Legal dispute over health benefits leaves Newark firefighters and police in limbo


John Witsch worked as a Newark police officer for 28 years before he retired in 1999. Ever since, he has enjoyed one of the perks of retirement -- health care benefits provided by the city.

Until this month.

"I have no insurance right now. They rejected my application, and I'm in limbo," said Witsch, one of many police and firefighter retirees who have had similar problems following the City of Newark's shift to the State Health Benefits Program (SHBP) on Aug. 1. "They say it will be retroactively reinstated. Let's see how that goes." 

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A legal dispute over whether the SHBP provides the same coverage as required in union contracts has led to active and retired police and firefighters not being enrolled in the state's program, according to a letter obtained by TAPintoNewark.pdf

For many active and retired employees, the question of whether they actually have health insurance remains uncertain at best. 

The problems began when the city attempted to move all of its employees and retirees into the SHBP in an effort to save $14 million, a move that was approved by the City Council in January and set to take effect May 1.

While the administration of Mayor Ras Baraka reassured employees that their benefits would either stay the same or improve, four unions representing police and firefighters sued, claiming the SHBP does not provide the same benefits as required in their contract.

The city missed the May 1 deadline to enroll in the SHBP and received approval from the state to switch over on Aug. 1. 

However, the unions won a victory on July 21 when a state superior court judge enjoined the city from rescinding the Traditional Health Insurance Plan and ordered the city to maintain and/or restore coverage for the union's active and retired members.

Because of the judge's ruling, the state has not allowed the union employees to enroll in the SHBP, according to the Aug. 4 letter from David Pointer, the deputy director of the state Division of Pensions and Benefits.

The state will continue to enroll city employees in the state plan effective on Aug. 1, Pointer stated in the letter. However, Pointer noted that given the unfair practice charges filed in the state Public Employment Relations Commission (PERC) by the four firefighter and police unions and the court order enforcing the status quo regarding these unions, "the members of the Unions will not be enrolled in the SHBP as long as the court order requiring Newark to maintain the Traditional Plan for these Union members pending the outcome of its collective negotiation are in effect." 

According to New Jersey statues, there must be uniformity between the health benefits offered throughout the state health plan to state and local employees, Pointer said in the letter. Therefore, it is required that all active and retired Newark employees must be enrolled in the state health plan simultaneously. 

"When new collective bargaining agreements are reached, these employees and retirees must be enrolled in the SHBP in accordance with Newark's resolution and the governing statutes and regulations," the letter states.

"If the Unions are not enrolled in the SHBP as part of the next collective bargaining agreement, Newark may be removed from the SHBP." 

When the change was announced in January, Business Administrator Jack Kelly stated health care costs made up about 16 percent of the city's $650 million budget. Kelly has also stated that any unnecessary reductions made regarding retirees because of confusion over the shifting health plans would be reimbursed by the city. 

However, Pointer stated in the Aug. 4 letter that the city is prohibited from reimbursing employees.

"As part of the brief filed with the court, you assert that Newark has established a Fund to compensate/reimburse employees for any 'deficiencies in coverage between the SHBP and the [Traditional Healthcare Plan].' You further state that the Fund 'will be preserved for the sole purpose of eliminating any out-of-pocket expenses of unit employees.' Please be advised that a reimbursement fund is not permitted by the SHBP," Pointer write in the letter, noting that the State Health Benefits Program Act "clearly designates participant costs as part of the plan design." 

State officials could not be immediately reached for comment. 

A request for comment from the Baraka administration was not immediately satisfied after 9 a.m. Monday morning, with a spokesman stating that the Aug. 4 letter needs to thoroughly analyzed before offering comment. Kelly, the city's business administration, was cc'd on the Aug. 4 letter.

Several union officials expressed dismay over the letter's contents. 

"This letter says something contrary to what Jack Kelly told us," said John J. Chrystal III, a Newark police captain and the president of the Newark Police Superior Officers' Association. "It's clear that somebody didn't do their homework." 

"The city is refusing to comply with a court order," said Gary Vickers, a Newark police captain and the treasurer of the Newark Police Superior Officers' Association. "Apparently, a judge's order in meaningless in the eyes of the city."

Union and city officials are scheduled to meet this morning to discuss the matter.

When John Witsch looks ahead, his eyes see a troubling landscape. 

For Witsch, the change has led to unforeseen complications. But more than anything, he fears for his 42-year-old developmentally disabled daughter who has a job with health care that doesn't provide for all of her medical needs and is supplemented by Witsch's plan.

"She's going to need a hip replacement one day. She has neurological and physical issues that will be there forever. And I won't be here forever," Witsch said. "This isn't just about me. It's about my family. It's about people's lives."

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