Your CBA language on retiree benefits may be weaker than you think
The Connecticut Supreme Court reversed a lower court and held that the Town of Groton is not required to extend employer health savings account (HSA) contributions to retired police officers. In Duso v. Groton, 353 Conn. 667 (No. SC 21082), retirees argued that a 2008 pension agreement promising the “nature and scope of coverages, including but not limited to deductibles” in effect for active officers entitled them to the same HSA contributions the town provides to active officers under a later collective bargaining agreement.
The court disagreed. It drew a firm line between plan terms and funding mechanisms. A deductible, the court explained, is a fixed feature of the health insurance policy – a threshold where the insurer’s obligation begins. A health savings account (HSA) sits outside the policy. It is a separate, tax-advantaged account that does not change the deductible amount, and its funds can be used for purposes other than meeting the deductible. Because of that, HSA contributions are not insurance “coverage” and are not a “deductible” under the pension agreement’s retiree-parity clause.
The facts that framed the dispute are straightforward. Groton and the police union moved active officers from a preferred provider option (PPO) to a high-deductible health plan (HDHP) effective January 1, 2018. Under the 2016-2020 CBA, active officers were required to open and maintain HSAs. The town agreed to fund...
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