Retired city employees say the switch to Newark's new health benefits plan left them with gaps in coverage
NEWARK -- The city's roll-out of a new health benefits plan -- that left some retirees with little notice of the change and others without coverage -- unleashed furor among public safety unions, elected officials and some of Newark's longest-serving employees.
Among them: Former Mayor Sharpe James.
When Brick City's political giant tried to get treated for his back pain, he was denied; his city-issued health coverage had lapsed, he said.
"I am not concerned about the clinic denying my scheduled August 2, 2017 treatment for my excruciating leg and back pains," James wrote in an email to NJ Advance Media.
"I am concerned about others suffering from permanent and terminal illness pain that can't survive ten days or more of no treatment simply because the city was negligent in negotiating a no lapse in policy plan," he said.
Complaints like these jammed the phones of City Hall, City Council members and union leaders as Newark transitioned its 3,000 employees and more than 2,100 eligible retirees into the state's health benefits plan beginning on Aug. 1.
City officials acknowledged several issues in the process but vowed to fix it and work with the unions to ensure every current and former employee was covered.
"They are frustrated because of their inconvenience and they should be," Mayor Ras Baraka told NJ Advance Media. "But we're going to fix it and get through this painful time."
He stood by the city's decision -- which was approved by the City Council -- to move to the state plan.
"It's the best thing the city needs to do, it saves millions of dollars, it saves the taxpayers money," Baraka said. "The health insurance was spiraling out of control. We knew it was going to be painful, we should have braced ourselves a little better."
Business Administrator Jack Kelly told council members during a heated meeting Wednesday that the state, not the city was responsible for notifying retirees. But Kelly said Thursday the city, too, sent a letter to retirees on May 22 informing them of the changes.
Willem O. Rijksen, a spokesman for the Office of the Treasury, which is processing health insurance applications, said it send letters to 2,182 retirees on July 15 and had processed and received 908 applications since. Another 200 were received on Aug. 2.
Juan Aquino, known as John, is a retired Newark firefighter. He now has Alzheimer's and lives in Orlando. (Courtesy: Dulce Aquino)
"Why the hell did they take this long and not send me the proper forms?" asked Dulce Aquino, 56, whose husband, Juan Acquino served on city's fire department for 30 years. "This should have never happened."
Aquino lives in Orlando, Fla. with her husband who has Alzheimer's. She said she received a notification from the state on July 28, three days before her old coverage expired.
"I am really upset," she said, adding that she was working with the union to overnight her application to the state. "I'm devastated knowing I have no coverage."
For Kecia Daniels, the city's personnel director, retirees have been coming to her with issues that are vast and nuanced.
One retiree, with no living family, said he didn't know where to start. A nephew wondered if he could enroll -- and sign -- the new health plan on behalf of his infirm uncle.
"It's little things like that that can potentially be a powder keg," she said behind her desk piled with paperwork. "But this city, you have lots of employees who have lots of issues."
Daniels said she's in "triage mode," trying to help retirees that are sick, in hospitals or nursing homes. But she said there are some things she can't help with because she doesn't know who needs help. It was the state that reached out to the retirees and applications are mailed directly to the them.
Unless they call the city, "I have no way of knowing," Daniels said.
Rijksen, the spokesman for the state's treasury office, said it takes 10-14 business days to process an application. He said the state notified retirees of how to apply for their new benefits in non-certified letters sent July 15.
When asked why notifications were sent two weeks before the new plan kicked in, he said the city did not submit a list of eligible retirees until July 7.
Daniels said the city was focused on making sure current employees were enrolled and they didn't receive a request from the state until early July to identify retirees eligible for benefits.
"There's enough blame to go around," Daniels said. "We are not without fault ourselves."
"We could have done a better job at meeting with the union officials and sitting folks down and working through this together despite our argument, contention and ego," Baraka said. "We didn't put together a strategy with the union to be able to deal with it in a more effective kind of way. We're dealing with it as a crisis as opposed to putting something together in anticipation that these things may occur."
Four police and fire unions sued the city over the benefit changes, saying it violated their contract.
"This is a humongous nightmare," said Anthony Tarantino, president of Newark Fire Officers. But he said the unions were not being contentious. "If they would have just kept up with the contract and negotiated with us, we're reasonable people, we could have worked this all out."
A mayor denied
Former Mayor James, who said he sent in his application for the new benefits, said he couldn't see a doctor when he went for a follow-up visit after his MRI.
That same day, as James was denied coverage, his son, South Ward Councilman John Sharpe James, moved to issue a vote of no confidence against Kelly, the business administrator, saying he improperly rolled out the benefits plan. Three other council members gave Kelly a vote of no-confidence but the motion ultimately failed.
"It's anger and emotion," Baraka said in response. "We'll get through this difficult thing."
The elder James said he applied for the new plan but received a letter from the state six days before his coverage lapsed, saying he needed to provide proof he was eligible for Medicare. The card he needed would take 10 days for Social Security to mail to his house, James said.
James said Daniels, the city's personnel director, helped him complete the application and had a copy of the paperwork he needed in her office.
"If the city had taken responsibility for pre-enrollment in assisting the seniors, all of this would have been known and the state could have been timely assisted," James said.
The state said 218 applications were received that required proof of Medicare and remained pending.
'We are taking care of you'
Retired police officer Fred Soto, 76, who lives in East Brunswick, said he went to pick up his wife's rheumatoid arthritis medication that he usually pays $1.50 for and was charged $623.
Soto said his prescription coverage had lapsed even though he mailed in his insurance application more than a month ago.
Fred Soto retired from the Newark Police Department in 1995. (Left) Pictured with his wife. (Courtesy: Fred Soto)
"I feel scared, I feel depressed, I feel like we're being betrayed by the city after I served for over 25 years. I never had no problem before," he said.
Former Fire Director James W. Stewart, said he didn't get a notification from the state until Aug. 1. He said he received a letter from the city a few months back but it didn't tell him what to do.
"It might have been the state's responsibility but since we retired from the city ... the city should not have totally left it up to the state," he said.
Baraka said Newark would continue to take care of its workers -- past and present. He said the problem needed context: Many retirees and their spouses have health care benefits for life, he said.
"We're taking care of you and the city of Newark residents are taking care of you and in some instances we can't afford to take care of you," he said, citing escalating costs. "We're not finished, there's more we have to do with the health benefits but we have to do it."
The council agreed to move to the state's health benefits plan in January as a way to cut $14 million in spending. At the time, Kelly said health care costs made up about 16 percent of the city's $650 million budget.
Originally Kelly recommended hiring a new broker, Frenkel Benefits, LLC., to transition the city to a self-insured plan. The city previously contracted Brown & Brown as its broker. But the council rejected the measure and city alternately proposed moving to the state's insurance plan.
Daniels said two additional workers are staffing her office and she's working late to take calls from people who need help. Current or former employees who need assistance can call the state at 609-292-7524 or the city at 973-733-8008.
Karen Yi may be reached at kyi@njadvancemedia.com. Follow her on Twitter at @karen_yi or on Facebook.