ASSEMBLY, No. 1600

 

STATE OF NEW JERSEY

 

INTRODUCED FEBRUARY 29, 1996

 

 

By Assemblywoman MURPHY, Assemblymen KAVANAUGH, Lance, Augustine, Gregg and Blee

 

 

An Act concerning the State Health Benefits Program for certain employers other than the State and certain other benefits for public employees and supplementing Title 52 of the Revised Statutes.

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1. Notwithstanding the provisions of any other law to the contrary, the obligations of any employer other than the State, as defined in section 4 of P.L.1964, c.125 (C.52:14-17.35), other than an independent State authority, board, commission, corporation, agency, or organization, to pay the premium or periodic charges for health benefits coverage provided under P.L.1961, c.49 (C.52:14-17.25 et seq.) may be determined by means of a binding collective negotiations agreement, including any agreements in force at the time of the adoption of P.L. , c. (now pending before the Legislature as this bill). With respect to employees of such employers for whom there is no majority representative for collective negotiations purposes, the employer may, in its sole discretion, modify the respective payment obligations set forth in P.L.1964, c.125 for such employer and such employees in a manner consistent with the terms of any collective negotiations agreement binding on the employer. Employees of any such employer shall have the opportunity to adjust their coverage under the available health care plans during an annual open enrollment period or a special open enrollment period, as appropriate, before any change in the respective obligations for the employer and its employees to pay the premium or periodic charges for health benefits coverage takes effect.

 

    2. Notwithstanding the provisions of any other law to the contrary, the governing body of a local unit of government, a school district, or an independent local public authority, board, commission, corporation, agency or organization may establish as an employer a cafeteria plan for its employees pursuant to section 125 of the federal Internal Revenue Code, 26 U.S.C. §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 benefits plan, and dependent care expenses as provided in section 129 of the code, 26 U.S.C. §129, and such 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 the employee's salary.

 

    3. This act shall take effect immediately.

 

 

STATEMENT

 

    This bill allows employers other than the State (other than an independent State authority, board, commission, corporation, agency, or organization) to modify the employer and employee obligations to pay for health benefits coverage under the State Health Benefits Program (SHBP) in accordance with the terms of a binding collective negotiations agreement. SHBP benefits with regard to covered services remain unchanged.

    The bill provides that the obligations of any such employer to pay the premium or periodic charges for health benefits coverage under the SHBP may be determined by means of a binding collective negotiations agreement, including any agreements in force at the time of the adoption this bill. With respect to employees of such employers for whom there is no majority representative for collective negotiations purposes, the employer may, in its sole discretion, modify the respective SHBP payment obligations for such employer and such employees in a manner consistent with the terms of any collective negotiations agreement binding on the employer. Employees shall have the opportunity to adjust their coverage under the available health care plans during an annual open enrollment period or a special open enrollment period before any change in the employer-employee obligations to pay the charges for SHBP coverage takes effect.

    The definition of "employer" includes a county, municipality, school district, or a public agency or organization which operates public works or is engaged in service to the public for one or more municipalities, local boards of health, or counties and whose revenue is not derived from State funds.

    The bill also allows local public employers to establish a cafeteria plan for their employees pursuant to section 125 of the Internal Revenue Code to provide for a reduction in an employee's salary in exchange for payment by the employer of any required employee contribution for SHBP coverage, medical or dental expenses not covered by SHBP, or dependent care expenses. 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 Internal Revenue Code, shall not be included in the computation of federal taxes withheld from the employee's salary.

 

 

                             

Allows certain public employers other than State to change employer-employee SHBP contribution obligations in accordance with union contracts and to establish cafeteria plans for employees under section 125 of Internal Revenue Code.