Governor Chris Christie • Lt. Governor Kim Guadagno  
The Official Web Site For The State of New Jersey - Department of Treasury
Global Navigation
FAQs Departments/ Agencies Services A to Z NJ Home Page
Disclaimer
Twitter YouTube Facebook
Pensions and Benefits
PENSION AND HEALTH BENEFITS
REVIEW COMMISSION 2016

View Pension and Health Benefits Review Commission Meetings from 2014 and 2015.

2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004


PENSION AND HEALTH BENEFITS REVIEW COMMISSION
2016 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:

  • February 19, 2016 - CANCELLED
  • March 18, 2016
  • May 20, 2016
  • July 29, 2016
  • September 23, 2016 - CANCELLED
  • October 21, 2016 - NEW!
  • November 18, 2016 - CANCELLED

Meeting Agendas for 2016

Archives

Pension and Health Benefits Review Commission Meeting Agendas from 2014 and 2015.

2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004


Vote Results for 2016

Archives

Pension and Health Benefits Review Commission Vote Results from 2014 and 2015.

2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004


MEETING AGENDAS

Pension and Health Benefits Review Commission
Agenda for March 18, 2016

The Pension and Health Benefits Review Commission will meet on Friday, March 18, 2016 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-448 (Allen)/A-2313 (Vainieri Huttle)
Requires health insurers, SHBP, and SEHBP health benefits coverage for eating disorders.

S-659 (Turner)/A-2297 (Vainieri Huttle)
Requires health insurance coverage for contraceptives to include prescriptions for 12 months.

S-707 (Gordon)
Requires certain health benefits plans to provide coverage for outpatient behavioral health care services.

S-859 (Stack)
"Volunteers in Public Service Pension Reform Act," allows municipal elected officials in PERS to retire based on other PERS service and remain in office with no salary or health care benefits for that office.

A-1082 (Brown)
Makes all members of Legislature ineligible to participate in SHBP.

A-1464 (Lampitt/Coughlin/Conaway/Vainieri Huttle/Lagana)
Authorizes health care practitioners to provide health care services through telemedicine.

A-1783 (Burzichelli/Carroll)
Increases salary of certain government officials; codifies legislative district office allowance and legislative director salary; opens PERS enrollment to certain elected officers; eliminates PERS/TPAF disability insurance.

ACR-109 (Prieto/Jimenez)/SCR-2 (Sweeney/Turner/Greenstein)
Proposes constitutional amendment to require payments by State to State-administered retirement systems and establish in Constitution right of public employees to pension benefit; provides for enforcement of funding obligations and benefit rights.


Pension and Health Benefits Review Commission
Agenda for May 20, 2016

The Pension and Health Benefits Review Commission will meet on Friday, May 20, 2016 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-148 (Madden)
Requires health insurance coverage for certain student athlete physical examinations.

S-296 (Vitale/Gill)/A-2329 (Vainieri Huttle/Wisniewski/Muoio/Gusciora)
Establishes certain standards for health benefits plans with tiered network.

S-1929 (Lesniak)
Requires health insurance coverage for amino acid-based elemental formula.

S-1936 (Vitale/Gordon)/A-3423 (Benson/Lampitt)
Provides for designation of acute stroke ready hospitals; establishes Stroke Care Advisory Panel and Statewide stroke database; requires development of emergency services stroke care protocols; and mandates insurance coverage for telemedicine for stroke care.

A-3542 (Vainieri Huttle)
Requires health benefits coverage of hearing aids for children 17 years of age and younger.

A-3558 (Wisniewski/Gusciora/Holley/Muoio)/S-1934 (Weinberg/Allen)
Places freeze on future enrollment in tiered network health benefits plans until new legislation and regulations governing those plans are in effect.

A-3587 (Prieto/Jimenez)
Enhances PFRS accidental death pension for surviving spouse by providing for minimum of $50,000 annually.

A-3610 (Conaway/Singleton/Greenwald)
Increases accidental death benefit to 70 percent of final compensation for surviving children if there is no surviving spouse of SPRS member who dies in performance of duty, changes definition of child.


Pension and Health Benefits Review Commission
Agenda for July 29, 2016

The Pension and Health Benefits Review Commission will meet on Friday, July 29, 2016 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-1980 (Bucco)/A-3916 (Quijano/Benson)
Requires health insurers to provide coverage for hearing aids.

