Press Releases

CWA Reaches Agreement with New Jersey to Avert Catastrophic Healthcare Cost Hikes and Cut SHBP Expenses

FOR IMMEDIATE RELEASE

September 4, 2025

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CWA Reaches Agreement with New Jersey to Avert Catastrophic Healthcare Cost Hikes and Cut SHBP Expenses

TRENTON, NJ – CWA District 1, alongside unions representing over 140,000 state employees, has reached an agreement with the State of New Jersey to significantly reduce the cost of the State Health Benefits Plan (SHBP) and avoid catastrophic benefits erosion for state workers. This agreement prevents a $100 million unilateral cut in the FY2026 budget that would have shifted unprecedented price increases solely to employees without any structural or management reforms to control costs. The resulting MOA balances modest increases in out-of-pocket costs with commitments on longer-term governance and cost containment reforms, improving a plan covering hundreds of thousands of working families.

The deal also calls on the State Legislature to rescind the budget resolution that initiated these negotiations and to ensure future budgets respect existing healthcare agreements.

Key highlights of the agreement include:

  • Formation of a Working Group: The State will create a group with union representatives to develop a roadmap for the next Administration to address soaring healthcare costs. This will focus on reducing provider prices, new governance models for accountability, and innovative contracting for savings.
  • Vendor Report on Overpayments: A vendor report will be delivered by October 22, 2025, to recommend ways to expand claims reviews for plan year 2026, identify overpayments to providers, and recoup those funds.
  • Pharmacy Benefit Manager (PBM) Savings: A reverse auction process will be used for the PBM contract procurement to generate hundreds of millions in savings.
  • GLP1 Incentives: Employees using GLP1 medications for weight loss will be incentivized to participate in lifestyle counseling programs to improve outcomes and manage costs.
  • In-Network Encouragement: Design changes will be implemented to encourage the use of in-network providers over more expensive out-of-network options.
  • Ambulatory Surgery Centers: The plan will encourage the use of lower-cost Ambulatory Surgery Centers for over a dozen common procedures, including colonoscopies, lumpectomies, and arthroscopy.
  • Out-of-Pocket Costs: Increases in certain copays and out-of-pocket costs, balanced with no increase in member contributions for 2026. 

Billy Gallagher, CWA District 1 Assistant to the Vice President, released the following statement:

"This agreement is a hard-won victory for the 100,000 state workers and retirees who were facing catastrophic healthcare cost hikes. It proves that when we sit down at the table through the proper channels, we can find solutions that protect working families and control costs for the state. This deal not only rescinds a dangerous precedent of bypassing our contracts but also establishes a collaborative path forward to tackle the root causes of rising healthcare costs. It is a powerful testament to what we can achieve through collective bargaining and good-faith dialogue, and it ensures our members' voices are heard in shaping the future of their healthcare."