Oct. 1, 2013 – Milwaukee County is not required to reimburse a group of Milwaukee lawyers and health professionals for Medicare premiums paid in retirement because reimbursement rights did not vest until retirement, an appeals court majority has ruled.
Prior to 2010, Milwaukee County ordinance provided that certain retired members of the county retirement system “shall be eligible for reimbursement of the cost of their Medicare Part B premiums,” which cover necessary and preventative services.
The ordinance was amended in 2011. Under the amendment, the county was not required to reimburse union members of the Association of Milwaukee County Attorneys who retired and began receiving benefits after 2011, or members of the Federation of Nurses and Health Professionals who retired and began receiving benefits after 2012.
In other words, Milwaukee County stopped its Medicare Part B reimbursement program. Only lawyers who retired before 2011 and health professionals who retired before 2012, the county argued, were eligible for reimbursement of Medicare Part B premiums.
Union members who had not retired before 2011 and 2012 sued, arguing that reimbursement rights vested before they retired, regardless of those deadlines.
A circuit court ruled in favor of the union members. But in Association of Milwaukee Attorneys et al. v. Milwaukee County, 2012AP2490 (Oct. 1, 2013), the District I Court of Appeals, by a 2-1 majority, ruled that plaintiff union members missed the boat.
“[T]he union members’ inchoate eligibility for County payment of their Medicare Part B premiums did not mature into an entitlement because they did not retire before the deadlines, even though they could have,” wrote Judge Ralph Adam Fine.
The majority followed Loth v. City of Milwaukee, 2008 WI 129, 315 Wis. 2d 35, 758 N.W.2d 766, in which the Wisconsin Supreme Court ruled that an employee was not entitled to retirement benefits because the benefit was eliminated before he retired.
“Here, although the union members may have satisfied, as have the named plaintiffs, the first two criteria (length of service and reaching retirement age) none satisfied the third criterion – actual retirement,” wrote Judge Fine, joined by Judge Patricia Curley.
Judge Joan Kessler dissented on the ground that “Loth does not apply to benefits established by collective bargaining agreements.” And under applicable “enabling statutes,” contract benefits vested before retirement and could not be altered.
Kessler said the cases relied upon by the circuit court were controlling. Both cases involved retirement and disability benefits under collective bargaining agreements that substantially changed before the plaintiff union members began receiving the benefits.
However, the majority noted that the applicable Milwaukee ordinance applied after the collective bargaining agreements expired, and “the parties have not pointed to any collective-bargaining agreement that affects the merits of this appeal.”
