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Illinois Circuit Judge Bars State from Requiring State Retirees to Pay Health Premiums

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October 2014

A Sangamon County Circuit Court judge issued a preliminary injunction preventing the State of Illinois from requiring retirees to pay a portion of their retiree health premiums. This circuit court ruling is an extension of the Illinois Supreme Court’s ruling in Kanerva v. Weems that was issued in July. As covered in more detail in our separate alert, the Kanerva ruling held that retiree health benefits are a protected benefit under the pension protection clause of the Illinois Constitution.

In 2012, Illinois passed the State Employee Group Insurance Act of 2012 (Public Act 97-695), which required current state retirees to begin making contributions towards the cost of their health premiums. The Supreme Court held in Kanerva that retiree medical benefits are constitutionally protected, and remanded the case back to the lower court to determine whether the benefit reductions effected by Public Act 97-695 violated the pension protection clause of the Illinois Constitution. On remand, Circuit Judge Steven Nardulli has now issued a preliminary injunction against the enforcement of Public Act 97-695, halting state efforts to collect health premiums from current retirees.

As explained in our prior alert, it is still unclear what impact these decisions will have on the impending legal challenge to Senate Bill 1, passed in December of 2013, which made various benefit reductions to public pensions, including for current pensioners.  

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