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Court Rules on Retiree Health Insurance

Court Rules on Retiree Health Insurance

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Posted: 
July 11, 2014
Court Rules on Retiree Health Insurance

On July 1, 2013, per P.A. 97-0695, SURS retirees began paying a percentage of their pension annuity for health insurance coverage. Those covered under Medicare paid one percent of their annuity and those not covered by Medicare paid two percent of their annuity.

Beginning July 1, 2014, according to the law, those costs doubled. Annuitants covered under Medicare now pay two percent of their annuity and those not covered under Medicare pay four percent.

On July 3, 2014, the state Supreme Court ruled health insurance premium subsidies promised to retirees are protected by the state Constitution and “therefore the General Assembly was precluded from diminishing or impairing that benefit.” This decision overrules a previous circuit court decision. The lawsuit now goes back to the lower court where the plaintiffs will need to prove that P.A. 97-0695 actually “diminished or impaired” their health insurance benefits.

SURS will continue to deduct the health insurance premiums from annuitants’ checks each month until otherwise advised by the state.