Unable To Require Premium Copayment From Police Retirees, St. Louis Allowed To Reduce Healthcare Benefits

Prior to 2001, the Board of Police Commissioners of the City of St. Louis had provided healthcare coverage to police retirees at no cost to the retirees. In 2001, the Police Board tried to require retirees to pay a portion of the premiums for their health insurance coverage. The St. Louis Police Officers’ Association and several of its members filed a successful lawsuit against the Police Board, obtaining an injunction that stopped the City from implementing its plans.

In 2006, the Police Board altered the health insurance plans offered to police retirees. Two plans were offered: A Basic Plan, which was provided at no premium cost to police retirees, and a Premium Plan, which was offered for $251 a month. The free Basic Plan marked a significant reduction from the previous free health insurance plans offered to police retirees. Annual deductibles and co-insurance maximums increased significantly, while the co-insurance coverage percentage decreased noticeably. Co-payments for office and hospital visits increased as well.

The Association filed a new lawsuit, challenging the reduction in benefits. The Missouri Court of Appeals rejected the lawsuit and upheld the Police Board’s decision.

The centerpiece of the lawsuit was a Missouri statute that states that the Police Board “shall provide health, medical, and life insurance coverage for retired officers and employees of the Police Department.” The Association argued that the Basic Plan was “an illusory plan.” While the Court conceded that the Basic Plan “is not the most generous of healthcare plans in terms of its deductibles, co-pays, and prescription drug benefits, this does not make the healthcare insurance that it provides an illusory plan. The evidence presented at trial is that the Basic Plan offers comprehensive medical coverage, and as part of the BlueCross/Blue Shield network, gives its members a choice of over 90 percent of the healthcare providers in the St. Louis area.”

The Association also argued that the reduction in retiree healthcare benefits violated their due process rights. The Court was unconvinced, finding that since the “Basic Plan meets the requirements of the statute, the Association has not been deprived of a constitutionally protected property interest. The decision of the Police Board to cut the free benefits to police retirees, admittedly a cost-cutting measure directed against a group that is arguably more vulnerable to such actions, might be considered harsh. The failure to request bids for alternative plans that might have less of an impact on the health insurance benefits provided at no premium to the police retirees might be regarded as lacking a depth of planning. This does not, however, make the decision truly irrational.”

St. Louis Police Officers’ Association v. Board of Police Commissioners of the City of St. Louis, 2007 WL 2915186 (Mo.App. 2007).

This article appears in the April 2008 issue