Wednesday, February 19, 2020

"The Governor's Budget Book outlines a reduction in the contribution for retired teacher health insurance (TRIP/TRAIL) of $51,244,324"

Today, Governor Pritzker delivered his budget address for fiscal year 2021. The Governor's Budget Book outlines a reduction in the contribution for retired teacher health insurance (TRIP/TRAIL) of $51,244,324. At the same time fully funding health insurance for retired Chicago educators. The funding model of TRIP/TRAIL is a functional and emulatable model that should be used when structuring other retiree healthcare programs in the State. The model works because the program relies on payments from retirees, active teachers, local school districts and the State of Illinois. Those payments increase modestly year after year as the overall number of retired teachers and the cost of health care increases. The Illinois Retired Teachers Association can not support diverting funding away from the TRIP/TRAIL program to pay for other programs, like the Community College Retiree or the Chicago Retired Teachers Healthcare programs.


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1 comment:

  1. from John Fitzgerald of Tabet, DiVito & Rothstein LLC:

    Kanerva v. Weems: Health Insurance Benefits Are Protected!

    • This was a constitutional challenge to an amendment to the State Employees Group Insurance Act which reduced State contributions toward health insurance costs for retired public pension system members and their survivors.

    • The Court held that this amendment was unconstitutional.

    • The Pension Protection Clause protects more than the pension annuity. It protects all “benefits” of membership in a pension system, including health insurance benefits.

    • If there is any doubt about the scope of a constitutional protection for pension rights, those doubts are resolved in favor of the pensioner.

    Kanerva and your health insurance benefits:

    • In Kanerva, the Supreme Court ruled that the Pension Protection Clause protects not only pension annuities but also “health insurance subsidies.” (Kanerva, par. 49.)

    • In Kanerva, the Supreme Court invalidated amendments to the State Employees Group Insurance Act that “altered the State’s obligation to contribute toward the cost” of coverage by increasing retirees’ premiums and reducing the State’s contributions. (Kanerva, par. 12-13.) Importantly, the amendments challenged in Kanerva didn’t abolish a health insurance program. They just made the benefits more expensive and pushed more costs onto retirees.

    Attorney John Fitzgerald’s Power-Point Presentation at the IRTA Biennial Convention on October 30, 2017