This dispute concerns the allowable scope of negotiations for employee contributions to health care and prescription coverage (collectively health insurance) costs in accordance with L. 2011, c. 78, §§ 39 and 41 (Chapter 78), codified at N.J.S.A. 52:14-17.28c and N.J.S.A. 18A:16-17.1. Chapter 78 prescribed health insurance contribution rates for public employees over a four-year period beginning July 1, 2011 and ending June 30, 2015, at gradually increasing rates designated Tier 1, Tier 2, Tier 3 and Tier 4.
Petitioner Ridgefield Park Education Association appealed the scope of negotiations ruling by the Public Employment Relations Commission (PERC) in favor of respondent Ridgefield Park Board of Education, that Chapter 78 preempted the terms of the parties' collective negotiations agreement (CNA) for the period July 1, 2014 to June 30, 2018, such that the Association members were required to contribute at the Tier 4 rate throughout the remaining three years of the 2014-2018 CNA and not just for the first year – July 1, 2014 - June 30, 2015. The court reverses the final agency decision because under the circumstances presented PERC's interpretation of Chapter 78 is contrary to the Legislature's intent since it creates the absurd result of a financial hardship of having Association members contribute at the Tier 4 level for three additional years. The court further remands the matter to PERC to fashion and implement an appropriate remedy within sixty days to refund Association members their health insurance contributions that were improperly deducted.