Cook County Record

Saturday, January 25, 2020

Chicago pensioners will appeal to IL Supreme Court, demand city pay health benefits for life

By Taryn Phaneuf | Oct 7, 2016

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CHICAGO — Pensioners who retired after working for the city of Chicago and are fighting to keep health care benefits they claim are theirs for life will appeal their case to the Illinois Supreme Court.

“We’re going to try to get the Illinois Supreme Court to resolve this sufficiently before year end so we can get their coverage protected, so that come Jan. 1, they’re not just out on their own on the streets,” Clinton Krislov, an attorney representing the retirees, told the Cook County Record.

The current iteration of what has been an ongoing issue was brought in 2013 by a class of Chicago pensioners looking to stop the city from phasing out health care benefits. Citing its financial circumstances, the city planned to cut health insurance coverage by 2017 for city workers who had retired after 1989. The city’s Retiree Health Care Benefits Commission determined in 2013 that “continuing the existing health care arrangements for the retirees was not viable given the city's financial circumstances, industry trends, and market conditions.”

Plaintiffs claimed any reduction to their health benefits would violate the Pensions Clause of the Illinois Constitution and constitute a breach of contract. In 2015, the plaintiffs called for a preliminary injunction to stop the city from implementing its plan. The motion was denied by the Cook County Circuit Court. On Sept. 21, the Illinois First District Appellate Court affirmed the circuit court’s ruling.

The issue has had a long history in the courts. In 1987, the city asked a court to declare it had the right to stop paying the city’s four worker pension funds to cover retiree health care. The pension funds and two classes of retirees countersued. Under the resulting settlement, the city agreed to pay half of retiree health insurance costs through 1997. Those settlement terms were then extended to 2003, and again to 2013. That year, the amended deal included the creation of the Retiree Health Care Benefits Commission, which would recommend solutions to issues affecting retirees and health care costs.

In 2013, the city told retirees it would stop funding retiree health care benefits by 2017. The city agreed to continue covering 55 percent of health insurance premiums for retirees who had been among the classes under the original settlement agreement. That excludes pensioners who retired after 1989. For that group, the city would begin “adjusting premiums and deductibles and modifying benefits” to “phase out the plan entirely over a three-year period.”

Between decades of amended agreements and three parties who disagree over who should cover pensioners’ health care costs, the issue is complicated, Krislov said. Plaintiffs believe the city and the funds are obligated to provide coverage, including for those who retired after 1989; the funds assert their task is to collect money but not provide coverage; and the city argues it only has to provide coverage to workers who retired by 1989.

“That is a huge mess. For these people, it’s a really terrible situation,” Krislov said. “We entered the case on behalf of the participants, saying, essentially, the city and the pension funds told these people they were going to have a lifetime, fixed rate subsidized health plan. Regardless of who is responsible, we want that coverage.”

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