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Thursday, April 02, 2015

A collective bargaining agreement may establish a vested right to a continuation of the same health coverage enjoyed by the individual at the time of his or her retirement


A collective bargaining agreement may establish a vested right to a continuation of the same health coverage as a retiree enjoyed by the individual at the time of his or her retirement
Guerrucci v School Dist. of City of Niagara Falls,  2015 NY Slip Op 02617, Appellate Division, Fourth Department

Reversing a ruling by Supreme Court, the Appellate Division held that the “individual plaintiffs are entitled to the health insurance coverage provided in the collective bargaining agreement in effect at the time each individual plaintiff retired” and “those individual plaintiffs eligible for conversion of health insurance coverage ‘supplemental to Medicare’ are entitled to such coverage that, when combined with Medicare, equals the health insurance benefits prior to such conversion.”

Retired administrators [Plaintiffs] who were employed by Niagara Falls City School District alleged that the School District was in breach of contract with respect to its providing health insurance to these retirees.

The Appellate Division noted that the parties did not dispute that the language at issue in the various CBAs is unambiguous and, at oral argument, the School District had conceded that this case is controlled by Kolbe v Tibbetts (22 NY3d 344).

In Kolbe the Court of Appeals held that the relevant collective bargaining agreements [CBAs] “establish a vested right to a continuation of the same health coverage under which plaintiffs retired, until they reach age 70, and that the Insurance Moratorium Law does not provide a basis for abrogating retirees' vested contractual rights.”

Here the 1984-1987 and 1987-1990 CBAs provided that "[a]ny administrator who retires . . . shall continue to receive the Blue Cross/Blue Shield coverage in effect at the time of his or her retirement, excluding dental coverage and major medical insurance, until the administrator becomes eligible for Medicare, at which time the Board [of Education] shall no longer provide such coverage" while the 1990-1994 CBA provided that "[a]ny administrator who retires . . . shall continue to receive the Blue Shield coverage in effect at the time of his or her retirement, excluding dental, vision and major medical coverage, until the administrator becomes eligible for Medicare, at which time the Board [of Education] shall no longer provide such coverage," except for those retirees entitled to conversion of that coverage to coverage that is "supplemental to Medicare." The 1994-1997 and later CBAs provide that "[a]ny administrator who retires . . . shall continue to receive medical coverage in effect at the time of his or her retirement, excluding dental, vision and major medical coverage, until the administrator becomes eligible for Medicare, at which time the Board [of Education] shall no longer provide such coverage," except for those entitled to conversion of that coverage to coverage that is "supplemental to Medicare."

The court said that it:

1. It agreed with Plaintiffs that the plain meaning of the CBA provisions at issue is that, upon retirement, a retiree will receive the health insurance coverage that the retiree was receiving prior to retirement, until the retiree becomes eligible for Medicare;* and

2. It agreed  with Plaintiffs that the supplemental coverage provided for in the CBAs required that School District provide health insurance coverage that, when combined with Medicare, equaled the health insurance benefits that the retirees enjoyed prior to qualifying for Medicare, 

The court explained that in interpreting a CBA, "it is logical to assume that the bargaining unit intended to insulate retirees from losing important insurance rights during subsequent negotiations by using language in each and every contract which fixed their rights to coverage as of the time they retired."

In the words of the Appellate Division, “In view of our determination that the CBAs prevented [the School District] from reducing the retirees' health insurance benefits during retirement and that the intent of the CBAs was to ‘fix [the retirees'] rights to coverage as of the time they retired’ ... we conclude that the provision for ‘coverage . . . which is supplemental to Medicare’ means coverage that when combined with Medicare is equivalent to the health insurance coverage that the retirees enjoyed prior to becoming eligible for Medicare.”

* The Appellate Division noted that the CBAs provided that when certain retirees "reache[d] his or her sixty-fifth (65th) birthday and qualifie[d] for medical insurance under Social Security, the coverage shall be changed to that which is supplemental to Medicare."

The decision is posted on the Internet at:

Handbooks focusing on State and Municipal Public Personnel Law continue to be available for purchase via the links provided below:

The Discipline Book at http://thedisciplinebook.blogspot.com/

A Reasonable Penalty Under The Circumstances at http://nypplarchives.blogspot.com

The Disability Benefits E-book: at http://section207.blogspot.com/

Layoff, Preferred Lists at http://nylayoff.blogspot.com/

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