School district directed to resume reimbursing its retirees' Medicare Part B surcharges

Pursuant to collective bargaining agreements [CBAs] between the School District [District] and the Congress of Teacher [Congress], an association representing district employees, the District agreed to provide health care benefits for active and retired employees and their spouses and dependents. 

Retired employees over age 65, however, were required to enroll in a Medicare Part B program [Part B] and the district reimbursed retirees the cost of Part B coverage.

Some retirees, based upon their household income, were subject to a surcharge in addition to the standard Part B premium. This surcharge was an income-related monthly adjustment amount and referred to as the "IRMAA". Prior to August 2018, the district reimbursed retirees for IRMAA surcharges in addition to their standard Medicare premium payments.

In response to the District's informing retirees that it would no longer reimburse them for IRMAA surcharges, certain retirees [Plaintiffs] commenced a CPLR article 78 proceeding seeking [1] a court order annulling the District's decision, contending that the District's discontinuing such reimbursements violated Chapter 729 of the Laws of 1994 (as amended by Chapter 22 of the Laws of 2007), the State's Retiree Health Insurance Moratorium Act [Act]* and [2] a court order reinstating the reimbursements.

The Supreme Court agreed that the District's discontinuation of its reimbursements of IRMAA surcharges violated the Act, granted the Plaintiff's petition, and directed the District to reinstate providing the reimbursement, plus making appropriate retroactive reimbursements. The District appealed.

Explaining that Act sets "a minimum baseline or 'floor' for retiree health benefits" which is "measured by the health benefits being received by active employees," the Appellate Division sustained the lower court's ruling. In other words, the Act does not permit an employer to whom the statute applies to provide its retirees with lesser health insurance benefits than it provides its active employees.

Citing Matter of Baker v Board of Educ., 29 AD3d 574, the Appellate Division opined that a school district may not diminish retirees' health insurance benefits unless it makes "a corresponding diminution in the health insurance benefits or contributions of active employees." 

In the words of the court, the purpose of the Act was to protect the rights of retirees who "are not represented in the collective bargaining process, [and] are powerless to stop unilateral depreciation or even elimination of health insurance benefits once the contract under which they retired has expired"**

It was undisputed both that the CBAs between the District and the Association did not address Part B or IRMAA reimbursements and that the district provided such reimbursements, even if, as it claims, it made such reimbursements inconsistently. 

The parties, said the court, conceded that the reimbursements were "retiree health insurance benefits that were voluntarily conferred as a matter of school district policy." Accordingly, the Appellate Division held that Supreme Court "correctly concluded that the discontinuation of IRMAA reimbursements was a matter subject to the moratorium statute."

Additionally, the Appellate Division noted reimbursing retirees for Medicare Part B premiums is not an improper gift of public funds in violation of Article VIII, §1, of the New York State Constitution," citing Baker v Board of Education, 29 AD3d 574.

The Appellate Division sustained the Supreme Court ruling, finding it to have correctly determined that the District's discontinuation of IRMAA reimbursements violated the Act and thus had properly granted the Plaintiffs' petition.

* The purpose of the moratorium statute was to tie retiree benefits to active employee benefits so that retirees could benefit from the collective bargaining power of the active employees.

** See Matter of Bryant v Board of Educ., Chenango Forks Cent. School Dist., 21 AD3d 1134, quoting Assembly Memorandum in Support of Bill, 1996 McKinney's Session Laws of New York at 2050.

Click HERE to access the Appellate Division's decision.

Fraudulent letter scheme impersonating New York State's Secretary of State reported

On September 21, 2021, the New York State Department of State and the Division of Consumer Protection issued a press release warning of a fraudulent letter scheme claiming the recipient is entitled to receive a large payment being held by the Department of State to settle debts relating to the sale of timeshares.

The scheme, which uses a forged signature of New York Secretary of State Rossana Rosado and the New York State seal, has been referred to the New York State Attorney General for investigation. Anyone who has received this or a similar letter is asked to contact the New York State Attorney General’s Real Estate Enforcement Unit, New York State Office of the Attorney General, 28 Liberty Street, New York, NY 10005.

To help protect against these types of scams, the Division of Consumer Protection  recommends the following:

1. Exercise caution with all communications you receive, including those that appear to be from a trusted entity.

2. Inspect the sender’s information to confirm the message was generated from a legitimate source – be suspicious if the reply to address is different from the sending address.

3. Independently verify the entity’s contact information through an online search engine.

4. Consider calling the sender at a known good number, not listed within the communication, to confirm they sent the communication.

For more consumer protection information, call the Division of Consumer ProtectionHelpline at 800-697-1220, Monday through Friday, 8:30am-4:30pm or visit the Division of Consumer Protection website at https://dos.ny.gov/consumer-protection. 

The Division can also be reached via Twitter at @NYSConsumer or Facebook at www.facebook.com/nysconsumer

 

Applying the Doctrine of Judicial Estoppel

In its decision in 12 New St., LLC v National Wine & Spirits, Inc., 196 3d 883, the Appellate Division, Third Department, said its "longstanding doctrine of judicial estoppel has been succinctly stated as follows: 

Where a party assumes a position in one legal [action or] proceeding and succeeds in maintaining that position, that party may not subsequently assume a contrary position in a second [action or] proceeding because its interests have changed. 

In order for the doctrine of judicial estoppel to apply, there must be a showing that the party taking the inconsistent position had benefited from the determination in the prior action or proceeding based upon the position it advanced there and "For the doctrine to apply, there must be a final determination endorsing the party's inconsistent position in the prior proceeding."

