health-insuranceIt has been four years since the Commonwealth Employment Relations Board (“CERB”) took the view that municipal employers have a duty to bargain health insurance contribution rates of certain retirees, i.e. current employees who will retire in the future. Under CERB’s logic, an employer could unilaterally alter the health insurance contribution rate of persons already retired, but not for persons about to retire or any other future retiree. In the 2011 City of Somerville case, CERB ordered the City to restore previous payments (80%, 90%, or 99%) towards health insurance for persons who retired after July, 2009. To its credit, the City appealed and the Supreme Judicial Court (“SJC”) took jurisdiction.

The SJC decision issued on February 3, 2015, firmly concludes that the Legislature intended in M.G.L. c. 32B to leave the determination of retiree contribution rates to cities and towns. Since the local option statutes in c. 32B permitting health insurance contributions are not listed in c. 150E, §7(d) as statutes which can be superseded by a collective bargaining agreement, retiree contribution rates are not a mandatory subject of bargaining. The Court reasoned:

In our view, the Legislature conferred authority on municipalities to decide whether and how much to contribute to retirees’ health insurance premiums in recognition of the fact that as public employers, they must balance the needs of their retired workers with the burden of safeguarding their own fiscal health, thereby ensuring their ability to provide services for all of their citizens.

In articulating that view, the Court cited two cases our firm handled: Twomey v. Middleborough, 468 Mass. 260 (2014), which affirmed the power of the Board of Selectmen, not Town Meeting, to set the health insurance contribution rate for retirees, and Yerestsky v. Attleboro, 424 Mass. 315 (1997), which overrode a Superior Court decision requiring a 90% contribution rate to retirees in HMOs, leaving the choice of employer contribution, between 50% and 90%, to the political process.