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Board of Education of Upper Freehold Regional School District v. State Health Benefits Commission

August 27, 1998

BOARD OF EDUCATION OF UPPER FREEHOLD REGIONAL SCHOOL DISTRICT
v.
STATE HEALTH BENEFITS COMMISSION


Before Judges King, Kestin and Cuff.

The opinion of the court was delivered by: The opinion of the court was delivered by Kestin, J.A.D.

On appeal from the Superior Court of New Jersey, Law Division, Civil Part, Monmouth County.

By way of order to show cause and verified complaint, plaintiff, Board of Education of the Upper Freehold Regional School District (Board), sued in the Chancery Division to enjoin the State Health Benefits Commission (Commission) from "attempting to decide the controversy between the parties ... by any administrative procedure pursuant to any adjudicatory authority incorrectly and illegally assumed" by the Commission. The trial court determined that the Commission had properly asserted its authority to adjudicate the controversy administratively as a contested case pursuant to the Administrative Procedure Act, N.J.S.A. 52:14B-9, -10, subject to judicial review in the Appellate Division, R. 2:2-3(a)(2). Accordingly, the complaint was dismissed. The Board appeals. We affirm.

The genesis of the controversy occurred during the 1992-93 school year when the Board negotiated a successor collective agreement with an employee representative. Under the old contract, scheduled to expire on June 30, 1993, the Board had provided health benefits through the State Health Benefits Plan (SHBP or Plan) administered by the Commission pursuant to statute, N.J.S.A. 52:14-17.25 to -17.45. Under the new contract, effective September 1, 1993, the Board would provide health benefits through a private plan. The Board was to withdraw from the SHBP.

By a short certified letter, dated June 15, 1993 and received on June 17, the Board notified the Commission of its withdrawal effective September 1. The letter, in its essential entirety, declared:

The Upper Freehold Regional School District is withdrawing from the New Jersey State Health Benefits Program effective September 1, 1993. We are changing our health insurance carrier to CIGNA.

If you have any questions or need additional information, please let us know.

The Commission responded in a letter dated July 20, which, in its provisions material to this dispute, advised:

Since initial enrollment in the program is accomplished by a resolution adopted by the governing body, likewise, termination of participation must be accomplished in the same manner. I am enclosing the resolution which must be completed in its entirety. You should note the 60 day time element involved before termination will occur[.]

As a terminating location, the following regulations deserve your attention:

b) Before the final approval of your termination can be processed by the State Health Benefits Commission, all monetary obligations must be paid. Following our audit of your account, you will receive a separate and final billing for any shortages outstanding spanning your period of participation in the State Health Benefits Program. Also, at this time, a refund check will be issued to those locations showing overpayment. ABSOLUTELY NO ADJUSTMENTS SHOULD BE MADE TO YOUR FINAL PAYMENT.

c) Also, before the final approval of your termination can be processed by the State Health Benefits Commission, you must provide adequate documentation of your new program. In accordance with N.J.S.A. 18A:16- 21, 52:14-17.27 and 40A:10-25. This documentation must include:

1. A copy of the new insurance or ...


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