S-2304 (Beck)
Establishes primary health care plan with optional riders in SEHBP for school employees; requires contribution by school employees for health care benefits.

S-2305 (Beck)
Establishes primary health care plan with optional riders in SHBP for public employees.

S-2327 (Greenstein)
Increases accidental death benefit to 70 percent of compensation for surviving spouse or surviving children of PERS law enforcement, correction, and firefighter members; redefines child.

A-3712 (Conaway/Vainieri Huttle)
Requires certain health benefits plans to provide treatment for substance abuse and dependency when determined medically necessary by physician or psychologist.

A-3743 (McKeon/Lampitt/Vainieri Huttle)
Requires certain health benefits plans to provide coverage for behavioral health care services determined to be medically necessary, including 90 days per year of inpatient residential care.

A-3890 (Kean)
Allows consideration of purchased PERS credit for federal service in Central Intelligence Agency to qualify for employer-provided health care benefits in retirement.


Pension and Health Benefits Review Commission
Agenda for October 21, 2016

The Pension and Health Benefits Review Commission will meet on Friday, October 21, 2016 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-2304 (Beck)
Establishes primary health care plan with optional riders in SEHBP for school employees; requires contribution by school employees for health care benefits.

S-2305 (Beck)
Establishes primary health care plan with optional riders in SHBP for public employees.

S-2441 (Stack)
Permits county prosecutors to enroll in Prosecutors Part of PERS.

A-982 (Gove/Rumpf)
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.

A-1284 (McGuckin)
Extends eligibility for certain veterans' benefits to members of reserve components of US Armed Forces and NJ organized militia who serve at least 180 continuous days.

A-3206 (Wolfe/Singleton/Quijano/Holley)
Provides that PFRS definitions of widow, widower and spouse will include domestic partners of all PFRS members.

A-3905 (O’Scanlon)
Sets level for health care benefits; requires employee contributions; prohibits reimbursement of Medicare Part B; adds member to SHBP/SEHBP plan design committees; requires retirees to purchase health care through exchanges.

A-3941 (O’Scanlon/Mukherji)
Prohibits multiple employer coverage for health care benefits of public employee and requires payment based on employee's aggregate public income.

ACR-190 (O’Scanlon)
Proposes constitutional amendment to authorize changes to pension and health care benefits of public employees and to require State annual pension payments in certain cases.

 


VOTE RESULTS

Pension and Health Benefits Review Commission
Vote Results

March 18, 2016

S-448 (Allen)/A-2313 (Vainieri Huttle)
Requires health insurers, SHBP, and SEHBP health benefits coverage for eating disorders.

Motion:  Recommend not to enact.
    
Discussion:   The Commission does not recommend enactment of this bill because it usurps the authority of the SHBP and the SEHBP Plan Design Committees.

Coverage for the eating disorders mentioned in this bill is already provided by the SHBP/SEHBP.  However, they are not statutorily mandated.

S-659 (Turner)/A-2297 (Vainieri Huttle)
Requires health insurance coverage for contraceptives to include prescriptions for 12 months.

Motion:  Recommend not to enact.  
    
Discussion:   The Commission does not recommend enactment of this bill because:

      • It may generate waste,
      • A plan participant could terminate prior to the end of the 12 month prescription period,
      • The State plans currently provide reminders about prescription refills,
      • Its enactment may encourage the expansion of this mandate to other prescribed drugs, and
      • It usurps the authority of the SHBP and the SEHBP Plan Design Committees.

                           
S-707 (Gordon)
Requires certain health benefits plans to provide coverage for outpatient behavioral health care services.

Motion:  Recommend not to enact.             

Discussion:   Limiting comments to this bill’s impact on the SHBP/SEHBP, the Commission does not recommend enactment of this bill because:

  • It eliminates the ability for the plans to exercise utilization management review,
  • It takes away the determination of medical necessity from the plan and transfers it to the medical provider,
  • There are significant additional costs associated with the bill, and 
  • It usurps the authority of the SHBP and the SEHBP Plan Design Committees.

S-859 (Stack)
"Volunteers in Public Service Pension Reform Act," allows municipal elected officials in PERS to retire based on other PERS service and remain in office with no salary or health care benefits for that office.

Motion:  Recommend to enact. 

