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Pensions and Benefits
PENSION AND HEALTH BENEFITS
REVIEW COMMISSION 2006

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PENSION AND HEALTH BENEFITS REVIEW COMMISSION
REVISED 2006 CALENDAR

The following meeting dates have been scheduled at 10:00 AM in the first floor board room at the
Division of Pensions and Benefits, 50 West State Street, Trenton, NJ 08625

March 3, 2006
April 28, 2006
June 23, 2006
September 15, 2006
December 8, 2006
revised 9/28/2006

Meeting Agendas

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Vote Results

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MEETING AGENDAS



Pension and Health Benefits Review Commission
Agenda for December 8, 2006 Meeting

The Pension and Health Benefits Review Commission will meet on Friday, December 8, 2006 at 10:00 AM in the first floor boardroom of the Division of Pensions and Benefits, 50 West State Street, Trenton.  No verbal comments are accepted during the meeting.  The Commission should receive written comments at least ten business days in advance of the meeting.  The agenda is as follows:

S-2205 (Vitale)
Requires health insurers and SHBP to provide certain mental health benefits for eating disorders under same terms and conditions as for other illnesses and diseases.

S-2178 (Sweeney)/A-3509 (Moriarty)
Eliminates membership in various State-administered retirement systems for part-time public employees and elected officials commencing service after enactment; clarifies that part-time public employees and officials are ineligible for employer-paid health care.

S-2175 (Sweeney)/A-3503 (Moriarty)
Requires that public employees who are married or with domestic partners receive health care benefits from only one public employer.

S-2174 (Sweeney)/A-3504 (Moriarty)
Provides State and local governments will pay 90 percent of cost of post-retirement SHBP benefits for future retirees.

S-2173 (Sweeney)/A-3499 (Moriarty)
Changes payment obligation of State and other public employers for SHBP coverage for employees and dependents to no more than 90 percent of SHBP cost.

S-2163 (Lesniak)
Permits local employers in SHBP to negotiate benefits and cost sharing with employees; permits local employers to offer incentives to employees for waivers of SHBP coverage; requires annual independent review of SHBP.

A-3431 (Cohen)
Establishes maximum premium rate for certain dependent health benefits coverage at 45% of single coverage.

S-2192 (Singer)
Allows application for PERS accidental disability benefit for injury sustained while employed at State psychiatric institution or correctional facility immediately prior to PERS membership.

S-2180 (Lance)
Creates defined contribution program for elected officials and certain appointed public officials.

S-2179 (Sweeney)/A-3510 (Moriarty)
Provides that public employee pension benefits are calculated on base salary exclusive of various forms of extra compensation.

S-2176 (Sweeney)/A-3507 (Moriarty)
Changes prospectively definition of compensation used to calculate benefits in PERS and TPAF to average of five highest-paid years and in PFRS, SPRS, and JRS to average of three highest-paid years.

S-2125 (Lance)
Increases statutory mandatory retirement age for justices, judges, administrative law judges, county prosecutors, and workers’ compensation judges from 70 to 75.



The Pension and Health Benefits Review Commission
Agenda for September 15, 2006 Meeting

The Pension and Health Benefits Review Commission will meet on Friday, September 15, 2006 at 10:00 AM in the first floor boardroom of the Division of Pensions and Benefits, 50 West State Street, Trenton.  No verbal comments are accepted during the meeting.  The Commission should receive written comments at least ten business days in advance of the meeting.  The agenda is as follows:

A-3152 (Johnson)
Establishes presumption of eligibility for accidental disability allowance for certain public employees who worked in certain locations following September 11, 2001 attack in New York City.

A-3085 (Johnson/Prieto)
Extends eligibility for certain benefits to veterans who performed active service in U.S. Armed Forces during Cold War.

A-3146 (O’Toole)
Increases enrollment threshold in PERS and TPAF to $10,000; changes definition of compensation used to calculate benefits in PERS, TPAF, PFRS, SPRS, and JRS to average annual compensation of all service years.

A-3067 (Van Drew)
Allows PERS Prosecutors Part members to purchase service credit in that part for service prior to January 7, 2002 credited in regular PERS.

A-3021 (Merkt)
“Part-time Public Employees and Elected Officials Pension Reform Act” ends retirement system enrollment for Legislators and part-time public employees and elected officials commencing service after enactment.

S-2061 (Sweeney/Kyrillos)/A-3403 (Moriarty/Mayer)
Permits elected officials and legislators with simultaneous PERS-covered elected office or employment to choose only one position for receipt of PERS credit.

