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Dean Olsen, Staff Writer
Springfield State Journal Register

July 3, 2014—The Illinois Supreme Court sided with state government retirees today, overruling a Sangamon County judge who had thrown out the retirees' challenge of health-insurance premiums they began to pay last summer for the first time.

The high court ruling didn't eliminate the premiums that most of about 80,000 retirees now are paying. But the language of the ruling bodes well for retirees' chances in their ultimate quest to have the premiums struck down, according to Springfield lawyer Donald Craven, one of the attorneys representing retirees.

“It's a victory,” he said.

The 6-1 decision also gives an "extraordinarily encouraging sign" that opponents of the state's pension-reform law will ultimately prevail in their pending legal challenge, Chicago lawyer John Fitzgerald told The State Journal-Register.

In the health premiums case, the court overruled Sangamon County Associate Judge Steven Nardulli, who had dismissed four lawsuits that were seeking to stop the state from imposing insurance premiums on retirees with 20 years or more of service who previously paid no premiums. Dissenting from the majority's decision was Justice Anne Burke.

Nardulli had ruled in March 2013 that health-insurance benefits are not considered “guaranteed pension benefits” protected by state law and that the retirees who sued “do not have a vested contractual interest in free health insurance.”

But a summary of the ruling by the Supreme Court said the “state's provision of health-insurance premium subsidies for its retirees is a benefit of membership in a pension or retirement system” under the state's “pension-protection” clause, “which the General Assembly was precluded from diminishing or impairing.”

According to the summary of the ruling, written by Justice Charles Freeman: “The Supreme Court said that the plain language of the Constitution supports this conclusion. When the provisions of the 1970 Constitution were formulated, the group-insurance statute then in effect provided health-insurance subsidies to members of the State's retirement systems, and the drafters of the Constitution are presumed to have known that. Health-care benefits are not referred to in the pension clause, but neither is there any limitation imposed concerning them. The Illinois Supreme Court said in this decision that it is a well-settled principle that pension rights should be liberally construed in favor of the rights of the pensioner.”

The Supreme Court decision sends the case back to Nardulli for more arguments. The court's decision is available online at Nardulli's ruling is available at

Freeman's ruling, citing the strength of the Constitution's pension-protection clause, "shows that the clause has a wide reach," said Fitzgerald, who represents retired teachers and school administrators in a court challenge of the pension-reform law. "It shows that the Supreme Court is giving the pension-protection clause the broad interpretation that the drafters of the Illinois Constitution intended."

State officials have argued that the state's fiscal crisis justified the law's changes in pension benefits and didn't conflict with the Constitution.

The pension lawsuit is in front of Sangamon County Circuit Judge John Belz. But however Belz rules, a final resolution of the case is expected to come from the state Supreme Court.

It's not clear when there might be a final decision on whether the health-insurance premiums, authorized by Gov. Pat Quinn and the Illinois General Assembly, will continue or stop, Craven said. Those premiums are being kept in a special fund in case they need to be refunded.

State retirees with more than 20 years of service began paying premiums, effective July 1, 2013, equivalent to 1 percent of their pension benefits if they were eligible for Medicare, and 2 percent if they were not eligible for Medicare. On July 1 of this year, those levels changed to 2 percent for Medicare-eligible retirees and 4 percent for non-Medicare-eligible retirees.



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