Update on the NYSHIP Buyback Litigation

***Please note that the December 2015 issue of News and Notes will contain an article updating this and other pending court cases of interest to our members. This change in the case status occurred after the issue went to print.***

In May 2012, the New York State Department of Civil Service issued a rule that employers, including school districts, who offered health insurance through the New York State Health Insurance Program (NYSHIP) were no longer permitted to offer a financial incentive to employees for opting not to take health insurance if the employee’s alternate health insurance was also through NYSHIP. Both SAANYS and NYSUT commenced separate litigations challenging this rule.

The SAANYS litigation was unfortunately dismissed before the case even got to the merits under the theory that the statute of limitations for challenging the rule commenced when Civil Service issued it, in spite of the unrefuted evidence that the school district in that case did not inform the union of the change until months later. SAANYS appealed the decision to the Appellate Division, which upheld the lower court’s determination, and then brought the matter to the state’s highest court, the Court of Appeals, which declined to hear the matter.

The two cases brought by NYSUT were victorious on the merits; however the state appealed that decision. Oral arguments were held in October 2015 and on November 25, 2015, the Appellate Division Third Department overturned NYSUT’s victory on the same statute of limitations grounds that prevented the SAANYS case from being brought to trial. NYSUT is planning on bringing this disappointing turn of events to the Court of Appeals for review.

Many bargaining units that were impacted by the prohibition on buybacks had reached agreements that any money that would have been paid but for the prohibition would be held in escrow until such time as the litigations were finally resolved by the courts. While this turn of events does not look promising, the case is not yet over. SAANYS will continue to keep you apprised of any developments in this matter.