Exhausting administrative remedies

Exhausting administrative remedies

Jardim v PERB, 265 AD2d 329

The Jardim case demonstrates the importance of exhausting one's administrative remedies before initialing litigation challenging an administrative determination.

A Public Employment Relations Board administrative law judge [ALJ] dismissed improper practices charges filed by Leroy Jardim. Jardim claimed that he had been subjected to disciplinary action as a result of his performing his union duties.

In effect, Jardim alleged that he had been disciplined for performing “protected activities” within the meaning of the Taylor Law -- an unfair labor practice. The ALJ decided that the disciplinary action had not been taken against him because of his union activities.

Jardim then filed a petition with a State Supreme Court appealing the ALJ's determination. This proved to be a fatal procedural error. His petition was dismissed because the court determined that Jardim had not exhausted his administrative remedies. It seems that Jardim elected to file a petition appealing the ALJ's decision in State Supreme Court pursuant to Article 78 of the Civil Practice Law and Rules instead of filing his “exceptions” to the ALJ's ruling with PERB.

The Appellate Division, Second Department affirmed the lower court's ruling. The court said that “administrative review” was available to Jardim. Thus, the dismissal of his petition by the Supreme Court was appropriate.

The court pointed out that PERB's rules provided for such an administrative review, citing Section 204.10 [4 NYCRR 204.10] of the rules. Section 204.10(a) permits a party to appeal a determination by an ALJ to the board, provided such an appeal -- referred to as “exceptions” to the ALJ's determination -- is filed within 15 working days after the individual has received the ALJ's decision.

Section 204.10 (b)(4) of the rules requires the party filing exceptions to specifically state them in the appeal. Any basis for an exception to a “ruling, finding, conclusion or recommendation” made by the ALJ “which is not specifically urged is waived”.

Not being familiar with the rules not a valid excuse for failure to follow procedures

Not being familiar with the rules not a valid excuse for failure to follow procedures

Broome Co. Sheriff's Law Enforcement Supervisors v Sheriff's Department, 32 PERB 3054

Binghamton Police Supervisors Association v City of Binghamton, 32 PERB 3055

Ignorance or a misunderstanding of PERB's rules is not an acceptable excuse as the Law Enforcement Supervisors and Binghamton Police Supervisors decisions illustrate.

The Broome County Sheriff's Law Enforcement Supervisors Association filed a representation petition with PERB's Director of Employment Practices and Representation. The Association wanted to have the Broome County Sheriffs PBA decertified and the Association designated as the collective bargaining representative for a unit consisting of supervisory officers.

PERB’s director of representation dismissed the Association's petition after finding that the “showing of interest” [SOI] simultaneously filed with its petition “did not include a description of the unit the Association alleged to be appropriate....” The section of the Association's SOI form to be used to describe the unit the Association sought to represent was blank. This, said the director, meant that the SOI was not “on a form prescribed by the director” and therefore did not meet the requirements set out in Section 201.4(b) of PERB's' rules [4 NYCRR 201.4(b)].

The Association filed an exception to the director's ruling, contending that it had not been promptly notified of the deficiency and thus was prevented from correcting it in a timely fashion. In addition, the Association's representative said that the representation forms he received from PERB “had not included any form for an SOI petition.”

PERB sustained the director's determination. It said that the rules clearly set out the requirement. “A party who is ignorant of a requirement under the Rules is no differently situated than a person who is mistaken in his or her understanding of the meaning or application of the Rules.”

As an alternative argument, the Association claimed that it used a “floppy disk” of PERB forms that PERB created and offered for sale to the public but that the disk did not contain an SOI petition. PERB rejected the claim, noting that the disk included the SOI petition and “the Association's representative apparently used that computer version of the form to file a corrected SOI petition with the director.”

Commenting that it applies its rules strictly, “especially the Rules pertaining to showing of interest requirements,” PERB sustained the director's dismissal of the Association's representation petition.

In a similar case, Binghamton Police Supervisors Association v City of Binghamton, 32 PERB 3055, PERB rejected the Association's representation petition because, it also, “did not include a description of the unit the Association alleged to be appropriate....”

