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September 04, 2013

Retiree health care case heads to Supreme Court

On Sept. 18 the Illinois Supreme Court will hear arguments regarding a union-backed appeal of a Circuit Court judge’s ruling that dismissed a lawsuit aimed at overturning a new law that changes the longstanding benefit structure of retiree health care benefits.

If you want to attend this hearing, here’s what you need to know:

In March, Circuit Court Judge Stephen Nardulli granted the state’s motion to dismiss a lawsuit brought by AFSCME, the Fraternal Order of Police, the Illinois Nurses Association and the Illinois Federation of Teachers seeking to have the new law (Public Act 97-695) declared unconstitutional.

The lawsuit argued that the law – passed by the General Assembly as SB 1313 – violates the Illinois constitution’s prohibition against the diminishment of retirement benefits. Three other lawsuits were filed based on the same fundamental claim – and the court consolidated all four of the suits in considering whether to allow the case to proceed.

When Judge Nardulli agreed with the state’s argument and dismissed the suit, AFSCME and its union partners appealed the ruling. By mutual agreement of all parties, the case bypassed the Appellate Court and went directly to the Illinois Supreme Court.

If AFSCME’s argument prevails on appeal, then the case would be returned to circuit court for a full hearing on its merits.

The new law allows the Illinois Department of Central Management Services to set health care premium contributions for retirees. AFSCME took the position that any changes to the current payment structure, which is included in the AFSCME state employee contract, must first be negotiated with the union.

While the recently ratified state contract preserves affordable health care for retired state workers, the language of the law leaves open the possibility that in the future the state could try to act unilaterally to raise premiums.