FOR IMMEDIATE RELEASE
Date: August 21, 2012
Contact: Dave Comerford
Four unions representing state of Illinois and state university employees are backing a class action lawsuit challenging a new law that threatens to saddle state retirees with unaffordable new health insurance premiums.
A group of representative plaintiffs charge that Senate Bill 1313 violates the Illinois Constitution. Governor Pat Quinn signed the legislation in June, eliminating the terms of the previous health insurance plan for retired state employees and giving the director of the state Department of Central Management Services the authority to set premium costs for retirees.
The suit argues that state employees and retirees have contractual rights to the sliding fee schedule for retiree health premiums provided in state law and union contracts. Those who retired before 1998 currently pay no individual premium if they worked for the state for at least eight years. Those who retired after 1998 must work at least 20 years before the individual premium is fully covered by the state. Both groups pay a premium for their spouses.
By invalidating this contractual right, the suit contends, SB 1313 violates the Illinois Constitution, which provides that the state may make “no … law impairing the obligation of contracts.”
Second, the suit notes that state law provides retirees with access to health insurance “by virtue of their membership and participation in the State Employees Retirement System and the State Universities Retirement System.” Thus, plaintiffs say, SB 1313 also violates the constitutional clause that defines “Membership in any pension or retirement system of the State” as “an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”
The unions backing the lawsuit are the American Federation of State, County and Municipal Employees (AFSCME) Council 31, the Illinois Federation of Teachers, the Illinois Nurses Association and Troopers Lodge 41/Fraternal Order of Police.