N.J. court rules Christie administration exceeded authority in raising retirees' copays

By Samantha Marcus | NJ Advance Media for NJ.com
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on December 31, 2014

WOODBRIDGE —New Jersey’s pension division overstepped its authority when it raised state retirees’ prescription copays, the state appellate court ruled today.

The Division of Pensions and Benefits should have maintained the status quo while labor and public employer representatives resolved a dispute over revised copays for 2013, judges ruled.

Hetty Rosenstein, director of the New Jersey branch of the Communications Workers of America and a plaintiff in the suit, said the retirees overpaid for their prescriptions — a few dollars on each, she suggested — and should be reimbursed.

“I think (the administration) owes them the money,” she said.

A sweeping pension reform package in 2011 shifted authority over state health benefits plans to a 12-person State Health Benefits Plan Design Committee, with equal representation between union and Gov. Chris Christie appointees, from a five-person State Health Benefits Commission, where the administration had a membership advantage.

The new design committee deadlocked over retiree prescription drug copays, forcing it to turn to a “super-conciliator” process for breaking impasses.

In the meantime, the State Health Benefits Commission voted to approve revised premium rates that adjusted retiree copays, and the Division of Pensions and Benefits made the change, effective Jan. 31, 2013.

While union representatives argued the pension division exceeded its authority, the administration claimed where the design committee fails to act, “existing statutes, rules, regulations, policies and procedures of the State Health Benefits Program continue into effect,” according to the suit.

In its decision, the court disagreed with the administration, saying the law “unmistakably gave (State Health Benefits Plan Design Committee) the authority to set, among other things, retiree prescription copayment levels…”

“Because those levels have not been set due to the SHBPDC impasse, and cannot be resolved… until the impasse is broken through the conciliatory process or otherwise, the (State Health Benefits Commission) acted without authority when it unilaterally decided to increase retiree copayments.”

And until seven members of the design committee approve the change, the court said, the copays should have been untouched.

Rosenstein, who is also co-chairwoman of the design committee, said that committee is a poor substitute for collective bargaining, but moreover the committee is “meaningless” if the state can unilaterally increase copays.

A spokesman for Christie declined to comment.

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