NJ Public Sector Unions Hold Healthcare Collective Bargaining Conference

On Friday, September 12, 2014, over 150 negotiators and activists from the public employees unions in New Jersey gathered at the Wyndham Garden Hotel in Trenton for a “Public Sector Health Care Collective Bargaining Conference.”  The conference was sponsored by AFT, Communication Workers of America, Health Professional Allied Employees (AFT), NJ Education Association, NJ Police Benevolent Association, Professional Firefighters Association of New Jersey and the NJ State Police Benevolent Association.

Council president Tim Haresign, Executive Director Steve Young and Staff Representative Debra Davis attended the conference along with local leaders from the Montclair, Rowan, Jersey City and Ramapo locals.

The conference began with an overview of the legislative attacks on public employee healthcare bargaining that started in 2006. The legislature wanted to impose changes in pension and healthcare benefits but the unions were successful in forcing these issues back to the bargaining table. This led to State employees paying 1.5% of salary in 2007 until Governor Christies signed Senate Bill 2397 into law as Chapter 78 in 2011.  It requires increases in employee premium contributions that phased in over four years. The State employee contribution sections of Chapter 78 expire on June 28, 2015. Local and County unions whose contracts expired and were renegotiated during this four year period of Chapter 78 will have to wait a full four years before they can negotiate health care benefits.

Currently the average premium cost sharing percentage for all State workers is 19% of their premiums. The Council’s College/University employee average premium cost sharing percentage is 25% because of our higher average salaries.

Chapter 78 also created a State Health Benefits Plan Design Committee that consists of 12 members from various State and local constituencies. The Committee includes 3 members appointed by the Public Employee Committee of the State AFL-CIO. The Committee has authority to create, modify or terminate any plan or component of any plan at its sole discretion. If any matter receives seven votes the State Health Benefits Commission must approve and implement the Committee’s decision. Beginning January 1, 2012, the Committee had to provide the option of selecting from three levels of coverage for the family, individual and spouse or individual and dependent plans. The different levels of coverage were to be based on different out-of-pocket costs, including co-pays and deductibles.

The Committee deadlocked on the co-pays for the retiree prescription drug plan. Under Chapter 78 there is no binding way to break a deadlock. Because of the deadlock, the Division of Pensions and Benefits claimed that a regulation in effect prior to Chapter 78, which provided for automatic escalators to co-pays, was the default governing language.  The union members of the Design Committee claim that the regulation that predated Chapter 78 is no longer operative and that in the event of a deadlock, co-pays cannot be increased. This issue is now pending in the court's appellate division and oral argument has yet to be scheduled.

Once the employee contribution sections of Chapter 78 sunset in June 2015, the 2010 requirement that employees contribute at least 1.5% of base salary becomes the default contribution rate and it is the minimum employees must contribute unless a higher amount is negotiated. For plans other than the State Health Benefit Plan and the School Employee Health Benefit Plan, the design of the plan continues to be negotiable.

An overview was given of the Affordable Care Act (aka. Obama Care) and how public employees and the State Health Benefit Plans fit into this mix for negotiations.

Since State and other public unions are about to regain their right to bargain over the level of employee contributions in the 2015 negotiations, the conference focused on what could be negotiated, what information we need to draft meaningful proposals, the need to regularly communicate with each other and working together to achieve common goals.

One thing everyone agreed on is that now more than ever, New Jersey’s public employee unions need to speak with one voice on health care benefits when we go to the bargaining table in 2015.