Court backs Medford on employee’s insurance

April 03--Medford officials won a resounding victory Wednesday when the Oregon Court of Appeals ruled the city doesn't have to provide health insurance to a retired public works employee.

"Hopefully today's opinion will help us find closure," City Councilor Daniel Bunn said. "This has gone on a very long time."

It was the second ruling by the Court of Appeals</org> upholding Medford's practice of ending health insurance for employees when they retire. Former City Attorney Ron Doyle also sued and lost, in a case that went before the Oregon Supreme Court last year.

Doyle and Joseph Bova, a former public works employee, have maintained they are entitled to "bridge" health care coverage from the city until they reach age 65.

The courts have treated the two cases differently because Doyle was retired when he filed the legal action, while Bova was still employed with the city.

Bova did not immediately respond to a request for a phone interview Wednesday.

In the original ruling in the Bova case, Circuit Court Judge Mark Schiveley said the city has resisted court orders from 2009 that said retired city employees are entitled to "bridge" health insurance.

Then, in February 2010, the Oregon Supreme Court ruled the city of Medford must provide health benefits to its retirees -- or prove that it is unable to do so.

In 2010, the city estimated it would have to pay $1.8 million annually to cover the benefits for retirees.

The Supreme Court also found the retirees have constitutionally protected rights to health coverage, but left open the door to further legal interpretation.

The Court of Appeals, in its ruling, however, pointed out that the Supreme Court didn't address the question of whether the inability to provide health insurance allowed retirees to seek damages under state statute.

Until 1990, the city offered retirees continuing health insurance. The city began to phase out the practice when it entered into an agreement with the Oregon Teamster Employers Trust to cover its police officers. It added its management employees to the plan in 2001, and in 2002, non-management employees in the parks and recreation and public works departments were added.

When Bova first sued the city in 2008, the legislative statute held that Bova had to show only that there was coverage in the marketplace available to retirees, regardless of the cost to the city.

But the Oregon Supreme Court changed that standard while Bova's case was still in litigation. Under the new standard, the city could have said that the existing insurance was "unreasonably burdensome."

"Because that was not the correct standard to test the evidence presented on summary judgment, and because the city might have created a different evidentiary record under the (new Supreme Court standard), we decline to exercise our discretion to affirm the trial court's ruling," Judge Timothy Sercombe wrote in the panel's ruling.

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