Lacey School Board Seeks State Relief For Rising Health Benefit Costs

LACEY, NJ — The Lacey Township Board of Education said rising health care costs are the biggest pressure on the district budget and tied that strain to state benefit laws that limit local bargaining options.

During a recent board meeting, Acting Superintendent William Zylinski said the district's budget picture has tightened as insurance premiums rise while employee contribution levels remain capped under state law.

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Zylinski said the shift from Chapter 78 to Chapter 44 changed how employees contribute to insurance costs. Under Chapter 78, employees paid a percentage of their insurance premiums, so their share rose as rates rose. He said Chapter 44, introduced in 2020, moved the system to salary-based sharing, with health care contributions capped at a percentage of an employee's base salary.

Zylinski also said that under the current law, contribution levels and plan designs are locked in until late 2027, making them "effectively unbargainable."

He said that in the past, the board and union could negotiate a different balance between salary increases and health care contributions.

"We've lost that local control when we want to try and find a middle ground between salaries and health care benefits," Zylinski said.

The district is now absorbing much of the increase as premiums climb, according to Zylinski.

"While employee contribution percentages remain fixed, the health care premiums have spiked by nearly 30 percent," Zylinski said. "Because the new law prevents us from negotiating higher contributions to help cover these death spiral price hikes, the board is forced to absorb almost the entire increase."

Zylinski said the board offered raises of 2 percent for 2025-26 and 3.5 percent for 2026-27 in current negotiations with the LTEA, but no agreement has been reached.

"The narrative that the board does not care about our staff is simply not true," Zylinski said.

Later in the meeting, the board discussed a resolution to be sent to the governor and other state officials.

The resolution says districts across New Jersey are facing "unsustainable growth in healthcare premiums" and cites a 31.9 percent premium increase that took effect in January 2026, following an overall increase of nearly 74 percent over the preceding five years.

It calls on the governor and Legislature to provide immediate short-term relief and to pursue long-term reforms to the state system for delivering health care to public employees.