Early Retiree Populations):
  • +35.5% medical
  • +40.4% prescription
    
• View Aon’s SHBP “Plan Year 2027 Rate Setting Recommendation Analysis” Local Government draft report
• View Aon’s “2027 SHBP Rate Setting Analysis” draft report presentation

• SEHBP – School Boards (Active Populations):
  • +32.4% medical
  • +45.5% prescription
• SEHBP – School Boards (Early Retiree Populations):
  • +9.2% medical
  • +18.1% prescription
    
• View Aon’s SEHBP “Plan Year 2027 Rate Setting Recommendation Analysis” draft report
• View Aon’s “2027 SEHBP Rate Setting Analysis” draft report presentation

Both the SHBP and SEHBP rate-setting analyses raise concerns that the proposed 2027 premium increases may not fully resolve the programs’ underlying financial challenges. In both cases, a portion of the increases is being used to repay prior funding obligations and rebuild depleted reserves, rather than solely cover projected healthcare costs.

Key Concerns

• Premiums exceed projected costs:
  • SHBP: Recommended premiums are set 11.3% above projected costs for Actives and 34.5% above projected costs for Early and Medicare Retirees, including repayment of the remaining $90 million Chapter 86 obligation.
  • SEHBP: Recommended Active premiums are set 15.9% above projected claims costs, including a 4.2% margin to repay the projected $70 million Chapter 28 obligation plus an additional 11.7% to help build the Claims Stabilization Reserve (CSR).
• Reserves remain below target:
  • Despite these significant increases, both programs project CSR balances of only 1 month of plan costs, well below the recommended 2-month target.
• Future increases may be needed:
  • Actuaries for both programs caution that additional margin may be required, signaling the potential for further premium increases in 2027 and beyond.
• Participation risk:
  • The analyses warn that rising costs will likely drive lower-risk employers out of the plans, increasing costs for those who remain and potentially creating additional financial pressure.
    • SHBP: This includes anti-selection assumptions of 5% in 2026, and 3% in 2027 reflecting the increased risk of employers choosing to leave the plan as a result of the additional cost.  This level of anti-selection may be insufficient if attrition from the plan is significant.
    • SEHBP: This includes anti-selection assumptions of 5% in 2026, and 4.75% in 2027 reflecting the increased risk of employers choosing to leave the plan.  Active enrollment is expected to decrease to 8.75% in 2027.

Bottom Line

While these increases are still recommendations and are not yet finalized, they reflect the ongoing financial instability in the state plans. Employers, employees, and retirees risk needing to absorb substantial premium increases, reduced benefits, and more out-of-pocket cost sharing with little confidence that it will be enough to meet targets and avoid future rate hikes—raising concerns about long-term affordability and sustainability.

Benecard will continue to update you on any further developments with the final 2027 rate actions as more information is released.

In the meantime, for plan sponsors enrolled in the SHBP or SEHBP, now is the time to start evaluating alternative options. In this volatile market, Benecard’s fixed-rate prescription benefit model can offer greater predictability and stability. Contact Richard Van Noord, Vice President of Sales, at Richard.VanNoord@benecard.com or (609) 651-5412 to learn about our unique prescription benefit solutions and to start a quote.

Sources:

1. Plan Year 2027 Rate Renewal Reports (recommendations):                                
https://www.nj.gov/treasury/pensions/rate-renewal.shtml

2. Aon’s SHBP “Plan Year 2027 Rate Setting Recommendation Analysis” Local Government draft report: https://www.nj.gov/treasury/pensions/documents/hb/rate-renewal/py2027-rate-setting-analysis-local.pdf

3. Aon’s “2027 SHBP Rate Setting Analysis” draft report presentation: https://www.nj.gov/treasury/pensions/documents/hb/rate-renewal/shbp-2027-rate-setting-analysis.pdf

