Governor Chris Christie • Lt.Governor Kim Guadagno  
The Official Web Site For The State of New Jersey - Department of Treasury
Global Navigation
FAQs Departments/ Agencies Services A to Z NJ Home Page
Disclaimer
Twitter YouTube Facebook
Pensions and Benefits
PENSION AND HEALTH BENEFITS
REVIEW COMMISSION 2012

View Pension and Health Benefits Review Commission Meetings from

2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004


PENSION AND HEALTH BENEFITS REVIEW COMMISSION
2012 CALENDAR

The following meeting dates have been scheduled at 10:00 AM in the first floor board room at the
Division of Pensions and Benefits, 50 West State Street, Trenton, NJ 08625:

  • February 17, 2012
  • April 20, 2012
  • May 18, 2012
  • June 15, 2012 - CANCELLED
  • August 17, 2012
  • September 21, 2012
  • November 16, 2012

Meeting Agendas for 2012

Pension and Health Benefits Review Commission Meeting Agendas from

2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004


Vote Results for 2012

Pension and Health Benefits Review Commission Vote Results from

2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004


MEETING AGENDAS


Pension and Health Benefits Review Commission
Agenda for February 17, 2012  

The Pension and Health Benefits Review Commission will meet on Friday, February 17, 2012 at 10:00 AM in the first floor boardroom of the Division of Pensions and Benefits, 50 West State Street, Trenton.  No verbal comments are accepted during the meeting.  The Commission should receive written comments at least five business days in advance of the meeting.  The agenda is as follows:

A-373 (Wolfe)
Eliminates remarriage prohibition for PFRS death benefits; provides retirement allowance to certain survivors of PFRS members.

A-378 (Wolfe)
Provides that PFRS definitions of widow, widower and spouse will include domestic partners of all PFRS members.

A-409 (McGuckin)
Extends eligibility for certain veterans' benefits to members of reserve components of US Armed Forces and NJ organized militia who serve at least 180 continuous days.

A-626 (Gove/Rumpf)
Allows PERS ordinary disability retiree to earn up to $3,000 in PERS-covered employment annually before cancellation of disability benefit and reenrollment in PERS.

A-694 (Ramos)
Provides for continuation of health insurance coverage in group and SHBP health plans for unlimited period of time for certain former employees and their dependents. 


Pension and Health Benefits Review Commission
Agenda for April 20, 2012
 

The Pension and Health Benefits Review Commission will meet on Friday, April 20, 2012 at 10:00 AM in the first floor boardroom of the Division of Pensions and Benefits, 50 West State Street, Trenton.  No verbal comments are accepted during the meeting.  The Commission should receive written comments at least ten business days in advance of the meeting.  The agenda is as follows:

S-1122 (Beck)/A-2118(O’Scanlon)
Allows SPRS members to purchase SPRS credit for prior military service.

S-292 (Pennacchio)
Requires immediate resumed qualification as dependent covered person under certain health benefits plans after active military duty under certain circumstances.

S-1253 (Vitale)/A-1665(Johnson/Vainieri Huttle)
Revises statutory mental health coverage requirements and requires all health insurers and SHBP to cover treatment for alcoholism and other substance-use disorders under same terms and conditions as for other diseases or illnesses.

S-498 (Bucco)
Requires insurers and SHBP to provide coverage for expenses incurred in screening for ovarian cancer.

S-547 (Gill)
Extends certain benefits to veterans of Operation Allied Force in Kosovo.


Pension and Health Benefits Review Commission
Revised Agenda for May 18, 2012 

The Pension and Health Benefits Review Commission will meet on Friday, May 18, 2012 at 10:00 AM in the first floor boardroom of the Division of Pensions and Benefits, 50 West State Street, Trenton.  No verbal comments are accepted during the meeting.  The Commission should receive written comments at least ten business days in advance of the meeting.  The agenda is as follows:

S-1819 (Thompson)
Provides for distributions from ABP during transition to retirement programs for faculty at institutions of higher education.

S-1714 (Bucco)
Allows certain members of PFRS to serve until age 70 upon approval by municipal governing body.

A-168 (Peterson)
Increases statutory mandatory retirement age for Supreme Court Justices, Superior Court Judges, Tax Court Judges, Administrative Law Judges, Workers’ Compensation Judges and County Prosecutors from 70 to 75.

A-1656 (Johnson)
Requires SHBP to provide coverage for expenses incurred in screening for prostate cancer.


Pension and Health Benefits Review Commission
Agenda for August 17, 2012

The Pension and Health Benefits Review Commission will meet on Friday, August 17, 2012 at 10:00 AM in the first floor boardroom of the Division of Pensions and Benefits, 50 West State Street, Trenton.  No verbal comments are accepted during the meeting.  The Commission should receive written comments at least ten business days in advance of the meeting.  The agenda is as follows:

S-214 (Holzapfel)
Eliminates remarriage prohibition for PFRS death benefits; provides retirement allowance to certain survivors of PFRS members.

S-1861 (Van Drew)/A623 (Gove/Rumpf/Milam)
Provides certain veteran benefits to veterans of the global war on terror conflicts and those of certain military engagements served during certain periods.

S-1910 (Madden)
Requires health insurance coverage for certain student athlete physical examinations.

A-2336 (Johnson)
Adds option of receipt of employee's contributions plus portion of employer contributions when vested PERS member leaves PERS-covered service.

