Retiree Health Insurance Lawsuit Dismissed

A Sangamon County judge has upheld a new Illinois law that requires state employees to pay for their health insurance upon retirement, but the issue is not settled for good.

Retired state appellate court justice Gordon Maag filed the lawsuit last summer after Gov. Pat Quinn signed a law requiring retired state employees, lawmakers and judges to start paying premiums.

Part of the reason many employees have kept their jobs in Illinois government for so long was that if they put enough years in with the state, upon retirement the state paid a workers' health insurance premium.

That was how it went until a law was passed last year saying retirees have to pay at least a portion of their health care costs. Exactly how much was determined in union negotiations.

"Silly us, we trusted them," said Don Craven, an attorney who represented state employees - even a former judge - who sued over the law.

Craven’s clients claimed the state picking up their health insurance tab was a constitutionally-protected benefit.

Illinois' constitution says pension benefits "shall not be diminished or impaired."

But in his ruling, Associate Circuit Judge Steve Nardulli said health insurance benefits do not fall under that protection. Nardulli said it was foreseeable that group insurance plans would regularly change.  

For now, Gov. Quinn is claiming victory, saying it is a step forward to restoring fiscal stability to Illinois.

The case may provide clues as to what lawmakers can do as they debate reducing state workers' pension benefits.

Senate President John Cullerton said the decision supports his legal theory on pensions. Under Cullerton's method, employees could keep their current pension benefits but lose access to state-backed health care upon retirement, or they can keep access to the health care, but take a smaller pension.

Meanwhile, Craven said he will appeal the ruling.