Preserving retiree
health benefits
In recent years, much of the attention over
the issue of health insurance coverage has
focused on Chapter 78 and what it means
for active and retired members. There is
good reason that this issue has consumed so
much attention. However, it is also import-
ant to keep in mind that PBA Locals contin-
ue to have the right to enforce the levels of
benefits retirees currently enjoy, assuming
there is language in the collective negoti-
ations agreements protecting their levels
of benefits. We recently won an arbitration
award involving Newark’s attempt to change
the level of prescription benefits for retirees. While the award
did not involve a PBA Local, the same principles would apply
in any public sector setting.
The essential facts are as follows: We are the attorneys for
the Newark Fire Officers Union Local 1860, which represents
fire captains, battalion chiefs and deputy chiefs employed
by Newark. The collective negotiations agreement includes
language which prevents the city from changing the levels of
health benefits, including prescription benefits, unless the
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NEW JERSEY COPS
■ MARCH 2019
new benefits are “substantially similar...but
no less than those presently in effect.” This
is a somewhat awkwardly stated standard.
However, in related unfair practice litigation
before PERC, a PERC designee concluded
that the language meant that the new ben-
efits had to be “at least equal to” those that
were being replaced. The collective negotia-
tions agreement also included a provision –
a prevailing rights clause – which protected
the levels of benefits in existence during the
term of the agreement, even if they were not
specifically included in the agreement.
Not surprisingly, the city changed prescription benefits only
for retirees from a plan provided by Horizon to a plan provid-
ed by Navitus. Active fire officers remained in Horizon for pre-
scription coverage. The prescription benefits under the Navi-
tus plan were substantially different than those provided by
Horizon. For example, the Navitus plan included a formulary
drug list, a step therapy procedure and a prior authorization
procedure that were not part of the Horizon plan. The city did
not notify Local 1860 about the changes in the level of bene-