NY Retiree Group Sues over Increase in Health Benefit Costs
December 8, 2011 (PLANSPONSOR.com) - The Retired Public Employees Association (RPEA), on behalf of its 40,000 members, has commenced legal action against New York Governor Andrew M. Cuomo and New York State over an attempt to make public service retirees pay a larger portion of health insurance costs.
The suit asks for a rollback of a 2% increase in the percentage retirees pay toward the cost of their health insurance premiums. The lawsuit, RPEA, et. al. vs. Cuomo, et.al., was filed in Albany County Supreme Court and asks that Cuomo and other state officials who "administratively extended" provisions of negotiated union contracts to retired public employees be legally stopped from imposing such terms on existing retirees.
Stan Winter, RPEA president, stated: "When we retired from the State there was a promise that our percentage cost would remain stable – now the administration feels that since they negotiated new contracts they can extend them to non-represented retirees. The Taylor Law does not allow retirees to participate in collective bargaining and therefore, it is blatantly illegal to apply such agreements to those who have already retired."
Under existing Civil Service Law, state employees who retired after January 1, 1983, pay 10% of the cost of health insurance premiums for individual coverage and 25% for family coverage. The last time contribution percentages were changed as a result of union contracts, existing retirees were "grandfathered" and only future retirees had to pay the increased percentages.
Retirees' costs are based on premiums and co-pays which are set by the health insurance carriers that can and do increase every year. In the past 15 months there have been four premium increases. These plans are coordinated and administered by the New York State Health Insurance Plan (NYSHIP) under the auspices of the NYS Department of Civil Service, Employee Benefits Division which is a named defendant along with the Governor in the lawsuit.