Divorced retiree may enroll his or her new spouse for dependent coverage in the retiree’s health insurance plan as provided by the CBA

Divorced retiree may enroll his or her new spouse for dependent coverage in the retiree’s health insurance plan as provided by the CBA
Giblin v Village of Johnson City, 2010 NY Slip Op 06133, Decided on July 15, 2010, Appellate Division, Third Department

When William Giblin retired from his position with the Village of Johnson City, he continued his individual and dependent health insurance for himself and his then-wife pursuant to the terms of the relevant collective bargaining agreement [CBA]. The controlling provisions in the CBA provided that "[a]ll present retirees … and all members who retire in the future shall continue to receive Blue Cross, Blue Shield Major Medical Insurance coverage for themselves and their dependents (or comparable coverage as may then be in effect)."

Giblin and his then-wife divorced some time later. As the dependent health insurance coverage for Giblin’s former wife automatically terminated upon divorce, Johnson City terminated Giblin’s “family health insurance plan, switching him to an individual coverage plan.”

Some time later Giblin remarried and he asked Johnson City to enroll his new spouse in the City’s health insurance plan as his dependent. Johnson City refused to do so and advised Giblin that he “no longer had family coverage and was not entitled to change his [individual coverage] plan to family coverage.”

Giblin sued, seeking a court order to annul the City’s determination and a declaration that it was required to provide dependent health insurance coverage to his new spouse. Supreme Court annulled the City’s denial of Giblin’s request and directed the City to extend health insurance benefits to Giblin new spouse as his dependent. The City appealed.

The Appellate Division commenced its consideration of the City’s appeal by noting that while Giblin is challenging an action by a municipality, the damages claimed flow from an alleged breach of contract. Accordingly, said the court, "the claim must be resolved through the application of traditional rules of contract law" rather than under CPLR Article 78.

The court then concluded that the City had “breached its contractual obligation” to provide health insurance benefits to Giblin new spouse. Pointing out that the CBA states that Giblin, as a retiree, "shall continue to receive" health insurance coverage for himself and his dependents…” the court observed that “Nothing in the agreement freezes benefits so as to limit coverage to people who are dependents of a retiree at the time of retirement.”

Rejecting the City’s argument that the word "continue" in the CBA supports its determination, the Appellate Division said that “when the whole sentence is read in context it says that insurance coverage will continue for retirees and their dependents, not that retirees will continue to receive the same type of coverage (family or individual).”

Further, the Appellate Division commented that the CBA did not “specifically prohibit retirees from changing their enrollment from individual to family coverage or vice versa.”

The court explained that although Giblin’s former wife was no longer eligible for coverage when they divorced, Giblin “did not request a change to individual coverage and, when he remarried, he merely desired to continue receiving family coverage as he had at the time of his retirement.”

Reading the plain language of the CBA, the Appellate Division decided that Giblin was entitled to a declaration that City must provide dependent health insurance coverage to Giblin new spouse.

The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2010/2010_06133.htm