Discussion:  The Commission recommends enactment of this bill because no compensation or employer-paid active employee health benefits would be provided once the elected official retires and continues in the public office.  However, the bill does provide an exception to the “bona fide retirement” rules regarding returning to public employment after retirement.  The Commission’s decision to recommend enactment is predicated upon the determination that this bill’s enactment will not jeopardize the tax qualified status of the pension plan.

A-1082 (Brown)
Makes all members of Legislature ineligible to participate in SHBP.

Motion:  Recommend to enact. 

Discussion:  The Commission recommends enactment of this bill because it would result in a temporary reduction in the State’s employer health benefit costs.  However, its enactment would only apply to members of the State legislature and not to all part-time elected and appointed officials who are currently eligible for employer paid SHBP coverage.  The Commission recommends ADDITIONALLY CONSIDERING extending its provisions to part-time locally elected and appointed officials who continue to receive employer-paid health benefit coverage.

A-1464 (Lampitt/Coughlin/Conaway/Vainieri Huttle/Lagana)
Authorizes health care practitioners to provide health care services through telemedicine.

Motion:  Recommend not to enact.

Discussion:  Limiting comments to this bill’s impact on the SHBP/SEHBP, the Commission does not recommend enactment of this bill because, as written, the bill would not produce a reduction in plan costs, and it usurps the authority of the SHBP and the SEHBP Plan Design Committees.

A-1783 (Burzichelli/Carroll)
Increases salary of certain government officials; codifies legislative district office allowance and legislative director salary; opens PERS enrollment to certain elected officers; eliminates PERS/TPAF disability insurance.

Motion:  Recommend not to enact, with comment. 

Discussion:  Although parts of the bill have merit, such as its repeal of the PERS and TPAF long term disability insurance benefit, the Commission considers this bill to be in need of modification because it amends sections of the law that are outdated, specifically, the bill’s salary increase provisions.

ACR-109 (Prieto/Jimenez)/SCR-2 (Sweeney/Turner/Greenstein)
Proposes constitutional amendment to require payments by State to State-administered retirement systems and establish in Constitution right of public employees to pension benefit; provides for enforcement of funding obligations and benefit rights.

Motion:  Recommend not to enact. 

Discussion:  The Commission does not recommend enactment of this bill.  Without significant structural changes in State revenue and expenditures, quarterly payment requirements would significantly increase the State’s short term cash borrowing needs.  Depending on market conditions, additional cash flow borrowing could be impossible and, if possible, would adversely impact State’s credit ratings and increase exiting short term borrowing costs.  If financial markets could accommodate additional short term borrowing, the impact on the State budget of higher short term borrowing costs would be offset by earnings on accelerated quarterly payments which would help constrain the ARC.  Constitutional amendment requiring State pension contributions will restrict State spending in other areas and/or require tax increases, especially in years when economic conditions otherwise suppress ordinary revenue collections.
The Commission also expressed concern that writing benefit levels into the Constitution would make additional reforms to curtail pension abuses more difficult. Noted abuses cited by members included part time employees grandfathered under prior reforms continuing to receive full year pension credit and then receiving end of career full time positions that dramatically boost pensions.


Pension and Health Benefits Review Commission
Vote Results

May 20, 2016

S-148 (Madden)
Requires health insurance coverage for certain student athlete physical examinations.

Motion:  Recommend not to enact.

Discussion:  The Commission does not recommend enactment of this bill because annual physical examinations are already covered under the SHBP/SEHBP, and the health benefit mandates imposed by this bill would usurp the authority of the SHBP/SEHBP Plan Design Committees.

Annual physical examinations are already covered under the SHBP/SEHBP by each of the carriers that provide coverage for each of the plans in the State’s program, i.e. Horizon Blue Cross Blue Shield of New Jersey and Aetna. Network providers in each of these plans offer a full range of services that include well-care and preventive services such as annual physicals, well-baby/well-child care, immunizations, mammograms, annual gynecological examinations, and prostate examinations.

S-296 (Vitale/Gill)/A-2329 (Vainieri Huttle/Wisniewski/Muoio/Gusciora)
Establishes certain standards for health benefits plans with tiered network.

Motion:  Recommend not to enact.

Discussion:  In regard to the SHBP/SEHBP, the Commission recommends not to enact because of its provision that would legislatively mandate the cost-sharing of the least preferred tier, usurping the authority of the SHBP/SEHBP Plan Design Committees and restricting them from future plan design changes that could result in significant savings to the taxpayers of this State as well as public employees and their employers.