S-2036 (Gormley/Sweeney)
Changes age of eligibility for TPAF and PERS early retirement option without benefit reduction from 55 to 60 for new enrollees.

S-1943 (Kean/Kyrillos)/A-3012 (Corodemus)
Requires PERS designate position providing least compensation, for member holding concurrent positions, as compensation base for contributions and pension calculations.

A-3095 (Cryan/Diegnan)
Requires local boards of education to join SHBP.

A-3003 (Thompson)
Requires insurers and State health care coverage programs to cover cost of HIV vaccine.



The Pension and Health Benefits Review Commission
Agenda for June 23, 2006 Meeting

The Pension and Health Benefits Review Commission will meet on Friday, June 23, 2006 at 10 AM in the first floor boardroom of the Division of Pensions and Benefits, 50 West State Street, Trenton. No verbal comments are accepted during the meeting. The Commission should receive written comments at least ten business days in advance of the meeting. The agenda is as follows:

S-719 (Inverso)
Changes calculation of PERS retirement allowances for certain members who receive significant compensation enhancement within five years of retirement.

S-1601 (Asselta)
Extends mandatory retirement age for certain PFRS members.

S-1393 (Connors)
Phases in cost of living adjustment in pension allowances and survivor benefits payable to certain former public safety officers and their survivors.

S-105 (Coniglio/Sweeney) /A-999 (Prieto/Manzo)
Requires health benefits coverage for certain therapies and applied behavioral analysis for the treatment of certain autism disorders.

A-2913 (Van Drew)
Provides paid health benefits under State Health Benefits Program to certain TPAF veteran retirees.

A-1742 (Johnson/Barnes/Scalera)
Provides certain benefits to New Jersey Transit police officers.

A-2163 (Payne)
Provides for enrollment in PERS of certain employees of the City of Newark.

A-815 (Payne)
Provides additional retirement benefits for certain county and county college employees and certain municipal employees who retire between September 1, 1995 and January 1, 1996.

A-360 (Chatzidakis/Bodine)
Extends certain benefits to veterans of operations that have continued from "Desert Shield/Desert Storm."

A-160 (Vandervalk/Bateman/Steele)
Changes compensation trigger for reenrollment of PERS retiree from $15,000 in aggregate to $15,000 per public employer.



The Pension and Health Benefits Review Commission
Agenda for April 28, 2006 Meeting

The Pension and Health Benefits Review Commission will meet on Friday, April 28, 2006 at 10:00 AM in the first floor board room of the Division of Pensions and Benefits, 50 West State Street, Trenton. No verbal comments are accepted during the meeting. The Commission should receive written comments at least ten business days in advance of the meeting. The agenda is as follows:

A-2163 (Payne)
Provides for enrollment in PERS of certain employees of the City of Newark.

S-1416 (Connors)
Allows PERS ordinary disability retiree to earn up to $3,000 in PERS-covered employment annually before cancellation of disability benefit and reenrollment in PERS.

S-1111 (Ciesla)/A-2419 (Wolfe/Holzapfel)
PFRS members to reduce retirement allowance to provide survivor benefit for named beneficiary.

S-1110 (Ciesla)/A-2420 (Wolfe/Holzapfel)
That PFRS definition of widow, widower and spouse will include domestic partners of all PFRS members.

A-2727 (Manzo)
Provides for continuation of health insurance coverage in group and SHBP health plans for unlimited period of time for certain former employees and their dependents.

A-2534 (Baroni)
Requires health insurance coverage by health insurers and the SHBP for expenses incurred in connection with prophylactic mastectomies and other mastectomy-related procedures.

A-2311 (McKeon)
Requires health insurers and State Health Benefits Commission to provide coverage for posttraumatic stress disorder under same conditions as other sickness.

A-2217 (Van Drew)
Extends fully paid SHBP benefits to surviving spouses of school district and county college retirees with 25 or more years of service.

A-971 (Stender)
Requires health insurers to provide health benefits coverage for treatment of pathological gambling.

A-1936 (Wisniewski)
Concerns coverage for childhood immunizations.



The Pension and Health Benefits Review Commission
Agenda for March 3, 2006 Meeting

The Pension and Health Benefits Review Commission will meet on Friday, March 3, 2006 at 10:00 AM in the first floor board room of the Division of Pensions and Benefits, 50 West State Street, Trenton. No verbal comments are accepted during the meeting. The Commission should receive written comments at least ten business days in advance of the meeting. The agenda is as follows:

S-544 (Buono)
Requires health insurers and SHBP to provide coverage for screening for cervical cancer, including testing for HPV.