Determining the “future income” of a disabled public officer or employee

Determining the “future income” of a disabled public officer or employee

Iazzetti v City of New York, 93 NY2d 808

The Court of Appeals' ruling in the Iazzetti case is of importance to public employees, and, in the case of death, their survivors, who are injured while performing their duties.

Mario Iazzetti, an employee of the New York City Department of Sanitation, was injured on the job and was awarded accidental disability retirement benefits - a pension equal to 3/4 of his last annual salary.

Iazzetti and his wife, however, sued the City claiming it was responsible for his disability. A jury awarded them $200,000 in past lost earnings and benefits, $25,000 in past pain and suffering, $750,000 in future lost earnings and benefits, $250,000 in future lost pension, and $25,000 in future pain and suffering. The jury apportioned 80 percent of the responsibility for the accident to the City and 20 percent to Iazzetti.

The City moved to have the award for past and future loss of earnings and for “future lost pension” modified. A State Supreme Court justice ruled that Section 4545(b) of the Civil Practice Law and Rules [CPLR] allowed the City to offset the jury's award for past loss of earnings by the amount Iazzetti had received from his accident disability retirement pension but said the jury's award for future losses could not be similarly reduced. The basis for the ruling: CPLR 4545(b) does not allow defendants to offset future losses.

The City appealed, contending that Section 4545(c) of the CPLR, rather than 4545(b) applied in Iazzetti's case. The Appellate Division agreed with the city. This resulted in a significant difference to the Iazzetties since unlike subdivision (b), subdivision (c) allows the employer to offset both past and future economic losses in such situations. Iazzetti asked the Court of Appeals to review the Appellate Division's ruling.

After a highly technical analysis of the impact of an amendment to the CPLR on its exiting provisions, the Court of Appeals determined that CPLR Section 4545(b) had not been repealed by implication when the Legislature amended the CPLR by adding a new subdivision (c) to Section 4545 and reversed. It ruled that “the Appellate Division erred in applying CPLR 4545(c) to reduce [Iazzetti's] jury verdict for future lost earnings.”

The significance of this ruling: Court and jury awards for future economic losses are permitted where the public employer is held liable, in whole or in part, for the injury or death of its employee.

Election of a remedy

Election of a remedy

Appeal of A.D. – Decisions of the Commissioner of Education, Decision No. 15,492

A tenured math teacher attempted to appeal a personnel matter to the Commissioner of Education. The Commissioner declined to assume jurisdiction in the matter pointing out that the appeal concerned a matter that had earlier been considered under a contract grievance procedure involving the same parties.

The Commissioner said that a school employee who elects to submit an issue for resolution through a contractual grievance procedure may not bring an appeal to the Commissioner for review of the same matter. As the record reflects that A.D. brought a grievance “on the very same issues that are the subject of this appeal and the grievance resulted in a final determination reached on January 29, 2006,” that decision precluded review by the Commissioner. 

The Commissioner cited Appeal of Coughlin, 41 Ed Dept Rep 484 and Decision No. 14,751 in support of his ruling.

Employee not entitled to interest on back pay due upon reinstatement to his or her former position pursuant to court order

Employee not entitled to interest on back pay due upon reinstatement to his or her former position pursuant to court order
Miller v Nassau County Civ. Serv. Commn. 2011 NY Slip Op 05033, Appellate Division, Second Department

Roberta Miller sued the Nassau Civil Service Commission, seeking reinstatement to her former position and for back pay.

Miller appealed Supreme Court’s failure to award her predecision interest.*
 
The Appellate Division rejected her claim for “predecision interest,” noting that the award of back pay to in this instance is derived from Civil Service Law §77, "and that statute does not provide for predecision interest." Citing Matter of Bello v Roswell Park Cancer Inst., 5 NY2d 170.

§77, in pertinent part, provides that “Any officer or employee who is removed from a position in the service of the state or of any civil division thereof in violation of the provisions of this chapter, and who thereafter is restored to such position by order of the supreme court, shall be entitled to receive and shall receive from the state or such civil division, as the case may be, the salary or compensation which he would have been entitled by law to have received in such position but for such unlawful removal, from the date of such unlawful removal to the date of such restoration, less the amount of any unemployment insurance benefits he may have received during such period….” 

