* From the Madison-St. Clair Record…
The Illinois Supreme Court on Thursday is expected to decide whether a law requiring state retirees to start paying premiums for their health insurance is constitutional.
The anticipated ruling in Roger Kanerva et al., etc. v. Malcolm Weems, etc., et al. will not only resolve the constitutional question for thousands of retirees affected by the new law, but will likely provide court watchers and state leaders a glance into how the justices may react to a pension dispute expected to wind up before them in the near future.
At issue in Kanerva is Public Act 97-695, a law Gov. Patrick J. Quinn signed in 2012.
The law, which took effect July 1, 2013, requires retired Illinois employees, judges and university workers to pay premiums for their health insurance, something they previously didn’t have to do after serving the state for four to 20 years depending on their positions.
The Supreme Court in 2012 consolidated four suits brought over the law in the Sangamon County Circuit Court. The suits were filed in Madison, Sangamon and Randolph counties by several plaintiffs, including former Fifth District Appellate Court Justice Gordon Maag and members of the state retirement systems.
The opinion is expected to be released shortly after 9 o’clock tomorrow morning, according to a document posted on the Supreme Court’s website.
* More background on the case…
The putative class representatives bring various challenges to the 2012 amendments. All argue that the amendments violate the Pension Protection Clause of the Illinois constitution, which provides that “Membership in any pension or retirement system of the State, and unit of local government or school district, or any agency thereof, shall be an enforceable contract relationship, the benefits of which shall not be diminished or impaired.” Illinois Constitution, Article XIII, Section 5. Two plaintiffs argue that the law violates Article I, Section 16 of the state Constitution: “No . . . law impairing the obligations of contracts . . . shall be passed.” One alleges that the statute is an unconstitutional delegation of legislative authority to the Director of CMS. One seeks an award of money damages, and three of the four seek to enjoin enforcement of the 2012 amendments.
The Sangamon County Circuit Court allowed defendants’ motions to dismiss all four complaints. With respect to the Pension Protection Clause, the court held that since health benefits are not actuarially predictable (in contrast to pension benefits, which are akin to an annuity), they are not analogous to pension benefits, and not covered by the clause. The Court rejected the challenges under the Contracts Impairment Clause, holding that since it was foreseeable that the terms and conditions of the group insurance plans would change yearly, no enforceable contractual rights were vested in retirees.
The court rejected the separation of powers challenge, holding that the statute had a clear legislative purpose, identified the persons covered, provided the means for the agency to meet the purpose of the statute, and appropriately limited the agency’s discretion. Finally, the Court dismissed the claims of one class plaintiff who sought damages, holding that such claims must be brought first in the state Court of Claims.