More than 20,000 city employees and retirees have been dealt a crushing blow that could cost them dearly, but end up saving Chicago taxpayers $130 million a year.
In a six-word ruling on Thanksgiving eve, the Illinois Supreme Court refused to hear the retirees’ appeal of a state Appellate Court ruling that essentially upheld Mayor Rahm Emanuel’s now-completed, three-year phase-out of retiree health care coverage and a 55 percent city subsidy for anyone who did not retire by Aug. 23, 1989.
Clint Krislov, an attorney representing the retirees, said the decision means those retirees are entitled only to bare-bones protections outlined by lower courts.
“For the city, this is a huge benefit. The amount they’re paying is dropped from $137 million a year to between $7 million and $8 million,” Krislov said Monday.
“What the [lower courts] have said is that all you get is what’s in the statute. You cannot rely on anything the city tells you unless you can prove that person had authority to bind the city.”
Law Department spokesman Bill McCaffrey refused to comment on the ruling while there is “still litigation pending.”
In December 2015, Circuit Judge Neil Cohen ruled that the four city employee pension funds have an obligation to provide and subsidize retiree health care with funds provided by the city, but only at levels outlined in 1983 and 1985 amendments to the state’s pension code.
That guaranteed subsidy amounts to $55-a-month for police and fire retirees not eligible for Medicare and $21 for those who are. For retirees covered by the Municipal Employees and Laborers pension funds, the guaranteed monthly subsidy amounts to just $25.
Cohen applied those benefits only to those city employees who had retired by Aug. 23, 1989. The appellate court subsequently expanded that umbrella to cover everyone hired by early 2003, including current city employees.
Last week’s ruling is particularly costly to roughly 10,000 city employees who started working for the city before April 1, 1986, and therefore did not qualify for Medicare.
They have been forced to choose between exorbitant premiums that, in some cases, are double their retirement checks or go without health insurance coverage at a time when they need it the most due to their age and declining health.
For years, Krislov has argued that the retirees’ claim to lifetime benefits was strengthened immeasurably when the state Supreme Court ruled in 2014 that health care benefits provided to state employees are a “permanent benefit” guaranteed by the state constitution.
But he never got a chance to make that case or the argument that promises made during city-sponsored retirement seminars should have been kept.
“The courts have let these people down. They and the mayor have ignored the most vulnerable among us who gave their lives and careers to the city and were assured they would have lifetime health care coverage,” Krislov said.
“The city basically said, ‘Sorry. We’ve changed our mind. Now, get lost.’ That’s terrible — especially for that group of people … who worked full-time, didn’t have side gigs, relied on the city’s promises because their city employment didn’t qualify them for the federal Medicare program.”
Even before the Supreme Court ruling, retirees were furious about what they called a “heartless” 2015 email Emanuel wrote on one of his private accounts bragging about the retiree health care phase-out.
“Since when did Rahm Emanuel let a judicial ruling get in his way and not find a creative work-around solution?” venture capitalist Henry Feinberg wrote then.
Emanuel replied, “Never. Which is why I eliminated retiree health care. Only elected official to eliminate — not cut or reform — a benefit. Thank you very much. A $175 million saving!”
The mayor has said he “wasn’t bragging” as much as he was “acknowledging how we stabilized” skyrocketing health care costs.
Still, the bitterness lingers.
Two weeks ago, a police widow asked Police Superintendent Eddie Johnson after a luncheon address to the City Club how the city “justifies stripping” police widows and retirees of health benefits, which the woman said has led to “widow homelessness in some cases.”
Johnson called it “an embarrassment to me that that question even has to be raised because that’s not right.”
“There’s no reason that a police officer’s widow should be homeless after that person gave their life to serve the citizens of the city,” Johnson said that day.
“As a police officer who’s been involved in shootings and … injured myself, I know how traumatic that is and the financial burden that’s placed on families of police officers. … It’s my commitment and my pledge to you that we will never forget you.”