.* See http://publicpersonnellaw.blogspot.com/2011/06/jurys-decision-in-favor-of-plaintiff.html for a summary of the earlier determination by the Appellate Division giving rise to this appeal.

The decision is posted on the Internet at:  
http://www.courts.state.ny.us/reporter/3dseries/2011/2011_05033.htm

Retaliatory dismissal

Retaliatory dismissal

Lipphardt v Durango Steakhouse, 267 F.3d 1183

An employee has a consensual intimate relationship with a co-worker. After discontinuing the relationship the employee tells the employer that he or she is being subjected to harassment by the co-worker and as a result, is terminated. These were the events leading to the Mary Hope Flipchart’s lawsuit against Durango Steakhouse.

The issue before the Circuit Court of Appeals: is an employee who was formerly involved in an intimate relationship with a co-worker precluded from bringing a claim against the employer for retaliatory discharge if the employee is fired after reporting former boyfriend's or girlfriend's harassing conduct to their mutual employer?

Lipphardt complained that after ending her relationship with co-worker Donald Knuth, she began having difficulties with Knuth at work. According to Lipphardt, Knuth consistently attempted to convince Lipphardt to resume their intimate relationship. After a number of off-the-job episodes, Lipphardt reported Knuth's actions and their impact on her to her supervisor and requested a transfer.

According to the decision, while Lipphardt was on a previously scheduled vacation, Knuth was told that the company was considering firing both of them. Knuth alleged that the general manager then asked him if he knew anything that could get Lipphardt fired, as the restaurant would rather keep him and “get rid of the bitch.” Knuth told the general manager that Lipphardt had given free food to the employees of a nearby tanning salon in exchange for tanning services. Lipphardt was fired upon her return from vacation.*

Lipphardt filed complaint alleging hostile work environment, sexual harassment, quid pro quo sexual harassment, retaliation, and negligent retention. The district court granted Durango's motion for summary judgment on the quid pro quo sexual harassment charge and, at the close of evidence, its motion for judgment as a matter of law on the claim of negligent retention.

The two remaining issues were submitted to the jury. The jury returned a verdict in favor of Durango on the hostile work environment and sexual harassment issues but in favor of Lipphardt on the issue of retaliation.

The district court granted Durango's motion to vacate the jury's determination in favor of Lipphardt's with respect to her retaliation complaint “as a matter of law.” Lipphardt appealed.

The Circuit Court disagreed with the lower court's ruling overturning the jury's decision. It said that “[f]ollowing the clear instructions it was given, the jury returned a verdict recognizing Lipphardt's belief that she was the victim of harassment as objective. This decision was not improper as a matter of law, as a prior intimate relationship, while important, is not a determinative factor in a sexual harassment analysis.”

It also reversed the district court's order granting Durango judgment as a matter of law on Lipphardt's claim of retaliation. Further, said the court, it was remanding the matter to the district court to enter judgment for Lipphardt and award damages as decided by the jury.

* It was established at trial that a different employee was trading food for tanning services and that Knuth had never actually seen Lipphardt engage in this practice when he made the allegation. No one followed up with Knuth regarding his allegation before Lipphardt was dismissed.

Settlement agreements

Settlement agreements

McLean v Village of Sleepy Hollow, 166 F. Supp. 2d 898

What can an individual do if the terms of a settlement agreement between the employee and the employer fail to provide the benefit or result expected by the employee? In the absence showing that agreement to the settlement was the result of some fraud on the part of the employer, very little, as the McLean decision by a federal district court judge demonstrates.

Gary McLean was a part-time Buildings Code Enforcement Officer in the Village of Sleepy Hollow. He was also employed full time in another position and in view of this, he was permitted to set his own work schedule. McLean was terminated from his position following the election of a new mayor. He sued in federal district court, contending that he had been fired in retaliation for his vocal support of the previous administration.

The Village and McLean settle the case. McLean was to be reinstated with back pay and his attorneys' fees paid -- all the relief to which he would have been entitled had he won his lawsuit. Settlement documents were signed and the Court “so ordered” the Stipulation and Order of Settlement.

