Court says annuitants cannot be charged for insurance

The Illinois State Supreme Court ruled Thursday that state-subsidized health care premiums for retired state employees are protected under the Illinois Constitution.

The 6-1 decision centers on a 2012 law that allowed the state to charge retired workers for health care insurance premiums. Prior to then, many retirees did not have to pay, depending on how long they worked for the state.

Retired workers sued, arguing that the change violated a provision in the state constitution that declares pension benefits “shall not be diminished or impaired.” The state argued that that clause pertained only to pension benefits, and not health insurance.

In its ruling today, the court sided with the retirees.

“We conclude that the state’s provision of health insurance premium subsidies for retirees is a benefit of membership in a pension or retirement system within the meaning (of the Constitution) and therefore the General Assembly was precluded from diminishing or impairing that benefit,” justices wrote in their opinion.

The action reverses a ruling by a Sangamon County Circuit Court judge and returns the case to the lower court for further action.

The state’s Central Management Services (CMS), which oversees health care insurance for annuitants, issued a statement Thursday saying that it was still studying the ruling and had not commented on its precise impact.

“On the surface, this would appear to be good news for annuitants, but we are awaiting official word from CMS before we comment more broadly,” said Bill Nicklas, vice president for Operations and Community Relations.

Jim Lockard, president of the NIU Annuitants Association, sounded a similar note of cautious optimism.

“I believe that this signals the end of annuitants having to pay toward health care, but the fact that it is going back to a lower court makes things a little unclear. We will eagerly await clarification on the matter,” Lockard said Thursday afternoon.

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