Victory in Medicare Part B Lawsuit  

PEF received an extremely favorable decision from the Appellate Division in our Medicare Part B lawsuit against New York State. By a vote of 5-0, the Appellate Division reversed the lower court’s ruling and granted PEF’s petition. This is a significant victory for all public sector employees and retirees in New York, and represents a major cooperative effort among public sector unions.

PEF filed the lawsuit in January 2006 with the New York State Correctional Officers and Police Benevolent Association (NYSCOPBA), the New York State Police Investigators Association (NYSPIA), and the Organization of Management/Confidential Employees (OMCE). United University Professions (UUP), Civil Service Employees Association (CSEA) and District Council 37 (DC 37) also filed Article 78 proceedings in Albany County Supreme Court on this same issue, and the Retired Public Employees Association (RPEA) filed an  amicus curiae (friend of the court) brief in support of our case.

It is PEF’s position that the State violated the law when it implemented a new interpretation of Civil Service Law 167-a which would require State employees and retirees to pay a portion of the State’s Medicare Part B reimbursement expenses as part of their health insurance premium payments. Prior to January 2006, the State had paid the full cost of the Medicare Part B reimbursement for the past 40 years. Under the new interpretation, the State required all New York State Health Insurance Program (NYSHIP) enrollees to pay the Medicare Part B premiums as a component of their health insurance premiums.

All of the lawsuits were argued before the Albany County Supreme Court, which dismissed the petitions. The unions and appealed and in a unanimous decision, the Appellate Division reversed the lower court’s judgments and granted the petitions.

In an extremely straightforward decision, the Appellate Division ruled that based on the plain language of Civil Service Law 167-a, the legislative history of Civil Service Law Article 11 and the State’s correct long-standing interpretation of that statutory scheme, the State’s newer January 2006 interpretation is arbitrary, capricious and contrary to law.  

We do not yet know whether the State will attempt to appeal this decision to the Court of Appeals. Under New York law, if the State wishes to appeal this decision, we believe they will need permission from the Appellate Division or the Court of Appeals. Further developments will be reported at  www.pef.org and in The Communicator.