The settlement included the following provision:

“IT IS FURTHER AGREED that the plaintiff will be re-employed by the Village of Sleepy Hollow at the annual salary of $10,000 per annum as a part-time Code Enforcement Officer subject to all terms and conditions of employment attendant to that position.”

McLean was told that he could return to work by letter dated June 14, 2000. Prior to this date, however, the Mayor endorsed a recommendation that Building Code Inspectors be required to work between the hours of 9 a.m. and 12 p.m. Mondays through Fridays. As McLean's full time job required that he be at work 7:30 a.m. and 3:30 p.m., he was unable to meet the Village's new work schedule set for his position. The possibility of a new policy changing the work hours of his job was not mentioned to McLean during the settlement negotiations.

Although the Village offered McLean the option of working any three successive hours between 8:30 AM and 4:30 PM on weekdays, this would not solve his problem and he did not return to work as contemplated by the settlement. The Village subsequently filed disciplinary charges against McLean for failure to return to work “as scheduled.” The hearing officer ruled that the Village had acted within its authority when it changed McLean's work schedule and recommended that McLean be dismissed from his position because he failed to report for work.

The Village Board adopted the hearing officer's findings and recommendations and terminated McLean. McLean filed an Article 78 in state supreme court challenging the Village's action. He also asked the federal district court to enforce the terms of the settlement order.

McLean's argument: he would never have settled the case if he had known that he would have to give up his full-time job in order to go back to work as a Building Code Examiner. He contended that the use of the phrase “subject to all the terms and conditions of employment attendant to that position” in the Stipulation and Order means that the Village had to reemploy him on the terms that were in effect at the time he agreed to settle the case.

The district court said that although the “situation is extremely unfortunate” and McLean did not get what he thought he was entitled to under the settlement to which he agreed, it agreed with the Village that his motion must be denied.

Although it is clear that the court has subject matter jurisdiction to enforce the settlement, “subject matter jurisdiction was only the first hurdle to adjudication” in this case. The federal judge pointed out that McLean participated in a civil service disciplinary hearing, where he litigated and lost the issue of the Village's right to dismiss him notwithstanding the terms set out in the settlement agreement.

According to the ruling, whether the hearing officer's finding against McLean bars his obtaining a different interpretation of the meaning of the relevant language in the settlement Stipulation in federal court is a complicated question. While any decision by the New York State Supreme Court in the Article 78 proceeding would be entitled to preclusive effect under the Full Faith & Credit Clause, regardless of whether the Supreme Court ruled on questions of fact or of law, here there is only the administrative determination. Is an administrative hearing officer's unreviewed findings entitled to preclusive effect under the circumstances?

According to the ruling, this depends on whether the challenged elements constitute findings of fact, where preclusive effect is accorded, or findings of law.

The judge said that he did not have to decide if there was any “preclusionary effect” with respect administrative findings of law. Instead the court held that even if McLean could relitigate the meaning of the settlement agreement, he agreed “with the conclusions of the hearing officer.”

McLean conceded that the Village had the right to set the terms and conditions of employment, including the work schedule, of its employees. In the words of the court:

The Village is of course free to waive its rights in this regard, but any such waiver must be apparent from the face of the contract between McLean and Sleepy Hollow. The terms of the Stipulation and Order are artless (at least from McLean's perspective), but the relevant sentence is not ambiguous and cannot be read as a waiver by the Village of its right to alter the terms and conditions of its employees' jobs. The Stipulation does not require the Village to maintain the terms and conditions of McLean's employment as they were at the time the settlement was negotiated. It says only that McLean will be reemployed on the terms and conditions that are “attendant to his position.” While the words “from time to time” do not appear after the word “position,” they do not have to, because the usual rule is that job terms can be changed. McLean's reading of the Stipulation, not the Village's, is the one that departs from the usual rule; thus McLean's reading cannot be adopted unless it is clearly spelled out in the contract. It is not. End of discussion.

