Commission Restrains Arbitration Over Impact of Elimination of Opt-out Payment for Waiving Health Insurance Coverage

Town of Westfield and Superior Officers Association, PBA Local 90A

In P.E.R.C. No. 2018-12, the Commission restrained arbitration over a grievance contesting the discontinuation of health insurance opt-out payments.  The Commission concluded that N.J.S.A. 40A:10-17.1 preempted opt-out payments for waiving coverage under a private health insurance plan and that negotiations unit members’ resulting loss of income was not a severable arbitrable claim.  The Commission stated that severable claims are those that flow from the exercise of a managerial prerogative and that this case did not deal with a managerial prerogative per se, but a preemptive statute that rendered the issue non-negotiable.  In addition, the Commission stated that allowing negotiations and arbitration over the asserted monetary impact would circumvent the preemptive statute.

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