Removes certain part-time elected public officials from eligibility for employer-paid health care benefits coverage; makes elected public officials ineligible for payments for waiving health care benefits coverage; codifies Pension Fraud and Abuse Unit.

A1306

ASSEMBLY, No. 1306

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman CODY D. MILLER

District 4 (Atlantic, Camden and Gloucester)

Assemblyman MICHAEL INGANAMORT

District 24 (Morris, Sussex and Warren)

Co-Sponsored by:

Assemblyman Hutchison

SYNOPSIS

���� Removes certain part-time elected public officials
from eligibility for employer-paid health care benefits coverage; makes elected
public officials ineligible for payments for waiving health care benefits
coverage; codifies Pension Fraud and Abuse Unit.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

concerning investigations for public pension and
benefit fraud and concerning health care benefits for certain elected public
officials, amending N.J.S.40A:10-16 and P.L.1995, c.259, and supplementing
P.L.1955, c.70 (C.52:18A-95 et seq.).

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

���� 1.��� N.J.S.40A:10-16 is
amended to read as follows:

���� 40A:10-16.� As used in this
subarticle:

���� a.���� "Dependents"
means an employee's spouse and the employee's unmarried children, including
stepchildren, legally adopted children, and, at the option of the employer and
the carrier, children placed by the Division of Youth and Family Services, under
the age of 19 who live with the employee in a regular parent-child
relationship, and may also include, at the option of the employer and the
carrier, other unmarried children of the employee under the age of 23 who are
dependent upon the employee for support and maintenance, but shall not include
a spouse or child while serving in the military service.� At the option of the
employer, "dependent" may include an employee's domestic partner as
defined in section 3 of P.L.2003, c.246 (C.26:8A-3);

���� b.��� "Employees"
may, at the option of the employer, include
:

����
(1)
elected officials
who
have or are eligible for health benefits coverage provided in accordance with P.L.1961,
c.49 (C.52:14-17.25 et seq.) immediately prior to the effective date of P.L.���
c.������� (pending before the Legislature as this bill) and continuously
thereafter, and

����
(2) commencing on or after
that effective date, elected officials whose hours of work are fixed at 35 or
more per week
, but shall not include persons employed on a short-term,
seasonal, intermittent or emergency basis, persons compensated on a fee basis,
or persons whose compensation from the employer is limited to reimbursement of
necessary expenses actually incurred in the discharge of their duties;

���� c.���� "Federal Medicare
Program" means the coverage provided under Title XVIII of the Social
Security Act as amended in 1965, or its successor plan or plans.

(cf: P.L.2005, c.334, s.2)

���� 2.��� Section 37 of P.L.1995,
c.259 (C.40A:10-17.1) is amended to read as follows:

���� 37.� Notwithstanding the
provisions of any other law to the contrary, a county, municipality or any
contracting unit as defined in section 2 of P.L.1971, c.198 (C.40A:11-2) which
enters into a contract providing group health care benefits to its employees
pursuant to N.J.S.40A:10-16 et seq., may allow any employee who is eligible for
other health care coverage to waive coverage under the county's, municipality's
or contracting unit's plan to which the employee is entitled by virtue of
employment with the county, municipality or contracting unit.� The waiver shall
be in such form as the county, municipality or contracting unit shall prescribe
and shall be filed with the county, municipality or contracting unit.� In
consideration of filing such a waiver, a county, municipality or contracting
unit� may pay to the employee annually an amount, to be established in the sole
discretion of the county, municipality or contracting unit, which shall not
exceed 50% of the amount saved by the county, municipality or contracting unit because
of the employee's waiver of coverage, and, for a waiver filed on or after the
effective date of P.L.2010, c.2, which shall not exceed 25%, or $5,000,
whichever is less, of the amount saved by the county, municipality or
contracting unit because of the employee's waiver of coverage.� An employee who
waives coverage shall be permitted to resume coverage under the same terms and
conditions as apply to initial coverage if the employee ceases to be covered
through the employee's spouse for any reason, including, but not limited to,
the retirement or death of the spouse or divorce.� An employee who resumes
coverage shall repay, on a pro rata basis, any amount received which represents
an advance payment for a period of time during which coverage is resumed.� An
employee who wishes to resume coverage shall file a declaration with the
county, municipality or contracting unit, in such form as the county,
municipality or contracting unit shall prescribe, that the waiver is revoked.�
The decision of a county, municipality or contracting unit to allow its
employees to waive coverage and the amount of consideration to be paid therefor
shall not be subject to the collective bargaining process.

