Retirees Take on Chicago Over Benefit Cuts

CHICAGO (CN) – More than 300 retired city employees sued Chicago, claiming the city is cutting their medical coverage though they were promised lifetime health benefits.
     Lead plaintiff Michael C. Underwood and 331 others filed a class action against the City of Chicago and trustees of the retirement funds for Chicago Policemen, Firemen, Municipal Employees and Laborers, in Cook County Court.
     The retirees, all of whom were hired before 1986, seek “permanent relief for annuitant healthcare participants in litigation that has continued off and on for 26 years.”
     After the case was originally filed in 1987, the city and trustees “entered into a 10-year class action settlement that was approved by the circuit court over the participant class’ objections, and affirmed by the Illinois Appellate Court,” according to the new lawsuit.
     At the end of the 10 years, the class revived litigation, and the parties eventually entered into another 10-year agreement that expired in June this year.
     Now that the second settlement has expired, the plaintiffs again seek the health-care coverage they were promised.
     From 1984 until 1987, Chicago held pre-retirement seminars that informed employees “that they would be able to participate in the health plan for life, that their own coverage was to be for life at no cost; and that they would only have to pay for additional coverage for spouse and dependents,” the complaint states.
     “It thus became widely understood among City employees that they could rely on this subsidized fixed-rate plan for their lifetime following retirement from their City employment; at no out-of-pocket premium cost for police and fire annuitants own coverage, subsidized at $25 per month for municipal and laborers annuitants.
     “Many employees worked, retired and made plans on the basis of the representations made to them in these seminars. Additionally, it was the common understanding among City employees that the City would provide medical coverage for life upon retirement, and that was a significant factor for many individuals in choosing to work for the City, rather than work for a private sector employee.
     “Many individual employees retired on the basis that this coverage existed, and did not seek medical coverage elsewhere,” the plaintiffs say.
     According to complaint: “Local government employees who were originally hired and began their work prior to April 1, 1986 (federal Combined Omnibus Budget Reconciliation Act of 1985) cannot qualify for healthcare coverage under the Medicare plan by their government employment, regardless of their length of service.”
     The city recently announced that it intends to reduce participants’ benefits beginning in January 2014, according to the complaint.
     “Participants assert that the funds’ obligations to provide and subsidize healthcare coverage for annuitants are themselves benefits of participation in their respective fund protected by the Illinois Constitution Article XIII, Section 5 from being diminished from the levels in existence during any participant’s lifetime,” the complaint states.
     The retirees add: “Each plaintiff and class member has a property right to a lifetime healthcare plan unreduced from the best terms during a person’s participation in one of the retirement funds.”
     The retirees seek an injunction preventing Chicago from reducing their retirement benefits below the level they were provided during their employment.
     They are represented by Clinton Krislov.

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