A-2942 (Caputo)
Changes calculation of years of service from date of enrollment in pension system to date of appointment to determine certain retirees' payment obligations for health care coverage.


Pension and Health Benefits Review Commission
Agenda for September 21, 2012

The Pension and Health Benefits Review Commission will meet on Friday, September 21, 2012 at 10:00 AM in the first floor boardroom of the Division of Pensions and Benefits, 50 West State Street, Trenton.  No verbal comments are accepted during the meeting.  The Commission should receive written comments at least ten business days in advance of the meeting.  The agenda is as follows:

S-481 (Thompson)
Requires insurers and State health care coverage programs to cover cost of HIV vaccine.

S-719 (O’Toole)/A1579 (Wisniewski)
Requires health insurance coverage by health insurers, SHBP and SEHBP for expenses incurred in connection with prophylactic mastectomies and other mastectomy-related procedures.

A904 (Schepisi)
Changes compensation trigger for reenrollment of PERS retiree from $15,000 in aggregate to $15,000 per public employer.

A-1278 (Coughlin)
Requires health insurers and SHBP to provide certain mental health benefits for eating disorders under same terms and conditions as for other illnesses and diseases.

A-2863 (McKeon)
Requires health insurers and State Health Benefits Commission to provide coverage for posttraumatic stress disorder under same conditions as other sickness.


Pension and Health Benefits Review Commission
Agenda for November 16, 2012
 

The Pension and Health Benefits Review Commission will meet on Friday, November 16, 2012 at 10:00 AM in the first floor boardroom of the Division of Pensions and Benefits, 50 West State Street, Trenton.  No verbal comments are accepted during the meeting.  The Commission should receive written comments at least ten business days in advance of the meeting.  The agenda is as follows:

S-2048 (Vitale)/A-3041 (Conaway/O’Scanlon)
Requires insurers to provide information about organ donation and allows insurers to limit reimbursement for organ transplant if recipient has not made a gift pursuant to Revised Uniform Anatomical Gift Act.

S-2076 (Beach)/A-3094 (Wilson)
Concerns sharing of certain services by municipalities subject to provisions of "Municipal Rehabilitation and Economic Recovery Act."

A-3080 (Schaer/Lampitt/Giblin/Mosquera)/S-2166 (Thompson/Madden)
Requires health benefits coverage for refills of prescription eye drops under certain conditions.    

A-3151 (O’Scanlon/Bucco)
Requires certain elected officials and appointed officers eligible for dual health benefits coverage to choose coverage from one public entity.

 


VOTE RESULTS

Pension and Health Benefits Review Commission
Vote Results
February 17, 2012 

A-373 (Wolfe)
Eliminates remarriage prohibition for PFRS death benefits; provides retirement allowance to certain survivors of PFRS members.

Motion: Recommend against enactment since the bill creates a disparity among the State-administered retirement systems
.
Discussion: As the bill impacts only the PFRS, its enactment would create a disparity among the State-administered retirement systems. Additionally, PERS and TPAF provide an annuity to a surviving spouse upon the accidental death of a member, which terminates upon remarriage and this bill changes the fundamental purpose to provide a means of support for the surviving spouse. Chapter 181, P.L. 2003 eliminated the remarriage prohibition for PFRS and SPRS accidental death benefits, but not for PERS and TPAF, and only as to accidental death to which PFRS and SPRS are exposed.The enactment of this bill would possibly encourage future legislation providing the same change to the other State plans not impacted by this bill. It is estimated that employer pension contributions will increase over $2.4 million per year.

A-378 (Wolfe)
Provides that PFRS definitions of widow, widower and spouse will include domestic partners of all PFRS members.

Motion:  Recommend against enactment since the bill will increase local employer cost and State mandate State pay issues need to be addressed.

Discussion: The bill only impacts PFRS and it would make the domestic partnership provisions compulsory for all local employers. For State employees in the pension system and local employees whose employer adopts the pension provisions of the Domestic Partnership Act, pension benefits that were formerly payable exclusively to a surviving spouse can now be provided to a same sex domestic partner. In PFRS, this benefit includes the 50% of final compensation annuity payable to a spouse upon the death of an active or retired member, and the 70% of final compensation annual annuity payable to the surviving spouse upon the accidental death of an active member. A statutory solution to secure this benefit is utilization of the P.L. 2006, c. 103 Civil Union Law. It is estimated that employer pension contributions will increase $8 million per year.

A-409 (McGuckin)
Extends eligibility for certain veterans' benefits to members of reserve components of US Armed Forces and NJ organized militia who serve at least 180 continuous days.

Motion:  Recommend against enactment since the bill would result in additional State and local employer pension costs.

Discussion: The Commission does not support this bill since it detracts from the Legislature’s original intent as to who should qualify for veteran preference in this State. The increased veteran population will cause pension costs to significantly increase, as it is estimated that employer pension contributions will increase over $28 million per year.  Increases to certain pensions are not advisable, particularly while COLA and other unfunded liability issues are being addressed through the reforms initiated in P.L. 2011, c. 78. Originally, veteran preference in the State was to include all who service in the “theatre of operations” during world wars or major national emergencies.

A-626 (Gove/Rumpf)
Allows PERS ordinary disability retiree to earn up to $3,000 in PERS-covered employment annually before cancellation of disability benefit and reenrollment in PERS.

Motion: Recommend against enactment since the bill liberalizes the intent of a total and permanent disability and does not encourage consistent policy of disability benefits among the State-administered retirement systems.

