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NJ Local Retirees "Off the Grid"

Few developments in New Jersey public sector labor law created more widespread confusion among administrators (and consternation among employees and unions) than Public Law 2011, Chapter 78 ("Chapter 78"). Chapter 78 is the source of the infamous four-year "grid" whereby public employees gradually contribute more and more toward their health insurance until, by the fourth year, most of their contributions exceed private sector insurance premium contribution averages.

Chapter 78 was Governor Christie's hallmark legislation to rein in public employee health care costs by mandating contributions by employees and retirees.

Whereas earlier permutations of the bill would have affected a broader swath of retirees, on the floor of the Legislature a compromise was reached wherein public employees with at least 20 years of service, as of "the effective date" of the legislation, would be "grandfathered", and hence, not have to pay the mandated contributions into their retirement.

This result might seem unfair to non-unionized employees who will not be grandfathered unless they had 20 years on June 28, 2011. Stay tuned to this blog for further developments, keeping in mind that administrative clarification is not binding on New Jersey courts.

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