Click HERE to access the Appellate Division's decision in 12 New Street, LLC.

Also, click HERE  to access Matter of Roberts v New York City Office of Collective Bargaining, 2010 NY Slip Op 32953(U), [Not selected for publication in the Official Reports].

ABOUT A TEACHER

ABOUT A TEACHER is an intimate film, filmed by some of the educator's former students, candidly takes the viewer through the personal journey of a new New York City inner-city public high school film teacher. 

Inspired by the filmmaker’s real-life experiences as an inner-city high school film teacher, Hanan (played by Dov Tiefenbach) enters the profession oblivious to the actual demands of teaching, and unaware of his own shortcomings and biases. 

Click HERE for more information about this realistic film.

Audits and reports issued during the week ending September 18, 2021 by the New York State Comptroller

New York State Comptroller Thomas P. DiNapoli announced the following audits and reports were issued during the week ending September 18, 2021

Office of Alcoholism and Substance Abuse Services: Oversight of Contract Expenditures of Palladia Inc. (2020-S-5) In 2014, OASAS entered into a five-year $45.6 million contract with Palladia, under which Palladia would provide drug and addiction treatment services. Auditors found OASAS is not effectively monitoring the expenses reported by Palladia to ensure that reimbursed claims are allowable, supported and program related. For the three fiscal years ended June 30, 2018, auditors identified $2,508,682 in costs that did not comply with the requirements for reimbursement. 

Office of Children and Family Services (OCFS): Oversight of Direct Placement of Children (Follow-Up) (2021-F-6) An audit issued in March 2020 found that OCFS did not maintain adequate oversight of direct placement to ensure that Local Departments of Social Service (Local Districts) comply with applicable laws and regulations and that children are placed in safe environments. OCFS also had not developed the same type of centralized standards, policies, or procedures for Local Districts to follow in supervising all direct placement cases as it has for similar child welfare services, such as foster care. In a follow-up, auditors determined OCFS officials have made limited progress in addressing the issues identified in the initial report. 

Office of General Services (OGS): Compliance with Executive Order 95 (Open Data) (Follow-Up) (2021-F-12) An audit released in April 2020 found OGS had taken steps to meet the requirements of EO 95; however, certain aspects of the order were not fully addressed. OGS did not identify the total population of publishable state data that it maintains. Therefore, there was limited assurance OGS provided a complete catalogue of its publishable state data or accompanying schedules for making that data public, as required. In a follow-up, auditors found OGS made limited progress in addressing the problems identified in the initial audit report. 

Department of Health (DOH): Improper Fee-for-Service (FFS) Payments for Services Covered by Managed Long-Term Care (MLTC) Plans (Follow-Up) (2021-F-4) An audit issued in January 2020 identified $16.4 million in improper Medicaid FFS payments for MLTC covered services. Of these overpayments, $15.6 million was paid because DOH did not configure eMedNY payment system edits and MLTC benefit packages correctly, so eMedNY did not identify certain services as the responsibility of the MLTC plan. The remaining $877,000 was improperly paid because, at the time eMedNY adjudicated the claim, the recipient was not enrolled in MLTC, but was retroactively enrolled at a later date. In a follow-up, auditors found DOH made some progress in addressing the problems identified in the initial audit report; however, further actions are still needed.  

Homes and Community Renewal - Division of Housing and Community Renewal: Controls Over Federally Funded Programs and Maximization of Federal Funding (2020-S-48)Generally, the division has established controls to ensure the Weatherization Assistance Program meets federal reimbursement documentation requirements and that the division receives federal reimbursements on time and in a manner that recovers all funds. However, the division lost $120,475 in federal funding during the audit period because it was not expended by program deadlines, primarily due to a decrease in production caused by the COVID-19 pandemic. As of Dec. 31, 2020, the division had until March 31, 2022 to obligate and expend $10,925,486 or it will be returned to the U.S. Department of Energy. 

Public Service Commission (PSC): Enforcement of Commission Orders and Other Agreements (Follow-Up) (2021-F-5) An audit issued in March 2020 found PSC’s Department of Public Service does not always adequately monitor compliance with order conditions – and in some cases even lacks the equipment necessary to do so. Orders are, at times, ambiguous and lack time frames for completion, interim performance measures, and consequences for non-compliance, making enforcement difficult and inconsistent. In a follow-up, auditors found department officials made significant progress in addressing the issues identified in the initial audit report. 

Department of State: Compliance with Executive Order 95 (Open Data) (Follow-Up) (2021-F-11) An audit released in April 2020 found the department had generally complied with the requirements of EO 95, incorporating compliance with EO 95 into its core business functions and continued to identify new data sets to add to Open Data. However, the department did not identify the total population of publishable State data that it maintains. Additionally, the audit found some problems with the usability of some of the department’s data sets on Open Data. In a follow-up, auditors determined the department has made progress in addressing the problems identified in the initial audit report. 

Department of Taxation and Finance: Efforts to Collect Delinquent Taxes (2019-S-61) For a significant number of the delinquent tax assessments reviewed, auditors were unable to determine, based on documentation, that the department took adequate collection actions prior to completing or closing cases for one of the five collection steps tested: using applicable search tools to identify taxpayer resources that might be pursued to satisfy the debt. Auditors recommended the department improve documentation for each relevant assessment to affirm which actions are applicable and which actions staff take in their collection activities; and take steps to ensure compliance with policies and procedures that address abatement decisions, and, when needed, document the rationale for decisions.