S-899 (Bucco)
"Grace's Law;" requires health insurers, State Health Benefits Program and NJ FamilyCare to provide coverage for hearing aids for covered persons 18 and younger.

A-1628 (Conaway)
Requires SHBP to cover prostate cancer screening.

A-1681 (Beck)
Prohibits certain elected officials and appointed officers from receiving dual health benefit coverage.

S-508 (Gill)
Provides additional SHBP benefits to certain retired PFRS, CPFPF and PERS survivors.

A-1606 (Conaway)
Increases TPAF cost of living adjustment from 60% to 100% of Consumer Price Index.

A-631 (Rumpf)/(Connors)
Revises computation of accidental death benefit payable to beneficiaries of certain members of SPRS killed in line of duty.

A-544 (Hackett) (TO BE HELD AT SPONSOR’S REQUEST)
Permits purchase of PERS credit for unpaid service as elected official.

A-527 (Panter)
Requires legislators to designate one covered position of elected office or employment for PERS credit.

A-1754 (Greenwald)/(Roberts)/(Mayer)
Provides PFRS death benefit of 3 1/2 times the annual rate of compensation in the event of accidental death occurring in the first year of creditable service.



VOTE RESULTS



Pension and Health Benefits Review Commission
Vote Results
December 8, 2006

S-2205 (Vitale)
Requires health insurers and SHBP to provide certain mental health benefits for eating disorders under same terms and conditions as for other illnesses and diseases.

Motion: Recommend not to enact since the bill would increase State and local employer SHBP costs.

Discussion: Treatment for the symptoms associated with eating disorders is covered by the SHBP under the rules regarding coverage for non-biologically based mental illness.  Coverage is limited to maximums of $10,000 per calendar year and $20,000 for the entire period of coverage under the plan.  The enactment of P.L. 1999, c.441 removed the caps on biologically based mental illnesses and provided that the same terms and conditions as other illnesses under the SHBP would apply.  This bill if enacted would remove the non-biological based mental illness caps for eating disorders and would increase SHBP costs to $25 million annually.

S-2163 (Lesniak)
Permits local employers in SHBP to negotiate benefits and cost sharing with employees; permits local employers to offer incentives to employees for waivers of SHBP coverage; requires annual independent review of SHBP.

Motion: Recommend to enact with modifications.

Discussion:  Recommendation to support the provision that would allow for the closure of the Traditional Plan for new employees of a local employer based on a collectively negotiated agreement

Recommendation to support the provision that would provide local employers the ability to modify through collective bargaining agreements with their active employees the benefits provided to those employees through the SHBP.

Recommendation to support the provision that would allow for the payment obligation of local employer premiums for active employee coverage to be collectively negotiated.

Recommendation to support the provision that would extend the waiver of health benefits coverage incentive to all local employers.

Recommendation not to support the Division of Pensions and Benefits refunding an employee of a local employer when the employee enrolls a spouse that is already covered by the SHBP as an employee of a local employer as a dependent and is required to pay the full cost of the dependent coverage.  The State Health Benefits Commission approved the publication of a proposed regulation concerning elimination of duplicate coverage for members.

Recommendation to support the provision that would permit part-time local employees to participate at their own expense in the NJ PLUS plan of the SHBP.

Recommendation to oppose the provision that would require the State Health Benefits Commission to initiate an annual independent review to assess the structure of the SHBP.  A five year review would be supported.

A-3431 (Cohen)
Establishes maximum premium rate for certain dependent health benefits coverage at 45% of single coverage.
 
Motion: Recommend not to enact since the bill would set an unrealistically low premium for over age dependents in the SHBP.

Discussion: The SHBP consultant recommended that the premium rates be set at 27% higher than the SHBP rates for single coverage. The State Health Benefits Commission approved rates at 110%, therefore to establish a premium rate of 45% of single coverage for overage dependents would result in increase costs to both State and local employers of the SHBP.

S-2192 (Singer)
Allows application for PERS accidental disability benefit for injury sustained while employed at State psychiatric institution or correctional facility immediately prior to PERS membership.

Motion:  Bill is tabled until the decision of the Appellate Court is released

S-2180 (Lance)
Creates defined contribution program for elected officials and certain appointed public officials.

Motion: Recommend to enact with modifications.

