Feb. 16, 2015 – A state appeals court has clarified that a police officer had no vested right to lifetime reimbursements for health plan deductibles because deductible reimbursements expired when the applicable collective bargaining agreement expired.
Gary Monreal was a New Berlin police officer for 30 years. He was union member of the New Berlin Professional Police Association. A collective bargaining agreement (CBA) governed Monreal’s employment in the three-year period from 2009 through 2011.
In 2010, a shoulder injury forced Monreal into retirement. But he qualified for duty-related disability retirement under Wis. Stat. section 40.65. The CBA said officers who retire under section 40.65 receive the same health benefits as active duty officers.
The CBA required the city to reimburse employees for all in-network deductibles. After the CBA expired, and after Monreal retired, the city’s health insurance plan changed. It no longer reimbursed in-network deductibles for active duty police officers. Employees had to pay up to $5,200 in deductibles per year for family coverage under the plan.
In 2013, the deductible amount climbed to $6,000, with no reimbursements. Monreal paid deductibles in 2012 and 2013 and sought reimbursement, which the city denied. Monreal sued, arguing he has a vested right in deductible reimbursements for life.
The circuit court ruled for Monreal, arguing that he retired with a vested right in the CBA that promised deductible reimbursements to duty-related disability retirees.
But in Monreal v. City of New Berlin, 2014AP458 (Feb. 4, 2015), a three-judge panel for the District II Wisconsin Court of Appeals reversed, concluding that Monreal had vested rights to health insurance benefits but the CBA limited the scope of those rights.
The panel reviewed the CBA to determine that one section granted vested rights to deductible reimbursements, while another section allowed the plan to change.
“The language of the CBA did not obligate the City to provide Monreal with the coverage he received under Section 5.02 during the term of the 2009-2011 CBA in perpetuity,” wrote Chief Appeals Judge Richard Brown for the three-judge panel.
“Under the promise the City made through Section 5.03, switching Monreal to a coverage plan that required him to pay a higher deductible did not interfere with any of his vested rights,” Judge Brown explained.
Related Article
No Medicare Reimbursements for County Employees in Retirement, Court Says – WisBar News (Feb. 12, 2015)