Discussion: The Commission is concerned with the increasing number of disability claims that result in part from changing court and statutory policy that ease eligibility requirements. The bill only impacts the PERS and its enactment will create a disparity among the State-administered retirement systems, specifically when compared to TPAF, which has similar return to employment laws regarding disability pensions. Additionally, the bill indicates it is applicable only to members who retire with an ordinary disability pension. Accidental disability pensions appear to be excluded. The introduction of future bills extending this bill’s provisions to the other State pension plans can be anticipated. The enactment of recent pension reforms changed the eligibility requirements for PERS membership several times. Prior to the enactment of P.L. 2008, c. 89, PERS membership was predicated on an annual salary of at least $1,500 (Tier 1 and Tier 2 members. Chapter 89, P.L. 2008 increased the minimum annual salary requirement to $7,500 adjusted annually for changes in the CPI (currently $7,800). Full-time status i.e. 35 hours per State, 32 hours per week for locals, is required for TIER 4 and Tier 5 membership in PERS as a result of the enactment of P.L. 2010, c. 1. Also, Tier 4 and 5 PERS members are no long eligible for the ordinary disability pension benefits addressed by this bill. These members are eligible for disability insurance coverage pursuant to Chapter 3, P.L. 2010. Consequently, the $3,000 earnings limit provided for in this bill would only apply to Tier 1 and Tier 2 PERS members.

A-694 (Ramos)
Provides for continuation of health insurance coverage in group and SHBP health plans for unlimited period of time for certain former employees and their dependents.
 
Motion:  Recommend against enactment since it will increase State and local SHBP costs and it continues the questionable practice of mandating health benefit coverage.

Discussion: The bill allows the State Health Benefits Commission to assess the former employee an additional premium not to exceed 102% of active coverage for the extended coverage period provided by the bill. As such, the premiums paid by the employees electing the coverage many not absorb the entire higher coverage costs associated with this bill. Consequently, employers participating in the SHBP will partially subsidize the resulting increased costs through increased required premiums. The SHBP will experience adverse selection since only those employees who need the extended coverage will elect to do so, compounding the negative financial impact to the participating SHBP employers. It is estimated that the additional SHBP costs will over $10 million per year In addition, the bill continues the questionable practice of mandating health benefit coverage.


Pension and Health Benefits Review Commission
Vote Results
April 20, 2012
 

S-1122 (Beck)/A-2118(O’Scanlon)
Allows SPRS members to purchase SPRS credit for prior military service.

Motion: Recommend against enactment.
.
Discussion: This bill is unclear as to what the additional pension accrual will be for the service credit allowed to be purchased. The SPRS is unique in that to get full accrual toward a SPRS pension the time must be served exclusively as a State Trooper. Under current pension law, a SPRS member may purchase or transfer service established in any other State-administered retirement system, but the additional pension benefit increase to be derived from such non-State police service is limited to 1 percent of final compensation for each year. For a SPRS member to qualify to retire on a service retirement of 50 percent of final compensation upon attaining twenty years of service, the entire twenty years must be served as a State Trooper. Other creditable service would increase the annual pension by one percent for each year of such other creditable service. It is unclear in this bill whether the service allowed to be purchased will be permitted to meet the service thresholds required for certain retirements in the SPRS (i.e. 20 years for a service retirement or 25 years for a special 65 percent of final compensation pension) or will it be limited to the additional 1 percent provision.

S-292 (Pennacchio)
Requires immediate resumed qualification as dependent covered person under certain health benefits plans after active military duty under certain circumstances.

Motion: Recommend to enact with the condition that eligibility rules are consistent with the SHBP/SEHBP.

Discussion: Since the SHBP/SEHBP currently provides coverage to a participant’s dependents up until age 26 regardless of the dependent’s marital, student or financial status, the enactment of this bill would have little impact on the plans. The provisions of this bill seem to infer that health benefit coverage under a plan would be extended to a dependent child beyond the age of 18 only if the dependent was a student. However, student status is not a prerequisite for dependent coverage in the SHBP/SEHBP.  Beginning with the plan year 2012, and pursuant to recently enacted federal health care reform, the SHBP/SEHBP is required to cover the dependents of a plan participant up until December 31 of the year the dependent turns 26, regardless of their marital, student or financial status. Prior to this federally required mandate, pursuant to State statute, dependent child coverage under the SHBP/SEHBP was provided to an employee's unmarried children under the age of 23 years who lived with the employee in a regular parent-child relationship, regardless if the child was a student or not. The State law has been pre-empted by the federal mandate.

S-1253 (Vitale)/A-1665(Johnson/Vainieri Huttle)
Revises statutory mental health coverage requirements and requires all health insurers and SHBP to cover treatment for alcoholism and other substance-use disorders under same terms and conditions as for other diseases or illnesses.

Motion: Recommend against enactment.

Discussion: The SHBP/SEHBP already provides coverage for the conditions addressed by this bill.  Benefits include treatment for both mental health and alcohol/ substance abuse provided by an eligible behavioral health provider and include —in-patient, partial hospital, residential, intensive out-patient, and group treatment.

Historically, coverage under the SHBP for both biologically and non-biologically based mental illness were at one time limited by annual and lifetime dollar limits ($10,000 annual  limit and $20,000 lifetime limit under the old Traditional Indemnity Plan, and a $15,000 annual limit and $50,000 lifetime limit under NJ PLUS).  The enactment of P.L. 1999, c.441 mandated the SHBP to cover biologically based mental illness as it does for all other illnesses.  Coverage for non--biologically based illness was however still subject to the annual and lifetime caps.  However, as a result of health benefit reforms and plan design changes to the SHBP/SEHBP, these limits no longer apply. 