The bill would restrict the Plan Design Committees, authorized pursuant to P.L. 2011, c.78 with the responsibility for the plan design of the SHBP and SEHBP, from making future changes to the plans.  The provision in this bill that mandates the cost sharing amount associated with the lowest tier of the health benefits plan will restrict the Plan Design Committees ability to adjust cost-sharing amounts in the future.

In addition, including “University Hospital and any other general or acute care hospital designated as an instrumentality of the State” defeats the purpose of a tiered network. By definition a tiered network provides for a limited network of facilities. Insisting that one or more facilities be included in the highest tier could prevent the inclusion of a more cost effective, efficient and higher quality facility from participating.

S-1929 (Lesniak)
Requires health insurance coverage for amino acid-based elemental formula.

Motion:  Recommend not to enact.

Discussion:  The Commission does not recommend enactment of this bill because over-the counter drugs normally are not covered by the SHBP/SEHBP, it will increase SHBP/SEHBP costs for all employers participating in the plan, it shifts the final determination of medically necessary for insurance coverage away from the plan to the treating physician, and it usurps the authority of the SHBP/SEHBP Plan Design Committees.

S-1936 (Vitale/Gordon)/A-3423 (Benson/Lampitt)
Provides for designation of acute stroke ready hospitals; establishes Stroke Care Advisory Panel and Statewide stroke database; requires development of emergency services stroke care protocols; and mandates insurance coverage for telemedicine for stroke care.

Motion:  Recommend not to enact.

Discussion:  Limiting its decision to this bill’s impact on the SHBP/SEHBP, the Commission does not recommend enactment of this bill because it would negate any savings to be derived from delivering medical consultations via telemedicine by requiring providers of this service to be reimbursed by the plan at the same rate as in-person consultations.

SHBP/SEHBP coverage for telemedicine is an issue for the Plan Design Committees and should not be mandated by legislation.

A-3542 (Vainieri Huttle)
Requires health benefits coverage of hearing aids for children 17 years of age and younger.

Motion:  Recommend not to enact.

Discussion:  The Commission does not recommend enactment of this bill because it will increase SHBP/SEHBP costs to the State and participating local employers.  The enactment of this bill may encourage the introduction of future legislation to expand this coverage to the SHBP/SEHBP population over the age of 17, with potentially significant cost, and it usurps the authority of the SHBP and the SEHBP Plan Design Committees.  P.L. 2008, c. 126 created coverage up to age 15, and New Jersey offering it is generally the exception.

A-3558 (Wisniewski/Gusciora/Holley/Muoio)/S-1934 (Weinberg/Allen)
Places freeze on future enrollment in tiered network health benefits plans until new legislation and regulations governing those plans are in effect.

Motion:  Recommend not to enact.

Discussion:  Since employer/employee costs associated with the tiered network options in the SHBP/SEHBP are currently lower than other plans offered under the programs, a moratorium on future enrollment in the State programs’ tiered network plans will eliminate potential health benefit cost reduction options available to the State and participating local employers and employees.

A-3587 (Prieto/Jimenez)
Enhances PFRS accidental death pension for surviving spouse by providing for minimum of $50,000 annually.

Motion:  Recommend not to enact.

Discussion:  The Commission does not recommend enactment of this bill because it increases pension liabilities and the State’s and local employers’ cost’s to fund the PFRS.

The underfunded status of the pension plan makes it difficult to consider benefit enhancements at this time.  Additionally, this bill detracts from the formula based benefits upon which current pensions are based and provides no rationale for establishing its proposed $50,000 benefit floor.

The Commission supports the current formula system for determining benefits and does not consider a flat amount as viable for the integrity of the pension funds.  The Commission notes there is a decision expected soon from the New Jersey Supreme court as to the current Cost Of Living Adjustment (COLA).  As to benefits, the Commission is typically concerned about increasing expenditures when the plans are very underfunded.

A-3610 (Conaway/Singleton/Greenwald)
Increases accidental death benefit to 70 percent of final compensation for surviving children if there is no surviving spouse of SPRS member who dies in performance of duty, changes definition of child.

Motion:  No recommendation since the Commission received letters from Speaker Vincent Prieto and Senate President Stephen M. Sweeney serving as notice that A-3610/S-2061 are an urgent matter that legislatively will be considered and voted on as soon as practicable as required by N.J.S.A. 52:9HH-2.