����
Commencing on the effective
date of P.L.��� , c.������� (pending before the Legislature as this bill), an
elected public official shall not be eligible to receive any payment in
accordance with this section for waiving coverage under the county�s,
municipality�s, or contracting unit�s plan to which the elected public official
is entitled by virtue of the office held, including any elected public official
who waived coverage prior to the effective date.

(cf: P.L.2010, c.2, s.18)

���� 3.� Section 36 of P.L.1995,
c.259 (52:14-17.31a) is amended to read as follows:

���� 36. a. Notwithstanding the
provisions of any other law to the contrary, an employer other than the State
which participates in the State Health Benefits Program, established pursuant
to P.L.1961, c.49 (C.52:14-17.25 et seq.), may allow any employee who is
eligible for other health care coverage to waive coverage under the State
Health Benefits Program to which the employee is entitled by virtue of
employment with the employer.� The waiver shall be in such form as the Director
of the Division of Pensions and Benefits shall prescribe and shall be filed
with the division.� After such waiver has been filed and for so long as that
waiver remains in effect, no premium shall be required to be paid by the
employer for the employee or the employee's dependents.� Not later than the
180th day after the date on which the waiver is filed, the division shall
refund to the employer the amount of any premium previously paid by the
employer with respect to any period of coverage which followed the filing date.

���� b.��� Notwithstanding the
provisions of any other law to the contrary, the State as an employer, or an
employer that is an independent authority, commission, board, or
instrumentality of the State which participates in the State Health Benefits
Program, may allow any employee who is eligible for other health care coverage
that is not under the State Health Benefits Program to waive the coverage under
the State Health Benefits Program to which the employee is entitled by virtue
of employment with the employer.� The waiver shall be in such form as the
Director of the Division of Pensions and Benefits shall prescribe and shall be
filed with the division.

���� c.���� In consideration of
filing a waiver as permitted in subsections a. and b. of this section, an
employer may pay to the employee annually an amount, to be established in the
sole discretion of the employer, which shall not exceed 50% of the amount saved
by the employer because of the employee's waiver of coverage, and, for a waiver
filed on or after the effective date of P.L.2010, c.2, which shall not exceed
25%, or $5,000, whichever is less, of the amount saved by the employer because
of the employee's waiver of coverage.� An employee who waives coverage shall be
permitted to immediately resume coverage if the employee ceases to be eligible
for other health care coverage for any reason, including, but not limited to,
the retirement or death of the spouse or divorce.� An employee who resumes
coverage shall repay, on a pro rata basis, any amount received from the
employer which represents an advance payment for a period of time during which
coverage is resumed.� An employee who wishes to resume coverage shall notify
the employer in writing and file a declaration with the division, in such form
as the director of the division shall prescribe, that the waiver is revoked.�
The decision of an employer to allow its employees to waive coverage and the
amount of consideration to be paid therefor shall not be subject to the
collective bargaining process.

����
d.� Commencing on the
effective date of P.L.��� , c.������� (pending before the Legislature as this
bill), an elected public official shall not be eligible to receive any payment
in accordance with this section for waiving coverage under the State Health
Benefits Program to which the elected public official is entitled by virtue of
the office held, including any elected public official who waived coverage
prior to the effective date.

(cf: P.L.2010, c.2, s.11)

���� 4.� (New section)�� a.� The
State Treasurer shall establish a Pension Fraud and Abuse Unit within the
Department of the Treasury.� The unit shall be dedicated to the prevention and
investigation of fraud and abuse of the State�s pension and benefits systems,
including the payment of retirement, disability, and other benefits.

���� b.� The Director of the
Pension Fraud and Abuse Unit shall report directly to the State Treasurer, and
the State Treasurer shall appoint or assign such accountants, investigators,
and other employees to the unit as necessary for the efficient and effective
operation of the unit.