This, said the court, leads to a harsh result. However, the fact that McLean and his counsel assumed that everything would go back to the way it was, -- i.e., “that they subjectively intended the settlement would restore the status quo ante” -- is insufficient to bind the Village when that subjective intention is not clear from the objective manifestation of McLean's intent - the words of the Stipulation and Order.

Imprudent action bars accidental disability benefit

Imprudent action bars accidental disability benefit

Sullivan-Dorsey v NYC Police Pension Fund, 288 AD2d 131

The Board of Trustees of the New York City Police Pension Fund rejected the application for accidental disability benefits filed by Laura Sullivan-Dorsey, a New York City police officer. Sullivan-Dorsey appealed, contending that she was injured in the line of duty. She claimed that she was entitled to such disability benefits as a result of her falling from a building ledge while at work.

According to the decision, Sullivan-Dorsey was injured when she fell from a second-story window ledge while attempting to gain access to an adjoining office at the Queens Narcotic District Office.

Sustaining the Board's decision denying her application for accidental disability benefits, the Appellate Division said that Sullivan-Dorsey's injury was not the result of an “accident” within the meaning of City of New York Administrative Code Section 13-252 ... but of her own conscious and highly imprudent decision to attempt to gain entry to an office by means of a window ledge.

Jury’s decision in favor of plaintiff based on speculation rather than logical inference based on the evidence vacated

Jury’s decision in favor of plaintiff based on speculation rather than logical inference based on the evidence vacated
Miller v Nassau County Civ. Serv. Commission, 2011 NY Slip Op 05032, Appellate Division, Second Department

Roberta Miller, claiming that she was laid off in bad faith, sued the Nassau Civil Service Commission and others seeking reinstatement to her former position and back pay.

Although the jury ruled in her favor, Supreme Court set aside the jury’s decision as contrary to the weight of the evidence and directed that a new trial be held.

Nassau appealed, contending that Supreme Court should have dismissed the action against it “as a matter of law.”

The Appellate Division agreed, holding that Supreme Court should have granted Nassau’s motion. The court said that “A finding by the jury that [Miller] was singled out for layoff due to her political affiliation could only have been reached by the jury based upon speculation, rather than logical inferences drawn from the evidence.”

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_05032.htm

Reassignment pending disciplinary action

Reassignment pending disciplinary action

Gray v Crew, 267 AD2d 98

Prior to the filing of disciplinary charges against Dr. Simpson Gray, the New York City Community Superintendent advised Gray of the charges and “the nature of the complaints against him.” The Superintendent also told Dr. Gray that he would be transferred to the “district office” and reassigned to perform administrative duties pending the determination of the charges to be filed against him.

Gray challenged the transfer and reassignment to administrative duties but a State Supreme Court justice rejected his petition to rescind the superintendent’s decision. The Appellate Division, First Department, sustained the lower court’s dismissal of Gray’s petition.

The relevant law in this situation: subdivisions 7(c) and 8 of Section 2590-j of the Education Law. Subdivision 7(c) requires the community superintendent, “in advance of the filing of charges and specification,” to inform the teacher or administrator and the community board of “the nature of the complaint.” The court said that the community superintendent had complied with this requirement.

The court also noted that Subdivision 8 authorizes the community superintendent to transfer teachers and supervisors within the district without their consent for a number of reasons including “disciplinary action pursuant to subdivision 7....”

The Appellate Division said that “[c]ontrary to [Gray’s] claims” there were no procedural violations and the community superintendent “properly exercised” discretionary authority when Gray was transferred to the District Office pending the determination of disciplinary charges then pending against him.

The court also concluded held that Gray’s right to due process was not violated “since the discretionary transfer to which [Gray] was subject does not implicate due process concerns.”

Gray also argued that the reassignment caused him “irreparable financial or professional harm attributable to the Superintendent’s action.” The Appellate Division disagreed, pointing out “the transfer did not entail any reduction in [Gray’s] pay, and [Gray’s] lawsuit provides the basis for recovery of damages, if any.

