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State retirees await insurance premium refunds

Published: Thursday, July 10, 2014 11:43 p.m. CDT • Updated: Thursday, July 10, 2014 11:44 p.m. CDT

SPRINGFIELD – There's no timeline yet for the return of nearly $23 million in health insurance premiums that the Illinois Supreme Court has recently ruled belong to state retirees.

The Springfield State Journal-Register reports (http://bit.ly/1mO90pD ) that the money is being held in escrow with retirees continuing to pay into the special state account.

The court's 6-1 ruling on July 3 allows retirees to continue with their lawsuit in Sangamon County Circuit Court seeking to prevent the state government from forcing employees to pay for part of their own health care.

At issue is a law passed in 2012 that allows the state to collect premiums from retirees for their state-subsidized health care. Prior to that, state workers who retired with 20 or more years of service were entitled to premium-free health insurance. Under the new law, retirees had to cover part of the cost.

Springfield attorney John Myers, who worked on one of the lawsuits filed on behalf of retirees challenging the state's insurance premium law, described matters as "somewhat in flux."

"The decision last week is a huge win, and all parties concerned have to figure out how to implement it," Myers said.

Meanwhile, Abdon Pallasch, Gov. Pat Quinn's assistant budget director, said plans aren't being drawn up for reimbursements yet.

"We're not getting ahead of ourselves. The case is (being sent) to the lower court and it proceeds," Pallasch said.

Writing for the majority, Justice Charles Freeman said the plain language of the constitution supports the conclusion that health insurance premium subsidies are part of a contractual relationship with retirees that can't be diminished.

The case is seen as a possible indicator of how the court will rule on a wider challenge to a statewide pension overhaul approved last year. That overhaul reduced cost-of-living increases for retirees that unions argue also diminish the pensions.

The justices will formally return the case to the lower court in Springfield Aug. 7, where retirees can proceed with their challenge. The lower court will also decide on how the money is going to be returned.

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