LANSING — Michigan Education Association retirees have sued the union to block impending changes to their health care plans.
Costlier plans would be “devastating” to the union’s retired employees, Retired Staff Association President Mary Anne Adams said.
“These are benefits that were promised, and these are benefits that folks anticipated having into their retirement because they were promised for life,” Adams said. “They should be honored and not unilaterally changed.”
MEA officials say the move is necessary to combat the rising cost of health care and prescription drugs. In a July letter to retirees, association leaders said they are discontinuing programs that “are antiquated, expensive and threaten to destabilize our plan.”
The Retired Staff Association represents about 560 retirees of the MEA, the Michigan Education Special Services Association and MEA Financial Services.
In early 2019, retirees’ prescription drug plans shiftedfrom the Michigan Education Special Services Association to a Medicare Part D arrangement administered by Blue Cross Blue Shield of Michigan, the lawsuit states. That increased out-of-pocket costs and subjected higher-income retirees to a Medicare fee.
The MEA announced in July it would implement more changes to benefits plans in September. After RSA threatened to sue, the organization delayed those changes until Jan. 1.
The retirees’ union filed a suit in federal court Friday to block the impending changes.
“We attempted to talk to the employers, and they have gone forward with the unilateral decision,” Adams said. “That is what has forced us to court.”
Collective bargaining agreements struck between MEA and the retirees promised specific hospital, surgical, medical, vision, dental and prescription drug coverage for those workers, the retirees’ complaint states. The retirees’ union argued those agreements are binding for life.
Rising costs of prescriptions and medical care caused the MEA to pursue changes to retiree benefits, MEA Public Affairs Director Doug Pratt said. The changes are expected to save MEA nearly $92 million in long-term costs.
“This isn’t a unique experience,” he said. “We need to take action to ensure that our plans remain sustainable for years to come, not only for our current retirees but also our employees who hope to have these benefits in retirement.”
Continuing to provide retiree benefits at their current levels is not feasible considering the cost of modern health care, Pratt said.
“A fifty-cent drug card with today’s prescription prices is a really expensive benefit that’s just no longer sustainable,” he said, referencing the low prescription drug co-pays offered to some retirees.
Neither Pratt nor Adams provided an estimate of what the benefit changes could cost individual retirees.
The conflict between MEA and its retirees is the latest in a series of disputes about employers’ abilities to fund guaranteed retiree pension and health care benefits.
State and municipal governments, including some in Michigan, are facing a pension crisis as public employers are unable to follow through on funding benefit programs they once promised to employees.
The city of Lansing negotiated cuts to retiree health care for some of its workers this year.
This fall, the Detroit Free Press reported the Michigan Regional Council of Carpenters and Millwrights asked the federal government to allow the union to cut its members’ pension checks. Without cuts, the fund would be empty by 2035, council leaders said.
The state overhauled its pension program for Michigan public school workers in 2012. Proponents of the overhaul said the savings would keep the pension system afloat, while teachers’ groups and their supporters argued they were unfairly asked to shoulder the financial burden.
Contact Carol Thompson at (517) 377-1018 or email@example.com. Follow her on Twitter @thompsoncarolk.
Read or Share this story: https://www.lansingstatejournal.com/story/news/2019/12/24/michigan-education-association-mea-retirees-sue-health-care-plan/2733364001/