Pension and Health Benefits Review Commission
Vote Results

July 29, 2016

S-1980 (Bucco)/A-3916 (Quijano/Benson)
Requires health insurers to provide coverage for hearing aids.

Motion:  Recommend not to enact.

Discussion:  The Commission does not recommend enactment of this bill because the fiscal year 2017 budget is $252 million underfunded for employee healthcare, it will increase SHBP/SEHBP costs to the State and participating local employers, the bill’s provisions depart from the current benefit structure of the SHBP/SEHBP, and it usurps the authority of the SHBP and the SEHBP Plan Design Committees. 

S-2304 (Beck)
Establishes primary health care plan with optional riders in SEHBP for school employees; requires contribution by school employees for health care benefits.

Motion:  Tabled.

Discussion:  To be discussed at the next Pension and Health Benefits Commission meeting on September 23, 2016.  Additional information has been requested relating to the cost associated with the bill.

S-2305 (Beck)
Establishes primary health care plan with optional riders in SHBP for public employees.

Motion:  Tabled.

Discussion:  To be discussed at the next Pension and Health Benefits Commission meeting on September 23, 2016.  Additional information has been requested relating to the cost associated with the bill.

S-2327 (Greenstein)
Increases accidental death benefit to 70 percent of compensation for surviving spouse or surviving children of PERS law enforcement, correction, and firefighter members; redefines child.

Motion:  No recommendation since the Commission received a letter from Senate President Stephen M. Sweeney serving as notice that S-2327 is an urgent matter that legislatively will be considered and voted on as soon as practicable as required by N.J.S.A. 52:9HH-2.

A-3712 (Conaway/Vainieri Huttle)
Requires certain health benefits plans to provide treatment for substance abuse and dependency when determined medically necessary by physician or psychologist.

Motion:  Recommend not to enact.

Discussion:  The Commission does not recommend enactment of this bill because SHBP/SEHBP employer costs will increase, and it usurps the authority of the SHBP and the SEHBP Plan Design Committees. Although the coverage mandated by this bill is already provided by the SHBP/SEHBP, a provision in this bill would eliminate the utilization management review process from the plan relating to the mandated coverage.  Utilization management review is an effective strategy that reduces unnecessary and inappropriate levels of care.  Consequently, this bill’s provision eliminating utilization review will increase employer SHBP/SEHBP costs significantly.

A-3743 (McKeon/Lampitt/Vainieri Huttle)
Requires certain health benefits plans to provide coverage for behavioral health care services determined to be medically necessary, including 90 days per year of inpatient residential care.

Motion:  Recommend not to enact.

Discussion:  The Commission does not recommend enactment of this bill because SHBP/SEHBP employer costs will increase, and it usurps the authority of the SHBP and the SEHBP Plan Design Committees. Although the coverage mandated by this bill is already provided by the SHBP/SEHBP, a provision in this bill would eliminate the utilization management review process from the plan relating to the mandated coverage.  Utilization management review is an effective strategy that reduces unnecessary and inappropriate levels of care.  Consequently, this bill’s provision eliminating utilization review will increase employer SHBP/SEHBP costs significantly.

A-3890 (Kean)
Allows consideration of purchased PERS credit for federal service in Central Intelligence Agency to qualify for employer-provided health care benefits in retirement.

Motion:  Recommend not to enact.

Discussion:  The Commission does not recommend enactment of this bill because it reverses a recently enacted pension and health benefit reform, enactment will encourage the introduction of future legislation providing further exceptions, and it will accelerate employers’ liability to provide post-retirement medical benefits.


Pension and Health Benefits Review Commission
Vote Results

October 21, 2016

S-2304 (Beck)
Establishes primary health care plan with optional riders in SEHBP for school employees; requires minimum contribution by school employees for health care benefits.

Motion:  Recommend to enact, but with an amendment to include a  provision similar to what was contained in PL 2010, c.78, that allows premium sharing by employees to be less than the bill’s minimum requirement provided that the proposed health care plan and premium sharing is determined to be no more expensive for taxpayers  than utilization of SEHBP in conjunction with the statutorily established minimum premium sharing.    

