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Policy: Budgets & Deficits

Douglas County retirees lose health plan challenge

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Associated Press,Labor,Nebraska,Entitlements,Budgets and Deficits,Pensions

OMAHA, Neb. — Douglas County is not obligated to contribute the same amount to retiree health plans as it does for active employees, the Nebraska Supreme Court has ruled.

The ruling Friday reverses a lower court's decision last year to refund more than $1 million in health care premiums to Douglas County retirees, The Omaha World-Herald reported.

The dispute stems from the Douglas County Board's decision in 2009 to increase retirees' contributions to their health insurance premiums. The board reduced the county's subsidy for individual retiree health coverage from 93 percent to 75 percent — an additional $1,000 per year — and from 85 percent to 65 percent for retirees with dependents — an additional $2,000 to $2,750 a year.

Two retired deputies sued, arguing that county officials were contractually bound to maintain retirees' premium subsidies until they became eligible for Medicare. The lawsuit by Sam Christiansen and Rich McShane covered more than 250 retired Douglas County employees.

But the state Supreme Court held that health benefits, unlike pensions, are not a form of deferred compensation. As a result, the court wrote, "the retirees had no contractual right to participate in the (health care plan) for the same premiums paid by active employees."

Attorneys will advise the Douglas County Board in closed session Tuesday about whether the county can or should try to recoup the money paid out to retirees under the lower court's judgment, County Administrator Patrick Bloomingdale said.

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