Discussion: The Commission fully supports the sponsor’s intention of the bill in creating a defined contribution plan for elected and appointed officials. The proposed bill only impacts members of PERS and does not address the issue of part-time employment. Also, there are no provisions for the funding of the Divisions of Pensions and Benefits administrative costs.  If enacted, there are administrative and technical issues that would need to be addressed.
 
S-2125 (Lance)
Increases statutory mandatory retirement age for justices, judges, administrative law judges, county prosecutors, and workers’ compensation judges from 70 to 75.

Motion:  Commission is neutral on the proposed bill since it is a public policy bill and will not result in increased pension benefit costs. 



Pension and Health Benefits Review Commission
Vote Results
September 15, 2006

A-3152 (Johnson)
Establishes presumption of eligibility for accidental disability allowance for certain public employees who worked in certain locations following September 11, 2001 attack in New York City.

Motion: Recommend not to enact since the bill is limited to only certain members of the State’s public pension plans and a broader approach, possibly on a Federal level should be considered.

Discussion: The provisions of this bill would compensate only those members of the PERS, PFRS and SPRS and ignores members of the TPAF.  Also, many individuals who are not members of the State’s public pension systems that may have volunteered their efforts during the 9-11 crisis would not be impacted by this bill.  A broader approach, possibly on the Federal level, should address this issue.

A-3085 (Johnson/Prieto)
Extends eligibility for certain benefits to veterans who performed active service in U.S. Armed Forces during Cold War.

Motion:  Recommend not to enact since the bill’s scope is too broad and would result in additional State and local employer pension costs.

Discussion:  The population this bill attempts to target is much too broad since in order to qualify for veteran’s preference an individual must have performed active service in the US Armed Forces between February 4, 1945 and December 25, 1991.  Unlike existing State veterans preference laws, this bill does not require continuous active service for at least 14 or 90 days in a specific area of military conflict.  State mandate, State pay issues need to be addressed.

A-3146 (O’Toole)
Increases enrollment threshold in PERS and TPAF to $10,000; changes definition of compensation used to calculate benefits in PERS, TPAF, PFRS, SPRS, and JRS to average annual compensation of all service years.

Motion:  Bill is tabled awaiting the recommendations of the Joint Committee on Public Employee Benefits Reform.

A-3067 (Van Drew)
Allows PERS Prosecutors Part members to purchase service credit in that part for service prior to January 7, 2002 credited in regular PERS.

Motion:  Recommend not to enact since the PERS may be subject to potential anti-selection issues and future increased State pension contributions.

Discussion:  Although this bill requires the member to pay the full cost of converting their prior regular PERS service to Prosecutor Part service, the purchase of the prior PERS service will allow the member to attain certain
service credit thresholds in the Prosecutors Part plan that would qualify the member for an increased pension sooner than would otherwise be available had they not been able to purchase the service credit.

A-3021 (Merkt)
“Part-time Public Employees and Elected Officials Pension Reform Act” ends retirement system enrollment for Legislators and part-time public employees and elected officials commencing service after enactment.
 
Motion:  Recommend not to enact since the definition of part-time employment is not addressed in the bill.

Discussion:  Current pension statutes applicable to the State plans currently provide no uniform definition of a full-time employee.  Also, the bill does not provide for an alternative plan for Legislators.

S-2061 (Sweeney/Kyrillos)/A-3403 (Moriarty/Mayer)
Permits elected officials and legislators with simultaneous PERS-covered elected office or employment to choose only one position for receipt of PERS credit.

Motion:  Recommend not to enact since a more comprehensive approach to benefits reform should be considered.

Discussion: The bill as written would minimize the occurrence of tacking (tacking occurs when a public employee accepts multiple positions that are covered by the same retirement system at the same time in order to increase the salary base the will be calculated for retirement purposes) for State Legislators and elected officials but would not eliminate this practice for the remaining State and local employees that are members of PERS.

S-2036 (Gormley/Sweeney)
Changes age of eligibility for TPAF and PERS early retirement option without benefit reduction from 55 to 60 for new enrollees.

Motion:  Bill is tabled awaiting the recommendations of the Joint Committee on Public Employee Benefits Reform.

S-1943 (Kean/Kyrillos)/A-3012 (Corodemus)
Requires PERS designate position providing least compensation, for member holding concurrent positions, as compensation base for contributions and pension calculations.

Motion: Recommend not to enact since it may promote pension abuse.