Discussion:  The main reason for commission support was that the legislation would effectuate meaningful savings which are necessary so the State budget can better meet its financial responsibilities, including increasing State payments to the various defined benefit pension systems

The Commission initially expressed concerns about the bill insofar as it would trigger penalties under the Affordable Care Act (ACA), and alternative plan design changes should be considered. The Commission’s Motion is based, in part, on Sen. Beck’s letter that was emailed to the Commission on October 20, 2016 expressing her intent to amend S-2304 in a manner that would avoid ACA penalties.

Any reduction in SEHBP costs resulting from this legislation will be dependent upon the actual migration of plan participants from the current level of benefits under the Program’s legacy plans to the lower levels of coverage provided pursuant to this bill, which is uncertain.  If all active employees “bought up” to their current benefit levels, there will be no savings associated with this new legislation. Because the majority of current retirees do not pay anything towards the cost of their coverage and would not have an incentive to select anything less than the highest buy-up option that matches their current benefit levels, there would be no savings regarding retirees. Historical State of New Jersey migration patterns have shown very small changes due to the introduction of new plans, especially when employee cost sharing provisions do not change. Approximately 5% of the current total (State, Government, and Education) active enrollment elects non-Legacy plans (i.e. Legacy plans are defined as NJDIRECT10, NJDIRECT15, Freedom 10, Freedom 15, and the HMO plans). 

The ACA does not permit annual or lifetime maximums on any services that are considered “Essential Health Benefits” (EHB) under the ACA. EHB includes, but is not limited to, emergency services, hospitalization, prescription drugs, rehabilitative services, laboratory services, and preventive services. It is important to note that the ACA does not allow maximums on these benefits in an employer’s health plan. In addition, mental health parity does not require large employers to cover these benefits, but that if these benefits are covered requirements restrict the use of limits on mental health coverage. As a result of these regulations, the following Essential Benefits Primary Plan (EBPP) limits should be excluded from the legislation:

  1. Limit of 90 days for inpatient and outpatient hospital care
  2. $2,000 annual allowance for inpatient diagnostic tests
  3. Limit of 90 days for inpatient mental health coverage
  4. Limit of 30 days for inpatient/outpatient substance abuse coverage
  5. $800 annual limit per person for wellness and preventive care
  6. $800 annual limit per person for physician office visits

This bill would change the plan design of the SEHBP significantly. Other plan design changes should also be considered, such as suggested by the New Jersey Pension and Health Benefit Study Commission in their Supplemental Report on Health Benefits dated February 11, 2016 in which a Gold Level of health benefit coverage was recommended for public employees.

S-2305 (Beck) 
Establishes primary health care plan with optional riders in SHBP for school employees; requires minimum contribution by school employees for health care benefits.

Motion:  Recommend to enact, but with an amendment to include a provision similar to what was contained in PL 2010, c.78, that allows premium sharing by employees to be less than the bill’s minimum requirement provided that the proposed health care plan and premium sharing is determined to be no more expensive for taxpayers  than utilization of SHBP in conjunction with the statutorily established minimum premium sharing.    

Discussion:  The main reason for commission support was that the legislation would effectuate meaningful savings which are necessary so the State budget can better meet its financial responsibilities, including increasing State payments to the various defined benefit pension systems

The Commission initially expressed concerns about the bill insofar as it would trigger penalties under the Affordable Care Act (ACA), and alternative plan design changes should be considered. The Commission’s Motion is based, in part, on Sen. Beck’s letter that was emailed to the Commission on October 20, 2016 expressing her intent to amend S-2305 in a manner that would avoid ACA penalties.

Any reduction in State and local employer costs resulting from this legislation will be dependent upon the actual migration of plan participants from the current level of benefits under the Program’s legacy plans to the lower levels of coverage provided pursuant to this bill, which is uncertain.  If all active employees “bought up” to their current benefit levels, there will be no savings associated with this new legislation. Because the majority of current retirees do not pay anything towards the cost of their coverage and would not have an incentive to select anything less than the highest buy-up option that matches their current benefit levels, there would be no savings regarding retirees. Historical State of New Jersey migration patterns have shown very small changes due to the introduction of new plans, especially when employee cost sharing provisions do not change. Approximately 5% of the current total (State, Government, and Education) active enrollment elects non-Legacy plans (i.e. Legacy plans are defined as NJDIRECT10, NJDIRECT15, Freedom 10, Freedom 15, and the HMO plans). 

