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State retirees ask judge to roll back health insurance increase!! 5-24-2012
Posted On: May 24, 2012

State retirees ask judge to roll back health insurance increase

Retired state employees ask judge to toss out increased insurance rates

Published 11:46 p.m., Wednesday, May 23, 2012

TROY — Did the state Legislature give away its power to control how much money state employees pay toward their health care?

The question emerged during a court hearing Wednesday as the Retired Public Employees Association sought to roll back health insurance increases for retirees.

Charles Quackenbush, a lawyer for the state, cited an amendment last year that allowed Civil Service Acting Commissioner Patricia Hite to set the payments for state employees and retirees.

Only pension payments, not health insurance benefits, are guaranteed in the state constitution, he argued.

"They are ancillary forms of compensation," Quackenbush said of health insurance during his appearance before Justice George Ceresia Jr. in state Supreme Court in Rensselaer County.

Not so, argued Lewis Oliver, who is representing the state retirees group. Oliver contended that health benefits are vested, or established when state employees retire. "You have the reasonable expectation that your rights are fixed at the time of retirement," he said.

Lawmakers passed a measure almost a year ago that gave the head of the state Civil Service Commission authority to say how much active state workers and retirees should contribute for their coverage.

The change was tucked into what is known as the "pay bill" that lawmakers routinely approve to authorize salaries for state employees. It came at the end of the session last year.

Amid a push for savings last summer, the state increased the share that state employees as well as retirees pay toward insurance.

Retirees saw their share go from 10 percent to 12 percent of the total premium cost for an individual plan, and from 25 percent to 27 percent for a family plan, mirroring an increase paid by state workers.

Noting that typical costs could go from $250 to $331 per month for a family plan, or $59 to $95 for an individual, the retirees association said the change would place a harsh burden on members who live on fixed incomes.

The state argued the Civil Service president was given new authority as part of last year's pay bill. "The president, with the approval of the director of the budget, may extend the modified state cost of premium or subscription charges for employees or retirees," states part of the 2011 legislation.

"The amended language permits the President of the Civil Service Commission, with the approval of the Director of the Budget, to establish upward or downward modifications to the State's contribution — to the extent that such modifications are reflected in a collective bargaining agreement — for both current employees and retirees," Quackenbush wrote in a brief for the case.

Oliver countered by arguing that past practices set a precedent in which increases can only be made for future retirees.

"For almost 30 years, state employees who retired had 90 percent of their individual coverage and 75 percent of their dependent coverage paid in accordance with the clear an unambiguous language (of the law)," Oliver said in the brief for the retirees.

Last year's pay bill was passed under a "message of necessity," a procedural move that waives the three-day "aging" requirement for legislation. The governor can issue such a message when speed is required, but critics say the tactic denies lawmakers enough time to fully study and digest a bill.

The lawsuit is one of two challenging state retiree health costs.

Large public workers union such as the Public Employees Federation, the Civil Services Employees Association and others have gone to federal court to fight the changes. One of their arguments is that retirement benefits are a form of deferred compensation.

Ceresia reserved decision after the arguments. A decision is expected within the next several months, Oliver said. • 518-454-5758 • @RickKarlinTU

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