A federal appeals court has given Mayor Rahm Emanuel the green light to save $27 million in 2015 by forging ahead with a three-year phase-out of the city’s 55-percent city subsidy for retiree health care.
In July, the Illinois Supreme Court ruled that subsidized health care premiums for state employees are protected under the state Constitution and that the Illinois General Assembly was “precluded from diminishing or impairing” that benefit.
Attorneys representing the city’s 28,000 retirees and their dependents argued that the high court ruling “substantially increased” their chances of prevailing on the merits.
They wanted the 7th Circuit U.S. Court of Appeals to force Emanuel to roll back their monthly health insurance premiums to 2013 levels.
That’s when Emanuel announced plans to phase out the 55-percent subsidy by January 2017 — but continue that coverage for the 5,500 oldest retirees — and force the younger retirees to make the switch to Obamacare.
Earlier this week, the request for a preliminary injunction was denied. That means retirees must bear the brunt of huge increases in their monthly health insurance premiums–anywhere from 30 percent to 79 percent, according to their attorney Clinton Krislov—until the appeals court decides the retirees’ lawsuit, probably in mid-2015.
“We’re very disappointed that the court chose to make the retirees bear the cost of these increases during the period of the litigation when, in the past, state courts had stayed any changes while the litigation is pending,” Krislov said Thursday.
“These are good claims that retirees are entitled to lifetime health care they were promised. We showed a sufficient amount to justify holding everything in a freeze until the matter is resolved.”
Carl Gutierrez, a spokesman for the city’s Office of Budget and Management, had no immediate comment on this week’s ruling.
Emanuel has maintained that only 25 percent of any increase in monthly premiums would be caused by Year Two of the subsidy phase-out.
He has also argued that retirees have options to not only avoid the latest round of increases, but reduce their monthly premiums. The original deadline for making that pivotal decision was Friday.
Now, the mayor is throwing retirees a bone — by extending the deadline until Oct. 23.
“At the request of retirees, aldermen and our union partners — and in an effort to give retirees time to more fully consider expanded health care options this year — we have extended the enrollment period so they can make an informed decision as to which health care plan is the best fit for them and their families,” Emanuel was quoted as saying.
Krislov sarcastically commended Emanuel for pushing back the “insane and insensitive” Oct. 3 deadline.
“They’re arranging the deck chairs on the Titanic more nicely,” he said.
“It doesn’t deal with the basic problem. But, it gives people a more reasonable time frame to make the selections they shouldn’t be forced into making at all.”