New Jersey S 3949: Requires proportional distribution of payment between employers for health benefit payment obligations for certain retirees.

Bill Text

S3949 

SENATE, No. 3949 

STATE OF NEW JERSEY

222nd LEGISLATURE

� 

INTRODUCED MARCH 16, 2026

Sponsored by:

Senator� BENJIE E. WIMBERLY

District 35 (Bergen and Passaic)

SYNOPSIS

���� Requires proportional distribution of payment between 
employers for health benefit payment obligations for certain retirees. 

CURRENT VERSION OF TEXT 

���� As introduced.

�� 

An Act concerning payment for public employer-paid retirement 
health benefits and amending N.J.S.40A:10-23, P.L.1996, c.8, and P.L.2007, 
c.103.

���� Be It 
Enacted by the Senate and General Assembly of 
the State of New Jersey:

���� 1.��� N.J.S.40A:10-23 
is amended to read as follows:

���� 40A:10-23.� a.� Retired 
employees shall be required to pay for the entire cost of coverage for 
themselves and their dependents at rates which are deemed to be adequate to 
cover the benefits, as affected by Medicare, of the retired employees and their 
dependents on the basis of the utilization of services which may be reasonably 
expected of the older age classification; provided, however, that the total 
rate payable by a retired employee for himself and his dependents, for coverage 
under the contract and for Part B of Medicare, shall not exceed by more than 
25% the total amount that would have been required to have been paid by the 
employee and his employer for the coverage maintained had he continued in 
office or active employment and he and his dependents were not eligible for 
Medicare benefits.� 

���� The employer may, in its 
discretion, assume the entire cost or a portion of the cost of such coverage 
and pay all or a portion of the premiums for employees a. who have retired on a 
disability pension, or b. who have retired after 25 years or more of service 
credit in a State or locally administered retirement system and a period of 
service of up to 25 years with the employer at the time of retirement, such 
period of service to be determined by the employer and set forth in an 
ordinance or resolution as appropriate, or c. who have retired and reached the 
age of 65 years or older with 25 years or more of service credit in a State or 
locally administered retirement system and a period of service of up to 25 
years with the employer at the time of retirement, such period of service to be 
determined by the employer and set forth in an ordinance or resolution as 
appropriate, or d. who have retired and reached the age of 62 years or older 
with at least 15 years of service with the employer, including the premiums on 
their dependents, if any, under uniform conditions as the governing body of the 
local unit shall prescribe.� The period of time a county law enforcement 
officer has been employed by any county or municipal police department, 
sheriff's department or county prosecutor's office, may be counted cumulatively 
as "service with the employer" for the purpose of qualifying for 
payment of health insurance premiums by the county pursuant to this section.� 

���� b.� An employee who becomes a 
member of a State or locally-administered retirement system on or after the 
effective date of P.L.2010, c.2 shall pay in retirement 1.5 percent of the 
retiree's monthly retirement allowance, including any future cost-of-living 
adjustments, through the withholding of the contribution from the monthly 
retirement allowance, for health care benefits coverage provided under 
N.J.S.40A:10-22, notwithstanding any other amount that may be required 
additionally by the employer or through a collective negotiations agreement for 
such coverage.� This subsection shall apply also when the health care benefits 
coverage is provided through an insurance fund or joint insurance fund or in 
any other manner.� This subsection shall apply to any agency, board, 
commission, authority, or instrumentality of a local unit.

���� c.���� (1) 
Notwithstanding any provision of this section, or any other law, rule, or 
regulation to the contrary, if an employee qualifies for employer-paid health 
benefits coverage in retirement and was employed during the employee�s years of 
service by more than one State or local government entity or an institution of 
higher education, or is a retirant of a State-administered retirement system, 
the cost of the employer share for such coverage shall be paid on a pro rata 
basis by each former employer, commensurate with the period of employment with 
the employer. 

���� (2) �This section shall not 
be construed to require local government entities which have not opted to 
provide employer-paid health benefits coverage in retirement to contribute to 
the cost of such coverage for a retiree.

���� (3) This section shall not 
be construed to alter any applicable binding collective negotiations agreement 
in effect prior to the effective date of P.L.��� , c.��� (pending before the 
Legislature as this bill).

(cf: P.L.2010, c.2, s.15)

���� 2.��� Section 6 of P.L.1996, 
c.8 (C.52:14-17.28b) is amended to read as follows:

���� 6.