Gov. Phil Murphy announced Monday he has reached a deal with New Jersey public worker unions on health care that he says will save the state $500 million over two years.
It's also the latest sign that Murphy, who has vowed to not vilify unions, will try to work with public workers to make changes to the state's perpetually in-trouble pension system.
"I thank New Jersey's educators and public employees for coming to the table in good faith to negotiate ways to provide high-quality health care at the lowest possible cost," Murphy said in a statement.
"As I've said from day one, I believe in the power of collective bargaining and negotiating in good faith with our workforce," he said. "Today's agreement is a testament that this approach works - for the State of New Jersey, for workers, and for our taxpayers."
Among the labor groups the deal will effect is the state's largest teacher's union, the New Jersey Education Association.
The school employees plan design committee voted Monday to move Medicare-eligible retirees to Medicare Advantage, which are Medicare approved plans offered by private companies.
Murphy administration touted the agreement includes $274 million in savings in the coming plan year for health care costs for public employees and retirees and another $222 million in 2020 with the move to Medicare Advantage for both SHBP and SEHBP retirees.
The school employees plan design committee will also agree to create a new health plan that will encourage people to stay in network, which will include zero-dollar copays for primary care and specialists, and will have mandatory generics.
According to the administration, they expect premiums for employees and retirees in this plan to be 14 percent lower than last year's.
However, they don't have an estimate of what this will save because they don't know how yet many people will opt for this plan. But they said if 10 percent of active workers enroll, school districts could save $23 million.
They're also projecting savings from the new Medicare Advantage contract that Aetna won, replacing Horizon.