PERC restricts negotiations of
health care contributions
Once again, PERC has continued its assault on
the scope of negotiations in the public sector in a
recent decision involving the timing of
negotiations over Chapter 78 contributions. In a
decision involving the Clementon Board of Education, PERC recently held that parties cannot negotiate reductions in health insurance contributions,
even if the four-year progression of increased payments is completed under Chapter 78, if the parties
are in mid-contract at the time the four year progression is completed. PERC’s decision imposes the narrowest
possible interpretation of the right to negotiate changes in
health insurance contributions under Chapter 78. In doing so,
PERC has continued to restrict and limit negotiations over
issues which used to be negotiable.
The facts in the Clementon Board of Education case were as
follows. The board and a local teacher’s association were parties
to an agreement which was effective from July 1, 2011 through
June 30, 2014. The fourth year of Chapter 78 contributions
began on July 1, 2014, which would be the first year of any suc-
cessor agreement that the parties were negotiating.
The contract which expired on June 30, 2014 included
a provision setting employee health insurance contributions based upon 1.5 percent of base salary, which
was the statutory contribution level before Chapter 78
was enacted. The contract language was not changed
after Chapter 78 became effective in 2011, even
though the ratcheted increases in contributions still
occurred because of the Chapter 78 requirements.
The union argued that the contribution levels should automatically drop back to 1.5 percent of base salary once the
fourth year of contributions was completed on June 30. PERC
disagreed and held that the prior contract’s provision for contributions at 1.5 percent of base salary would not automatically
be reinstated once the fourth year of Chapter 78 contributions
was completed. Instead, PERC concluded that employee contributions would continue at the percentage in effect at the
completion of the fourth year, unless, and until, the parties
negotiated a lower contribution rate.
However, PERC went even further. It concluded that the
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