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Sep 13, 2010

Retiree health insurance benefits

Retiree health insurance benefits
Aeneas McDonald PBA v City of Geneva, App. Div., 245 A.D.2d 1042, Affirmed, 92 N.Y.2d 326

The elimination or modification of a public retiree’s health insurance coverage by a former employer has been the subject of a number of recent litigations. The latest rulings suggest that the resolution of the issue will turn on whether or not the retirees have a contractual right to such benefits.

For instance, in the Della Rocco v. City of Schenectady and Andriano v. City of Schenectady cases, decided August 28, 1997, New York State Supreme Court Justice Robert E. Lynch wrote that City of Schenectady police and fire department retirees were entitled to fully paid health insurance comparable to that in effect at the time of each retiree’s retirement because the benefits had been negotiated and set out in a Taylor Law agreement. Justice Lynch ruled that it was not relevant that the particular Taylor Law agreement under which the individual retired was no longer operative.

The Appellate Division recently applied the same reasoning in a suit filed by the Aeneas McDonald Police Benevolent Association, Inc., whose members include all current and retired members of the Geneva Police Department. The PBA sued to annul the City’s decision to unilaterally change the health insurance plan it provided for its retired police officers.

In a split decision, the Appellate Division ruled that the City of Geneva could change the health insurance it provided its retired police officers because the retirees’ health insurance coverage benefits were not protected by the terms of a collective bargaining agreement, either currently operative or expired.

The background: In 1972 the City adopted a resolution, Resolution 33, providing for the payment of health insurance benefits to retired City employees. The City simultaneously discontinued its membership in the State’s Employees’ Health Plan, electing to provide coverage through the Genesee Valley Medical Health Care Plan. Later the City replaced the Genesee Plan with the Blue Million Health Plan.

The City told its retirees that they would be covered by the Blue Million Health Plan until December 31, 1996, and that effective January 1, 1997 their coverage would be changed to the Blue Choice Extended Plan. The union sued. What proved to be critical in determining the rights of Geneva’s retired police officers was the fact that the City’s retirees’ benefits were being provided pursuant to a resolution adopted by the City rather than under the terms of a collective bargaining agreement.

Although New York State Supreme Court Justice Harvey held that Geneva’s decision to change the health insurance benefits of retirees violated the parties’ past practice of providing a certain level of benefits to retirees, the Appellate Division ruled that this was incorrect.

The Appellate Division pointed out that none of the previous collective bargaining agreements between the City and the bargaining units that represent active police officers addressed the issue of health insurance benefits for retired police officers. Consequently, said the Court, the union’s retired members “are not now nor have they at any time in the past been beneficiaries of a negotiated labor agreement that provides health insurance benefits during the period of their retirement.”

In contrast to the situation in the Schenectady case, the Court concluded in the Geneva case that (1) the retired union members never had any contractual rights with respect to health insurance benefits during retirement and (2) Resolution No. 33 did not give the retirees any vested rights to any particular health insurance benefits during retirement. In other words, unless the provision is deemed a “contractual” obligation, a legislative body may amend, or repeal, a law, rule, regulation, ordinance or resolution changing health insurance benefits for retirees. In addition, the Appellate Division said that the City was not required to negotiate its unilateral change in the health insurance benefits it provided its retirees and dismissed the union’s petition.

What about the State Constitution’s prohibition against “diminishing or impairing” a retirement benefit? The simple answer is that health insurance benefits are not “retirement benefits” within the meaning of the State’s Constitution. Unless there is some “contractual right” to health insurance benefits in retirement, the employer may unilaterally change the plan, contribution rates or other elements of a retiree’s health insurance.

The leading case involving this issue is Lippman v Sewanhaka Central High School District, 66 NY2d 313. The Court of Appeals said that a school board could change the rates of its employer contributions for retiree health insurance premiums that had been adopted pursuant to an earlier school board resolution where “the retirees had no contractual right” to the continuation of those contributions.