Some non-biologically based mental illness and substance abuse coverage under the SHBP/SEHBP may limit the number of doctor visits or inpatient stays to a specified number per year, but the Division believes the current level of coverage provides plan participants with adequate coverage.  Consequently, this bill’s provisions in Sections 19 and 21 eliminating any visitation and dollar limits pertaining to coverage for non-biologically based mental illness and substance abuse coverage would create only a moderate increase in plan costs.  Consultants to the SHBP/SEHBP have advised the enactment of this bill would increase annual employer SHBP/SEHBP costs by less than 0.1 percent ($3.4M annually).

The health benefit mandates imposed by this bill would usurp the authority of the SHBP and the SEHBP Plan Design Committees.  These committees were created with the enactment of P.L. 2011, c.78 (Pension and Health Benefit Reform) and were provided with the responsibility for plan design.

S-498 (Bucco)
Requires insurers and SHBP to provide coverage for expenses incurred in screening for ovarian cancer.

Motion: Recommend against enactment.

Discussion: The Commission does not support the enactment of this bill since it would increase annual employer SHBP/SEHBP costs. The SHBP/SEHBP already covers pelvic examinations, ultrasounds, and blood testing for cancer markers for women with symptoms of ovarian cancer. The plans also cover additional diagnostic procedures, including surgery, if indicated by the initial testing. In short, the SHBP/SEHBP already provides a full range of coverage in cases where a woman is symptomatic. The State plans also cover diagnostic testing in asymptomatic women at high risk for ovarian cancer based on genetics and family history. The health plans also cover an annual pelvic exam regardless of whether a woman is symptomatic or asymptomatic. 

S-547 (Gill)
Extends certain benefits to veterans of Operation Allied Force in Kosovo.
                       
Motion:  Recommend against enactment.

Discussion: The Commission does not oppose this bill from a policy perspective. Its enactment will, however, increase State and local employer pension costs.


Pension and Health Benefits Review Commission
Vote Results
May 18, 2012 

S-1819 (Thompson)
Provides for distributions from ABP during transition to retirement programs for faculty at institutions of higher education.

Motion: Recommend to enact.
.
Discussion: The Commission supports this bill in order to legitimize an unauthorized retirement program, termed Transition to Retirement Programs, currently being conducted by the State’s public colleges and universities.

Tax counsel to the State-administered pension plans has advised that current statutory and regulatory provisions that comprise the ABP retirement plan document would not allow for Transition to Retirement Programs. Failure of a qualified plan, such as the ABP, to be administered in accordance with its terms is an operational failure that can threaten the tax-qualified status of a plan. The adoption of the retroactive amendments is one way to correct that qualification failure. The other way to correct that failure would be to administer the plan in accordance with its terms both retroactively and prospectively – this would mean that many participants in the Programs would not be entitled to a benefit payment and many would have to repay benefits already distributed to them.

S-1714 (Bucco)
Allows certain members of PFRS to serve until age 70 upon approval by municipal governing body.

Motion:  Recommend against enactment.

Discussion:  Both municipal and PFRS law prohibits individuals over the age of 35 from being hired as police officers and enrolling as members of the PFRS.  PFRS law also requires members to retire upon turning age 65.

Historically, the PFRS laws have been amended to provide limited exceptions to the mandatory retirement age provision.  The enactment of P.L. 2005, c.81 provided the ability for PFRS members hired prior to January 1, 1987 to remain a member of the system until the member attains age 68 years or 25 years of creditable service, whichever comes first. 

The enactment of this legislation will undermine the rationale of allowing age restrictions for public safety officers as again allowed under the Age Discrimination and Employment Act.  This bill will allow a public safety officer to work till the age of 70, which, considering the risk factors associated with these positions, may not be in the best interest of both the individual and the public at large.

The introduction of bills that would provide exemptions from either the hiring or mandatory retirement age requirements for PFRS members are not uncommon.  The enactment of this bill will encourage the consideration of other bills seeking similar exemptions.

A-168 (Peterson)
Increases statutory mandatory retirement age for Supreme Court Justices, Superior Court Judges, Tax Court Judges, Administrative Law Judges, Workers’ Compensation Judges and County Prosecutors from 70 to 75.

Motion:  Recommend to enact upon amendment of Assembly Concurrent Resolution No. 23 of 2012.

Discussion:   The enactment of this bill will permit members of the Judicial Retirement system (JRS) to accumulate the required judicial service to become eligible for a significantly higher pension.  Members that attain the age of 70 for mandatory retirement without 10 years of judicial service are eligible for a pension that may be as little as 2% of final salary for each year of judicial service.  Those members that attain the 10 years of judicial service and are age 70 are eligible to receive a retirement benefit of 75% of final salary.  While this in itself may increase State pension costs, these additional costs could be negated by the much broader impact of this bill of allowing the majority judges to work longer and shortening the time over which they will receive a pension.

