A group of Bloomfield Township retirees, upset about a change to their health care benefits, sued Bloomfield Township on the basis that it violated their collective bargaining agreement promising lifetime benefits at a certain level.
Attorney Heather Cummings, of Cummings & Cummings Law Group PLLC in Royal Oak, represented retired township firefighters Steve Kuzmanovich, Jeffrey Callahan, Gary Treuter, Rick Foreman, James Raetzke, Robert Bartley and Karen Koval, in Oakland County Circuit Court in front of Judge Daniel O’Brien against Bloomfield Township, on Wednesday, November 29, for oral arguments. John Clark of Giarmarco, Mullins & Horton PC of Troy represented the township.
In March 2017, long-term retirees in Bloomfield Township were notified of changes to their health care benefits to match the health care policy current employees and retirees since 2011 receive. At a board of trustees meeting, township supervisor Leo Savoie explained that the township held an open meeting for all retirees and their families, that it is part of a health savings account, a tax-advantaged medical savings account that may have a higher deductible. He said the township promised them health care benefits, but that to be fiscally responsible to all taxpayers, some changes had to be made.
Savoie said that as more employees retiree, “there is a tsunami of health care changes coming,” including at the state level, with the governor creating a tax force to look into it. “There’s a good chance legislation is coming back, where both employees and retirees will have to pay 20 percent of their health care.”
In Bloomfield Township, the changes made have allowed them to put aside millions of dollars into the Voluntary Employee Beneficiary Association (VEBA) account. “We will continue to be a pay as you go account, and continue to put aside funds, so 30 to 40 years from now, we’ll have $30 to $40 million in VEBA. At no time will retiree health care be less than (what it is) for active employees,” Savoie said. “At the end of the day, HRA health care is a good plan.”
“The change to that retiree health care plan is just that – a change,” noted clerk Jan Roncelli at the March meeting. “You need to give it a chance to see how it works. It allows us to sustain the legacy for lifetime to retirees. The cost for a family is almost double what the cost was – and that’s $160,000 a year to the township.”
“Our relationship with employees and retirees is sacrosanct,” treasurer Brian Kepes said at the time. “But $160,000 a year for six or seven years – that’s $1 million that’s being put into a savings account for retirees. It will only grow to make sure commitment will be honored. I think it’s the right thing to do, and it’s something we have to do. We’re taking the savings and putting it right back into the VEBA plan.”
However, some retirees were angry at the changes, feeling they were being short-changed from their promised benefits.
“They forced these guys into an HRA plan in violation of their collective bargaining agreement,” Cummings said.
In her filing, Cummings said that “CBAs...guarantee a vested right to lifetime healthcare benefits to all union members who are eligible for a pension and their surviving spouses. Specifically, retirees are entitled to the same healthcare benefits in force at their retirement. In other words, when a firefighter retires, she continues receiving the healthcare benefits she was receiving while an active employee in the township.”
Clark is seeking summary disposition of the suit, stating in his defense motion that the plaintiffs’ position is “contrary to the language of CBAs and state law.
The hearing on the motion to dismiss will be held sometime in late January or early February.