On April 17, the Supreme Judicial Court struck down a town of Erving policy that restricted access to subsidized retiree health insurance benefits for certain former employees.
In 2006, Erving passed a bylaw requiring a minimum of 10 years of service to the town in order for a retiree to qualify for health insurance premium contributions from the town. Under the bylaw, retirees with less than 10 years of service to the town could choose to continue their coverage through the town, but would have to pay 100 percent of the premium.
The bylaw was put in place even though the town, in 2001, had adopted Chapter 32B, Section 9E, which requires a town to pay more than 50 percent of health insurance premiums for “employees retired from the service of the town.”
In 2012, an employee retired from the town having only worked there for six years, though she had worked in other Massachusetts municipalities for many years. Due to Erving’s bylaw, she was told she was entitled to stay on the town’s health insurance plan but had to contribute 100 percent of the premium.
In Galenski v. town of Erving, the SJC ruled against the town for two key reasons. The court ruled that the Erving bylaw established different premium contribution rates for different groups of retirees, which is explicitly prohibited under Chapter 32B. The court also found the town bylaw invalid because it conflicts with Chapter 32B, Section 9E, which calls for the town to pay more than half of the retiree’s premium.
The SJC went on to reference Chapter 32B, Section 9A1/2, the section that allows a municipality to bill another municipality for a portion of a retiree’s health insurance. The court asserts that Erving’s bylaw is unnecessary, as there is clear legislative intent under Section 9A1/2 to remedy the burden of the last place of employment being completely responsible for a retiree’s health insurance costs.
Written by MMA Senior Legislative Analyst Katie S. McCue