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.
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.
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.