Alaska Supreme Court rules that state can’t cut retiree health benefits
Ruling impacts 20,000 retired teachers, school administrators
and other public employees
The Alaska Supreme Court has ruled that medical benefits for retired teachers, school administrators and other public employees cannot be cut. In a June 13 ruling the court upheld a 2001 ruling by Anchorage Superior Court Judge Mark Rindner that Alaska’s Constitution does not allow the state to increase the cost of retiree medical benefits or to reduce benefit levels.
In a 20-page opinion, Justice Warren W. Matthews, speaking for the court, ruled that the constitutional provision promising to provide pensions to public employees also applied to the retiree medical plan. Matthews rejected the state’s argument that rising medical costs justify cutting the health plan: “[W]e acknowledge that medical costs are rapidly rising, making health insurance increasingly difficult to provide. But we do not believe that this fact is of sufficient weight to change the meaning of the plain language of article XII, section 7.”
In 2000 NEA-Alaska and NEA-Alaska/Retired sued on behalf of retired teachers and school administrators. The case was combined with two similar cases, brought by public employees unions Alaska Public Employees Association/American Federation of Teachers and Alaska State Employees Association. The combined cases represent about 20,000 public retirees.
NEA-Alaska President Rich Kronberg said: "NEA-Alaska financed this lawsuit because post-retirement health benefits are becoming a more and more important part of teachers' compensation packages. A secure pension program is a critical element in Alaska's ability to attract and retain the quality teachers and other public employees we must have. This ruling is a positive step in securing that stability for our retirement systems."
APEA/AFT Business Manager Bruce Ludwig said: "This ruling means the state can’t take away what it promised to provide. Retiree medical benefits can't be cut, or the cost increased, unless the state provides other, similar health benefits of like value.”
ASEA Business Manager Jim Duncan said: “Public employees earned those benefits through years of public service, and the fact that those benefits may now be more expensive is no excuse for the state to break its promise.”
In its ruling last Friday, the court made some suggestions about how to determine whether reductions in the plan are balanced out by new improvements. It then returned the lawsuit to Judge Rindner to re-evaluate whether the medical plan changes violated the Constitution.
According to NEA-Alaska/Retired President Jerry Patterson, “We still have a long fight ahead of us to make sure retirees get the best possible health care plan. But this decision means the state can’t just say its promises are just too expensive to keep. This makes the fight for a secure retirement much easier.”
