This action seeks a declaratory judgment concerning the legality of the following paragraph in a collective bargaining agreement entered into between plaintiff Teamsters Local 331 and defendant City of Atlantic City:
The City shall contribute an amount equal to medical, dental, optical and prescriptions plus 10% to the Union Health & Welfare Plan of Local 331 I.B.T., provided it is certified as legal and valid by appropriate State agency or the Courts of New Jersey. Second year to be reopened. Current cost $112.00-$115.00 per month for family coverage. If upgraded Union is entitled to increase.
The New Jersey State AFL-CIO and Local # 198 of the International Association of Firefighters appear amici curiae. The matter has been submitted on the record with briefs.
City argues that the State, by legislation, has preempted the field of insurance coverage for municipal employees. It relies upon two statutes, the first of which is N.J.S.A. 40A:10-17 and it provides:
Any local unit or agency thereof, herein referred to as employers, may:
a. Enter into contracts of group life, accidental death and dismemberment, hospitalization, dental, medical, surgical, major medical expense, or health and accident insurance with any insurance company or companies authorized to do business in this State, or may contract with a nonprofit hospital service, medical service or dental service corporation with respect to the benefits which they are authorized to provide respectively. The contract or contracts shall provide any one or more of such coverages for the employees of such employer and may include their dependents;
b. Enter into a contract or contracts to provide drug prescription and other health care benefits, or enter into a contract or contracts to provide drug prescription and other health care benefits as may be required to implement a duly executed collective negotiations agreement, or as may be required to implement a determination by a local unit to provide such benefit or benefits to employees not included in collective negotiations units.
Nothing herein contained shall be deemed to authorize coverage of dependents of an employee under a group life insurance policy or to allow the issuance of a group life insurance policy under which the entire premium is to be derived from funds contributed by the insured employees.
The second statute to which plaintiff points is N.J.S.A. 52:14-17.25 et seq. It establishes a State fund to which municipalities may make contributions and from which the State Health Benefits Commission may purchase contracts with providers to acquire medical ...