Discussion: The obvious intent of the bill is to eliminate the opportunity for tacking.  The bill provides that the lowest paying position will be designated as the basis for enrollment in PERS.  This will enable the member to contribute the lowest dollar amount to the pension system during their earlier pension years.  A member who gets closer to retirement can terminate from the lower paying position and designate the higher paying position as pensionable and collect a lifetime pension calculated on the higher salary.  The State and local employers participating in PERS would be responsible for the unfunded pension liability.

A-3095 (Cryan/Diegnan)
Requires local boards of education to join SHBP.

Motion:  Recommend not to enact since State-mandate, State-pay issues may need to be addressed.

Discussion:  Mandating the participation of each local school board in the SHBP may, increase the aggregate cost of providing health benefit coverage to school board employees.  Statutes governing employer provided health benefit coverage for non-SHBP participating boards of education allow these boards to negotiate the terms of employer provided health benefit coverage based on an executed collective negotiations agreement.  The SHBP participating local boards of education are not permitted to negotiate the terms for active employee coverage and are thereby required to pay the full cost of active employee coverage.

A-3003 (Thompson)
Requires insurers and State health care coverage programs to cover cost of HIV vaccine.

Motion:  Recommend not to enact since the HIV vaccine is not yet approved or available.

Discussion:  This bill would mandate insurance coverage for an HIV vaccination.  It is the SHBP policy to provide immunization coverage in the program’s managed care plans upon approval of the vaccination by the FDA.  Currently, there is no approved vaccination for HIV; therefore the provisions of this bill are prospective.  The bill also continues the questionable practice of mandating health benefit coverage.



Pension and Health Benefits Review Commission
Vote Results
June 23, 2006

S-719 (Inverso)
Changes calculation of PERS retirement allowances for certain members who receive significant compensation enhancement within five years of retirement.

Motion: Recommend not to enact since the bill is too narrowly focused.

Discussion: The bill’s provisions are limited to appointed State positions and positions not covered by civil service. Most salary increase problems are related to appointive positions, but 20 percent increases may also be possible in civil service positions. This bill would not be applicable to pension benefits that are based on final year salary or the highest 12-month salary, such as the Veteran’s Retirement benefit. Large salary increases are usually associated with this type of benefit.

S-1601 (Asselta)
Extends mandatory retirement age for certain PFRS members.

Motion: Recommend not to enact since the bill appears to be special legislation, contrary to the State’s policy regarding age restrictions for PFRS members and the issue of State mandate State pay.

Discussion: The narrowly drawn provisions of this bill more than likely indicate it is special legislation. The enactment of this bill will undermine the rationale of allowing age restrictions for public safety officers as again allowed under the ADEA. This bill will allow a public safety officer to work till the age of 69, which, considering the risk factors associated with these positions, may not be in the best interest of both the individual and the public at large.

S-1393 (Connors)
Phases in cost of living adjustment in pension allowances and survivor benefits payable to certain former public safety officers and their survivors.

Motion: Recommend not to enact because of the substantial increases in employer pensions costs.

Discussion: This bill would eliminate the current uniformity of COLA benefits and provide higher COLA benefits to retired policemen and firemen and their beneficiaries. It would further increase the disparity in benefits that currently exists between policemen and firemen and other public employees. If enacted, the cost of the unfunded liability will increase by $2 billion.

S-105 (Coniglio/Sweeney) /A-999 (Prieto/Manzo)
Requires health benefits coverage for certain therapies and applied behavioral analysis for the treatment of certain autism disorders.

Motion: Recommend not to enact since the bill does not address the overall issue of providing coverage for developmental disorders. These issues should be addressed during the next labor contract negotiations.

Discussion: Autism is classified as a “biologically-based mental illness” under State law, and treatment is currently provided at the same level as other medical conditions. Currently, the SHBP does not cover developmental therapies. If enacted this bill would increase State and participating local employer costs by $15 million in FY 2007.

A-2913 (Van Drew)
Provides paid health benefits under State Health Benefits Program to certain TPAF veteran retirees.

Motion: Recommend not to enact because of the significant increase in State costs.

Discussion: The enactment of this bill will create a disparity in the aggregate pension benefit when compared to those available to State and local veteran members of PERS. It would also encourage the introduction of future legislation that would provide PERS members who are veterans that retire with less than 25 years of pension service credit with State paid post retirement medical coverage. If enacted, the State cost for FY 2007 would increase by $10 million.

