Senator LEONARD T. CONNORS, JR.
District 9 (Atlantic, Burlington and Ocean)
Authorizes county colleges to establish cafeteria plans; requires establishment of cafeteria plans and collective negotiation of waiver terms prior to offering employees incentive to waive health care benefits.
CURRENT VERSION OF TEXT
An Act concerning the waiver of county college employee health benefits coverage, amending P.L.2003, c.3 and supplementing Title 18A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 3 of P.L.2003, c.3 (C.18A:64A-13.1) is amended to read as follows:
3. Notwithstanding the provisions of any other law to the contrary, a county college that enters into a contract providing group health care benefits to its employees may allow any employee who is eligible for other health care coverage to waive coverage under the county college's plan to which the employee is entitled by virtue of employment with the county college, provided that the county college shall first establish a cafeteria plan for its employees pursuant to section 125 of the federal Internal Revenue Code, 26 U.S.C. s.125. The waiver shall be in such form as the county college shall prescribe and shall be filed with the county college. In consideration of filing such a waiver, a county college may pay to the employee annually an amount[, to be established in the sole discretion of the county college,] which shall not exceed 50% of the amount saved by the county college because of the employee's waiver of coverage. The terms of the waiver, including the amount of consideration to be paid therefor, shall be mandatory subjects for collective negotiation between the county college employer and the majority representative of the employees in a collective bargaining unit. With respect to the county college employees not represented by the majority representative for collective bargaining purposes, the terms of the waiver shall be consistent with the terms of the collective negotiations agreement binding on the county college employer.
An employee who waives coverage shall be permitted to resume coverage under the same terms and conditions as apply to initial coverage if the employee ceases to be covered through the other health care coverage for any reason, including, but not limited to, the retirement or death of the employee's spouse or divorce. An employee who resumes coverage shall repay, on a pro rata basis, any amount received which represents an advance payment for a period of time during which coverage is resumed. An employee who wishes to resume coverage shall file a declaration with the county college in such form as the county college shall prescribe, that the waiver is revoked. [The decision of a county college to allow its employees to waive coverage and the amount of consideration to be paid therefor shall not be subject to the collective bargaining process.]
(cf: P.L.2003, c.3, s.3)
2. (New section) Notwithstanding the provisions of any other law or regulation to the contrary, a county college may establish as an employer a cafeteria plan for its employees pursuant to section 125 of the Internal Revenue Code, 26 U.S.C. s.125. The plan may provide for a reduction in an employee's salary, through payroll deductions or otherwise, in exchange for payment by the employer of medical or dental expenses not covered by a health care benefits plan, and dependent care expenses as provided in section 129 of the code, 26 U.S.C. s.129, and other benefits as are consistent with section 125 which are included under the plan. The amount of any reduction in an employee's salary for the purpose of contributing to the plan shall continue to be treated as regular compensation for all other purposes, including the calculation of pension contributions and the amount of any retirement allowance, but, to the extent permitted by the federal Internal Revenue Code, shall not be included in the computation of federal taxes withheld from an employee's salary.
3. This act shall take effect immediately.
Under current law, a county college may choose to allow an employee to waive health care benefits and to pay the employee up to 50% of the amount saved by the college. This bill empowers a county college to establish a cafeteria plan pursuant to section 125 of the Internal Revenue Code and requires that a county college establish a cafeteria plan as a prerequisite to offering an incentive to waive health care benefits. In addition, the bill provides that the terms of the waiver, including the amount of consideration to be paid therefor, are to be mandatory subjects for collective negotiation; however, the ceiling for the amount of consideration to be paid would remain 50% of the amount saved by the college.
A cafeteria plan, also known as a flexible benefit plan, allows an employee to make individual choices among federally nontaxable employer provided benefits. A cafeteria plan allows an employee to make voluntary pre-tax contributions from salary, through “flexible spending accounts,” to cover such expenses as group term life insurance, accident or health insurance coverage, or dependent care.