As reported by, Senate President Stephen Sweeney will unveil a plan that aims to slash the State’s huge medical costs by requiring public employees to kick in significantly more to health benefits, according to three officials familiar with the proposal.

The Sweeney plan shares much common ground with Governor Chris Christie’s reform agenda and signals significant momentum in Trenton for sweeping changes to public medical benefits. Sweeney is expected to unveil the plan at the Statehouse on February 15, 2011, one week before Christie delivers his proposed budget to the Legislature.

The Democrat’s plan would provide immediate savings and as much as $1 billion annually within seven years, according to the officials, who requested anonymity because they were not authorized to speak publicly on the proposal. Under Sweeney’s proposal, all public employees would pay a percentage of their premium instead of the current system that requires them to pay at least 1.5 percent of their salary. The increases would be phased in over seven years and would be applied on a sliding scale depending on the employees’ salary. 

For example, in the first year, public employees who make less than $30,000 would pay 2 percent of their premium, while those who earn more than $100,000 would pay 12 percent. When fully implemented after the seventh year, the lowest income workers would pay 12 percent of their premiums, while top earners would pay 30 percent. The annual payments would range from $2,280 to $5,700 a year.

Christie has called for all public employees to pay 30 percent of their premiums on a gradual basis, regardless of income. Current retirees, most of whom pay nothing for their medical benefits, would not be subject to the increase under both the proposals advanced by Christie and Sweeney. All increases would go into effect at the start of the next union contract. Like Christie, Sweeney will also call for the creation of a multi-tiered benefit plan where employees can pay less for less coverage and more for increased coverage.  

Unlike the laws governing public pension plan that typically require payments each year to fund the current and future costs, retiree medical benefits rules allow states to “pay as you go,” which means they pay on the current cost each year and ignore the long-term price tag. For New Jersey, that long-term price tag is nearly $67 billion, about $13 billion more than the State’s pension deficit. While the pension funds have $48 billion on hand, the State has not saved a dime for medical benefits.

New Jersey has the highest unfunded liability and annual medical benefit costs in the nation, according to an analysis by the Center for State and Local Government Excellence. As of the latest report, there are 394,521 active and retired employees enrolled in the state-administered health benefit plan. This includes active and retired employees from municipalities and school districts who participate in the state plan. Under Sweeney’s proposal, towns would be temporarily blocked from joining the state system to help the fund stabilize.

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Photo of Donald C. Barbati Donald C. Barbati

Donald C. Barbati is a shareholder of Crivelli, Barbati & DeRose, L.L.C. His primary practice revolves around the representation of numerous public employee labor unions in various capacities to include contract negotiation, unfair labor practice litigation, contract grievance arbitration, and other diverse issues…

Donald C. Barbati is a shareholder of Crivelli, Barbati & DeRose, L.L.C. His primary practice revolves around the representation of numerous public employee labor unions in various capacities to include contract negotiation, unfair labor practice litigation, contract grievance arbitration, and other diverse issues litigated before the courts and administrative tribunals throughout the State of New Jersey. In addition, Mr. Barbati also routinely represents individuals in various types of public pension appeals, real estate transactions, and general litigation matters. He is a frequent contributor to the New Jersey Public Safety Officers Law Blog, a free legal publication designed to keep New Jersey public safety officers up-to-date and informed about legal issues pertinent to their profession. During his years of practice, Mr. Barbati has established a reputation for achieving favorable results for his clients in a cost-efficient manner.

Mr. Barbati has also handled numerous novel legal issues while representing New Jersey Public Safety Officers. Most notably, he served as lead counsel for the Appellants in the published case In re Rodriguez, 423 N.J. Super. 440 (App. Div. 2011). In that case, Mr. Barbati successfully argued on behalf of the Appellants, thereby overturning the Attorney General’s denial of counsel to two prison guards in a civil rights suit arising from an inmate assault. In the process, the Court clarified the standard to be utilized by the Attorney General in assessing whether a public employee is entitled to legal representation and mandated that reliance must be placed on up-to-date information.

Prior to becoming a practicing attorney, Mr. Barbati served as a judicial law clerk to the Honorable Linda R. Feinberg, Assignment Judge of the Superior Court of New Jersey, Mercer Vicinage. During his clerkship Mr. Barbati handled numerous complex and novel substantive and procedural issues arising from complaints in lieu of prerogative writs, orders to show cause, and motion practice. These include appeals from decisions by planning and zoning boards and local government bodies, bidding challenges under the Local Public Contract Law, Open Public Records Act requests, the taking of private property under the eminent domain statute, and election law disputes. In addition, Mr. Barbati, as a certified mediator, mediated many small claims disputes in the Special Civil Part.

Mr. Barbati received a Bachelor of Arts degree in history, magna cum laude, from Rider University in Lawrenceville, New Jersey. Upon graduating, Mr. Barbati attended Widener University School of Law in Wilmington, Delaware. In 2007, he received his juris doctorate, magna cum laude, graduating in the top five percent of his class. During law school, Mr. Barbati interned for the Honorable Joseph E. Irenas, Senior United States District Court Judge for the District of New Jersey in Camden, New Jersey, assisting on various constitutional, employment, and Third Circuit Court of Appeals litigation, including numerous civil rights, social security, and immigration cases.