A-1742 (Johnson/Barnes/Scalera)
Provides certain benefits to New Jersey Transit police officers.

Motion: The bill was tabled at the sponsor’s request.

A-2163 (Payne)
Provides for enrollment in PERS of certain employees of the City of Newark.

Motion: The bill was tabled since the NERS demographic information was not received. The Division of Pensions and Benefits strongly opposes the enactment of this bill without an estimate of its fiscal impact.

A-815 (Payne)
Provides additional retirement benefits for certain county and county college employees and certain municipal employees who retire between September 1, 1995 and January 1, 1996.

Motion: Recommend not to enact because of the potential costs impact and the premature loss of institutional knowledge which results from an early retirement incentive program. Also, this bill does not provide current retirement dates.

Discussion: Historically, ERI programs have done little more than produce only short term cost savings. In most cases, the back filling of the vacated positions is more than likely to occur. In general, ERI programs are very costly to employers.

A-360 (Chatzidakis/Bodine)
Extends certain benefits to veterans of operations that have continued from "Desert Shield/Desert Storm."

Motion: Recommend to enact since the inclusion of this military operation is consistent with past practices.

Discussion: Statutory provisions are already in place giving special veteran’s preferences to pension system members who were involved in certain military campaigns. This bill will extend certain benefits to include this military campaign.

A-160 (Vandervalk/Bateman/Steele)
Changes compensation trigger for reenrollment of PERS retiree from $15,000 in aggregate to $15,000 per public employer.

Motion: Bill was tabled since the legislative joint committee will convene this summer to review pension reform.



Pension and Health Benefits Review Commission
Vote Results
April 28, 2006

A-2163 (Payne)
Provides for enrollment in PERS of certain employees of the City of Newark.

Motion: Bill was tabled and will be reviewed at the June 23, 2006 PHBRC meeting.

S-1416 (Connors)
Allows PERS ordinary disability retiree to earn up to $3,000 in PERS-covered employment annually before cancellation of disability benefit and reenrollment in PERS.

Motion: To recommend against enactment since it is inconsistent with current pension regulations and would encourage more ordinary disability retirements.

Discussion: Since the prerequisite to be eligible for a disability pension is to become "totally and permanently disabled," any legislation that encourages disability retirees to return to employment without threat of relinquishing their disability pension is contradictory to the purpose of a disability benefit.

S-1111 (Ciesla)/A-2419 (Wolfe/Holzapfel)
PFRS members to reduce retirement allowance to provide survivor benefit for named beneficiary.

Motion: To recommend enactment since the bill will provide similar benefits to that of the PERS and TPAF and is cost neutral.

Discussion: The bill if enacted would allow a PFRS member an actuarially reduced pension benefit in order to provide a continued benefit to a designated beneficiary. The bill will be cost neutral. Unlike PERS and TPAF the bill will continue to provide the surviving spouse pension provisions, which is 50% of final compensation payable upon the death of a retired PFRS member.

S-1110 (Ciesla)/A-2420 (Wolfe/Holzapfel)
That PFRS definition of widow, widower and spouse will include domestic partners of all PFRS members.

Motion: To recommend against enactment because of State-mandate, State-pay issues.

Discussion: It is estimated that employer pension contributions to the PFRS will increase between .5% and 1% of payroll if this bill is enacted. There are 548 local employers who participate in the PFRS, 27 have adopted the pension provisions of the Domestic Partnership Act. Consequently, 521 local employers will be impacted by this bill. Since local pension costs will be impacted by this bill, State-mandate, State-pay issues may need to be addressed.

A-2727 (Manzo)
Provides for continuation of health insurance coverage in group and SHBP health plans for unlimited period of time for certain former employees and their dependents.

Motion: To recommend against enactment since bill would provide coverage for an unlimited period of time and there are other health care coverage alternatives available.

Discussion: The bill would indefinitely expand the entitlement to the COBRA health benefits under Federal law. The premiums paid by the employees electing the COBRA coverage may not absorb the entire higher costs associated with this bill. Employers participating in the SHBP will partially subsidize the resulting increased costs through increased required premiums. Other alternative health care coverage exist that can provide basic health care coverage and may not be as costly.

A-2534 (Baroni)
Requires health insurance coverage by health insurers and the SHBP for expenses incurred in connection with prophylactic mastectomies and other mastectomy-related procedures.

Motion: To recommend against enactment since most of the SHBP already cover reconstructive breast surgery.

