Court: Disability retirees not required
to pay health insurance contributions
In one of the issues remaining from the 2011 litigation
challenging Chapter 78, the New Jersey Appellate Division recently issued a favorable decision over whether
disability retirees are required to contribute toward the
cost of coverage. In Brick Twp. PBA Local 230 & Michael
Spallina v. Twp. of Brick, issued on June 21, the court
concluded that law enforcement officers who retired on
an ordinary or accidental disability pension, and who
did not have 20 years of pensionable service as of June
28, 2011 when Chapter 78 became effective, were not
required to contribute toward their insurance coverage,
provided that the collectively negotiated agreement mandates retiree
health coverage. The case involved an appeal of a trial court decision
which rejected the PBA’s claim and dismissed the lawsuit. We represented the NJ State PBA as amicus curiae in the appeal.
The issue in the Brick Township case was left over from the litigation before Judge Jacobson in 2011, which we reported on in the
August 2013 issue of NJ COPS Magazine. Judge Jacobson denied our
request for injunctive relief at the time, in part, because there were
no disability retirees who had been required to pay for their health
insurance coverage because they had less than 20 years of pensionable service. In effect, the court said that the issue would have to wait
for an employer to require a disability retiree to pay. That event
occurred in Brick Township.
The lawsuit was initially brought by the Brick Township Local 230
after the township required one of its officers who retired on a disability pension to contribute toward his coverage because he did not
have 20 years of pensionable service as of June 28, 2011.
At the time of the officer’s retirement, the PBA contract
required the township to pay for coverage for officers
who retired on a disability pension. The PBA and its
member, Michael Spallina, then sued the township. The
trial court concluded that Chapter 78 required disability
retirees to contribute pursuant to the Chapter 78 grid if
they did not have 20 years of pensionable service when
that law went into effect on June 28, 2011, and dismissed
the PBA’s lawsuit. Local 230 then appealed, and the State
PBA joined the appeal.
In its decision, the Appellate Division framed the issue as “whether
Chapter 78 applies to government employees who receive disability
retirement benefits.” As amicus curiae, we argued along with Local
230 that the trial court decision was in error and that Chapter 78 does
not require retirees who retire on an accidental or ordinary disability
pensions to make contributions toward the cost of health insurance
benefits, even if they did not have 20 years of pensionable service as
of June 2011. As noted, this assumes that the PBA contract at the time
of the officer’s retirement required a public employer to pay the premiums for the disability retirees.
The Appellate Division agreed with the PBA’s position that the
clear language of Chapter 78 does not require that contributions be
made by those who retire on disability pensions (accidental or ordinary) even if they had less than 20 years of pensionable service. The
Appellate Division also considered sources outside the language of
Chapter 78, including a letter from the PFRS Assistant Director and
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