Wednesday, Oct 1, 2014
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Insurance refunds for state retirees in flux

2 months, 2 weeks ago Doug Finke, State Capitol Bureau

Nearly $23 million of retiree health insurance premium money is in a state account

From Doug Finke, State Capitol Bureau :
Nearly $23 million of retiree health insurance premium money is sitting in a special state account, and it continues to grow.
When it might be returned to retirees in the wake of last week's Illinois Supreme Court decision is anyone's guess.
“Patience is what I would advise,” said Springfield attorney Don Craven, who filed one of the lawsuits challenging the insurance premium law.
Last week, the Supreme Court ruled that state-subsidized health insurance for retirees is covered by the pension protection clause of the state constitution, which says pension benefits cannot be diminished or impaired. It reversed a lower court decision dismissing several lawsuits that challenged a 2012 law imposing premiums on retiree health insurance. Prior to the law, people who retired with 20 or more years of service were entitled to premium-free state health insurance.
The Supreme Court sent the case back to Sangamon County Circuit Court for further proceedings.
“Matters are somewhat in flux,” said Springfield attorney John Myers, who worked with Craven on the lawsuit. “The plaintiffs' attorneys are huddling, and I'm sure the state's attorneys are huddling, as to what happens next. The decision last week is a huge win, and all parties concerned have to figure out how to implement it.”
Since the law went into effect in July 2013, retirees have been paying premiums on the health insurance. Those also covered by Medicare started paying 1 percent of their retirement annuities for the insurance, while those not covered by Medicare paid 2 percent.
Craven and other lawyers got the courts to agree that the money should be held in an escrow account until the court challenges were resolved to ensure it would be available for refund if the law was overturned. As of Wednesday, the state comptroller's office showed nearly $23 million being held in the account.
For now, though, retirees are still paying into the fund, despite the Supreme Court ruling. In fact, on July 1, the amount they pay doubled.
Nothing is going to change immediately. The Supreme Court won't formally send the case back to Sangamon County until Aug. 7. Until then, there will be no further action on the case, Craven said.

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