A state board’s decision five years ago to change health insurance policies so that some recently retired educators would pay dramatically more for coverage is now the subject of a class-action lawsuit.
Some of the retirees — who have seen their rates about triple since they retired this year — argue in the lawsuit filed last week in Fulton County Superior Court that the Department of Community Health’s board broke a contract with them to provide the same state-subsidized insurance as other retirees.
“We just want to be treated fairly,” said Chuck Trader, a second-career Camden County teacher who retired over the summer and is a plaintiff in the lawsuit. “They have taken away what we’ve earned. Had a I known, I would have maybe not chosen to become a teacher.”
The lawsuit was filed about three weeks after The Atlanta Journal-Constitution first reported on the policy.
A Department of Community Health spokeswoman was not available for comment.
The policy was approved through a resolution a few weeks before Christmas in 2011.
The resolution created a system that gave retirees — teachers, school staffers, state employees — insurance subsidies based on their years of service. Anyone with less than five years of service with the state or a school system on Jan. 1, 2012, would get relatively little subsidy after 10 years. But the subsidy would increase with more time working for the state or school system.
While DCH officials sent out a memo in February 2012 to districts and agencies informing them about the decision — aimed at saving the state plan money — retirees and teachers contacted by the AJC said they didn’t know about what they called the “retroactive effect.”
The issue came to a head this fall because teachers, school staffers and employees hired in the 2007-2008 school year became vested in the state retirement systems after 10 years over the summer.
They began retiring, expecting to continue receiving state health insurance for the same premiums they were paying while they were working.
They say they found out after they retired that they’d have to pay nearly the full freight on the health care plan because they didn’t have five full years in the system as of January 2012.
Trader had left a career in corporate finance to become a middle school math teacher. When he retired after 10 years, his family’s insurance went from $540 a month to $1,611. That’s almost double the $870 pension check he receives for his decade in the classroom
Last month DCH officials declined a request for an interview on the issue but said in written responses to questions that the policy was “a proactive step toward plan sustainability for current and future retirees.” The “plan” that the DCH statement refers to is the $3 billion-a-year State Health Benefit Plan, which covers about 650,000 teachers, state employees, retirees and their dependents.
DCH officials have often projected massive deficits in the program and have made several changes to it over the years to keep it solvent.
In its written response to the AJC, the agency said it didn’t know how many teachers and state employees would be affected, and it didn’t answer a question asking how much the plan is projected to save.
Besides the earlier memo, the DCH said the agency sent out a letter in December 2016 to State Health Benefit Plan members who had not been part of the plan as of Jan. 1, 2012, notifying them about the policy.
Teachers and employees who retired this year when they reached 10 years in the system said they weren’t told about the issue when they talked with benefits managers this spring prior to leaving.
Critics of the policy say it could put a damper on the plans of second-career teachers, those wanting to teach 10 to 12 years after successful careers in other fields with the incentive that they’ll be able to retire with affordable health insurance.
“This is going to affect the recruitment of teachers,” Trader said. “And who is going to go to work for people who break their promises?”
The lawsuit asks for damages and for the policy change to not affect those on the payroll when it was approved in 2011.
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