Discussion: Reconstructive breast surgery following a mastectomy is already a covered procedure in all plans in the SHBP. This bill would mandate coverage for prophylactic mastectomy in the Traditional Plan and NJ PLUS out-of-network, which currently do not provide this coverage. Prophylactic mastectomy, which is considered a preventive care procedure, is currently covered under the NJ PLUS in-network plan and the HMO's participating in the SHBP. Preventive care coverage is typically not available in an indemnity plan. SHBP members may elect to participate in either the Traditional plan or one of the managed care plans.

A-2311 (McKeon)
Requires health insurers and State Health Benefits Commission to provide coverage for posttraumatic stress disorder under same conditions as other sickness.
.
Motion: To recommend against enactment since the bill addresses only one of the non-biological based mental illnesses.

Discussion: Currently, treatment for the symptoms associated with PTSD is covered by the SHBP under the rules regarding coverage for non-biologically based mental illness. Coverage is limited to maximums of $10,000 per calendar year and $20,000 for the entire period of the person's coverage under the plan. This bill would remove the non-biological based mental illness limitations for PTSD and coverage would be provided under the same terms and conditions as any other illness. It is recommended that the SHBP Commission review all limitations placed on mental illness coverage.

A-2217 (Van Drew)
Extends fully paid SHBP benefits to surviving spouses of school district and county college retirees with 25 or more years of service.

Motion: To recommend against enactment since it would increase the State's annual health benefits expense.

Discussion: The State's total obligation for active and retired employee health benefit coverage is projected to exceed $2.0 billion in fiscal 2006. To expand the State's obligation to include coverage for surviving spouses of school districts and county colleges with 25 or more years of service will increase the State's annual costs significantly.

A-971 (Stender)
Requires health insurers to provide health benefits coverage for treatment of pathological gambling.

Motion: To recommend against enactment since it would increase the State and local employer health care costs.

Discussion: The diagnosis and treatment of compulsive gambling is very subjective. A large majority of pathological gamblers may suffer from other co-morbid conditions that may be covered by the SHBP. To carve out pathological gambling disorder and treat it as any other medical illness would not be prudent at this time.

A-1936 (Wisniewski)
Concerns coverage for childhood immunizations.

Motion: To recommend against enactment since mostly all the SHBP health plans cover childhood immunizations except the Traditional Plan and the NJ PLUS out-of-network.

Discussion: Any preventive care coverage, including immunizations is typically not available in an indemnity plan. Coverage for preventive care is a feature unique to managed care plans such as NJ PLUS in-network and any of the five HMO's that participates in the SHBP. Members in the SHBP may elect in either the Traditional plan or any of the managed care plans. Mandating preventive care in an indemnity plan is contradictory to the design of the plan. State and local employer SHBP premiums are estimated to increase by $3.3 million.



Pension and Health Benefits Review Commission
Vote Results
March 3, 2006

S-544 (Buono)
Requires health insurers and SHBP to provide coverage for screening for cervical cancer, including testing for HPV.

Motion: Recommend enactment since there will be no increased costs to the State.

Discussion: The State currently requires larger group health insurers (groups greater than 50 persons), health maintenance organizations and SHBP to provide coverage for expenses incurred in conducting a Pap test and any confirmatory test. This bill broadens the requirement to include individual and small employer health benefit plans.

S-899 (Bucco)
"Grace's Law;" requires health insurers, State Health Benefits Program and NJ FamilyCare to provide coverage for hearing aids for covered persons 18 and younger.

Motion: Recommend enactment since the bill provides needed hearing aides to school children, which may in the long run decrease health and societal costs associated with hearing impairment.

Discussion: Early detection and treatment of hearing loss is most successful when the hearing loss is identified during the first few months of life. Most health plans cover the costs of auditory screenings. Hearing aides, although very expensive, greatly improve the health and quality of life for children. Costs controls can be achieved through network contracting and discounting.

A-1628 (Conaway)
Requires SHBP to cover prostate cancer screening.

Motion: Recommend against enactment since the procedure is already covered by the SHBP’s managed care plans and the NJ PLUS in-network.

Discussion: The procedure mandated by this bill is already covered under the SHBP’s managed care plans. It is not covered under the Traditional Plan or NJ PLUS out-of-network. Traditional Plan members that desire this coverage have the opportunity to enroll in the SHBP’s managed care plans during the program’s annual open enrollment period. Mandating this coverage in the Traditional Plan will increase the annual cost of the plan. It was also recommended that since the Traditional Plan does not provide for any diagnostic testing or treatment it is an outdated plan that should be abolished.

