Murphy, Public Sector Unions Reach Agreement on Health Benefit Savings

In a development that Gov. Phil Murphy described as “one of the most significant updates to [New Jersey’s] health benefits plan in nearly 15 years,” he and 17 public sector unions representing New Jersey state workers have reached an agreement designed to achieve roughly $75 million in recurring health benefit savings for the final six months of fiscal year 2026.

According to a statement from Murphy’s office, the agreed-upon changes will be proposed and voted by New Jersey’s State Health Benefits Plan Design Committee later in September.

Per the terms of the agreement, Murphy has agreed to send a letter to New Jersey legislators, expressing his willingness to sign legislation into law that would repeal budget language in the Fiscal Year 2026 Budget that sought to achieve $100 million in recurring health care benefit savings through the Plan Design Committee.

The state of New Jersey has also agreed to continue working with these unions in an effort to identify longer-term cost containment strategies, according to Murphy’s office. The changes in the recent agreement include:

• A $110 in-network deductible for individuals and a $220 in-network deductible for families for all plans that currently have lower deductibles;
• A $750 out-of-network deductible for individuals and a $1,500 out-of-network deductible for families for all plans that currently have lower deductibles;
• A $2,500 out-of-network, out-of-pocket maximum for individuals and a $6,000 out-of-network, out-of-pocket maximum for families for all plans that currently have lower out-of-network, out-of-pocket maximums;
• New co-pays on GLP-1, generic, brand, non-preferred brand and specialty medications across all plans;
• New co-pays on lab visits and imaging across all plans; and
• Incentivizing use of in-network ambulatory surgical centers for certain procedures across all plans.

“Today we are making responsible and reasonable changes to the State’s health plans—broad changes which have not been made in nearly 15 years,” said Murphy, in a statement.

“I am committed to working with the unions until the end of my Administration to provide solid recommendations to future State leaders on how the State can adopt best practices and get the best deals in the healthcare market on medical care and drug pricing.”