Politics & Government

Class-action suit seeks full health insurance payment for Lexington police retirees

In February, the Lexington police officers' union sponsored a bill that would have altered a state law and required the city to fund 100 percent of health insurance premiums for retirees.

The Lexington-Fayette Urban County Government opposed the bill, saying it would cost too much, and it died in committee shortly after it was filed. However, the issue was not forgotten — the forum for the argument changed from legislative halls in Frankfort to federal court in Lexington.

In September, two retired police officers and the president of the police union filed a class-action lawsuit against the city seeking to restore full health insurance payments for police retirees. The lawsuit was filed on behalf of more than 100 police retirees, most of whom saw their health insurance premiums increase by hundreds of dollars this year.

Retired officer Tommy Puckett, one of the plaintiffs, had been paying $287 per month for health benefits for himself and his wife, he said.

"After Jan. 1, I was paying close to $900," he said.

The issue began last fall, when the city unveiled a new insurance plan that increased the amount many city employees paid for health insurance and effectively doubled the cost of the high-end plan in which 89 percent of city employees were enrolled.

The increased rates also applied to retirees from the Lexington police and fire departments, who draw pensions from a locally funded retirement system. The city previously has covered in full the premiums for police and fire retirees, but that changed at the start of the year when the higher-cost insurance plans took effect.

In the lawsuit, Puckett, retired officer Donald Chumley and Detective Mike Sweeney, president of the Fraternal Order of Police Bluegrass Lodge No. 4, accused the city of violating retirees' constitutional rights by unilaterally raising health insurance premiums.

"This case arises from the broken promise of LFUCG to pay 100 percent of the health care benefits for police officers that have retired or will retire," the lawsuit said.

In doing so, the city violated a vaguely worded state law and local ordinances, the lawsuit said. The regulations say the city must pay for the retirees' health insurance premiums, but not more than 100 percent of the sum they give to current employees, the lawsuit said.

City spokeswoman Susan Straub said she could not comment on pending litigation, but city officials have said in interviews and in court documents that the wording of the laws does not require the city to pay health insurance premiums in full.

"What the plaintiffs do not address, but cannot deny, is that the LFUCG is still contributing to retiree benefit pools an amount equal to 100 percent of what the LFUCG contributes to the benefit pools of current LFUCG non-bargaining unit employees," the city said in a response to the class-action suit.

The city's response, filed three weeks after the lawsuit, asked U.S. District Court Judge Karen K. Caldwell to dismiss the case. Caldwell is reviewing the city's motion, according to court records.

Puckett said the lawsuit was filed in federal court rather than Fayette County Circuit Court because federal court allows a government's past practices to be taken into consideration.

Since 2000, the year after laws were passed governing police and fire retirees' health care, every mayoral administration has paid health insurance premiums in full.

However, the altered health-care plans for city employees and police and fire retirees were among a number of measures Mayor Jim Gray took to reduce a $35 million deficit when he took office in 2011. When Gray's administration opposed the bill in February, the city said paying retirees' premiums under the new health insurance plan would cost more than it could afford — about $3.4 million over the first two years and more as time went on.

Puckett said he didn't think police officers would lobby for another bill altering the state law next year.

"I don't think we're going to even attempt it now, because we're going to let the courts make the decision," he said.