* As you probably know, former appellate justice Gordon Maag sued the state over a new law that allows CMS to set public employee retiree health insurance premium rates, claiming the law is an “unconstitutional violation of the Illinois Constitution Pension Protection Clause.”

But Judge Steven Nardulli just tossed out the suit, ruling…

1) Health insurance benefits are not guaranteed pension benefits protected by the Pension Protection Clause;

2) Plaintiffs do not have a vested contractual interest in free health insurance;

The ruling is here.

…Adding… This would seem to strengthen Senate President Cullerton’s pension reform proposal, which would force folks to choose between a COLA and access to government health insurance.

…Adding More… From the decision…

If one were to accept the premise that health insurance benefits are vested rights that accrue upon retirement, one must accept the premise that those benefits cannot be reduced, regardless of changing medical technology or the willingness of insurance providers to make a particular policy of health insurance available. The fact that medical technology and contracts offered by insurance companies change, as opposed to the actuarial certainty of a pension payment, lead this court to the conclusion that health insurance benefits are not the same as a pension protected by the Pension Protection Clause. […]

This conclusion as applied to the Kanerva Plaintiffs requires special mention. The Kanerva Plaintiffs are all former Merit Compensation employees of the State, many of whom elected to take early retirement, allegedly in reliance upon promises made by the State that their medical benefits would be “sacrosanct” in retirement. Even accepting the allegation that promises by SERS and CMS were made to the effect that those retirees would not be charged premiums for health insurance, those representations cannot create a contract between the Kanerva Plaintiffs and the State.

*** UPDATE *** AFSCME responds…

“We are greatly disappointed by today’s decision,” AFSCME Council 31 executive director Henry Bayer said. “We continue to believe this law impairs the rights of men and women who retired after careers with state government or state universities to obtain health insurance coverage according to the terms in place when they retired. It also violates the constitutional clause that prevents the diminishment of retirement benefits earned by public employees. We intend to consult with the plaintiffs and our union partners about our options going forward.”

While AFSCME is not a party to the suit in question, it joined with other labor unions in support of a class action suit filed in August 2012, later consolidated along with other cases before Judge Steven Nardulli.