The Appellate Division dismissed Gray appeal, setting out the following three reasons for its ruling:

1. Gray failed to show his probability of success on the merits;

2. Gray failed to prove any danger that he would suffer irreparable injury in the absence of the requested relief; and

3. Gray did not demonstrate that the equities balanced in his favor.

Determining the amount of an award by the Division of Human Rights following its finding that an employee suffered discriminatory retaliation

Determining the amount of an award by the Division of Human Rights following its finding that an employee suffered discriminatory retaliation

Matter of Roy C. Bell v New York State Div. of Human Rights, 36 AD3d 1129

Roy Bell was a probationary elementary school physical education teacher employed by the New Paltz Central School District. Denied tenure, Bell filed a complaint with the State Division of Human Rights alleging that he was sexually harassed by his supervisor and was shortly thereafter denied tenure in retaliation for making a complaint to his union representative concerning the matter.

The Commissioner of Human Rights dismissed the sexual harassment charge but sustained the charge that the District had unlawfully retaliated against Bell for complaining to the union by denying him tenure.

The Commissioner awarded Bell $171,491, less withholdings and deductions for federal, state and local income taxes, as damages for back pay for the period between 1990 through 1998. The Commissioner also awarded Bell $25,000 in compensatory damages

Bell appealed the award, contending that the award of back pay was insufficient because, among other things, it failed to include certain stipends that he would have earned had his employment continued.

In reviewing the award, the Appellate Division held that:

● Based on the evidence, there was no reasonable basis to conclude that Bell would not have continued coaching for additional compensation had his employment not ended and, as such, the back pay award must be recalculated to reflect those additional coaching stipends.

● The Commissioner should not direct the District withhold deductions for federal, state and local income taxes as federal courts have held that an employer should not be permitted to pay less in a back pay award simply by deducting the taxes it assumes that the employee will owe on the award, because that would give “a benefit it has not earned [to the employer, who] had the entire use of the money during the litigation” citing Curl v Reavis, 608 F Supp 1265. However, Bell would remain personally responsible for his tax liability for those years, taking into account all applicable allowances or deductions.

● The Commissioner took all relevant factors into account, including the financial difficulties that petitioner experienced upon separation from his employment, and rendered an award “reasonably related to the discriminatory conduct” that the agency found to exist.

The decision is posted on the Internet at:
http://www.nycourts.gov/reporter/3dseries/2007/2007_00367.htm

Reimbursing NYSHIP Medicare-eligible retirees for Medicare Part B premiums

Reimbursing NYSHIP Medicare-eligible retirees for Medicare Part B premiums
Munger v Board of Educ. of the Garrison Union Free School Dist., 2011 NY Slip Op 05034, Appellate Division, Second Department

Carol Munger and other retirees of the Garrison Union Free School District sued in an effort to recover damages for breach of contract and for a judgment declaring that they are entitled to reimbursement for money they expended for Medicare Part B premiums since reaching the age of 65. Supreme Court dismissed Munger’s Article 78 petition.
Munger appealed and the Appellate Division reinstated that branch of her petition seeking reimbursement for Medicare Part B premium payments

Ruling that the issue of the school district's obligation to reimburse Munger and her co-plaintiffs for their Medicare part B premiums was not decided in the prior arbitration proceeding, the Appellate Division held that the arbitrator's award did not have preclusive effect on Munger's Article 78 action.

The court then explained that in considering a motion to dismiss a pleading for failure to state a cause of action, “the court must accept the allegations of the complaint as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory.”

Noting that Munger had submitted documents relating to the school district’s obligation, “as members of the statewide health care consortium,” to reimburse their retired employees for Medicare Part B premiums paid by the retirees pursuant to Civil Service Law §167-a, the Appellate Division observed that Civil Service Law §167-a requires that employers participating in the New York State Health Program for State and Local Governments to reimburse retirees who are 65 years of age or older for Medicare premium charges.

According, said the court, Munger and her co-plaintiffs every possible favorable inference from their allegations and supporting documents, the Garrison Union Free School District’s motion to dismiss Munger's first cause of action alleging breach of the collective bargaining agreements and seeking declaratory relief should have been denied.


Randall Comments: The Munger case appears to be another example of a public employer participating in the New York State Health Insurance Program attempting to circumvent the mandates of Civil Service Law §167-a* A brief review of the genesis of §167-a may be illuminating.

