As previously reported in School Board Notesthe NJSBA has made a sample resolution available to boards of education that they may adopt, urging the governor and Legislature to provide financial relief to offset any losses they’ve experiencing while implementing the 2020 law that made various to changes to school employees health care benefits. 

Commonly referred to as “Chapter 44, that law was intended to generate millions of dollars in health care savings for employees, school districts and taxpayers. While some districts are indeed seeing their health care costs go down, others are watching theirs go up. Passage of this resolution sends a clear message that this law should be revisited to ensure that all school districts enjoy the intended benefits.  

Boards and Unions Can Negotiate Chapter 44 Impacts  As individual boards of education gather more data and information on how the law is impacting their budgets, they may want to consider the need and appropriateness of invoking a provision included in the law that provides a potential alternative pathway to relief. Just before the Legislature gave final passage to the bill that eventually became Chapter 44, the following provision (section 8) was inserted into the measure: 

    1. With regard to employers that have collective negotiation agreements in effect on the effective date of this act, P.L. 2020, c.44, that include health care benefits coverage available to employees when the net cost to the employer is lower than the cost to the employer would be compared to the New Jersey Educators Health Plan, the employer and the majority representative shall engage in collective negotiations over the financial impact of the difference.

The NJSBA understands that this provision was included to provide districts that would be adversely impacted by Chapter 44 with a way to offset any financial losses they experience. That mechanism – collective negotiations – is one that boards of education, in consultation with the board attorney, may wish to explore even after they have implemented Chapter 44. While Section 8 did not necessarily ensure that all districts would be “held harmless, it does affirmatively obligate union representatives to meet with the board of education to discuss the impact of the law and consider ways to mitigate the net financial loss the district expects to incur.  

While some districts assumed an increase in their health care costs prior to implementing Chapter 44 going into effect, it has become evident that others did not – or could not – anticipate the law having the negative financial consequences on their budget that have subsequently come to light. 

Where the cost of the district’s health care benefits under the Chapter 44 plan exceeds the costs under the prior plan, there is nothing in the law preventing boards and local associations from revisiting Chapter 44’s effect and collectively bargaining over the financial impact of the Act’s implementation. Furthermore, as boards of education now have the data to support an argument that a rise in their health care costs is directly attributable to Chapter 44, they may be in a better position than they were prior to implementation to request concessions from the union. 

As always, board members should consult with their board attorney before invoking Section 8 or proceeding with a request to meet with the union to discuss the impact of Chapter 44. 

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