The Workers’ Compensation Judges Part of PERS, a separate tier of membership within the PERS which provided enhanced pension benefits to Workers’ Compensation Judges, was closed to new members effective July 1, 2007 with the enactment of P.L. 2007, c.92.  Effective May 22, 2010, the Prosecutors Part of the PERS, a separate tier of membership within the PERS which provided enhanced pension benefits to county prosecutors, assistant county prosecutors and certain employees in the Division of Criminal Justice, was closed to new members with the enactment of P.L. 2010, c.1.  New Workers’ Compensation Judges are now enrolled in the State-administered Defined Contribution Retirement Program while members formerly eligible for the Prosecutors Part of PERS are now eligible for participation in either the DCRP or regular PERS.

The sections of this bill increasing the mandatory retirement age for Supreme Court Justices and Superior Court Judges bill would only take effect if the voters of this State approve a constitutional amendment increasing their mandatory retirement age within two years of the bill’s date of enactment.  To date, Assembly Concurrent Resolution No. 23 of 2012 has received no legislative attention.  It has been referred to the Assembly Judiciary Committee where it is pending review.

A-1656 (Johnson)
Requires SHBP to provide coverage for expenses incurred in screening for prostate cancer.
                                                
Motion: Recommend against enactment.

Discussion:   The procedure mandated by this bill is already covered under the SHBP/SEHBP by each of the plans offered within the program, i.e. NJ DIRECT (Horizon Blue Cross Blue Shield of New Jersey), Aetna and Cigna.  Network providers in each of these plans offer a full range of services that include well-care and preventive services such as annual physicals, well-baby/well-child care, immunizations, mammograms, annual gynecological examinations, and prostate examinations. Regarding prostate exams, coverage under these plans provide for one routine in-network office visit per year, including a prostate-specific antigen test, for adult male members over the age of 40.

The health benefit mandates imposed by this bill would usurp the authority of the SHBP and the SEHBP Plan Design Committees.  These committees were created with the enactment of P.L. 2011, c.78 (Pension and Health Benefit Reform) and were provided with the responsibility for plan design.

This bill continues the questionable practice of mandating health benefit coverage.  Such mandates generally tend to continue to place the health insurance industry outside of the "free enterprise" system and drive up the cost of health insurance for both employer provided coverage and individual policies.  The continued enactment of health benefit mandate legislation could soon make coverage unaffordable for both.


Pension and Health Benefits Review Commission
Vote Results
August 17, 2012
 

S-214 (Holzapfel)
Eliminates remarriage prohibition for PFRS death benefits; provides retirement allowance to certain survivors of PFRS members.

Motion: Recommend against enactment because it would increase employer pension costs.

Discussion: Since this bill impacts only PFRS, its enactment would create a disparity when compared to the State Police Retirement System (SPRS) whose active and retired death benefit provisions are the same as the PFRS.  Additionally, the Public Employees’ Retirement System (PERS) and the Teachers’ Pension and Annuity Fund (TPAF) provide an annuity to a surviving spouse upon the accidental death of a member, which terminates upon remarriage.  Chapter 181, P.L. 2003 eliminated the remarriage prohibition for PFRS and SPRS accidental death benefits, but not for PERS and TPAF.  The enactment of this bill would, more than likely, encourage future legislation providing the same change to the other State plans not impacted by this bill.

Chapter 181 was prospective in nature.  It did not restore the accidental death benefit to widows and widowers of PFRS and SPRS members who remarried prior to Chapter 181’s effective date.  This bill’s provisions would not only be prospective, but it would also restore the death benefits of all PFRS widows and widowers whose benefits were terminated because of remarriage prior to the bill’s effective date.

The additional pension liabilities the bill would create if enacted is estimated to be approximately $50 million.

S-1861 (Van Drew)/A623 (Gove/Rumpf/Milam)
Provides certain veteran benefits to veterans of the global war on terror conflicts and those of certain military engagements served during certain periods.

Motion:  Recommend against enactment upon better definition of time period to qualify for veteran’s status and it would increase employer pension costs.

Discussion:  Generally, current pension laws require that a member serve at least 14 days directly in the “theatre of operation” to qualify for veterans status.  In addition to applying this standard to those involved in the global war on terror in order to qualify for veterans status, this bill also expands the existing veteran preference provisions by providing veterans status to a member who served for at least 90 days outside of the theater of conflict within the dates specified in existing statutes.  The Commission believes that the Legislature’s intent when it originally provided veterans preference in the State was to include all who specifically served in the “theatre of operations” during world wars or major national emergencies.  To include military duty where only limited, regional service is involved would provide a windfall for those who had no direct participation in a military engagement and detracts from the original intent regarding entitlement to this benefit.  That windfall directly increases the State pension system’s unfunded liability.

The additional pension liabilities the bill would create if enacted is estimated to be approximately $49 million.    

S-1910 (Madden)
Requires health insurance coverage for certain student athlete physical examinations.

Motion:  Recommend against enactment.
 
Discussion:  The procedure mandated by this bill is already covered under the SHBP/SEHBP by each of the plans offered within the program, i.e. NJ DIRECT (Horizon Blue Cross Blue Shield of New Jersey), Aetna and Cigna.  Network providers in each of these plans offer a full range of services that include well-care and preventive services such as annual physicals, well-baby/well-child care, immunizations, mammograms, annual gynecological examinations, and prostate examinations.
 
The health benefit mandates imposed by this bill would usurp the authority of the SHBP and the SEHBP Plan Design Committees.  These committees were created with the enactment of P.L. 2011, c.78 (Pension and Health Benefit Reform) and were provided with the responsibility for plan design.