Those involved in the public schools or BOCES should note that school retirees have special rights. Under temporary legislation, state law requires school districts and BOCES to provide their respective retirees with the same health insurance benefits that they provide for their active employees [Chapter 80 of the Laws of 1997 extended Chapter 729 of the Laws of 1994 for one additional year]. Retirees of other municipal employers are seeking similar legislative protection against changes in their health insurance coverage by their former employers.

The text of the decision is posted on the Internet at:

http://nypublicpersonnellawarchives.blogspot.com/2007/10/retiree-health-insurance-benefits.html
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Retaliating against employees for political activity

Retaliating against employees for political activity
Richardson v Saratoga Springs, App Div, 246 A.D.2d 900

Scott Richardson, one of two “city electricians” employed by the Saratoga Springs Department of Public Works, supported his brother-in-law in a political race against the City’s incumbent Commissioner of Public Works. After the incumbent won, Richardson sued, alleging that the City had retaliated against him for his political activities by:

1. Transferring some of his duties to a co-worker, Vincent Arpey; and

2. Discontinuing his de facto status as supervisor of the entire electrical crew.

He cited Section 107 of the Civil Service Law, which provides, in pertinent part, that political opinions or affiliations may not be a consideration in the “appointment or selection to or removal from an office or employment” (or in the discharge or promotion or reduction, or in any manner change in the official rank or compensation) of an individual whose position is subject to the Civil Service Law.”

The Appellate Division agreed, holding a jury trial was needed to determine whether Saratoga Springs violated this section of the law when it made a personnel decision that was “affected or influenced by” an employee’s political opinion or affiliation. “[A] reasonable factfinder could conclude that [Richardson] was discriminated against because of his political activities outside of working hours.”

The Court said discrimination could explain why Richardson’s was denied “a promotion and concomitant salary increase -- ‘for constitutionally impermissible reasons,’ namely, because of his off-duty political activities.” The fact that an independent consultant actually recommended the reclassification was, according to the ruling, of little significance “where, as here, it can be inferred that those actions were the direct consequence of the changes in the electricians’ work duties “affected or influenced by” the Commissioner.”
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Sep 10, 2010

School district ordered to reimburse Medicare-eligible retirees enrolled in Medicare the cost of Medicare premiums

School district ordered to reimburse Medicare-eligible retirees enrolled in Medicare the cost of Medicare premiums
Matter of Bryant v Board of Educ., Chenango Forks Cent. School Dist., Supreme Court, Broome County, 2010 NY Slip Op 20360, Decided on September 3, 2010, Supreme Court, Broome County, Judge Philip R. Rumsey

The Chenango Forks Central School District discontinued reimbursing its Medicare-eligible retirees and their dependents participating in its health insurance plan the premiums they were required to pay for participating in Medicare.

The District’s Health Insurance Plan was underwritten by “Blue Cross/Blue Shield” [Plan] that did not require that eligible individuals enroll in Medicare. However, the Plan would not cover services that would be provided to a Medicare recipient by Medicare even if an eligible individual or his or her covered dependent failed to enroll in Part B.*

Theodora Q. Bryant and a number of other school district retirees or the survivors of such retirees brought an Article 78 action in an effort to annul the School District’s failure to reimburse them for the Medicare premiums that were required to pay for their Medicare coverage. Bryant contended that the District’s action violated the statutory moratorium against reducing the health insurance benefits of school district retirees, or the contributions made to obtain such benefits, in the absence of a similar decrease in benefits or contributions for active employees.**

All petitioners are 65 years of age, or older, and are eligible to receive Medicare benefits, including Part B, which provides coverage for physician and outpatient services. A monthly premium for Part B coverage is deducted from the Social Security benefits payable to an enrolled individual. In 1987 and 1988, in accordance with a collective bargaining agreement, respondent provided health insurance to teachers and eligible retirees through NYSHIP, New York’s health insurance plan for State officers and employees and the officers and employees of political subdivisions of the State electing to become “participating employers.”

NYSHIP required Medicare-eligible individuals to enroll in Medicare as NYSHIP but reimburse the Medicare premiums that they were required to pay in accordance with the provisions of Civil Service Law §167-a.

