On June 2, the Massachusetts Supreme Judicial Court (SJC) decided in Twomey et al v. Town of Middleborough that the Board of Selectmen determine how much a retiree must contribute—between 10% and 50%—toward the premium cost of an HMO insurance plan. Attorney Leo J. Peloquin of our office represented the Town in the matter. In the 1997 case, Yeretsky v. City of Attleboro (argued by Attorney Phil Collins), the SJC decided that M.G.L. c. 32B, § 16 allowed cities and towns to contribute between 50% and 90% of the cost of an HMO rather than mandating a 90% contribution. However, the statute does not expressly state whether the Town or the retiree pays the 40% not accounted for in the statute or who makes that decision.
The Plaintiffs in Middleborough were Town and School Department retirees. They argued that the Board was bound by a Town Meeting vote that purported to “freeze” the Town’s contribution at 90%. The article found its way onto the warrant through the efforts of the Middleborough Retiree Insurance Group in the petition process available under M.G.L. c. 39, § 10. Aware that the article was on the warrant for the May, 2009 Town Meeting, the Board followed through with a planned vote earlier in May that, effective July 1, changed the premium split for retirees participating in the HMO from 90%-10% to 80%-20%. This mirrored the same change previously negotiated by the Town with all its unions. Despite the Board’s vote, the Town Meeting, attended by a large group of current and retired Middleborough employees, passed an article attempting to force the Town to keep the 90%-10% split.
The Plaintiffs argued that Town Meeting should make that decision because it acts on matters of municipal finance. But the Court agreed with the Town that this decision rested with the “appropriate public authority” under § 16 which, in a Town, is the Board of Selectmen. The Court adopted several arguments put forth by the Town, including that § 16 provides the Board with the authority to make virtually every significant cost decision with respect to HMOs and there is no reference to Town Meeting anywhere in § 16. This decision also logically applies to the determination of mayors (and city managers in a plan E form of government). After the Middleborough case, it is clear that significant decisions about health insurance contributions will not be made by legislative bodies, be they Town Meeting or City Council/Board of Aldermen.
It should be noted, however, that the Middleborough case did not involve a c. 150E claim that the Town had to bargain with its unions over an increase in active employees’ health insurance contributions when they retire. That issue is presented in the pending SJC case of City of Somerville v. Commwealth Employment Relations Board. The Somerville case has not yet been scheduled for oral argument.
If you have questions, please contact one of our attorneys at Collins, Loughran & Peloquin, P.C. The above is provided for informational purposes only and does not constitute legal advice.
