Supreme Court set to rule on constitutional challenge over state retiree health insurance law

The Illinois Supreme Court on Thursday is expected to decide whether a law requiring state retirees to start paying premiums for their health insurance is constitutional.

The anticipated ruling in Roger Kanerva et al., etc. v. Malcolm Weems, etc., et al. will not only resolve the constitutional question for thousands of retirees affected by the new law, but will likely provide court watchers and state leaders a glance into how the justices may react to a pension dispute expected to wind up before them in the near future.

At issue in Kanerva is Public Act 97-695, a law Gov. Patrick J. Quinn signed in 2012.

The law, which took effect July 1, 2013, requires retired Illinois employees, judges and university workers to pay premiums for their health insurance, something they previously didn’t have to do after serving the state for four to 20 years depending on their positions.

The Supreme Court in 2012 consolidated four suits brought over the law in the Sangamon County Circuit Court. The suits were filed in Madison, Sangamon and Randolph counties by several plaintiffs, including former Fifth District Appellate Court Justice Gordon Maag and members of the state retirement systems.

Sangamon County Associate Judge Steven Nardulli sided with the state, saying “health insurance benefits are not guaranteed pension benefits protected by the Pension Protection Clause” and as such, “plaintiffs do not have a vested contractual interest in free health insurance.”

After Nardulli dismissed the consolidated lawsuit, the Supreme Court agreed to review the case on direct appeal as it deals with the constitutionality of a state law. The justices heard arguments in the case in September 2013.

Before the high court, attorneys for the plaintiffs argued that the law is unconstitutional because it violates the Pension Clause, which refers to membership in the state’s pension and retirement systems as an “enforceable, contractual relationship, the benefits of which shall not be diminished or impaired.”

One of the plaintiffs’ attorneys told the justices that if the drafters of the Constitution intended for the Clause — which uses the word “benefits” as opposed to “pension benefits — to only cover pension benefits, they would have specifically drawn that distinction, but chose not to do so.

The attorney representing the state, however, urged the court to affirm Nardulli’s ruling, saying that doing otherwise, would give the Pension Clause a new and expanded interpretation.

He said the plaintiffs’ challenge tries to “slice and dice” the language of the Pension Code to fit their argument that health insurance benefits are pension benefits protected by the Constitution. He likened his opponents’ argument to attempting to fit “a square peg in a round hole.”

However the court may rule in Kanerva, its decision will likely provide a blueprint of sorts for lawyers involved in litigation over pension reform measures the General Assembly approved late last year.

A Sangamon County judge put the law’s June 1 effective date on hold pending a resolution of the constitutional challenge that makes the same argument in Kanerva regarding the Clause’s provision stating that benefits can’t be diminished or impaired, except it focuses on pension benefits, as opposed to health insurance benefits.

Also on Thursday, the Illinois Supreme Court is expected to issue a ruling that will address the state’s Pension Code in People ex. rel. Lisa Madigan v. Jon Burge, et al.

In this case, the justices have been asked to decide if the code requires former Chicago Police Cmdr. Jon Burge to forfeit his pension benefits based on his convictions for obstruction of justice and perjury stemming from the alleged torture and abuse of suspects by police under his supervision.