mercerme.com · Seth Siditsky · September 7, 2026
Sherrill, State Employee Unions Reach Deal to Hold Health Benefit Contributions Steady in 2027 - MercerMe
# Sherrill, State Employee Unions Reach Deal to Hold Health Benefit Contributions Steady in 2027
written by Seth Siditsky September 7, 2026
New Jersey state employees will not face an increase in their health benefit contribution rates in 2027 under an agreement announced by Gov. Mikie Sherrill and 17 public employee unions.
The agreement also launches a broader effort to address rising health care costs and financial pressures facing the State Health Benefits Program, with a working group expected to begin examining potential changes this fall.
New Jersey’s public employee health-benefit system provides coverage to approximately 690,000 people through state employee, local government and education plans. The Sherrill administration said rising health care and prescription drug costs, along with structural issues in the system, have put increasing pressure on employees, public employers and taxpayers.
“From Day One, I have been laser focused on making New Jersey more affordable, and that means tackling hard problems. The rising cost of health care is no exception,” Sherrill said.
Sherrill said the financial challenges facing the program did not result from a single decision and would not have a single solution.
“This agreement brings key stakeholders to the table to take on this challenge together, to address rising costs, while preserving high-quality benefits and putting the program on a more sustainable path for the future,” she said.
Under the agreement, the state will establish a working group by Oct. 1 that will include representatives of the state and unions as well as other stakeholders. The group could include legislators, health plan administrators, insurance carriers, health care providers and independent experts.
The group will consider changes ranging from vendor contracts and program operations to claims reviews, eligibility verification, provider networks, plan pricing, employee contribution structures and benefit design. Governance, data transparency and participation rules are also among the areas slated for review.
The group will ultimately make advisory recommendations to the governor.
Dennis Trainor, vice president of Communications Workers of America District 1, said the agreement prevents workers from absorbing another increase while giving organized labor a role in addressing the underlying costs of the system.
“Rising health care costs can’t be solved by asking workers to pay more year after year without addressing long-term systemic change,” Trainor said.
The agreement comes as public employee unions have pushed for changes to the health-benefit system amid rising costs. Sherrill’s office characterized the deal as the beginning of a longer reform process rather than a permanent solution to the program’s financial challenges.
“This is a problem we must address now,” Chief Operating Officer Kellie Doucette said. “The program’s financial instability affects public employees, employers and taxpayers in communities across New Jersey every day.”
The working group is expected to begin its work after it is established by Oct. 1.
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