The City of Newark has countered state claims in its ongoing labor dispute with firefighter and police unions over a recent change in health benefits, stating that union members can access health care and that members will be reimbursed for any unnecessary reductions made regarding retirees because of the shift to the State Health Benefits Program (SHBP).
An attorney representing the city outlined the administration's position in an Aug. 8 letter to David Pointer, the deputy director of the state Division of Pensions and Benefits. The Aug. 8 letter, written in response to an Aug. 4 letter obtained by TAPinto Newark, was provided by the city today to TAPinto Newark.
In the letter, the city asserts that certain critical state commission and court orders regarding problems arising from the health care plan change are essentially incorrect.
The problems began when the city attempted to move all of its employees and retirees into 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 unions filed unfair practice charges in the state Public Employment Relations Commission (PERC).
The city missed the May 1 deadline to enroll in the SHBP and received approval from the state to switch over on Aug. 1. For many active and retired employees, the question of whether they actually have health insurance remains uncertain at best, with firefighter and police members experiencing problems getting their health care benefits after Aug. 1.
A key focal point of the dispute centers on a July 21 court ruling, 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.
The city's response in the Aug. 8 letter argued against this decision and the charges filed in PERC.
"With respect to the Division of Pension's guidance contained in your letter, it is the City's position that that the PERC and Superior Court orders are being misinterpreted, overstated and misapplied to the current situation," the letter states, claiming these orders "were made in error."
"The orders only prevent the City from rescinding the the Traditional Plan as an available option for the members and retirees of the four Unions until a resolution of that matter to an Aetna plan," the letter continues. "Regarding the underlying matter, the City reserves all of the rights regarding it."
The Aetna plan is one of the state health care options available to current and retired city employees following the Aug. 1 health care shift. Under the former plan, Horizon/Blue Cross Blue Shield provided coverage for city employees. The new plan gives employees a choice between Horizon or Aetna.
"Please note that the proposed switch to the Aetna plan in no longer being pursued by the City and the City will be filing an application to dismiss the PERC matter shortly as it is now moot," the letter states, reflecting an apparent change in the city plan.
The letter goes on to say that the PERC and Superior Court orders to do not preclude any active or retired fire or police employee to join the SHBP, adding that any order to preclude enrollment of these employees "would be beyond the scope of the orders and in violation of them."
The city then stated that it seeks the ability to continue the enrollment of the uniformed employees and retirees who have decided to join the SHBP, adding that it believes the unions will agree with this position assuming the earlier plan remains an option. The letter adds that there is no ruling that states that the new plan is not "substantially similar" to the new plan.
The city also officially asked that the Aug. 8 letter is a request to offer reimbursement for out-of-pocket expenses for retirees enrolled in the SHBP for the difference in prescription co-pays.
The Aug. 4 letter from the state Division of Pensions and Benefits explicitly states that the city is prohibited from reimbursing employees. State officials could not be immediately reached for comment.
Union officials maintain an opposite position from the city, stating that the city is acting in defiance of the court order. The union officials also state that the Aug. 4 letter makes assertions that are contrary to statements made by city Business Administrator Jack Kelly about the terms of the State Health Benefits Program.