ARTIFICIAL INTELLIGENCE [AI] IS NOT USED, IN WHOLE OR IN PART, IN PREPARING NYPPL SUMMARIES OF JUDICIAL AND QUASI-JUDICIAL DECISIONS

October 05, 2016

Reducing health insurance prescription co-pay benefits for an employer’s retirees to the same level as the employer’s active employees' prescription co-pay benefit


Reducing health insurance prescription co-pay benefits for an employer’s retirees to the same level as the employer’s active employees' prescription co-pay benefit
Altic v Board of Educ., 2016 NY Slip Op 06315, Appellate Division, Fourth Department

As relevant to this action, §14 of Part B of Chapter 504 of the Laws of 2009  amended Chapter 729 of the Laws of 1994 and made permanent temporary legislation prohibiting a school district, a BOCES, or a vocational education and extension board providing health insurance benefits and employer contributions on behalf  retirees and their dependents that were less than the health insurance benefits and employer contributions it provide on behalf a corresponding group of active employees.*

In this action there was no question that the prescription co-pay benefits for retirees and active employees were identical from June 30, 1994, the effective date of this so-called Moratorium Statute through June 30, 2007. Effective July 1, 2007, pursuant to a collective bargaining agreement [CBA], the prescription co-pay benefit for active employees was reduced. The prescription co-pay benefit for active employees was again reduced pursuant to the terms and conditions of a subsequent CBA, effective September 1, 2013. 

Accordingly, Onondaga-Cortland-Madison Board of Cooperative Educational Services [OCM] reduced its prescription co-pay benefits for its active employees’ as the result of collective bargaining effective September 1, 2013. OCM subsequently reduced its prescription co-pay benefits for its retirees to the same level it paid on behalf of the active employees' for the prescription co-pay benefit effective April 1, 2014.

Nancy Altic, on behalf of herself and other OCM retirees, filed an Article 78 petition challenging OCM’s reduction of its prescription co-payment benefits it made on behalf of its retirees. Supreme Court granted Altic’s petition and annulled OCM’s decision to reduce the OCM’s prescription co-pay benefit for its retired employees to the then same level of its prescription co-pay benefit it made on behalf of its active employees as set out in the collective bargaining agreement. Supreme Court held that OCM had violated certain provisions of Chapter 504 of the Laws of 200.

OCM appealed and the Appellate Division unanimously reversed the Supreme Court’s ruling “on the law” and dismissed Altic’s petition.

The Appellate Division explained that the Moratorium Statute, first enacted in 1994 "sets a minimum baseline or floor for retiree health insurance benefits.” That floor was measured by the health insurance benefits received by active employees.” In other words, said the court, the Moratorium Statute “does not permit an employer to whom the statute applies to provide retirees with lesser health insurance benefits than active employees."

In view of this, the Appellate Division concluded that, “inasmuch as there was a corresponding diminution of  [prescription co-pay] benefits . . . effected [with respect to retired employees] . . . from the present level  … on or after June 30, 1994” to the level of the prescription co-pay benefits being made on behalf of active OCM employees, OCM did not violate the Moratorium Statute.

* §14 of Part B of Chapter 504 of the Laws of 2009 amended §1 of Chapter 729 of the laws of 1994, making permanent temporary legislation addressing the health insurance benefits and contributions to be made on behalf of retired employees of school districts, BOCES and certain other educational entities, to read as follows: “Section 1. From on and after June 30, 1994 [until May 15, 2010,]a school district, board of cooperative educational services, vocational education and extension board or a school district as enumerated in section 1 of chapter 566 of the laws of 1967, as amended, shall be prohibited from diminishing the health insurance benefits provided to retirees and their dependents or the contributions such board or district makes for such health insurance coverage below the level of such benefits or contributions made on behalf of such retirees and their dependents by such district or board unless a corresponding diminution of benefits or contributions is effected from the present level during this period by such district or board from the corresponding group of active employees for such retirees.” 

The decision is posted on the Internet at:



CAUTION

Subsequent court and administrative rulings, or changes to laws, rules and regulations may have modified or clarified or vacated or reversed the information and, or, decisions summarized in NYPPL. For example, New York State Department of Civil Service's Advisory Memorandum 24-08 reflects changes required as the result of certain amendments to §72 of the New York State Civil Service Law to take effect January 1, 2025 [See Chapter 306 of the Laws of 2024]. Advisory Memorandum 24-08 in PDF format is posted on the Internet at https://www.cs.ny.gov/ssd/pdf/AM24-08Combined.pdf. Accordingly, the information and case summaries should be Shepardized® or otherwise checked to make certain that the most recent information is being considered by the reader.
THE MATERIAL ON THIS WEBSITE IS FOR INFORMATION ONLY. AGAIN, CHANGES IN LAWS, RULES, REGULATIONS AND NEW COURT AND ADMINISTRATIVE DECISIONS MAY AFFECT THE ACCURACY OF THE INFORMATION PROVIDED IN THIS LAWBLOG. THE MATERIAL PRESENTED IS NOT LEGAL ADVICE AND THE USE OF ANY MATERIAL POSTED ON THIS WEBSITE, OR CORRESPONDENCE CONCERNING SUCH MATERIAL, DOES NOT CREATE AN ATTORNEY-CLIENT RELATIONSHIP.
NYPPL Blogger Harvey Randall served as Principal Attorney, New York State Department of Civil Service; Director of Personnel, SUNY Central Administration; Director of Research, Governor’s Office of Employee Relations; and Staff Judge Advocate General, New York Guard. Consistent with the Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations, the material posted to this blog is presented with the understanding that neither the publisher nor NYPPL and, or, its staff and contributors are providing legal advice to the reader and in the event legal or other expert assistance is needed, the reader is urged to seek such advice from a knowledgeable professional.
New York Public Personnel Law. Email: publications@nycap.rr.com