Many years ago Thomas McCracken, the then director of the Department of Civil Service’s health insurance unit, concluded that the State could realize substantial financial benefits in terms of a reduction in the employer’s contributions to the New York State Health Insurance Program for State and Local Government [NYSHIP] if individuals and the dependents of such individuals that were Medicare eligible retirees had Medicare as their primary insurer.**

Mr. McCracken was instrumental in the drafting and adoption of Civil Service Law §167-a to this end. He also successfully advocated modifying NYSHIP's health insurance contracts to “exclude” from NYSHIP coverage those benefits otherwise available to Medicare eligible retirees and their dependents under Medicare. The reason for this: Medicare premiums were less than the premium costs that would have been otherwise required were the State to continue to provide these benefits to retirees and their dependents were NYSHIP the primary insurer.

In developing the plan, Mr. McCracken realized that, in effect, “excluding” such coverage for retirees in the NYSHIP contracts for health insurance mandated that the Medicare eligible retirees designate Medicare as their primary insurer or lose a significant portion of their health insurance coverage as the NYSHIP contracts would only provide Medicare-eligible retirees and their dependents with health insurance benefits otherwise available to active employee that were not covered by Medicare.

To maintain their same level of health insurance benefits, the Medicare eligible retiree would be required to pay the Medicare premium otherwise required for Medicare as well as the full “employee contribution” required for NYSHIP. Hence the amendment of the Civil Service Law to provide for the reimbursement of Medicare premiums to the Medicare eligible retirees set out in §167-a.

As an illustration, if the employee contribution for individual coverage in NYSHIP was $xxx per year, the Medicare eligible retiree would be required to pay $xxx for his or her NYSHIP participation and, in addition, pay $yyy per year for Medicare premiums for a total of $zzz.Thus the Medicare eligible retiree would be eligible for the same level of health insurance benefits otherwise available to the non-Medicare eligible individual under NYSHIP but would be required to pay more in premiums for the identical coverage.

To eliminate this adverse financial impact on Medicare eligible retirees, §167-a was enacted in order to provide for the reimbursement of Medicare premiums to Medicare eligible retirees by the retiree’s employer, thus, once again, limiting their cost for health insurance to the $xxx per year that was required of active employees and non-Medicare eligibles in NYSHIP while NYSHIP continued to reap substantial financial savings to the benefit of the State and NYSHIP’s participating employers.

Simply stated, but for the Medicare eligible retirees participating in Medicare as their primary health insurance carrier, the health insurance costs to the State, participating employers and NYSHIP enrollees, active and retired, for health insurance benefits through NYSHIP would be higher.

* Civil Service Law §167-a, in pertinent part, provides: Reimbursement for medicare premium charges. Upon exclusion from the coverage of the health benefit plan of supplementary medical insurance benefits for which an active or retired employee or a dependent covered by the health benefit plan is or would be eligible under the federal old-age, survivors and disability insurance program, an amount equal to the premium charge for such supplementary medical insurance benefits for such active or retired employee and his or her dependents, if any, shall be paid monthly or at other intervals to such active or retired employee from the health insurance fund.

In addition, 4 NYCRR 73.3(6) provides as follows: (6) The employer shall pay an additional sum each month equal to the current monthly Federal Medicare charge as the employer's share of the cost of coverage for each employee and dependent covered under the health insurance plan who is 65 years of age or older, while 4 NYCRR 73.1(b), Definitions, defines the term "employer" as follows: (b) The term employer or an employer shall include the State of New York (in all its departments and agencies and those departments and agencies of the State maintained and financed from special or administrative funds) and any participating employer. The term participating employer shall mean any public authority, public benefit corporation, school district, district corporation, municipal corporation or other public agency, subdivision or quasi-public organization which elects, with the approval of the President of the Civil Service Commission, to include its employees and/or retired employees in the plan.

** Eligible individuals are not required by federal law to participate in Medicare upon attaining age 65 but if the individual elects not to do so, he or she may be required to pay higher Medicare premiums should he or she later decide to enroll in Medicare.

The Munger decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_05034.htm