Countywide : County to Fight Over Retiree Insurance

The Board of Supervisors agreed Tuesday to fight a judge’s order that the county provide medical coverage for thousands of retired county workers whose insurance benefits were slashed more than a decade ago.

The supervisors reached an agreement to appeal the March 9 ruling by Superior Court Judge Claude M. Owens during a closed-door executive session after Tuesday’s regular board meeting in Santa Ana, county officials said. Board members declined to comment on their decision because of the litigation.

In his ruling earlier this month, Owens chastised the county for its “cavalier” decision to discontinue the insurance coverage and said its actions violated an obscure state law governing medical benefits.

“We very respectfully disagree with the judge’s opinion,” said Lois Jeffrey, special counsel to the county. “As far as we know, no one has ever interpreted the statute that way and it’s been on the books for 27 years.”

If Owen’s ruling is not overturned, the cost of paying insurance premiums for the county’s 4,600 retirees could climb to $90 million annually by 1995, Jeffrey said. In addition, county officials have estimated that reimbursing retirees for benefits denied them since 1982 could cost another $42 million to $50 million.

The county stopped paying insurance benefits for workers who retired after 1979. But the Orange County Employees Assn. did not file suit until 1985 and the claims are limited by a three-year statute of limitations.

Nevertheless, the cost to the county would be prohibitive, the county’s special counsel said.

“The county doesn’t have the revenues,” Jeffrey said. “They would have to look at potentially laying people off or canceling some existing programs.” We’re limited as to what we can do with taxes by Proposition 13 and assorted other laws.”

Among retirees fighting the county is Rachel Hill, 79, the first female to work as a sergeant in the county marshal’s office. Hill said she was considering retirement in 1963. But that same year the Legislature enacted a law requiring public agencies to offer retirees insurance benefits comparable to the coverage offered employees still on the job.

As Hill understood the law, she would be eligible for full medical coverage if she hung on for another three years to complete her 20 years of service. She did, and the county extended her full coverage in 1966, the first year of her retirement and the first year the county offered the benefits to retirees under the new state law.

At the time, the cost of full coverage for Hill and her husband was $44 a month. But health insurance costs began soaring in the mid-1970s and, while the county increased its contributions for active employees, it required retirees to pay the difference themselves.

Hill now pays the bulk of her $215 monthly insurance payment for herself and her husband, who is in a nursing home, out of her retirement income.

But Hill said she considers herself fortunate. Employees who retired after 1979 must pay the entire cost of their insurance coverage, ranging as high as $300 monthly.

Attorneys in the case said Tuesday that the appeal could take another year or two to resolve and that additional appeals to the state Supreme Court could drag the case out even longer.

Richard S. Rockwell, an attorney for the employees association, disputed the county’s contention that it has no money to meet retirees insurance needs.

“I think they could reorganize their priorities a little bit and get this thing covered handily,” Rockwell said. “The total county budget is $4.5 billion. One billion of that is discretionary.”