Retired Firefighters Get Burned When Health Care Benefits are Terminated

Retired Firefighters Get Burned When Health Care Benefits are Terminated

By Burg Simpson
December 6, 2018
3 min read

Attorney Brian Matise at Burg Simpson handles complex civil litigation cases, and he has taken the lead on the West Metro Case. This case involves the distribution of more  than $1.8 million in funds that remained in a trust that was committed to fund health insurance benefits for 73 retired firefighters and their dependents. These first-responders and their families had been covered by an irrevocable employee benefit trust that was intended to fund their health insurance premiums from the time they retired until they were eligible for Medicare at age 65. In 2015, the District terminated the trust except for annual contributions of approximately $500,000 a year from 2015-2017. But after the trust was terminated, nearly $2 million remained in the retiree account that should have been used to fund health insurance premiums for the firefighters and their families until those funds were exhausted.  Instead, in April 2016, the District distributed those funds to active employees only, depleting the retiree health account.

A 2006  Agreement for Coverage of Retirees mandated that the Trust keep funds intended for retiree benefits in a separate account, permanently segregated and held in trust for retiree health care coverage. This Agreement was reaffirmed in 2011 and again in 2015 when the District terminated the trust. Under these agreements, the remaining funds in the retiree account were to be used only for this purpose. At the time of termination, the Trust and the District appointed the Executive Committee of Local 1309 as the successor-in-interest to insure that the District honored its commitments under the retiree agreements.  Instead of protecting the rights of the retirees, the President and Secretary/Treasurer of Local 1309 during the 2016 contract negotiations period agreed to transfer the retiree funds to the District, to be disbursed to accounts of active employees and chiefs.

If the remaining funds had not been distributed to active employees within the fire department, it would have allowed continued payments of 50% of the cost of premiums of health care coverage for existing retirees as of December 31, 2017 for at least 4-5 years. That likely would have allowed most of them to obtain affordable health insurance coverage until they qualified for Medicare at age 65.

Burg Simpson attorneys Brian Matise and Nelson Boyle have moved for certification of the class on behalf of all eligible retirees and their eligible dependents who would have been entitled to coverage as of December 31, 2017. The motion for class certification is pending at this time.  Trial is scheduled for February 2018. The case is Tim O’Hayre and Ruth Brienza v. Executive Committee of IAFF Local 1309 and West Metro Fire Protection District, Jefferson County District Court No. 2018CV30375.

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