CINCINNATI (TDB) -- The argument was over complaints that Norwood illegally shifted increased costs for health care insurance to its pensioners. Former police and fire department workers said they took lower pay in the 1970s in exchange for promises of medical benefits after they retired. When the costs rose, Norwood broke its promise. Judge Charles Kubicki has not set a date for the fairness hearing in Hamilton County Common Pleas Court, but the joint request filed last week signals that the conclusion of the lawsuit is near. The case -- which involved about 150 city workers -- is important, although it has not attracted a great deal of attention. The Norwood case shows that attempts by state and Cincinnati officials -- who are battling an explosion in pension expenses for public employees -- to chop retirement benefits for government workers will likely wind up in court.
The Norwood lawsuit is Case No. A 098881 and was filed by retirees who started working for that city before 1975. The city promised health care benefits as part of the pension package. The retirees said said they gave up pay raises and cost of living adjustments in exchange for the health care benefits. The retirees claim that in 2005 Norwood forced them to begin paying a portion of their health care insurance premiums:
"Sometime in 2005, the city, without any notice or process being provided to the retirees, implemented a policy that certain police and fire retirees that were non-Medicare eligible would not be reimbursed for all health care premiums. Indeed, the evidence [to be presented at trial] will reveal that the City reimbursed these premiums since at least 1990 as part of its contractual obligations that were made when induced the retirees to continue to work for at as well as certain language contained in police and fire labor contracts. Many retirees were made aware of this newly adopted policy not by the City, but by the third party administrator that handles their claims and paperwork."
Norwood said it agreed to pay up to $2,250 a year for co-pays, deductibles and medical expenses not covered by the pension insurance, which came from the Ohio Police and Firefighters Fund. Norwood contended: "Any medical expense not covered by the applicable insurance policy or in excess of the ($2,250 a year) would be paid for by the retirees. . . The plain language of the plan limits benefits to $2,250 'per plan year for each plan participant.' The language could not be any more clear or unambiguous."
Kubicki was scheduled to try the class-action Oct. 7 without a jury. The trial was canceled. The case was originally filed in U.S. District Court where Judge Michael Barrett spent three days holding unsuccessfully settlement talks. It was moved to Common Pleas Court last year, were the parties tried to mediate a deal. They have explored a possible settlement, and the Oct. 12 request for a fairness hearing indicates they reached an agreement. A fairness hearing is unique to class-action litigation -- it requires the judge to determine that the settlement is fair, adequate, reasonable and not based on collusion between the lawyers. The judge is supposed to act as the protector of the class, and once the settlement is presented, the judge make his evaluation.