Paterson schools cancel health care change but now face $10M gap - NorthJersey.com

PATERSON — City education officials are scrambling to make up for more than $10 million in unexpected budget cuts after the school board on Wednesday night rejected a proposed switch in employee health coverage.

The preliminary budget had been based on switching medical insurance from Horizon to Aetna, a change that would have produced about $14 million in savings, officials said.

After hearing numerous complaints from employees worried about their health care, the Board of Education voted not to approve the $96 million-per-year Aetna contract for about 3,000 district employees.

“We’ll have to balance the budget without it,” Business Administrator Richard Matthews said of the health contract savings.

But Matthews told the school board that finding the extra money will be difficult, partly because the Paterson school district received a smaller increase in state aid than it was expecting.

The district plans to unveil its proposed 2022-23 budget at meetings next week on Monday and Wednesday. Officials indicated Wednesday night that the new budget may come with a tax increase that will be even higher than the 9.25% originally projected.

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Board members indicated they still may be willing to make the health insurance change but needed to get answers to employees’ questions about the proposed Aetna coverage. Matthews told them the state deadlines wouldn’t allow the district to delay its budget to provide extra time on the health insurance decision.

Many employees and union leaders who spoke at recent public meetings about the medical insurance expressed fears, anger and frustration. Just four years ago, the district changed coverage, causing widespread health care problems for its employees.

The president of the city teachers’ union, John McEntee Jr., reminded the school board of the previous medical insurance debacle. He asked the board why it would change health plans.

“It’s not because they will provide better service. It’s not because they will provide more doctors,” McEntee asserted during Wednesday’s meeting. “They’re doing it because of dollars and cents.”

School board records said the Horizon contract proposal was for $110 million, significantly higher than the Aetna price.

Employees told the board their doctors already informed them they were not part of the Aetna network of providers. The district’s medical insurance consultants, CBIZ, said Paterson’s school employees would be allowed to continue seeing the same physicians. But board members raised questioned about the costs employees faced by staying with providers under the Aetna plan.