A Passaic County Superior Court judge has ordered mayor Andre Sayegh’s administration to move all employees, nearly 2,000 people, back to the municipal self-insurance program, likely creating a $20 million fiscal hole.
“The City shall move all employees to the self-insured plan by the end of June 2020,” states Passaic County assignment judge Ernest Caposela, pictured, in an opinion dated June 19.
Caposela also issued an accompanying order dated June 22 denying the city’s motion to reconsider a previous ruling and ordered the city to restore the same level of coverage employees had prior to December 31, 2018.
The order also covers retirees. In all, the city will have to move 2,344 employees and retirees to a self-insurance program.
Sayegh administration collapsed the costly self-insurance program and moved all employees to the state health benefits plan on January 1, 2019. Municipal officials at the time said the change will save taxpayers $20 million per year. Officials had struggled with ever increasing health care expenses for employees.
The city spent $46.6 million in fiscal 2014 on health benefits; by fiscal 2018, the city was spending $59.1 million, according to court records.
The police and fire unions protested the Sayegh administration’s move in September 2018. Many retirees argued the state plan coverage is inferior. They said the change violated the equal to or better clause in their contracts.
Sayegh confirmed the administration intends to appeal the decision.
Municipal officials said the administration intends to take the case to the appellate division to try to secure a favorable ruling.
Mason Maher, president of the police superior officers’ union, said the unions are willing to try to work out a resolution with the administration.
Sayegh said he is open to striking a deal with the unions to resolve the matter.
Members of the City Council blamed the mayor and his administration for failing to give the unions more time to conduct their own analysis of the health insurance change.
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Updated at 12:26 p.m.