This bill continues the questionable practice of mandating health benefit coverage.  Such mandates generally tend to continue to place the health insurance industry outside of the "free enterprise" system and drive up the cost of health insurance for both employer provided coverage and individual policies.  The continued enactment of health benefit mandate legislation could soon make coverage unaffordable for both.

A-2336 (Johnson)
Adds option of receipt of employee's contributions plus portion of employer contributions when vested PERS member leaves PERS-covered service.
                                                
Motion: Recommend against enactment because it would increase employer pension costs.

Discussion:  If enacted, this bill would introduce a significant benefit enhancement that would be available to PERS members upon vesting (attaining 10 years of service).  A PERS member would be able to opt for a lump sum distribution consisting of the member’s contribution along with regular interest in addition to employer contributions totaling 2.5 percent of total lifetime compensation.  The TPAF, whose benefits are nearly identical to PERS, is not impacted by this bill.  Consequently, a TPAF member opting for a lump sum distribution would be limited to a return of member contributions plus interest at 2%.

Since the enactment of this legislation would increase local employer pension costs, “State mandate, State pay” issues may need to be addressed.

Section 2 of the bill would provide retroactive application of this bill to the beneficiary or estate of a PERS member who died prior to the effective date of this bill.  This provision indicates that the bill is special legislation.

The additional pension liabilities the bill would create if enacted is estimated to be approximately $49 million.

A-2942 (Caputo)
Changes calculation of years of service from date of enrollment in pension system to date of appointment to determine certain retirees' payment obligations for health care coverage.

Motion: Recommend against enactment.

Discussion:  This bill detracts from the current statutory standard of using pension service credit to determine eligibility for certain employer-paid health benefits, e.g. employer-paid post-retirement medical (PRM) benefits, which generally requires a member to retire with 25 or more years of pension service credit in a State or locally administered retirement system to qualify for this benefit. 

Since the enrollment date is critical in measuring a member’s total pension service credit, the appointment date does not appear in the Division’s database.  Consequently, it would be difficult for the Division to certify a member’s actual appointment date as required under this bill.  If enacted, impacted members may need to self-identify themselves to the Division, and the Division then would need to certify the appointment date with the member’s current or former employer to establish the member’s ability to take advantage of this bill’s provisions.

The enactment of this bill could lead to other administrative problems.  Since the 20 year grandfathering provision is currently predicated on pension service credit, it could include purchased service credit that still counts toward to the attainment of 25 years of pension service credit needed to qualify for employer paid PRM benefits, such as former membership service and prior military service.  Since the amendment put forth by this bill would now predicate the 20 year grandfathering provision based on time served with an employer from the date of appointment to the date of termination, interpreted literally, this could exclude purchased pension service credit, thereby excluding another portion of current members from attaining the 20 years required to be grandfathered, since pension service credit would no longer be the criteria.

Some of the pension and health benefit reforms adopted under P.L. 2011, c.78, and the several reform laws preceding it, were prospective in nature, i.e. they only impact public employees who become members of the pension system on or after the law’s effective date; while some reforms set deadlines that the State cannot afford to now amend as this bill would for P.L. 2011, c. 78.  Many of the reforms provide prospective new members with reduced pension benefits.  Enacting legislation that provides exceptions to certain public employees, allowing them to receive benefits not intended by the previously enacted reform legislation, as this bill does, may only encourage the introduction of more bills that would provide even further exceptions, defeating the purpose of enacting critically needed pension and health benefit reforms.


Pension and Health Benefits Review Commission
Vote Results
September 21, 2012

S-481 (Thompson)
Requires insurers and State health care coverage programs to cover cost of HIV vaccine.

Motion: Recommend against enactment.

Discussion: This bill would mandate insurance coverage for a HIV vaccination. It is the SHBP policy to provide immunization coverage in the Program’s managed care plans upon approval of the vaccination by the FDA. Currently, there is no approved vaccination for HIV, so the provisions of this bill are prospective.  Health benefit consultants to the SHBP/SEHBP have indicated that approval of a vaccine is years away at this point.

The health benefit mandate imposed by this bill would usurp the authority of the SHBP and the SEHBP Plan Design Committees.  These committees were created with the enactment of P.L. 2011, c.78 (Pension and Health Benefit Reform) and were provided with the responsibility for plan design.

S-719 (O’Toole)/A-1579 (Wisniewski)
Requires health insurance coverage by health insurers, SHBP and SEHBP for expenses incurred in connection with prophylactic mastectomies and other mastectomy-related procedures.

Motion: Recommend against enactment.   

Discussion:  Reconstructive breast surgery following a mastectomy is already a covered procedure in all plans in the SHBP/SEHBP.  P.L. 1997, c.75 mandated coverage for reconstructive breast surgery following a mastectomy under the general insurance laws.  The SHBP statutes were not impacted by this law.  However, reconstructive breast surgery was covered by the SHBP even prior to this mandate because it was always deemed by the plan to be a medically necessary procedure.  Prophylactic mastectomy, which is considered a preventive care procedure, is also covered under the NJ DIRECT plan and the HMO's participating in the SHBP/SEHBP.

A-904 (Schepisi)
Changes compensation trigger for reenrollment of PERS retiree from $15,000 in aggregate to $15,000 per public employer.

Motion: Recommend against enactment. 

Discussion: Chapter 23, P.L. 1997 was enacted to provide some relief to PERS members who were somewhat disadvantaged by the return to public employment after retirement laws and allowed PERS retirees to earn up to $10,000 annually with suspending their pension and re-enrolling in the plan.  When this law was enacted, it was interpreted that the $10,000 threshold applied to each employer with whom the retiree was employed.  This interpretation was codified under N.J.A.C. 17:2-2.3 (a) 7.

