Retirees lose MCH fight

April 20--After the Ector County Hospital District board decided to kick the retirees off the hospital insurance plan last year, hundreds of them sued.

But their case effectively died on Wednesday.

The retirees showed evidence supporting that they had been promised healthcare benefits for life. For some, it was enough to work for below market-wages during the financial doldrums of the 1980s.

But the retired judge assigned to the case, Cecil Puryear of Lubbock, found they failed to show there had been a contract where the hospital district waived the immunity it has as a governmental entity from such lawsuits.

Several retirees in the Ector County courtroom said their best hope for restored benefits now lies in the upcoming hospital board election in May.

"Just go out and vote!" retired nurse Charlene Pearce said from her wheelchair after the judge's decision. Pearce said she struggled to find secondary insurance after the retiree benefits expired Jan. 1. "Can the staff now believe what they are told?"

In the courtroom gallery, another man who declined to give his name addressed fellow attendees.

"Ladies and gentlemen, there's still a thing called a ballot box," he said.

The courtroom was packed, with standing room only, and Puryear acknowledged "the volatile nature" of the case before announcing his decision.

There were a total 317 plaintiffs in the case, including many retirees' dependants. They can appeal, and their attorney J.C. Nickens said they would discuss whether to do so. Their suit argued the hospital district breached their contracts by removing them from the hospital insurance plan. The retirees sought an injunction late last year to prevent their benefits from expiring.

"Everyone in that room knew there was a contract," Nickens said. "You don't pay benefits for 30 years if there wasn't a contract."

In addition to the district, the suit named CEO Bill Webster and the district's seven board members as defendants.

But hospital officials, who prevailed, categorically denied the retirees' claims.

"As you might expect we're pleased with the result, but we need to assess the details and consult with counsel to more fully understand and appreciate the full impact, and to determine what our next steps will likely be," Webster said after the judge's ruling.

Outside attorneys Miles Nelson, Scott Drake and James Leito represented the hospital district and hospital officials.

The board approved ending the retiree benefit program on Oct. 4 in what they described as a cost-savings measure. Hospital officials said the cuts would save about $3.25 million in Fiscal Year 2017.

But the decision also meant 380 retirees who received free health insurance from the hospital had to find new health insurance. Another 88 active employees had also been eligible for the health plan once they retired.

Instead, the board approved funding Health Reimbursement Arrangements so retirees could buy private insurance that would not require them to use MCH doctors or pay two deductibles if they were using the retiree benefits as secondary insurance. They could also use the funds for other healthcare expenses.

But retirees argued the HRAs are not enough to cover their secondary insurance policies.

All the retirees worked for the hospital system before the Ector County Hospital District was created as a governmental entity in 1990. Employees hired after Jan. 1, 1993, never got the retiree health benefits.

As a county hospital, employees did not pay Medicare taxes and they paid into a state retirement fund instead of Social Security, the plaintiffs argued. That prompted leaders of the hospital to worry employees hired before Jan. 1, 1993, might not be eligible for full Medicare benefits when they reached age 65, so they decided to keep the those retirees on the group plan.

Sandy McKown, a plaintiff in the case who oversaw employee orientation, said she remembered telling new employees about the lifetime health benefits.

"Early on in orientation I would tell employees they had a lifetime benefit, because I truly believed that," she said.

Lead plaintiff David Meisell, a former human resources administrator for the hospital, said employees policies and handbooks that employees signed described the promise of health benefits they would receive once they retired.

Another plaintiff, retired hospital Administrator J. Michael Stephans, testified that the promise of lifetime benefits helped the hospital keep employees who were considering other jobs at a time at a time when the hospital was in poor financial shape.

"You were given health benefits upon retirement," said Stephans, Webster's predecessor, explaining later that "the reason really was for recruitment of employees and retention of employees -- to improve our benefits package."

Plaintiff Laura Watson said Wednesday was "a sad day for the retirees" who felt "blindsided" by the hospital board's decision, which came amid investments in "buying and building" that she questioned.

Watson said she decided to work in records for the hospital in 1981 because of the benefits. Even though Watson said she is in good health, has Medicare and found new secondary insurance, she worries for the retirees who worked lower paying jobs and who had dependents relying on their insurance.

She was among those after the Wednesday ruling who saw urgency in the upcoming election, saying "we've got to get people to go out to vote."

"Lose or not, they were still wrong," Watson said. We are dying off. This was going to go away, so why make that move?"

Odessa American staff writer Jessica Bruha contributed to this report.

Contact Corey Paul on Twitter @OAcrude on Facebook at OA Corey Paul or call 432-333-7768.

___

(c)2017 the Odessa American (Odessa, Texas)

Visit the Odessa American (Odessa, Texas) at www.oaoa.com

Distributed by Tribune Content Agency, LLC.