4. View Aon’s SEHBP “Plan Year 2027 Rate Setting Recommendation Analysis” Education draft report: https://www.nj.gov/treasury/pensions/documents/hb/rate-renewal/py2027-rate-setting-analysis-education.pdf

5. Aon’s “2027 SEHBP Rate Setting Analysis” draft report presentation: https://www.nj.gov/treasury/pensions/documents/hb/rate-renewal/sehbp-2027-rate-setting-analysis.pdf

Rising healthcare costs are forcing employers to make increasingly difficult financial decisions. Nowhere is this more evident than in public school systems. A recent BenefitsPRO article highlighted findings from a national survey of public school districts, where nearly every district reported significant budget pressures from escalating healthcare costs. Many now devote as much as 30% of their operating budgets to employee benefits, with prescription drugs—including specialty medications and GLP-1 therapies—identified as major cost drivers.

For benefit consultants and plan sponsors, the message is clear: controlling pharmacy benefit costs has become a necessary focus to improve overall healthcare affordability without sacrificing member care, particularly for organizations like school districts that must balance fiscal responsibility with contractual obligations and mission-driven outcomes.

An Independent PBM with a Proven Track Record of Cost Stability

Unlike many PBMs that are owned by pharmacy chains or health insurers, Benecard remains one of the few independent, standalone PBMs in the marketplace. For nearly 40 years, our singular focus has been helping employers and school districts achieve clinically sound, financially responsible prescription benefit solutions.

More importantly, Benecard stands apart with its 100% risk-free, guaranteed-cost prescription benefit arrangement. Benecard’s fixed monthly program charges—determined on a per employee per month (PEPM) basis—bundle prescription drug claims, rebates, administrative fees, clinical management programs, and excess loss insurance protection into one predictable monthly cost. This proven model eliminates all financial risk to the plan sponsor and offsets claim costs immediately with upfront rebates being accounted for beginning in the first month, while providing the budget certainty organizations—especially school districts—need in today’s volatile healthcare environment.

For districts navigating multi-year labor agreements and taxpayer-funded budgets, this level of predictability supports smarter financial planning without requiring ongoing renegotiation of employee benefits.  See our proven results by clicking here for our case study. To see what benefit consultants think of our services click here.

Proven Purchasing Power That Delivers Long-Term Results

Benecard also administers multiple Group Purchasing Arrangements (GPAs) that have been successfully operating for more than a decade. These established purchasing arrangements leverage collective buying power while maintaining flexibility for participating employer groups, including public sector entities like school districts. The results speak for themselves:

• Stable rate action histories
• Annual prescription drug trends consistently outperforming broader market averages
• Sustainable savings—not just short-term savings strategies

For school districts, joining a GPA is particularly valuable. One of the key advantages of joining any GPA we administer is that there are no mandated benefit design changes—plan sponsors retain 100% autonomy over their benefits.

Therefore, rather than reacting to rising pharmacy costs with concessions at the bargaining table or cuts to student-facing investments, districts can adopt a structure that supports financial discipline and labor stability.

A Better Path Forward

As healthcare costs continue to rise, employers don’t have to accept unpredictable prescription benefit expenses as the new normal. With an independent PBM, guaranteed-costs, and proven savings strategies, Benecard helps organizations replace uncertainty with stability—protecting both employer budgets and employees’ access to quality pharmacy care.

For school districts in particular, this approach offers a path to regain control over one of the fastest-growing cost concerns, while respecting collectively bargained agreements and ensuring that more resources remain focused where they matter most: supporting educators and improving student outcomes.

If you’re looking for a better way to manage rising prescription benefit costs while bringing greater budget certainty, we’d welcome the opportunity to show you how Benecard’s proven approach can help. Please reach out to us at talktous@benecard.com to start the conversation.

Sources:

1: BenefitsPRO, “Rising health care costs force schools to cut benefits and tap reserves,” June 23, 2026, summarizing findings from the AASA and ASBO International report Rising Premiums, Falling Opportunities: The Budgetary Impact of Health Care Costs on School Districts.