A federal judge has dismissed a lawsuit brought by Sonoma County government retirees over a controversial rollback in contributions to their health care premiums.
The Sonoma County Association of Retired Employees claimed in a lawsuit last year that the county reneged on a contractual promise in 2008 when it began forcing retirees to pay an increasing share of premium costs.
The rollback, which also affects current employees and eventually will reduce county contributions to retiree health care to $500 a month, went against previous county pledges to pay "substantially all of the cost" of employee medical benefits during retirement, the association claimed.
But U.S. District Court Judge Claudia Wilken in San Francisco said the association, which represents about 1,500 former county workers, failed to show that the county agreed to provide retirees with health care benefits in perpetuity.
The association "has not identified any specific Sonoma County resolution or ordinance that granted its members this purported vested right" to health care benefits, Wilken wrote in her decision last week.
It followed an earlier court order in May that dismissed the original complaint but allowed the association to file an amended complaint with documentation of its claims.
"This validated for us that we had the authority to do what we did," Board of Supervisors Chairwoman Valerie Brown said of the restructured medical benefits.
Association president Carol Bauer said the group plans to appeal.
She said Wilken shortchanged the value of "implied contracts," identified as job postings and memoranda of understanding with employees, that the group claims promised retirees lifelong health care benefits.
"We have some good points and (the case) needs to be looked at in the broader context," Bauer said.
The dispute stems from changes to rein in health care costs that supervisors approved unanimously in August 2009 over heated opposition from current and retired workers. At the time, then county administrator Bob Deis said the county faced annual deficits of $15 million because of rising health care premiums that were predicted to total $407 million over the next 30 years.
Under the changes, which went into effect last June, the county's contribution to retiree health benefits will decrease 20 percent annually over five years until 2013 when it reaches a level of $500 a month per retiree, regardless of the number of dependents.
Officials estimate the changes affect about 40 percent of the 2,500 county retirees who are eligible for county medical benefits. The remainder are unaffected because they are eligible for other coverage, such as Medicare, officials said.
Similar changes were imposed on 650 non-union county employees and unions representing about 3,000 workers. However, those employees received a discretionary cash allowance of $600 per month, which retirees did not get.
Retirees argued in the lawsuit that they were owed a similar cash allowance, but the court ruling denied that claim.
The county already has saved about $15 million in retiree medical costs because of the changes, according to a review of benefit costs released earlier this year.
Those numbers also validated the restructuring, supervisors said.
"It was a step that needed to be taken. In the end, it will be a huge benefit for Sonoma County," former supervisor Tim Smith said in May, when the savings were announced.
Representatives of the retiree association have questioned the county's savings figure, claiming the total paid out in cash allowances each year amounts to $40 million, or double the estimated annual county savings for active and retired workers.
Undoing the rollback also remains a goal for some employee groups in contract negotiations.
Meanwhile, retiree representatives say former workers on fixed incomes are struggling to pay for their health care coverage. Some may have to drop their insurance, Bauer said
"It's very difficult for people who retired thinking they had their health care paid for the rest of their lives," she said.
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