The ACA does not permit annual or lifetime maximums on any services that are considered “Essential Health Benefits” (EHB) under the ACA. EHB includes, but is not limited to, emergency services, hospitalization, prescription drugs, rehabilitative services, laboratory services, and preventive services. It is important to note that the ACA does not allow maximums on these benefits in an employer’s health plans. In addition, mental health parity does not require large employers to cover these benefits, but that if these benefits are covered requirements restrict the use of limits on mental health coverage. As a result of these regulations, the following Essential Benefits Primary Plan (EBPP) limits should be excluded from the legislation:

  1. Limit of 90 days for inpatient and outpatient hospital care
  2. $2,000 annual allowance for inpatient diagnostic tests
  3. Limit of 90 days for inpatient mental health coverage
  4. Limit of 30 days for inpatient/outpatient substance abuse coverage
  5. $800 annual limit per person for wellness and preventive care
  6. $800 annual limit per person for physician office visits

This bill would change the plan design of the SHBP significantly.  Other plan design changes should also be considered, such as suggested by the New Jersey Pension and Health Benefit Study Commission in their Supplemental Report on Health Benefits dated February 11, 2016 in which a Gold Level of health benefit coverage was recommended for public employees.

S-2441 (Stack)
Permits county prosecutors to enroll in Prosecutors Part of PERS.

Motion:  Recommend not to enact. 

Discussion:  The Commission does not recommend enactment of this bill as it would increase pension liabilities on an already underfunded pension system. Additionally, the provision in this bill would restrict enrollment in the Prosecutors Part to someone “who is enrolled in the Defined Contribution Retirement Program, but who previously was enrolled in the Public Employees’ Retirement System (PERS) and in the Judicial Retirement System, for an aggregate period of not less than ten years” indicates this bill is more than likely “special legislation” which would impact only one individual.

The Prosecutors Part of PERS was closed to new members with the enactment of Chapter 1, P.L. 2010.  This law was enacted to institute a number of public employee pension and health benefit reforms as recommended by the Joint Legislative Committee on Public Employee Benefit Reforms in their report dated November 15, 2006.  The enactment of this bill to allow new members into this plan after it was closed to new members would be contrary to the objectives of Chapter 1 (i.e. pension reform) and may serve to increase employer costs and PERS’ unfunded liabilities, as well as to encourage the introduction of future legislation providing further exceptions.

A-982 (Gove/Rumpf)
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:  Recommend not to enact. 

Discussion:  The Commission does not recommend enactment of this bill 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 a contradiction in terms.  Also, this bill promotes “double-dipping.” (i.e. the ability to collect a public pension and a public salary simultaneously.) 
Since this bill only impacts the PERS, its enactment will create a disparity in the pension provisions when compared to the other State-administered retirement plans, specifically the TPAF, which has similar return to employment laws regarding disability pensions.  Additionally, the bill indicates it is applicable only to members who retired with an ordinary disability pension.  Accidental disability pensions appear to be excluded. The introduction of future bills extending this bill’s provisions to the other State pension plans can be anticipated.

A-1284 (McGuckin)
Extends eligibility for certain veterans' benefits to members of reserve components of US Armed Forces and NJ organized militia who serve at least 180 continuous days.

Motion:  Recommend not to enact. 

Discussion:  The Commission does not recommend enactment of this bill as it would increase pension liabilities on an already underfunded pension system.  The Commission also does not recommend enactment of this bill because the Legislature’s intent when it originally provided veterans preference in the State was to include all who served in the “theatre of operations” during world wars or major national emergencies.  To include military duty where only limited, regional service is involved would provide a windfall for those who had no direct participation in a military engagement and detracts from the original intent regarding entitlement to this benefit.
The enactment of this bill will create increased annual pension contributions for both the State and local public employers.  State-mandate, State-pay issues need to be considered. 

A-3206 (Wolfe/Singleton/Quijano/Holley)
Provides that PFRS definitions of widow, widower and spouse will include domestic partners of all PFRS members.

Motion:  Tabled. 

Discussion:  To be discussed at a future Pension and Health Benefits Commission meeting, after receiving further information from the Attorney General’s Office as to what substantive provisions of the legislation may already have been effectuated by court decisions and what provisions would represent a shift in policy. 

A-3905 (O’Scanlon)
Sets level for health care benefits; requires employee contributions; prohibits reimbursement of Medicare Part B; adds member to SHBP/SEHBP plan design committees; requires retirees to purchase health care through exchanges.

