40. a. Notwithstanding the provisions of any other law to the contrary, public employees of the State and employers other than the State shall contribute, through the withholding of the contribution from the pay, salary, or other compensation, toward the cost of health care benefits coverage for the employee and any dependent provided under the State Health Benefits Program or the School Employees’ Health Benefits Program in an amount that shall be determined in accordance with section 39 of P.L.2011, c.78 (C. 52:14-17.28c), except that, an employee employed on the date on which the contribution commences, as specified in subsection c. of this section, shall pay:

during the first year in which the contribution is effective, one-fourth of the amount of contribution;

during the second year in which the contribution is effective, one-half of the amount of contribution; and

during the third year in which the contribution is effective, three-fourths of the amount of contribution,

as that amount is calculated in accordance with section 39 of P.L.2011, c.78 (C. 52:14-17.28c).

The amount payable by any employee under this subsection shall not under any circumstance be less than the 1.5 percent of base salary that is provided for in subsection c. of section 6 of P.L.1996, c.8 (C. 52:14-17.28b), subsection a. of section 7 of P.L.1964, c.125 (C. 52:14-17.38), or subsection b. of section 39 of P.L.2007, c.103 (C. 52:14-17.46.9). An employee who pays the contribution required under this subsection shall not also be required to pay the contribution of 1.5 percent of base salary under those subsections listed above.

This section shall apply to employees for whom the employer has assumed a health care benefits payment obligation, to require that such employees pay at a minimum the amount of contribution specified in this section for health care benefits coverage.

b. (1) Notwithstanding the provisions of any other law to the contrary, public employees of the State and employers other than the State, as those employees are specified in paragraph (2) of this subsection, shall contribute, through the withholding of the contribution from the monthly retirement allowance, toward the cost of health care benefits coverage for the employee in retirement and any dependent provided under the State Health Benefits Program or the School Employees’ Health Benefits Program in an amount that shall be determined in accordance with section 39 of P.L.2011, c.78 (C. 52:14-17.28c) by using the percentage applicable to the range within which the annual retirement allowance, and any future cost of living adjustments thereto, falls. The retirement allowance, and any future cost of living adjustments thereto, shall be used to identify the percentage of the cost of coverage.

(2) The contribution specified in paragraph (1) of this subsection shall apply to:

(a) State employees and employees of an independent State authority, board, commission, corporation, agency, or organization for whom there is a majority representative for collective negotiations purposes who accrue 25 years of nonconcurrent service credit in one or more State or locally-administered retirement systems on or after the effective date of P.L.2011, c.78, or on or after the expiration of an applicable binding collective negotiations agreement in force on that effective date, and who retire on or after that effective date or expiration date, excepting employees who elect deferred retirement;

(b) State employees and employees of an independent State authority, board, commission, corporation, agency, or organization for whom there is no majority representative for collective negotiations purposes who accrue 25 years of nonconcurrent service credit in one or more State or locally-administered retirement systems on or after that effective date, or on or after the expiration of an applicable binding collective negotiations agreement in force on that effective date if the terms of that agreement concerning health care benefits coverage in retirement have been deemed applicable by the commission or the employer to those employees, and who retire on or after that effective date or expiration date, excepting employees who elect deferred retirement;

(c) employees covered by section 3 of P.L.1987, c.384 (C. 52:14-17.32f), section 2 of P.L.1992, c.126 (C. 52:14-17.32f1), or section 1 of P.L.1995, c.357 (C. 52:14-17.32f2) who accrue 25 years of service credit on or after that effective date and retire on or after that effective date, including employees who elect deferred retirement;

(d) employees of an employer other than the State for whom there is a majority representative for collective negotiations purposes who accrue the number of years of service credit, and age if required, as specified in subsection b. of section 7 of P.L.1964, c.125 (C. 52:14-17.38), on or after that effective date, or on or after the expiration of an applicable binding collective negotiations agreement in force on that effective date, and who retire on or after that effective date or expiration date, excepting employees who elect deferred retirement, when the employer has assumed payment obligations for health care benefits in retirement for such an employee; and

(e) employees of an employer other than the State for whom there is no majority representative for collective negotiations purposes who accrue the number of years of service credit, and age if required, as specified in subsection b. of section 7 of P.L.1964, c.125 (C. 52:14-17.38), on or after that effective date, or on or after the expiration of an applicable binding collective negotiations agreement in force on that effective date if the terms of that agreement concerning health care benefits payment obligations in retirement have been deemed applicable by the employer to those employees, and who retire on or after that effective date or expiration date, excepting employees who elect deferred retirement, when the employer has assumed payment obligations for health care benefits in retirement for such an employee.

