Corzine Inks Benefits Reform

Corzine Inks Benefits Reform

Gov. Jon S. Corzine signed the pension and health benefits reform bill (S-17) into law May 10.

The legislation, which originated in the special session on property tax reform, gives school districts the ability to unilaterally offer their employees incentives to waive coverage under the State Health Benefits Program.

“Combined with the recently negotiated contracts with our public workers, this bill will help protect the integrity of the retirement system and give the public faith that the benefits we provide to our public workers are accounted for honestly,” Corzine said in a prepared statement.

S-17’s waiver incentives will complement SHBP reforms enacted through another bill, A-1. Those reforms include allowing employee contribution to premiums and variations in coverage levels for different classifications of employees, based on their date of hire, salary and other factors.

Victory for Boards “This is a victory for school boards, which have been asking for this option for as long as I recall,” said Mike Vrancik, NJSBA director of governmental relations. “It will give our members the ability to save their school districts money.”

In addition to SHBP reform, S-17 will prohibit people who have professional services contracts with government entities and school districts from participating in the Public Employees’ Retirement System. It also removes elected and appointed public officials from that system.

Newly elected and appointed officials will instead participate in a 401(k)-style defined contribution plan, according to the governor’s office.

Sick Leave Cap Other S-17 reforms include placing a $15,000 cap on payments for accrued sick leave, a provision that will apply to certain elected and appointed officials. Further clarification of the cap will need to come through regulation.

As a service to its members, NJSBA has developed a password-protected analysis of S-17’s impact on insurance cost savings.

NJSBA is seeking clarification of other S-17 provisions and is continuing its review of the new law. As soon as they become available, updates will be given to the members.

Fast Facts:

About 33 percent of the state’s public school districts currently participate in the SHBP.
Municipalities have had the waiver incentive option since 1995, municipal authorities since 2001 and county colleges since 2003. That same flexibility will now benefit school districts.
Districts with private carriers have always had the ability to negotiate waiver incentives and other cost containment provisions.