���� c.� The unit shall:

���� (1)� investigate public
pension claims and payments, including, but not limited to, disability pension
claims, and claims of improper participation in the retirement systems, as well
as potential fraud and abuse of other benefit systems as the State Treasurer
may direct;

���� (2)� work closely and
coordinate with both the Division of Pensions and Benefits within the
department and the Office of the Attorney General and receive referrals from
the Office of the State Comptroller on claims of potential fraud and abuse;

���� (3)� work closely with the
Division of Pensions and Benefits, the Office of the Attorney General, and the
Office of the State Comptroller to identify cases of suspected pension fraud,
abuse, and ineligibility, and undertake investigations, share information and
resources, develop strategies for curtailing fraud and abuse, and identify
cases for civil and criminal prosecution; and

���� (4)� hold regular meetings
with the Division of Pensions and Benefits, Office of the Attorney� General,
and the Office of the State Comptroller to ensure the maximum cooperation
between these agencies.

���� d.� The unit may recommend all
civil or criminal remedies as may be provided by law to address such pension
fraud, abuse, and improper participation, and, in conjunction with the Division
of Pensions and Benefits and the Office of the Attorney General, and as
provided by law, may pursue such petitioning of the appropriate boards as
necessary for denial of an application or revocation of a pension or benefit
improperly granted, and may refer matters to the Division of Pensions and
Benefits, the Office of the Attorney General, and other State agencies as
appropriate for further action.

���� e.� The unit shall encourage
the public to report fraudulent pension and benefit claims and payments and
shall maintain a website, mailing address, facsimile, electronic mail address,
toll-free number, and other methods to receive such reports at the discretion
of the director.

���� f.� The requests,
investigations, and responses of the unit shall remain confidential until such
time as the matter is presented to the respective board of trustees for
consideration or any criminal action is completed.� Disclosure of existence of
an investigation to the subject of the investigation shall be expressly
prohibited. Any records, documents, videos, and voice recordings obtained by
the unit during an investigation are considered privileged and confidential
during the pendency of the investigation.

���� g.� The unit is authorized to
call upon the expertise and assistance of all State departments, divisions,
offices, or agencies, as well as all political subdivisions of the State, to
carry out its mission, duties, and responsibilities, including, but not limited
to, the Department of Labor and Workforce Development, the Department of the
Treasury, the New Jersey Motor Vehicle Commission, and the Office of the
Attorney General.

���� h.� The unit may subpoena
witnesses and compel their attendance, and also may require, by subpoena, the
production of books, papers, documents, or other evidence in any matter
involving the unit�s investigation of fraud and abuse of the State�s pension and
benefits systems, including the payment of retirement, disability, and other
benefits.

���� If any person shall refuse to
obey any subpoena so issued, or shall refuse to testify or produce any books,
papers, documents, or other evidence, the unit may apply ex parte to the
Superior Court to compel the person to comply forthwith with the subpoena.

���� i.� All departments,
divisions, offices, agencies, and political subdivisions of the State shall, to
the extent not inconsistent with law, cooperate with the unit and furnish the
unit with information upon request by the unit.

���� 5.��� This act shall take
effect immediately.

STATEMENT

���� This bill limits eligibility
for health care benefits coverage for elected public officials of a
municipality or county to those elected public officials whose hours of work
are fixed at 35 or more per week.� This limitations applies to counties and
municipality that do not participate in the New Jersey State Health Benefits
Program (SHBP).� The limitation is the same as the current eligibility
requirement for health care benefits coverage in the SHBP.� Elected public
officials currently receiving health care benefits coverage may continue to
receive such coverage as long as they remain eligible prior to the effective
date of the bill and continuously thereafter.

���� The bill also makes elected
public officials who choose to waive health care benefits coverage ineligible
for payments for such a waiver.� Such payments are currently permitted for
certain public employees by public employers that participate and that do not
participate in the SHBP.

���� This bill codifies the Pension
Fraud and Abuse Unit (PFAU) within the Department of the Treasury, which was
established by executive order in 2013 to prevent and investigate cases of
intentional deception or misrepresentation that result in an unauthorized
benefit to a member or to some other person from the State-administered
retirement systems and benefits programs. �This includes, but is not limited
to, disability pension claims and improper participation in the retirement
systems and other benefit programs.

���� This bill also provides
subpoena power to the PFAU to assist the unit during investigations.

���� According to an investigative
report issued by the State Comptroller, the PFAU has inadequate statutory
authority to compel public employers to comply with requests for information
during investigations.� Codifying the unit will result in more effective
investigations.