Health care obligations for NC retirees before the Supreme Court
RALEIGH, NC (AP) – North Carolina’s highest court on Monday considered whether lawmakers’ decision 10 years ago to start charging some retired public servants and teachers a health insurance premium violated a past deal by the state with these workers.
Courts did not immediately rule following oral argument in the case, which could affect hundreds of thousands of retirees and cost the state more than $ 100 million in premium refunds, as well as expenses. to cover additional benefits for retirees.
Retired employees sued the state’s health plan in 2012, claiming the state was contractually obligated to offer them premium-free benefits through a plan in which they paid 20 percent of their coinsurance. . The plaintiffs included retired Chief Justice Beverly Lake Jr., who died in September 2019.
The legislature and ultimately the state health plan launched the premium requirement in 2011 for workers and retirees with the most generous plans to fill spending gaps.
In 2017, a first-instance court judge sided with retirees who filed a lawsuit, saying the scheme and the state are “in substantial contention” with more than 220,000 retirees or their estates within the company. the category that could benefit financially. But the state appeals court overturned the trial court’s decision in March 2019, saying such an obligation does not exist.
Lawyers for the retirees said in a Supreme Court brief that several court decisions regarding other employee or retiree benefits in North Carolina have found them to be contractual in nature. Retirees have been promised a level of basic health benefits without a premium for working, lawyer Sam McGee told the court on Monday, and those benefits have already vested.
“Everyone knows that what these people have been told is that if you meet these acquisition conditions, you will benefit from the regular health insurance plan (insurance) without premium throughout your life. retirement, “McGee told court. “This is what was sold to the class (retirees).”
But state attorneys wrote that it was clear that health benefits differ from retirement benefits. While courts have previously ruled that public pensions are contractual – all employees must send a fixed part of their income to the pension system – participation in health insurance is voluntary.
State law and state health plan documents have made it clear that benefits can be changed at any time to meet cost containment, state Solicitor General Ryan Park said. The three-judge panel noted that the legislature or health plan had changed coverage hundreds of times since the General Assembly first authorized benefits without premium in 1981.
“We believe this case is about democratic governance,” Park told the judges. “It’s about who has the power to decide how to spend these huge sums of money that hamper the state’s budget planning in the future. “
The legal class affected by the case would include almost all retirees eligible for health coverage as of September 2016.
Today, both current workers and retirees can still enjoy individual benefits without premium under the “70/30” health care plans. Retirees can also participate in a Medicare Advantage plan with no premium. Otherwise, retirees this year are paying $ 73 or $ 110 per month for more generous plans. More than 750,000 current and retired civil servants and their dependents are now covered by the state health plan.
A final decision could be made in months. The Supreme Court hardly heard the case – it wrote in January that five of the seven justices had living or deceased family members who were once civil servants or teachers, raising questions of recusal that could have left too much few judges to rule.
But the court decided in August to hear the arguments after all because of the importance of the case to citizens, the potential impact on the state’s fiscal position, and the court’s place as place of “last resort” to resolve legal issues.
Yet Chief Justice Paul Newby was not involved in the deliberations leading up to that decision or Monday’s arguments. No reason was given on Monday as to why he is being challenged. The January court order said Newby’s mother is a retired public school and community college teacher.