P.L. 2001, c.278 (Senate Bill #517) was enacted and increased the earnings threshold to $15,000.  S-517, however, was amended in the Assembly State Government Committee to include a provision that made the new salary threshold apply to the total salary earned by the PERS retiree from all employers. 

The enactment of c.278 continued to provide the PERS retiree de minimus relief from the return to employment laws while avoiding significant negative public backlash by not creating the perception of “double-dipping’ (i.e., receiving a public pension and a public salary simultaneously) which was historically precluded by original public pension laws.  The enactment of this bill would generate an obvious trend toward a situation the legislature intended to avoid with the enactment of c.278.
 
A-1278 (Coughlin)

Requires health insurers and SHBP to provide certain mental health benefits for eating disorders under same terms and conditions as for other illnesses and diseases.
                                                
Motion:  Recommend against enactment.

Discussion:  The health benefit mandate imposed by this bill would increase plan costs and usurp the authority of the SHBP and the SEHBP Plan Design Committees.  These committees were created with the enactment of P.L. 2011, c.78 (Pension and Health Benefit Reform) and were provided with the responsibility for plan design.

Currently, treatment for the symptoms associated with eating disorders is covered by the SHBP/SEHBP under the rules regarding coverage for non-biologically based mental illness.  Although the SHBP statutes limit coverage for non-biologically mental illness to maximums of $10,000 per calendar year and $20,000 for the entire period of the person’s coverage under the plan (N.J.S.A. 52:14-17.29), these limits have been pre-empted as a result of the enactment of federal legislation.  Biologically based mental illnesses were, at one time, also subject to these statutory limits.  However, with the enactment P.L. 1999, c.441, biologically based mental illnesses are no longer subject to these limitations and are covered under the same terms and conditions as any other sickness under the SHBP/SEHBP.

The federal enactment of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) generally required that health plans adopt mental health parity.  However, self-funded, non-federal governmental plans like the SHBP’s plans were able to elect an exemption from certain HIPAA requirements, including mental health parity, on a year to year basis, provided that an annual election form is properly filed with the federal Centers for Medicare and Medicaid Services and annual notice of the exemption is provided to all plan participants.  The SHBP has done so since HIPAA’s inception.

The Patient Protection and Affordable Care Act (ACA) was signed into law on March 23, 2010, and the related Health Care and Education Reconciliation Act of 2010, which modifies certain provisions of ACA, was signed into law on March 30, 2010. These laws preclude the State Health Benefits Commission from placing dollar limits on mental health coverage, but do allow for the day or visit limits.  Visit limits continue to apply to the SHBP/SEHBP coverage for non-biologically-based mental illness as a result of the plan’s annual election to opt-out of mental health parity.

A-2863 (McKeon)
Requires health insurers and State Health Benefits Commission to provide coverage for posttraumatic stress disorder under same conditions as other sickness.

Motion:  Recommend against enactment.

Discussion:  The health benefit mandate imposed by this bill would increase plan costs and usurp the authority of the SHBP and the SEHBP Plan Design Committees.  These committees were created with the enactment of P.L. 2011, c.78 (Pension and Health Benefit Reform) and were provided with the responsibility for plan design.

Currently, treatment for the symptoms associated with PTSD is covered by the SHBP under the rules regarding coverage for non-biologically based mental illness.  Although the SHBP statutes limit coverage for non-biologically mental illness to maximums of $10,000 per calendar year and $20,000 for the entire period of the person’s coverage under the plan (N.J.S.A. 52:14-17.29), these limits have been pre-empted as a result of the enactment of federal legislation.  Biologically based mental illnesses were, at one time, also subject to these statutory limits.  However, with the enactment P.L. 1999, c.441, biologically based mental illnesses are no longer subject to these limitations and are covered under the same terms and conditions as any other sickness under the SHBP/SEHBP.

The federal enactment of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) generally required that health plans adopt mental health parity.  However, self-funded, non-federal governmental plans like the SHBP/SEHBP were able to elect an exemption from certain HIPAA requirements, including mental health parity, on a year to year basis, provided that an annual election form is properly filed with the federal Centers for Medicare and Medicaid Services and annual notice of the exemption is provided to all plan participants.  The SHBP has done so since HIPAA’s inception.

The Patient Protection and Affordable Care Act (ACA) was signed into law on March 23, 2010, and the related Health Care and Education Reconciliation Act of 2010, which modifies certain provisions of ACA, was signed into law on March 30, 2010. These laws preclude the State Health Benefits Commission from placing dollar limits on mental health coverage, but do allow for day or visit limits.  Visit limits continue to apply to the SHBP/SEHBP coverage for non-biologically-based mental illness as a result of the plan’s annual election to opt-out of mental health parity.


          Pension and Health Benefits Review Commission
Vote Results
November 16, 2012

S-2048 (Vitale)/A-3041 (Conaway/O’Scanlon)
Requires insurers to provide information about organ donation and allows insurers to limit reimbursement for organ transplant if recipient has not made a gift pursuant to Revised Uniform Anatomical Gift Act.

Motion:   Recommend against enactment.

Discussion:  The health benefit mandate imposed by this bill would impose yet another governmental notification requirement on the SHBP/SEHBP as a plan administrator. Current mandated notifications include:

    • Providing Benefit Summaries each year to each subscriber pursuant to the Affordable Care Act;
    • HIPAA notices that are required to be provided to subscribers every three years;
    • CMS’s annual notification requirements for Medicare eligible members enrolled in our RX program.

