Hearing over retiree health insurance suits set for Feb. 20

By Bethany Krajelis | Jan 23, 2013


A Sangamon County judge will hear arguments next month over four lawsuits challenging a new law that requires state retirees to start paying premiums for their health insurance.

Circuit Judge Steven Nardulli set a Feb. 20 hearing to listen to arguments over the state’s motion to dismiss the consolidated suits, said Indianapolis attorney Rodney Taylor.

Taylor, who represents the plaintiffs in the Madison County class action suit over the new law, said Nardulli allocated each side 60 minutes for argument.

He said plaintiffs’ attorneys in the four suits have yet to decide who will make the argument or whether they will split time among each other, but expects they will do so in a way that is most efficient for them and the court.

Plaintiffs in all four suits, Taylor said, have the same basic argument: the new law –Public Act 97-695 – is unconstitutional.

The law, which took effect July 1, requires retired state employees, as well as former judges, lawmakers and university workers, to pay premiums for their health insurance, something the state previously paid for after four to 20 years of service depending on position.

The plaintiffs claim it violates the Constitution’s Pension and Benefits Protection 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.”

Gordon Maag, a former Fifth District Appellate Court justice, brought the first challenge to the law in June in Sangamon County.

Three more class action complaints were filed over the summer in Sangamon, Madison and Randolph counties. They were consolidated in September in Sangamon County.

Illinois Attorney General Lisa Madigan’s office, which represents the state officials named as defendants in the suits, asked Nardulli in November to throw out the suits for failure to state a claim and lack of jurisdiction.

In its motion to dismiss, Madigan’s office argued that the Protection Clause “protects only pension benefits and does not prevent the government from raising the cost of other employment benefits, including health insurance.”

“This construction of the clause,” Madigan’s office asserted in its motion, “is supported by the language and history of the clause, the General Assembly’s decision to codify retiree health benefits in the Employees Insurance Act, rather than in the Illinois Pension Code” and case law.

Taylor said “we are hopeful” the court will see the plaintiffs’ side of the constitutional challenge.

“We understand the state of Illinois has some severe financial needs,” Taylor said, “but that is a burden that should be bore by all of residents, not just a select few.”

Not only do the plaintiffs in the suits “have a lot at stake,” but Taylor said he expects “a lot of people around the country” that live in states that like Illinois, are exploring ways to cut costs, will keep a close eye on how this case plays out.

The plaintiffs in the four suits are represented by several attorneys, including Taylor, Glen Carbon attorney Ethan Flint and Wood River attorneys Peter and Thomas Maag, among others.

Assistant Attorney General Richard Huszagh submitted the state’s motion to the dismiss, along with colleagues Paul Berks, Marni Malowitz, Kate Pomper and Patrick Fitzgerald.

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