Collective bargaining agreement requires village to reimburse its retirees participating in its health insurance plan their Medicare premiums

Collective bargaining agreement requires village to reimburse its retirees participating in its health insurance plan their Medicare premiums
Millington v Village of S. Glens Falls, 30 Misc 3d 405

Marvin Millington and the class he represents are retired employees of Village of South Glens Falls and prior to their respective retirements, were members of a collective bargaining unit represented by the Civil Service Employees Association, Inc., Local 1000, AFSCME, AFL-CIO.

Effective April 1, 2007 the Village terminated its practice of reimbursing all qualifying Village retirees the cost of their Medicaid Part B premium. Millington, contending that the Village’s action violated the collective bargaining agreements between the Village and CSEA, sued seeking a court order directing the Village reimburse all eligible retirees for such premiums in full.

The Village, on the other hand, contended that it is required to pay either a retiree's medical health insurance premium or Medicare Part B premium, but not both and that it neither violated the law nor the collective bargaining agreement when it terminated its prior practice of paying both premiums.

The Village's private medical insurance plan, Empire Blue Cross, requires every participant in the plan at age 65 to sign up for Medicare Part B as a condition to continued coverage. The Village directly paid the Empire Blue Cross premium while the Medicare Part B premium was deducted from the retiree's Social Security benefit and then the Village reimbursed the employee for that premium.*

Although the Village, said the court, was not required to provide health insurance benefits to a retired employee absent an enforceable contractual obligation to do so, here Judge Nolan said “the salient issue is whether the word "or" in the collective bargaining agreements supports, as a matter of law, the Village's interpretation.” He found that it did not, noting that “While the efforts of the Village to reduce costs are praiseworthy, its interpretation of the word "or" in its disjunctive sense does not square with the rest of the language of the most recent contract in force since 1995.”

The court found that when the medical insurance provisions in the agreements are read as a whole, the retirees were contractually entitled to receive continued coverage under the Village's medical insurance plan with the Village to pay 100% of the qualifying retiree's medical insurance premiums. Accordingly, said Judge Nolan, the Village was responsible to pay 100% of the cost of health insurance for any and all retired Village employees hired before June 1, 1995 including such retirees' Medicare Part B premium.

Further, said the court, Millington and all members of the class he represents were to be reimbursed by the Village “for any and all Medicare Part B premiums which they have individually paid since April 1, 2007, with statutory interest….”

* See Civil Service Law §167-a, reimbursement for Medicare premium charges, with respect to political subdivisions of the State that are “participating employers” in the New York State Health Insurance Program [NYSHIP].

The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2010/2010_20470.htm
NYPPL