In 1988, the collective bargaining agreement between the District and the Chenango Forks Teachers Association replaced NYSHIP with a Blue Cross/Blue Shield Plan (Plan), which does not require that eligible individuals enroll in Medicare. However the Plan did not provide benefits services that would be provided to a Medicare recipient in the event a Medicare-eligible participant failed to enroll in Medicare. Although the new collective bargaining agreement was silent with respect to the District reimbursing Medicare premiums to the Medicare-eligible participants, the District reimbursed such retirees for their Medicare premiums continuously since at least 1980.

The District discontinued making such reimbursements effective July 1, 2003.

Bryant, however, contended that the Moratorium precluded any diminution in health insurance benefits provided to retirees or their dependents, or contributions made toward the payment of retiree health benefits, "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, [emphasis Judge Rumsey's]. Judge Rumsey agreed and, annulling the District’s discontinuing it practice of reimbursing Medicare-eligible retirees their Medicare premiums and directed it to pay Bryant and her co-litigants “the amounts of such premiums that would have been so reimbursed, in the absence of the challenged determination.”

* The State’s NYSHIP health insurance plan incorporates a similar limitation in that its health insurance plan does not pay for those services that would be otherwise paid by Medicare on behalf of a Medicare-eligible individual thereby requiring such an individual and his or her dependents to enroll in Medicare and pay the premiums required for such Medicare coverages in order to have such coverages.

** Initially enacted in 2003 (see Chapter 48 of the Laws of 2003), the prohibition was periodically extended and made permanent in 2009 [Chapter 504, Laws of 2009, §14(b)].

The Byrant decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2010/2010_20360.htm

For additional information concerning the issues concerning reimbursing Medicare-eligible retirees for their Medicare premiums, please go to:
http://publicpersonnellaw.blogspot.com/2010/05/reduction-of-medicare-premiums.html
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Appealing an administrative determination by the State Department of Education

Appealing an administrative determination by the State Department of Education
Appeal of Dean F. Goewey, Decisions of the Commissioner of Education, Decision #16,135

The State Education Department’s Office of School Personnel Review and Accountability denied Dean F. Goewey’s request for a change in venue with respect to a hearing to be held pursuant to Part 83* of the Commissioner’s Regulations [8 NYCRR 83]. Goewey filed an appeal with the Commissioner of Education in an effort to overturn the Department’s decision not to change the venue of the hearing.

The Commissioner dismissed Goewey’s appeal, explaining that a §310 appeal is not the appropriate forum to review either the determination of the hearing officer or the determinations of OSPRA staff. The Commissioner also noted that he had appointed the hearing officer “to conduct a Part 83 moral character hearing” on his behalf."

The Commissioner said that the proper forum to challenge such administrative actions is via “a proceeding brought in a court of competent jurisdiction pursuant to Article 78 of the Civil Practice Law and Rules.”

As to the administrative proceeding itself, the Commissioner said that Goewey could appeal the administrative determination as provided by §83.5 of the Commissioner’s Regulations [8 NYCRR 83.5] within 30 days after receipt of notification of the findings and recommendations of the hearing panel.**

* Part 83 of the Commissioner's Regulations addresses “Determination of Good Moral Character” and, as a first step, requires that any information “indicating that an individual holding a teaching certificate has been convicted of a crime, or has committed an act which raises a reasonable question as to the individual's moral character, shall be referred by the chief school administrator having knowledge thereof to the professional conduct officer of the [Education] department.”

**
8 NYCRR 83.5 (a) addresses, in pertinent part, the right to appeal. It provides that “The certified individual or applicant may commence an appeal of the findings and recommendations of the hearing officer by filing the original appeal papers with the commissioner, with proof of service by regular mail upon the executive director of the Office of Teaching Initiatives. The executive director of the Office of Teaching Initiatives may file a written response with the commissioner within 30 days of being served with such appeal papers, with proof of service by regular mail on the certified individual or applicant or the attorney of record of such certified individual or applicant.”

The Commissioner’s decision is posted on the Internet at:
http://www.counsel.nysed.gov/Decisions/volume50/d16135.htm
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NYPPL Publisher 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.

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