Fifty-seven retired teachers and the spouse of a deceased teacher filed a class-action lawsuit Monday against the Broadalbin-Perth Central School District.
The lawsuit, filed in Fulton County Supreme Court, alleges that the district violated state law prohibiting municipalities from diminishing health insurance benefits for retirees below the level of benefits provided to active employees. The suit requests the court force the district to pay for all the health insurance co-payment costs for the plaintiffs and reimburse the New York State United Teachers union for legal costs. NYSUT has provided the retirees with attorneys to sue the district.
Kathleen Rockwell, the unofficial leader of the retired teachers and a former teachers union president, said the legal dispute goes beyond the cost of the $5 co-pays retired teachers are being forced to pay. She said allowing Broadalbin-Perth to violate the moratorium could set a bad precedent.
“We think it’s wrong for [people] to say it’s OK for the district not to follow the law if they can save money,” she said. “We’re certainly not going to teach our children that. We think the district isn’t above the law.”
The suit stems from a contract renegotiation the district and the Broadalbin-Perth Teachers Association agreed to in July, which allowed the district to stop offering the high-priced Blue Cross Blue Shield Indemnity insurance plan and replace it with the less-expensive Blue Cross Blue Shield Preferred Provider Organization Plan A. Many of the district’s retired teachers had the indemnity plan, which featured a $2,000 lifetime cap on deductibles, after which policy holders pay no further co-pays for doctor visits or prescription drugs. According to the lawsuit, the retired teachers and Jacqueline Vrooman, widow of retired teacher Bruce Vrooman, have reached the $2,000 limit.
The contract deal saved the district $321,836 in health insurance costs for the 2009-10 school year. The district was required to use the money to restore teacher positions cut from the budget and set up and fund Health Reimbursement Accounts for active teachers.
Superintendent Stephen Tomlinson, who is named as a defendant in the lawsuit, has argued that the district did not violate the moratorium because the Blue Cross Blue Shield PPO A plan offers a steep discount in premiums for the retired teachers, which should more than make up for their new $5 co-pays.
The lawsuit filed Monday disputes Tomlinson’s claim that premium savings from the less expensive PPO plan will compensate retired teachers for increased co-pays. “For persons with long-term or chronic conditions, the cost of prescription co-payments can run into thousands of dollars a year,” according to the suit.
Federal tax law prohibits employers from offering HRAs to retired employees, which the retired teachers acknowledge, but they would like another fund established to pay for their co-pays. The HRAs were given to all active teachers, regardless of whether they had had the indemnity plan and experienced any premium savings for switching to the PPO A.
The PPO A plan will cost district taxpayers and employees about $17,820 for a family of four for the school year. An indemnity family plan would have cost $24,897.