New York unions sue over retiree health-care change

ALBANY, New York Thu Dec 29, 2011 5:05am IST

New York Governor Andrew M. Cuomo speaks during a cabinet meeting in Albany, New York, October 12, 2011. REUTERS/Hans Pennink

New York Governor Andrew M. Cuomo speaks during a cabinet meeting in Albany, New York, October 12, 2011.

Credit: Reuters/Hans Pennink

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ALBANY, New York (Reuters) - Seven New York state unions filed federal lawsuits on Wednesday seeking to prevent Governor Andrew Cuomo from increasing the amount that retired workers pay for health care.

The increases enacted this year were unconstitutional because the state has no authority to unilaterally raise retirees' health-care costs, the unions said. Each union filed a lawsuit in federal court in Albany, they said.

"What the Cuomo administration is trying to do is pull the rug out from under state retirees, many of whom planned their retirements based on when they felt they could afford to retire," Kenneth Brynien, president of the Public Employees Federation, said in a statement.

"These decisions were based on a promise and expectation of what their health insurance costs would be," he said.

But Cuomo spokesman Josh Vlasto said in a statement that the state had done nothing illegal.

"The law clearly allows the administration to apply the terms of a new contract to retirees and it has been well-known standard practice to do so," Vlasto said.

One of the seven lawsuits was quickly made public on the Albany court's website, and the unions provided copies of two additional lawsuits. The remaining lawsuits were not immediately available.

Earlier this year, Cuomo negotiated new contracts with some of the state's largest public employee unions, including PEF and the Civil Service Employees Association.

The austere state budget passed in March forced the unions to concede $450 million in savings in wages and benefits or face up to 9,800 layoffs.

The insurance increases for retirees were not part of the collective bargaining agreements that came out of this year's negotiations. Instead, the Cuomo administration unilaterally increased health-care contributions to 12 percent from 10 percent for individual coverage and to 27 percent from 25 percent for family coverage.

New York law has "consistently recognized retirement health insurance benefits at a contribution level that is fixed and vested at the time of retirement to be of contractual status and a continuing obligation of the state," PEF's statement said.

Without that guarantee, retirees could theoretically lose all of their retirement benefits at the state's whim, the complaint said.

CSEA spokesman Stephen Madarasz said several unions filed separate, similar suits, but he expects the court to consolidate them.

(Reporting by Daniel Wiessner; Editing by Edith Honan and Jan Paschal)

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