State Retirees Have a Right to Health Care, Illinois Supreme Court Rules

In a case that has implications for a new Illinois law limiting state workers’ pension rights, the Illinois Supreme Court ruled July 3 that health care for retired state workers is a constitutionally protected right, reversing a lower court’s ruling. The class action against a 2012 law giving the state the right to impose insurance premiums on retired workers was allowed to continue, with the court citing a state constitutional provision that protects public sector workers’ pension benefits. A law passed late last year which limits pension rights and was to take effect last month has been stopped by a lower court pending another class action.

Illinois has the worst-funded state pension plan, with an estimated $100 billion of unfunded liabilities and another $34.5 billion in health care liabilities.

Recently, a state court declined to require New Jersey Gov. Chris Christie to fully fund the state pension as promised. However, the bankruptcy court in the Detroit case allowed the city to reduce pension benefits in the face of the state constitution, which specifically restricts such actions.

When an irresistible force (unfunded pension and health care liabilities) hits an immovable object (state constitutions), something has to give — in the form of higher taxes, fewer services, reduced benefits or some combination thereof.

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One Comment

  1. John Matts
    Posted July 8, 2014 at 10:41 am | Permalink

    This is really hard to grasp…a benefit; which is really a “privilege” of an employment contract, is now considered “a right”. Regardless of the State of Illinois underfunded mess, will this “right” trickle down to the “private sector”? If so, watch private employer sponsored plans drop by the wayside for the unlimited liability. So now this potentially unlimited liability becomes a burden to the Illinois taxpayers….I used to think State Employees worked for the taxpayer; however, it appears the taxpayer now works for the State Employees and their rich benefit plans!!

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