Motion:  Recommend not to enact.
 
Discussion:  The provisions of this bill would apply to both participating and non-participating SHBP/SEHBP public employers and has the potential of generating significant health benefit cost reductions to most public employers, in particular, to the State.  It would also have a significant impact on how employer-provided health benefit coverage is delivered to all active public employees and, especially, to retirees eligible for employer paid post-retirement medical (PRM) benefits.

A major element of this bill contributing to the significant reduction in the State’s annual health benefit cost is the shifting of the State’s obligation to pay the cost of PRM benefits of eligible education retirees to the local school districts and other local education employers.  The report of the Pension and Health Benefit Study Commission indicates that the savings that will be incurred by local school districts and other local education employers resulting from adopting the reforms of this bill for their active employees will meet or exceed the cost of providing PRM benefits for their eligible retirees, making this bill, at the least, cost neutral to the local school districts and other local education employers.

Currently, retirees in the SHBP/SEHBP are eligible for a choice of coverage under the majority of the plans offered to active employees.  Local employers participating in the SHBP/SEHBP are billed monthly by the Division for the premiums required to cover their active employees and retired employees who qualify for employer-paid PRM benefits.  Under this proposal, retirees would be required to purchase coverage through a private exchange.  Funding to cover the cost of the premiums would be provided by the employer through a Retirement Reimbursement Account (RRA). 

The State Health Benefit Plan Design Committee and the School Employee Health Benefit Plan Design Committee were created with the enactment of P.L. 2011, c.78 (Pension and Health Benefit Reform) and were provided with the responsibility for plan design.  These committees have been stymied from instituting significant reforms because their membership consists of equal representation of the Executive Branch and certain unions who represent public employees in the State.  This bill would add one public member appointed by the Governor to each committee which could make these committees more productive. 

The change to the public employee health benefit system proposed by this bill poses significant administrative challenges.  It should be supported by the enactment of its companion bill, A-3906, which would create the Public Employee Pension and Health Benefits Reform Task Force to oversee and resolve any issues regarding its implementation.

Concerns raised by various commission members included:  the employee contribution toward premiums in the absence of flexibility where costs would be no greater to taxpayers; the inclusion of retirees whose pension COLA has been frozen and who would need to terminate their long-time coverage and find new coverage in an exchange with new funding sources; the bill is not prospective, and; the “freezing” of State and local pension plans that is implied in this bill.

A-3941 (O’Scanlon/Mukherji)
Prohibits multiple employer coverage for health care benefits of public employee and requires payment based on employee's aggregate public income.

Motion:  Recommend to enact with modification by requiring the employer to take disciplinary action against any employee who does not disclose the employee’s aggregate compensation by referring the matter to the Prosecutor’s office.

Discussion:  The Commission recommends enactment of this bill because local public employers would be the major benefactors of any savings to be derived from this bill, since State employees, all of which receive coverage from the SHBP, already are prohibited from duplicate SHBP coverage as a result of the enactment of Chapter 2, P.L. 2010.  Additionally, the elimination of the incentive to waive coverage in the case of multiple coverage would generate additional savings to local employer and would mirror the State’s policy of not offering monetary incentives to waive coverage to State employees. 

ACR-190 (O’Scanlon)
Proposes constitutional amendment to require the State to substantially increase pension payments, but to condition increased payments on achieving cost reductions with respect to public employee and retiree health care benefits. 

Motion:  Recommend not to enact. 

Discussion:  The Commission’s Motion reflects the discussion for A-3905. Additionally, a member expressed a general concern that it is not appropriate for the Constitution to speak to employee benefit levels.

 

 

 

 
spacer

Pensions and Benefits: Home | Employer Manual | Health Benefits | Forms and Publications | Counseling Appointments
Treasury: Home | ServicesPeopleBusinesses | Divisions/AgenciesFormsContact Us
Statewide:
NJ Home | Services A to Z | Departments/Agencies | FAQs
Copyright © State of New Jersey, 1996 -
This site is maintained by the Division of Pensions and Benefits.
 

Reports Accessibility Statement Legal Statement Privacy Notice Contact Us Open Public Records Act Proposed Rules and Amendments Comment or Petition for new Rule Division/Ageny Statutes and Rules Electronic Notification Twitter YouTube Facebook