(3) Employees described in paragraph (2) of this subsection who have 20 or more years of creditable service in one or more State or locally-administered retirement systems on the effective date of P.L.2011, c.78 shall not be subject to the provisions of this subsection.

(4) The amount payable by a retiree under this subsection shall not under any circumstance be less than the 1.5 percent of the monthly retirement allowance, including any future cost of living adjustments thereto, that is provided for such a retiree, if applicable to that retiree, under subsection d. of section 6 of P.L.1996, c.8 (C. 52:14-17.28b), subsection b. of section 7 of P.L.1964, c.125 (C. 52:14-17.38), section 3 of P.L.1987, c.384 (C. 52:14-17.32f), section 2 of P.L.1992, c.126 (C. 52:14-17.32f1), or section 1 of P.L.1995, c.357 (C. 52:14-17.32f2), or less than a comparable contribution with regard to the retirees who are members of the alternate benefit program. A retiree who pays the contribution required under this subsection shall not also be required to pay the contribution of 1.5 percent of the monthly retirement allowance under those sections or subsections listed above.

c. The contribution required under subsection a. of this section shall commence: (1) upon the effective date of P.L.2011, c.78 for employees who do not have a majority representative for collective negotiations purposes, notwithstanding that the terms of a collective negotiations agreement binding on the employer have been applied or have been deemed applicable to those employees by the commission or the employer, or have been used to modify the respective payment obligations of the employer and those employees in a manner consistent with those terms, as permitted by law, before that effective date; and (2) upon the expiration of any applicable binding collective negotiations agreement in force on that effective date for employees covered by that agreement with the contribution required for the first year under subsection a. of this section commencing in the first year after that expiration, or upon the effective date of P.L.2011, c.78 if such an agreement has expired before that effective date with the contribution required for the first year under subsection a. of this section commencing in the first year after that effective date.

Once those employees are subjected to the contribution requirements set forth in subsection a. of this section, the public employers and public employees shall be bound by this act, P.L.2011, c.78, to apply the contribution levels set forth in section 39 of this act until all affected employees are contributing the full amount of the contribution, as determined by the implementation schedule set forth in subsection a. of this section. Notwithstanding the expiration date set forth in section 83 of this act, P.L.2011, c.78, or the expiration date of any successor agreements, the parties shall be bound to apply the requirements of this paragraph until they have reached the full implementation of the schedule set forth in subsection a. of this section.

The provisions of law permitting the determination of an amount of contribution at the discretion of the employer or by means of a binding collective negotiations agreement, and by means of the application of the terms of such an agreement to employees who do not have a majority representative for collective negotiations purposes, or the modification of the respective payment obligations of the employer and those employees in a manner consistent with the terms of such an agreement, shall remain in effect with regard to contributions, whether as a share of the cost, or percentage of the premium or periodic charge, or otherwise, in addition to the contributions required under subsections a. and b. of this section.

Paragraphs (5) and (6) of subsection c. of section 6 of P.L.1996, c.8 (C. 52:14-17.28b) shall not be deemed to apply with regard to contributions specified and made under this section. Paragraph (7) of subsection c. of P.L.1996, c.8 (C. 52:14-17.28b) shall apply with regard to contributions specified and made under this section.

A qualified retiree under section 1 of P.L.1997, c.330 (C. 52:14-17.32i) who meets the eligibility requirements on or after the effective date of P.L.2011, c.78 shall not pay less than the contribution required under subsection b. of this section, including as specified in paragraph (3) of subsection b. of this section. Part-time State employees and part-time faculty members participating under section 1 of P.L.2003, c.172 (C. 52:14-17.33a) shall not pay less than the contribution specified in subsection a. of this section. Subsection b. of this section shall apply under subsection b. of section 7 of P.L.1964, c.125 (C. 52:14-17.38) to a surviving spouse of a retired employee of an employer other than the State and the employee’s dependents in the same manner as to the retiree at the time of death.

The minimum contribution based on the retirement allowance of members of the alternate benefit program in retirement shall be determined, as may be necessary, pursuant to the formula specified in paragraph (4) of subsection c. of section 6 of P.L.1996, c.8 (C. 52:14-17.28b).

All other provisions of law shall remain applicable to the extent not inconsistent with this section.

d. Any extension, alteration, re-opening, amendment or other adjustment to a collective negotiations agreement in force on the effective date of P.L.2011, c.78, or to an agreement that is expired on that effective date, shall be considered a new collective negotiations agreement entered into after that effective date for the purposes of this section.

L.2011, c.78, s.40.