A-1681 (Beck)
Prohibits certain elected officials and appointed officers from receiving dual health benefit coverage.

Motion: Recommend enactment since it broadens the dual coverage prohibition already in place for members of the State Legislature.

Discussion: The provisions of this bill prohibits dual health care coverage to any person holding State or local elective public office, or serving as an appointed member of a governing or advisory body of an independent authority, board, commission, agency or instrumentality of the State. Similar legislation was enacted P.L. 2003, c. 308 provided that if a member of the Legislature elects health benefits coverage on the basis of service in the Legislature, the member will not enroll as the primary insured for health benefits for which the member is eligible through any other public entity, and will not accept any amount of money in consideration for filing a waiver. P.L. 2005 c. 132, the fiscal year 2006 Appropriations Acts, contains a provision that effectively prohibits the State from paying for dual health benefit coverage for State and local elected officials employed by the State.

S-508 (Gill)
Provides additional SHBP benefits to certain retired PFRS, CPFPF and PERS survivors.

Motion: Recommend against enactment since it will increase the State’s health benefits costs and encourage more legislation extending these post retirement medical benefits to the other State retirement systems.

Discussion: The State is obligated to pay for post retirement medical (PRM) benefits for State employees and school district employees that retire with 25 years of pension service credit. As is currently the case under P.L. 1997 c. 330, the State’s obligation is limited to providing PRM benefits to the retiree and dependents, not surviving spouses. Surviving spouses may elect to continue coverage in the SHBP by paying premiums on their own. If this bill is enacted, the State would be obligated to pay PRM to Chapter 330 recipients on a more liberal basis than to State and school district employees.

A-1606 (Conaway)
Increases TPAF cost of living adjustment from 60% to 100% of Consumer Price Index.

Motion: Recommend against enactment because of the significant additional State pension costs and will set a precedent among the other State retirement systems.

Discussion: The current cost-of-living-adjustment is already considered a generous benefit in comparison to other state retirement systems. The enactment of this legislation would increase the State’s annual additional pension contribution by $285 million.

A-631 (Rumpf)/(Connors)
Revises computation of accidental death benefit payable to beneficiaries of certain members of SPRS killed in line of duty.

Motion: Recommend against enactment since it creates a disparity among the other State retirement systems.

Discussion: The provisions regarding the calculation of accidental death benefits are uniform under all the major State retirement systems, i.e., the annuity and the lump sum death benefit is calculated based on final compensation, or in the case of the SPRS, adjusted final compensation. This legislation would liberalize the SPRS provisions to provide a higher level of benefit based on an annual salary the member would have earned at some future point in time had the appointment become effective. The bill’s provision making it retroactive to SPRS accidental deaths occurring on or after January 1, 1996 indicates it is special legislation.

A-544 (Hackett) (TO BE HELD AT SPONSOR’S REQUEST)
Permits purchase of PERS credit for unpaid service as elected official.

A-527 (Panter)
Requires legislators to designate one covered position of elected office or employment for PERS credit.

Motion: Recommend enactment, and the bill should be broadened since it only impacts members of the legislature.

Discussion: The Commission supports this bill because it will assist in curbing the abusive practice of pension “tacking.” “Tacking” occurs when a public employee accepts multiple positions that are covered by the same retirement system at the same time in order to increase the salary base that will be used for retirement purposes. A pension abuse not rectified by this bill concerns public employees that are members of PERS based on part-time positions for the bulk of their career and prior to retirement obtain a high paying position that will boost their retirement benefit (“boosting”).

A-1754 (Greenwald)/(Roberts)/(Mayer)
Provides PFRS death benefit of 3 1/2 times the annual rate of compensation in the event of accidental death occurring in the first year of creditable service.

Motion: Recommend enactment but the Commission does not support the bill’s retroactive effective date.

Discussion: The Commission members suggested that the bill’s sponsors should expand the bill’s provisions to all State retirement systems not just the PFRS. At present, if a member of the PFRS dies as a result of an accident met in the actual performance of duty after only two months of employment, the beneficiary would receive the group life insurance calculated at 3 ½ times the two months of creditable base salary, not the full annual salary. This bill provides that in the even of accidental death occurring in the first year of creditable service, the death benefit paid to the beneficiary shall be computed at 3 ½ times the annual rate of compensation. The retroactive effective date to April 1, 1995 indicates that it is special legislation intended to impact one or a few individuals.

 
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