Payments for Waiving Health Coverage May Get Reduced
A proposal to limit public workers from getting coverage under more than one health plan has met resistance from unions because it would put a cap on how much a local government employee can be paid if they waive their health coverage.
Senate Majority Leader Loretta Weinberg, (D-Bergen), said she didn’t realize until a few months ago that a people could get paid for waiving one public health benefit even they’re covered by a second public health benefit. She said it’s “a little peculiar” that a person can be paid for waiving double coverage.
As an incentive to encourage public workers to waive their coverage, so long as they have coverage through a spouse or partner that’s not through a state plan, local governments can offer to pay them up to half of what they save by not having to provide that person insurance. Some offer it, others don’t.
In some places, the waiver payments amount to half of what a local government saves, said Weinberg, who wants the formula set at $5,000 or less.
“What we’re talking about here is not taking negotiations away. Heaven knows I understand how public employees are feeling,” Weinberg said. “What we’re talking about is not taking anybody’s health benefits away from them. We’re only talking about payment for not taking it because you already have health coverage.”
The New Jersey Education Association likens the proposal to the pension reforms adopted five years ago, saying the Legislature is looking to interfere with something that has long been part of contract negotiations.
“It simply goes after public employees once again instead of going after the underlying problem of spiraling health costs,” said NJEA President Wendell Steinhauer.
The proposal’s other primary sponsor is Senate Minority Leader Tom Kean Jr., R-Union.
If the bill were to become law:
- People with more than one public job could only get health coverage once and couldn’t get waiver payments.
- Public workers who are married to a public worker could only get health coverage through their employer or their spouse’s employer, not both.
- Such employees couldn’t be paid for waiving health coverage if they are in the State Health Benefits Program or School Employees’ Health Benefits Program. That’s already the rule.
- Such employees could get waiver payments if they’re not in one of the state plans. But those waivers would begin to be capped at 25 percent of the savings or $5,000, whichever is less. That’s already the formula for waivers filed after 2010.
- No elected officials could get a waiver payment.
Increasing contributions toward health benefits and pensions mean public workers take home less in pay now than they did five or six years ago, say officials from unions for teachers, police officers and firefighters, who want lawmakers to stop piling on.
“Teachers and school employees, other school employees, are leaving the profession because if their take-home pay is going down every single year, what is the incentive to stay,” said Francine Pfeffer, the NJEA’s associate director of government relations.
“We’re really just a few rules or laws away from being a right-to-work state. There’s nothing really much left to negotiate,” said Patrick Colligan, president of the New Jersey State Police Benevolent Association.
It’s unclear exactly how many public workers get waiver payments. But Weinberg says that in Atlantic City, around 350 school teachers are sharing more than $5 million a year in waiver payments, with some getting $18,000. Those payments may be changed in the current contract negotiations, said the union.
The PBA says a little more half of its contracts include health coverage through private, non-state plans. Similarly, the NJEA says more than half of its local contracts have private plans.
Weinberg backed off a plan to end the waiver payments, but she wants the top payments to be capped at the amounts other public workers can get – 25 percent of the savings or $5,000, which is less. Unions could negotiate that into a contract or reduce it to a smaller amount as a concession.
“It would seem to me this is a way to satisfy those who believe in collective bargaining and most important to stand up for taxpayers,” Weinberg said. “We’re talking about people here who are already getting an – I have no argument with their getting it, I’m glad that they’re getting good health care – are getting publicly funded health benefits.”
The proposal has been endorsed narrowly by the Senate budget committee, but Weinberg has agreed to meet again with union officials to see if the two sides can agreed on additional changes that can be made to the bill.
The unions say the proposal should be limited to people with more than one public job and elected officials, with the portions impacted union members removed from the bill.