Today, Wayne County’s largest stakeholder, Wayne County retirees who retired prior to December 1, 1990 or who retired pursuant to the 1990 Wayne County Health and Welfare Benefit Plan agreed to settle their lawsuit against the County. These retirees were union members during their employment with the County and were represented by 14 different labor unions including AFSCME, NUPO, GAA and the GBA. This resolution saves the County approximately $20 million per year in reduced health care costs.
“It was difficult to ask this large group of retirees to agree to reduce their health care benefits this drastically,” said Wayne County Executive Warren Evans. “Unfortunately, given the County’s financial condition there was no choice. It’s gratifying, however, to see the spirit of shared sacrifice reflected by this resolution, which we believe is a fair compromise in settlement of long-standing litigation.”
After more than 5 years of litigation and millions of dollars spent on attorney’s fees, these retirees and the County can now move forward. In their lawsuit the retirees claimed that the County, contrary to their respective collective bargaining agreements, had reduced their health care benefits. The County claimed it had the right to reduce and even eliminate all their health care benefits. Without this resolution this lawsuit would likely continue for many more years. The resolution of this lawsuit reduces the annual health care cost for these retirees from approximately $30 million a year to about $10 million.
There are approximately 5000 retirees who experienced a change in their benefits in October 2009 and are affected by the resolution of this case. Approximately 80 percent of these retirees are Medicare eligible. These retirees, in addition to receiving Medicare benefits will receive a monthly stipend of $130 for themselves and their spouse which can be used to purchase supplemental Medicare health insurance. The other 20% of retirees affected by this settlement, who are not presently Medicare eligible, will also receive a monthly stipend which is based on income levels. This stipend is usable to purchase health insurance on the national exchange available under the federal Affordable Care Act. Many of these retirees will qualify for federal tax credits in the purchase of their health insurance as a result of their income levels.
“I hope the remaining County stakeholders will take note. Achieving the necessary savings through voluntary shared sacrifice is clearly the preferable course. Much remains to be done. Past practices and claimed entitlements must all be reconsidered if we are to build and grow Wayne County as a stronger and more stable place for its residents, businesses and employees.” Evans added.
This settlement helps the Evans Administration accomplish goals outlined in the Recovery Plan to eliminate the County’s $52 million structural deficit. The Plan, which is ambitious and provides strong medicine to solve the County’s financial crisis, requests that all stakeholders share in the sacrifice to return the County to a solid financial footing.