SEASIDE HEIGHTS — The Seaside Heights Borough Council voted Thursday to pull its employees out of the New Jersey State Health Benefits Program, and a borough official said the town does not plan to apply for state transitional aid in 2027, after 11 years in the program.

At a special meeting Oct. 29, the council approved, with no votes against, three resolutions: withdrawing from the state health plan, joining the Roundstone group medical captive program starting Jan. 1, 2027, and appointing Marsh Agency as broker of record for all employee benefit lines. The official briefing the council described the Roundstone plan as a self-insurance-style plan that uses Cigna.

The official said the change would save the borough about $515,000.

Dispute with state monitors

Because Seaside Heights receives transitional aid, it is supervised by the state Division of Local Government Services, and the switch needed the division's sign-off. The official said the division told the borough last week that it would approve the change only if both employee unions gave letters waiving "any and all grievances" and lawsuits.

The official said the borough told the state by email right away that "that was not going to happen." The Teamsters local representing the borough's 11 public works employees had voted for the change, and its members' ballots showed the vote was unanimous, the official said. The police union did not vote either way; on its lawyer's advice, it preferred a standard letter from the borough promising that the new coverage would be equal to or better than the state plan, according to the official.

The official said that at a meeting the day before the council vote, the borough's state monitor said the division's director still wanted the letters and would not sign the waiver without them. "The what next is from borough council," the official said, "to decide to approve these resolutions or not."

The official called it "a little ridiculous" that the borough would be asked to "walk away from $515,000 of savings" over two letters, and suggested the state's demand grew out of union lawsuits in larger cities, naming Paterson.

The official also said the borough had tried to join a joint health insurance fund but was turned down because of its claims loss ratio.

Stepping away from transitional aid

The official said state monitors were told that the borough intends not to apply for transitional aid in 2027. The official said that if a town refuses something the state asks for under the program, the usual penalty is withholding aid, which matters little if the borough isn't seeking aid. The borough will also ask the state to drop the extra year of monitoring that normally follows a town's exit, the official said.

A council member said the expectation had been about $2 million in aid, but that the borough would get only 85% of its 2025 amount, about $300,000. "Again, to us, that's not a lot of money," the council member said.

The official said work on the 2027 budget would start next week, based on revenue from the first 10 months of 2026, and that the numbers suggest "we're gonna be fine." The official noted that before Hurricane Sandy, Seaside Heights went 99 years without transitional aid, and said the borough would be out of the program "sooner or later, hopefully sooner."

The official said the borough had done what the state asked during its time in the program, including laying off employees and doing two rounds of school studies. The second, a regionalization study, led to what the official called a "very vocally controversial" school referendum.

There was no public comment at the special meeting.