An association of retired Sonoma County government employees filed suit Tuesday claiming that the county reneged on promised health benefits last year when it began forcing about 2,500 retirees to pay an increasing share of premium costs.
"Retirees dedicated their careers to the county on the promise of these benefits," said Carol Bauer, president of the Sonoma County Association of Retired Employees. "Now, when retirees have limited means and are in great need of these benefits, the county is backing out on its end of the deal."
The lawsuit was announced Tuesday to cheers from about 200 association members who gathered for their monthly meeting at the Santa Rosa Veterans Memorial Building. The group has been in a three-year dispute with county administrators, who with acquiescence of supervisors, have pared back medical premium contributions to 4,000 union and non-union employees as well as to retired workers.
The association, filed suit in U.S. District Court in San Francisco on behalf of its 1,500 members, claims that for four decades, employees accepted lower wages, comparable to other government workers, in exchange for pledges of "substantially all of the cost" of medical benefits during retirement.
The dispute stems from cost-cutting policies advocated by former county administrator Bob Deis, who convinced supervisors that long-term obligations of providing employee benefits were draining the county budget. The administration said strong action was necessary to contend with a $15 million annual deficit in funding commitments for health care premiums, which are predicted to total $407 million over the next 30 years.
Under changes adopted by supervisors in August 2008, the county is no longer funding retiree medical premiums at 85 percent of the lowest-cost health plan, regardless of number of dependents covered. Under changes implemented last July, the county's contribution to retiree health benefits will decline 20 percent annually over the next five years until reaching a level of $500 a month, regardless of dependents covered.
Similar changes were imposed on 650 non-union county employees and unions representing about 3,000 other county employees. However, those employees received a discretionary salary boost of $600 per month, which retirees did not get.
Leaders of the retirees' association said that negotiations during closed sessions with supervisors failed to produce any change in county policy, so they decided to file the lawsuit.
"Three years of unfruitful discussions got us nowhere," Bauer said. "We may be older, but we are not stupid."
County officials said they would have no comment on the lawsuit.
At the time of the decision, county administrators and supervisors concluded that promises of future health benefits were unaffordable at a time when the sagging economy is siphoning government revenues.
Andrew Lah, attorney for the retirees, said California law requires that the county keep its promises of retiree benefits. In addition, Lah said the county's method of purchasing group health insurance that pooled employees and retirees pooled together for averaging medical costs and expenses, created conditions under which coverage would continue in the future.
According to the administration's estimates, nearly two-thirds of the 2,400 retirees will experience a drop in county contributions to their medical premiums. Those who insure dependents or who retired before age 65 are likely to see the biggest reductions. About 900 county retirees whose insurance premium is less than $500 would benefit by the changes.