COLLECTIVE BARGAINING REPORT
Alleviating the burden of spiraling healthcare costs
MICHAEL FREEMAN
With the expiration of many collective negotiations agreements that were successors to those in effect on June 28 , 2011 , most Local PBAs have satisfied the requirements of Chapter 78 , whereby the percentage of the healthcare premium requirement was implemented into a four-year phase-in at contribution levels of 1 / 4 , 1 / 2 , 3 / 4 and the full amount of the contribution rate during the phase-in years . Some Locals have been able to successfully negotiate reductions in the contribution levels for their membership . Since each Local and municipality has its own needs and limitations , the methods and amounts vary greatly in achieving these reductions .
Based on the plain language of P . L . 2010 , c . 2 , which states that the employee contribution cannot be less than 1.5 percent of the member ’ s salary , some Locals have used this as a guide and adopted it as an amount that will increase , but only at the rate that the member ’ s salary increases , thus putting a control on the cost . Obviously a fixed dollar amount will also eliminate increases in cost to the member , so some Locals have used that approach in their negotiations . Regardless of the premium increase , which is determined almost arbitrarily by the insurance companies , the membership will know exactly what their contribution levels will be for the duration of the contract .
There are other effective tracks that offer less cost control but still lower employee contribution levels . Using a fixed percentage of premium costs for all members in the bargaining unit or reverting to a previous phase-in level on the Chapter 78 contribution level
chart have proven fruitful for some Locals , while others have considered creating a new chart based on their circumstances . For example , some employers and bargaining units have agreed to contributions of 50 percent , as made during year two of the phase-in . Others have agreed to lower each contribution by two or three steps ; meaning , the percentage for family coverage for an employee with a salary of $ 115 , 000 is reduced from 35 to 28 percent . An employee in the same Local with single coverage and a salary of $ 62,000 is reduced from 27 to 14 percent .
A few municipalities have offered stipends or rebates to their employees specifically designed to offset healthcare costs . Some are made to the health spending account ( HSA ) or flexible spending account ( FSA ). These amounts are negotiable and have added tax advantages .
Because negotiations should always begin by preparing for arbitration , knowledge of the terms and conditions utilized by other Locals is imperative . Since an arbitrator must consider , as a factor , “ public employment in the same or similar comparable jurisdictions ,” your negotiations committee should have this information from the start . The database of contracts held by the NJSPBA is extensive but needs constant updates . Each PBA delegate is responsible for providing all agreements to the state office as soon as they are signed .
There are other , more creative ways to negotiate reductions in healthcare costs , and we will be making a presentation at the 2019 PBA Collective Bargaining Seminar in February to share this with our membership . Until then , I am available in the state office to answer questions . d
18 NEW JERSEY COPS ■ SEPTEMBER 2018