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New Jersey State Policemen''s Benevolent Association Local 42 v. New Jersey State Health Benefits Commission

Decided: October 6, 1977.

NEW JERSEY STATE POLICEMEN'S BENEVOLENT ASSOCIATION LOCAL #42 A/K/A THE LINDEN POLICEMEN'S BENEVOLENT ASSOCIATION, PLAINTIFFS-APPELLANTS,
v.
NEW JERSEY STATE HEALTH BENEFITS COMMISSION, DEFENDANT-RESPONDENT



Matthews, Crane and Antell. The opinion of the court was delivered by Antell, J.A.D.

Antell

Plaintiff, as exclusive majority representative of policemen employed by the City of Linden, negotiated a collective bargaining agreement whereby Linden was to pay the premiums for medical-hospitalization insurance coverage for policemen retiring on or after January 1, 1975 provided they met certain conditions of eligibility. Such coverage was not made available to those policemen who, though otherwise eligible, retired before that date.

The benefits in question are provided under the New Jersey State Health Benefits Program Act, N.J.S.A. 52:14-17.25

et seq. Acting thereunder, participating public employers such as Linden may purchase coverage for their employees through the State Health Benefits Commission on specified terms and conditions. This appeal is from a determination of the Commission precluding implementation of the plan negotiated by plaintiff and Linden. The reason for its determination is that coverage is made available only to some, and not all, eligible retired employees and their dependents. At issue in connection therewith is the validity of N.J.A.C. 17:9-5.5, promulgated by the Commission. This regulation provides:

A local employer will satisfy the requirements of Chapter 88, P.L., 1974 by adopting a resolution designed to:

(a) Apply to all eligible present and future pensioners of the employer and their dependents.

The enabling act provides a mechanism for the Commission to negotiate, for the benefit of state and local government employees, health benefit contracts with private insurance companies. Participation in the State Health Benefits Program (hereinafter SHBP) is made available to local government units at their voluntary election. N.J.S.A. 52:14-17.34 to 17.45. Authority to provide these benefits to retired employees is found in N.J.S.A. 52:14-17.32, 17.34 and 17.38. The employer participates in the program "subject to and in accordance with the rules and regulations of the Commission relating thereto." N.J.S.A. 52:14-17.37. Critical to this controversy is the following provision of N.J.S.A. 52:14-17.28:

The commission shall not enter into a contract under this act * * * unless coverage is available to all eligible employees * * *.

The Legislature's longstanding interest in assuring equality of treatment for all public employees is further shown by N.J.S.A. 40A:9-15. This statute requires local employers entering into health benefits contracts for its employees to

file copies thereof with the Commission. It also directs that the Commission report not less than every two years to the Governor and the Legislature as to these contracts,

The Commission's rule-making power is found in N.J.S.A. 52:14-17.27 which directs that the Commission establish rules and regulations "as may be deemed reasonable and necessary for the administration of this act." Furthermore, N.J.S.A. 52:14-17.36 specifically authorizes that body "to prescribe rules and regulations satisfactory to the carrier or carriers ...


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