Consent Order Brings Teachers, Administration to Benefits Table

Chase Brush | September 14, 2016 | Budget
NJEA has refused to meet, saying unfilled seat on health benefits commission tips balance of power in favor of Christie

Following a lengthy dispute over the summer that culminated in a court order earlier this week, state representatives and members of the New Jersey Education Association are finally set to meet face to face about potential changes to retiree healthcare plans in New Jersey.

An “informational purposes only” meeting is scheduled today between members of the state’s largest teachers’ union who sit on the School Employees Health Benefits Commission and Gov. Chris Christie’s administration. The two sides have been at odds over refusals by NJEA members to attend commission meetings, which the state hoped to compel them into doing with a legal filing earlier this month.

NJEA representatives on the board have skipped scheduled meetings, where they were expected to consider a healthcare savings proposal, because of an open position on the commission that Christie has refused to fill. The vacancy leaves the balance of the commission at 4-3 in the administration’s favor.

On Monday, the court spat ended when Superior Court Judge Mary Jacobson signed a consent order in which both sides agreed to attend a meeting and discuss the proposal. Contrary to expectation, the NJEA has declared her ruling a “win” since it will not allow a vote on the proposal.

The discussion will center on a state-backed proposal to shift public retiree healthcare plans onto Medicare Advantage. This is an effort by the administration to save on the growing cost of public healthcare in New Jersey. Experts list New Jersey among the states with the highest per-capita retiree healthcare costs in the country, and have argued the issue poses a greater threat to the state’s long-term fiscal health — and therefore ought to rank higher in priority — than its ailing pension system.

Christie earlier this year announced his intent to cut $250 million in employee healthcare benefits in order to address the issue, and called on legislators and union leaders to help find ways to do so.

By moving retiree plans onto Medicare Advantage, a federal program, the state hopes to save $74 million this year, according to documents filed in court by Christie’s legal team. But the problem, as NJEA members have argued it, is that details of the switch, and how it would affect retiree’s benefits, have not been made clear to them. And they’ve accused the administration of taking advantage of a long-standing vacancy on the board to ram through the changes.

“Christie’s blatant disregard for the law and his attempts to manipulate the commission are utterly inappropriate,” NJEA president Wendell Steinhauer said in an earlier statement on the issue.

The nine-member commission, which helps set benefits for public school retirees, is composed of four union and five state representatives, with a chairperson elected by the body. Positions are filled through the Office of Appointments, overseen by Christie.

But for over a year now one of those positions, formerly occupied by a member of the AFL-CIO who died in August 2015, has sat empty. As has the chair’s position, a candidate for which the rest of the commission’s members have failed to agree on.

The vacancies leave the commission with a 4-3 imbalance and an advantage for Christie that the NJEA has accused the administration of exploiting.

Twice in August three members representing the NJEA on the commission skipped out on scheduled meetings, citing the vacancies — and the administration’s insistence on seeking a vote on the retiree healthcare proposal regardless of them — as reason for their boycott. With no quorum, the vote couldn’t go forward, and the state responded by filing a legal action on August 31 to force the absent members to commit to attending one or more meetings from September 8 to September 15, or allow the commission to vote without a quorum.

Both sides made their case in front of Jacobson earlier this week. Jean Reilly, an assistant attorney general arguing on behalf of the state, said the union members were essentially forcing a ‘no’ vote on the healthcare proposal, while Robert Fagella, an attorney for the NJEA, accused the administration of withholding information on Medicare Advantage and questioned Christie’s avoidance on filling the AFL-CIO vacancy.

He also argued that approving the proposal falls outside of the commission’s purview and instead should be taken up by School Employees’ Health Benefit Plan Design Committee, which took over the commission’s responsibilities in 2011 during the state’s historic pension and benefits overhaul and handles things like copays and deductibles.

Jacobson, for her part, suggested the whole matter could have been avoided if the administration had presented the healthcare plan at one meeting, where commission members could study it, and then held the vote at another.

Her consent order requires that “the commission shall not conduct or take any vote with regard to any retiree medical plan for (School Employees Health Benefits Plan) current or future retirees or any other substantive matter” during their meeting at 1 p.m. today.

Steinhauer, in a statement following the court meeting Monday, said the decision was a win for the union.

“Gov. Christie thought he could take advantage of the imbalance on the SEHBC to get his way without following the process laid out in the law,” he said. “We refused to let him manipulate us, and today’s court order means that the state has to answer our questions. We will continue to defend our members’ right to receive the benefits they have earned.”