City Not Allowed To Cut Retiree Medical Benefits For Firefighters

The collective bargaining agreement between Local 732 of the International Association of Fire Fighters and the City of Woonsocket, Rhode Island requires the City to provide retiree medical insurance. When the City canceled the health insurance for seven retirees on the grounds that they had health insurance provided through other sources, Local 732 filed a grievance.

An arbitrator upheld the grievance. The Arbitrator recognized the City’s ability to terminate health-care coverage for any retiree who had “equal or better” insurance. The real question, the Arbitrator found, was whether the health insurance obtained by the seven retirees was in fact “equal or better.”

Because all of the insurance plans available to the retirees required a co-payment of health care premium, the Arbitrator found that at first blush, the alternate policies were not “equal or better” to the City’s policy. However, the Arbitrator noted that “that fact alone did not automatically mean that the alternative plans did not provide equal or greater benefits. What it did mean was that other benefits would have to be sufficiently greater than those provided by the employer’s plan in order to offset the cost of the insurance.”

After looking through the benefit levels of the alternative plans, the Arbitrator found that none of them had offsetting benefits equivalent to the value of the co-payment of premiums. The Arbitrator thus ordered the City to reinstate the health-care coverage for the seven retirees.

City of Woonsocket, Rhode Island, LAIG 6943 (Grossman, 2010).

This article appears in the November 2011 issue.