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 seeking “permanent relief for annuitant health care participants in litigation that has continued off and on for 26 years,” according to Courthouse News Service.
All of the retirees were hired before 1986, and the case was originally filed in 1987. The city and trustees entered into a 10-year class action settlement, and at the end of the 10-year period, the class revived the litigation and the parties entered into another 10-year settlement. That agreement expired in June.
According to the news report, the complaint states that 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 retirees claim reliance on this information kept many employed by the city rather than seeking employment in the private sector, and “many individual employees retired on the basis that this coverage existed, and did not seek medical coverage elsewhere.”
The complaint noted that, “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 health care coverage under the Medicare plan by their government employment, regardless of their length of service.”
The city recently announced it intends to reduce participants’ benefits beginning in January 2014. The retirees are seeking an injunction to prevent this.