July 30, 2018

Determining an employee's health insurance benefits upon his or her retirement


Determining an employee's health insurance benefits upon his or her retirement
Ames v County of Monroe, 2018 NY Slip Op 04886, Appellate Division, Fourth Department

In this decision the Appellate Division held that "although the collective bargaining agreements in effect at the time of an employee's' retirement are binding and enforceable agreements that dictate the retired employee's rights, the relevant collective bargaining agreements in this action did not require the County of Monroe [Monroe] to maintain for each Plaintiff fully-paid health insurance coverage equivalent to that in effect at the time such Plaintiff retired."

Plaintiffs had complained the Monroe failed to "to maintain fully-paid health insurance coverage equivalent to that in effect at the time each Plaintiff-retiree retired" and that the Monroehas breached those CBAs by failing to do so. 

Citing Greenfield v Philles Records, 98 NY2d 562, the Appellate Division disagreed, explaining that "It is well settled that "a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms," and whether a contract is ambiguous is a question of law. Significantly, said the court, extrinsic evidence may not be considered unless the document itself is ambiguous.

The various CBAs at issue provide "retirees" with certain health insurance benefits, but did not define the term "retirees." Plaintiffs interpret the term "retirees" to mean all retirees, even those who are eligible for or enrolled in Medicare. That interpretation is supported by other provisions of the CBAs, such as one that provides such benefits to spouses of deceased retirees "for the lifetime of the surviving spouse or until remarriage" (emphasis added in the decision). 

Monroecontended that the CBAs do not provide for health insurance for those Plaintiffs  eligible for or enrolled in Medicare because of the realities of Medicare, the CBAs' prohibition of duplicate coverage, and the fact that the specific insurance plans in effect at the time of the individual Plaintiffs' retirement were not available to individuals who were eligible for Medicare.

Indicating that the CBAs were ambiguous with respect to whether retirees who are eligible for, or enrolled in, Medicare are entitled to fully-paid health insurance coverage that is equivalent to the insurance coverage in effect at the time they retired, the court turned to "extrinsic evidence to determine the parties' intent with respect to the health insurance coverage to be provided to those retirees who are eligible for or enrolled in Medicare."

Where, as here, it is determined by a court that "a contract is ambiguous, its interpretation remains the exclusive function of the court unless determination of the intent of the parties depends on the credibility of extrinsic evidence or on a choice among reasonable inferences to be drawn from extrinsic evidence."
Noting that "for decades" Monroe's retirees who were not yet eligible for Medicare were provided with health insurance benefit. In contrast, its retirees enrolled in Medicare were only provided with Medicare supplement plans. No objection was made to this arrangement and, until recently, the union representing Plaintiffs never sought to negotiate any additional benefits for retirees eligible for or enrolled in Medicare.*
 
Considering the conduct of the parties "after the contract is formed" the Appellate Division concluded that Monroe had established as a matter of law that it and the union formerly representing Plaintiffs** did not intend that the County be required to maintain fully-paid health insurance coverage equivalent to that in effect at the time of retirement for those Plaintiffs who were eligible for or enrolled in Medicare."

* Presumably such negotiations for additional benefits upon retirement must be effective before, and are only applicable to, employees before their retirement. In Burnham and UFT, 28 PERB 4590, PERB ruled that the union's "duty of fair representation" runs only to employees; there is no such duty with respect to former unit members such as retirees [See, also,  McDonald PBA v City of Geneva, 92 N.Y.2d 326; Kolbe v Tibbetts, 22 NY3d 344].

** Retirees are not employees for the purposes of collective bargaining for the purposes of Article 14 of the Civil Service Law [the Taylor Law] 

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 decisions summarized here. Accordingly, these 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 DOES NOT CREATE AN ATTORNEY-CLIENT RELATIONSHIP.
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 in this blog is presented with the understanding that neither the publisher nor members of the staff are providing legal advice to the reader and in the event legal or other expert assistance is needed, the reader is advised to seek such advice from a competent professional.