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News Tuesday October 8th, 2013, 5:15pm

Emanuel To Move Forward With Retiree Health Care Subsidy Phase Out

Chicago Mayor Rahm Emanuel says he will move forward with his plan to phaseout the city's 55 percent health care subsidy for 30,000 retired city of Chicago employees and their dependents starting in January 2014. The phaseout will continue through 2017, and it's expected to save the city $23.7 million in 2014, bringing the city's yearly costs for retiree health care down from $108.7 million to $85 million, reports the Chicago Sun-Times.

As part of the plan, the 30,000 city of Chicago retirees and their dependents will have to shoulder increased monthly premiums. City officials haven't yet disclosed what the specific increases will be. 

Under the mayor's plan, 4,638 of the city's oldest retirees would continue to receive the 55 health care subsidy for the rest of their lives. The other 30,000 retires would have to look for coverage under the Affordable Care Act.

Retirees filed a class action lawsuit against the city and its employee pension funds in July looking to halt the three-year phaseout.

The suit charges that diminishing and impairing city pension benefits violates the state's constitution. Additionally, the lawsuit says the retired workers have "a property right to a lifetime health care plan" from the city, and a “depreciation of property rights” would go against the U.S Constitution's 14th Amendment.

The attorney representing the plaintiffs, Clinton Krislov, said on Tuesday that he was not pleased with the mayor's decision to move forward with the phaseout while the court case is still in the works.

“This is neither fair nor sufficient content to enable anybody to make plans. Andy why are we waiting until the last minute to let retirees know what they’re facing so they can make choices?” Krislov told the newspaper Tuesday. “It’s this type of last-minute treatment that’s one of the reasons why we’re asking the federal court to enjoin the city from making any changes. I understand the city’s desire is to save money and reduce its expenditures for retirees. The open question is whether the city has a right to do that. Our view is that participants have a constitutional protection against reducing their benefits.”

Meanwhile, city officials also said on Tuesday that retirees at or below 250 percent of the federal poverty threshold would be able to access a premium subsidy to pay for their health care costs. Previously, the premium subsidy was only offered to retirees at or below 200 percent of the federal poverty line.

Sources

  • News links: 
    Chicago Sun-Times

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Categories

  • Health care

Tags

  • Affordable Care Act
  • Benefits
  • Chicago
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