SAANYS Wins Major Court Victory Over Retiree Medicare Part B Reimbursements

Pursuant to the Medicare Modernization Act, enrollees in Medicare Part B are required to pay a monthly premium of $134, as well as an upwardly adjusted gross income related monthly adjustment amount (IRMAA) when their combined household modified adjusted gross income (MAGI) exceeds a threshold amount, ranging from a total monthly premium of $187.50 for individuals whose MAGI is between $85k and $107k (or $107k to $214k for those filing jointly), to a total monthly premium of $428 for individuals whose MAGI is above $160k (or $320k for those filing jointly).

A school district in Westchester County unilaterally decided that it would cease its long standing practice of reimbursing retirees’ full Medicare Part B premiums and instead would only pay the baseline premium, potentially costing retirees hundreds of dollars every month. Upon learning of this highly illegal change in retirees’ conditions, SAANYS promptly commenced an action in New York Supreme Court, Westchester County, on behalf of five retirees and their spouses, alleging that the district’s refusal to pay IRMAA, as it had in the past, was both a breach of contract, as well as a violation of the NYS Moratorium Law, which prohibits a public employer from changing benefits to retirees without negotiating a corresponding change to its active employees. A corresponding grievance and Improper Practice charge were also filed on behalf of the active employees within the bargaining unit and are pending.

In a swift decision, the NYS Supreme Court held that the district’s refusal to pay IRMAA to the retirees was illegal and ordered the enhanced reimbursements to resume, as well as ordered damages to be paid to the retirees for the amounts not reimbursed by the district. Since the decision, the district has started the appeal process. The damages to the retirees will continue to accrue while the appeal is pending and SAANYS will continue to vigorously defend the rights of its retiree members. This case highlights the importance of paying attention to retiree benefits, as well as maintaining SAANYS membership in retirement, and letting the Legal Department know immediately when a benefit changes. We will continue to update the membership on the status of this important matter.