N.J. Admin. Code § 17:9-6.8

Current through Register Vol. 56, No. 8, April 15, 2024

Section 17:9-6.8 - Premium-sharing for retired employee State Health Benefit Coverage and reimbursement for Medicare Part B costs

(a) All State employees, except nonaligned uniformed State Police officers, who accrue 25 years of service credit in a State-administered retirement system or retire on a disability retirement after July 1, 1997, for whom there is no majority representative for collective negotiations purposes, and who were hired by the State prior to July 1, 1995, and were continuously employed, shall, upon retirement, receive Medicare Part B reimbursement after retirement up to a cap of $46.10 per month per eligible employee and the employee's spouse or eligible partner and be subject to payroll deductions for coverage in advance of the coverage period in accordance with standard payroll procedures as set forth below. State employees, except nonaligned uniformed State Police officers, who accrue 25 years of service credit in a State-administered retirement system or who retire on a disability retirement after July 1, 1997, for whom there is no majority representative for collective negotiations purposes, and who were hired by the State on or after July 1, 1995, shall not be entitled to receive Medicare Part B reimbursement after retirement.

(b) For employees hired before December 11, 1995, who accrue 25 years of service credit in a State-administered retirement system or retire on a disability retirement after July 1, 1997 but before July 1, 2000, payroll deductions for NJ DIRECT10 or Aetna Freedom 10 coverage shall be determined using a base salary as of the first pay period of the calendar year in which retirement occurred, as follows:

1. Upon retirement, retirees with a base salary of $40,000 or more in the year of retirement shall pay the difference between the cost of the NJ DIRECT10 or Aetna Freedom 10 and the average cost for NJ DIRECT15 and participating HMOs, as determined hereinafter.

2. Upon retirement, retirees with a base salary of less than $40,000 in the year of retirement shall pay, on a monthly basis, one percent of the base salary but not less than $20.00 per month.

(c) Employees hired on or after December 11, 1995, who accrue 25 years of service credit in a State-administered retirement system after July 1, 1997 but before July 1, 2000, or retire on a disability retirement after July 1, 1997 but before August 1, 2000, shall, upon retirement, pay the difference between the cost of NJ DIRECT10 or Aetna Freedom 10 and the average cost to the State for the other participating plans, as determined hereinafter.

(d) The average cost for NJ DIRECT15 and other participating plans for each category of coverage for a rate time period shall be determined as follows:

1. Multiply the number of retirees who elected the category of coverage at the beginning of the rate time period immediately preceding the current rate time period by the premium or periodic charge rate for the category of coverage for the current rate time period for NJ DIRECT15 and each other participating plan.

2. Determine the total premium and periodic charges for all retirees who elected the category of coverage by adding the amounts determined under (d)1 above for NJ DIRECT15 and the other participating plans.

3. Divide the total premium and periodic charges for all retirees who elected the category of coverage determined under (d)2 above by the total number of retirees who elected the category of coverage at the beginning of the immediately preceding rate time period for NJ DIRECT15 and the other participating plans.

(e) For retirees who accrue 25 years of service credit in a State-administered retirement system on or after July 1, 2000 but before June 30, 2007, or retire on a disability retirement after July 1, 2000 but on or before July 1, 2007, payroll deductions for NJ DIRECT10 or Aetna Freedom 10 coverage shall be determined as follows:

1. Retirees electing NJ DIRECT10 or Aetna Freedom 10 shall pay 25 percent of the cost of that plan's premium as established by the Commission pursuant to 52:14-17.32b;

2. Retirees electing other plans shall have no premium payment.

(f) State retirees who accrue 25 years of service credit in a State-administered retirement system on or after July 1, 2007 but before June 30, 2011, or retire on a disability retirement after July 1, 2007 but before June 30, 2011, shall pay a health contribution for post-retirement health coverage. For most plans, except as specified under 52:14-17.28, the retiree will pay a health contribution of 1.5 percent of their retirement allowance, as negotiated, or 1.5 percent of 50 percent of the highest salary received in the last five years of employment for Alternate Benefit Program members. The health contribution is waived for retirees who participate in the Retiree Wellness Program.

1. Retirees who are eligible must elect to participate in the Retiree Wellness Program within 60 days of the date of retirement.

2. If the Retiree Wellness Program is not elected within this time period, the retiree will be required to pay the health contribution of 1.5 percent of the retirement benefit.

3. Retirees not electing to participate in the program when first eligible may elect to participate in the Retiree Wellness Program only during the Division's annual open enrollment.

(g) State retirees who accrue 25 years of service credit in a State-administered retirement system after June 30, 2011, and have 20 years of service credit as of that date, shall have a health contribution of 1.5 percent of their retirement allowance deducted for their post-retirement health benefits coverage for most plans, except as specified under 52:14-17.28c. This health contribution will not be waived, even for those who participate in the Retiree Wellness Program.

(h) State retirees who retire on a disability retirement or accrue 25 years of service credit in a State-administered retirement system on or after June 28, 2011, and do not meet the conditions of (g) above, shall have a health contribution deducted from their retirement allowance for their post-retirement health benefits coverage, pursuant to 52:14-17.28c. The health contribution is determined as a specific percentage of the premium, and is based on the member's annual retirement allowance and coverage level. A minimum contribution of 1.5 percent of the monthly retirement allowance is required.

(i) The premium-sharing obligations for retired nonaligned uniformed State Police officers shall be the same as those for retired Lieutenants of the Division of State Police.

(j) Independent State authorities, boards, commissions, corporations, agencies, or organizations who are excluded from determining by means of a binding collective negotiations agreement the payment obligations of the employer to pay the premium or periodic charges for SHBP coverage in retirement under the provisions of 52:14-17.38, and who are permitted by 52:14-17.28b to have their active employees premium share in the same manner as the State, may also have their retired employees premium share in the same manner as the State. The payment obligations of an employee under this subsection shall be the payment obligations applicable to the employee on the date the employee retired on a disability pension (if enrolled on or before May 21, 2010, for PERS and TPAF members) or the date the employee meets the service credit and service requirements for employer payment for the coverage, as the case may be.

(k) A member with less than 25 years of service credit upon retirement will be offered retired SHBP coverage but must pay the full cost of post-retirement health benefits coverage, in addition to meeting all other eligibility requirements.

N.J. Admin. Code § 17:9-6.8

Amended by 48 N.J.R. 2387(a), effective 11/7/2016