“Authorized” To Pay For Health Insurance Does Not Mean “Required”

In 2003, the Ohio Police and Fire Pension Fund announced a significant increase in its health insurance premiums. Shortly afterwards, Timothy Metcalfe, a retired City of Akron firefighter, sought to obtain primary insurance coverage through the City. When the City refused to provide coverage, Metcalfe instituted a class action lawsuit against the City.

Metcalfe’s argument turned on a provision of an Akron ordinance dealing with post-retirement health care. The ordinance read “that the director of finance is hereby authorized to pay the hospitalization insurance premiums for all City employees retiring on and after July 1, 1963, and the spouses of such employees.”

The Ohio Court of Appeals disagreed with Metcalfe’s interpretation of the ordinance. The Court ruled that “clearly the word ‘authorized’ is a delegation of power from the Council to its director of finance in accordance with the Charter. The statute grants the City’s director of finance authority to make payments; it does not obligate him to do so. That is, the City’s Charter requires the Council to appropriate funds prior to incurring any obligation for the expenditure of money. Nothing in the statute approaches the interpretation proffered by Metcalfe. The statute only permits the payment of those premiums as an expenditure if the City contracts for such an obligation.”

Metcalfe v. City of Akron, 2006 WL 2483875 (OhioApp. 2006).

This article appears in the November 2006 issue