The cross communication between the SHBP/SEHBP, the NJ Motor Vehicle Commission and the plan carriers that would be required under this bill poses administrative and logistical challenges.

Mandate imposed by this bill would usurp the authority provided to the SHBP/SEHBP Plan Design Committees created by Chapter 78, P.L. 2011 (Pension and Health Benefit Reform) to develop the plan design of these programs.

It’s not prudent to demand that critically ill individuals be required to pay more for needed medical services because of failure to register as an organ donor.  Personal or religious beliefs may preclude organ donor registration.

S-2076 (Beach)/A-3094 (Wilson)
Concerns sharing of certain services by municipalities subject to provisions of "Municipal Rehabilitation and Economic Recovery Act."

Motion:  Recommend against enactment.       

Discussion:  Limiting comments to the retirement component of this bill, the Commission opposes this bill because early retirement incentive (ERI) programs have proven themselves to be costly with no guarantee that they provide long term financial relief to the entities that adopt them.

Bill limits the ERI program only to locations subject to the provisions of the Municipal Rehabilitation and Economic Recovery Act, and not to all locations, considering shared services agreements.  The Commission suggested open discussions should take place to consider if ERI programs are feasible under these arrangements.

Technical Problems with the Bill:

  • The first paragraph indicates that both PFRS and PERS members would be eligible for the early retirement incentive, but the pension incentive provided in paragraph two only indicates 5 years of additional PFRS pension service credit;
  • The bill does not require any formal communication by the employer to notify the Division of Pensions and Benefits  that they have elected to provide an early retirement incentive;
  • The bill contains no provisions regarding the adopting employer’s responsibilities for payment of the additional pension liability incurred.

A-3080 (Schaer/Lampitt/Giblin/Mosquera)/S-2166 (Thompson/Madden)
Requires health benefits coverage for refills of prescription eye drops under certain conditions.    

Motion:  Recommend against enactment.     

Discussion:  This bill would change the SHBP/SEHBP’s prescription drug policy regarding the frequency of refills for prescription eye drops to coincide with the policy recommended by the Centers for Medicare and Medicaid Services (CMS) to Medicare Part D plan sponsors for topical ophthalmic products.  Since all Medicare eligible retirees in the SHBP/SEHBP are Medicare Part D participants, the SHBP/SEHBP is obligated to adopt the CMS’s guidance as it relates to this group even if this bill were not enacted.  If this bill is enacted, the SHBP/SEHBP would be further required to apply the CMS’s policy to all active plan participants and non-Medicare eligible retirees.

The State’s Prescription Drug Plans include various procedural and administrative rules and requirements designed to ensure appropriate prescription drug usage and to encourage the use of cost effective drugs, otherwise known as utilization management.  Through these efforts, plan members benefit by obtaining safe amounts of appropriate prescription drugs in a cost-effective manner.  One of programs included in the State’s Prescription Drug Plans utilization management is Quantity Management.  Quantity management limits the maximum amount of one medication a covered participant may receive over a period of time.

The commission believes that the provisions of this bill should not be legislatively mandated on the SHBP/SEHBP.  The health benefit mandate imposed by this bill would usurp the authority of the SHBP and the SEHBP Plan Design Committees.  These committees were created with the enactment of P.L. 2011, c.78 (Pension and Health Benefit Reform) and were provided with the responsibility for plan design.

A-3151 (O’Scanlon/Bucco)
Requires certain elected officials and appointed officers eligible for dual health benefits coverage to choose coverage from one public entity.
                                                
Motion:  Recommend to enact with amendment.
           
Discussion:   As a result of the enactment of P.L. 2010, c.2, participants in the SHBP/SEHBP are already precluded from multiple health benefit coverage (see Section 12).  This prohibition, however, is limited to multiple SHBP/SEHBP coverage.  Chapter 2’s multiple coverage prohibition did not extend to coverage outside of the SHBP/SEHBP.  The enactment of this bill would extend the multiple health benefit coverage prohibition to coverage in and out of the SHBP/SEHBP, although limiting its provisions to elected and appointed officials. 

P.L. 2003, c.308 was enacted into law and provided that if a member of the Legislature elects health benefits coverage on the basis of service in the Legislature, the member will not enroll as the primary insured for health benefits for which the member is eligible through any other public entity, and will not accept any amount of money in consideration for filing a waiver of coverage.  The provisions of this bill would extend a similar prohibition to any person holding State or local elective public office, or serving as an appointed member of a governing or advisory body of an independent authority, board, commission, agency or instrumentality of the State, regardless if the coverage was through the SHBP/SEHBP.

The Commission recommends the bill be amended to clarify which employer’s health benefit coverage should be dropped and suggests the coverage retained be based on the higher paid (full-time) position.

 
spacer

Pensions and Benefits: Home | Employer Manual | Health Benefits | Forms and Publications | Counseling Appointments
Treasury: Home | ServicesPeopleBusinesses | Divisions/AgenciesFormsContact Us
Statewide:
NJ Home | Services A to Z | Departments/Agencies | FAQs
Copyright © State of New Jersey, 1996 -
This site is maintained by the Division of Pensions and Benefits.
 

Accessibility Statement Legal Statement Privacy Notice Contact Us Open Public Records Act Twitter YouTube Facebook