A judge this week rejected a lawsuit that retired teachers filed against the Broadalbin-Perth school district after a change in their health care benefits.
A total of 57 retired teachers and one beneficiary filed suit in October 2010 claiming that the district violated a law that prohibits schools from reducing health insurance benefits for retirees without making the same changes for active teachers.
The suit is nearly identical to one filed last month by teachers retired from the Greater Amsterdam School District, which eliminated an indemnity plan and made a preferred provider organization plan available.
Faced with rising health insurance costs, the district in 2009 negotiated with the Broadalbin-Perth Teachers Association and eliminated a more costly insurance plan but maintained a preferred provider organization plan.
Under an agreement between the district and union, the district created health reimbursement accounts, or HRAs, for active teachers to pay for medical, dental, vision and other costs these employees would incur after the change.
The district put $500 annually into each HRA, which would roll over and accumulate up to a maximum of $10,000.
The district did not establish a similar account for retired teachers.
Under the agreement, the teachers who were employed at the time of the change would be able to continue to draw off of the HRA account until its funds were gone, but no further contributions were to be made by the district once the employee retired.
Retired teachers, represented by an attorney from the New York State United Teachers union, sought a judgment in state Supreme Court, arguing that the change violated the state’s health insurance moratorium that requires the same health insurance be made available to retirees and active teachers.
The retired teachers sought some form of similar account to help them pay for changes in their health insurance costs.
In a decision rendered Monday, State Supreme Court Justice Joseph M. Sise ruled that the district did not violate state law and said the HRAs are not health insurance as it relates to the law.
“Nothing therein states or indicates a retiree is entitled to all of the same types of benefits and contributions provided by a school district to active employees. To the contrary, only health insurance coverage, benefits and contributions are addressed therein,” Sise said in the decision.
Broadalbin-Perth Superintendent Stephen Tomlinson on Tuesday said losing the case could have cost the district between $90,000 and $100,000.
“Certainly, the board of education is very ecstatic that the judge ruled on behalf of the district and the taxpayers,” Tomlinson said.
According to Sise’s ruling, the teachers retired from the Broadalbin-Perth district are not losing out.
The health insurance change, according to the decision, reflects a $1,444 annual savings on premiums for retirees compared with a savings of $635.83 for active teachers.
Considering the $500 contribution to the active teachers’ HRAs, the retirees are still saving an average of $264.17 a year.
It was unclear Tuesday if an appeal will be filed. A spokesman at NYSUT said attorneys there are reviewing the decision.
Categories: Schenectady County