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Retired Buffalo city workers lose suit seeking Medicare Part B payments

Former blue-collar employees of the City of Buffalo who retired before 2009 have lost their class-action lawsuit to force the city to pay or reimburse them and other similar city retirees for their Medicare Part B premiums.

The retirees contended that the city had an obligation to pay those premiums under their union’s collective-bargaining agreements, which provided them with fully paid health insurance until they die.

State Supreme Court Justice Patrick H. NeMoyer on Friday granted the city’s motion seeking to dismiss the suit and requesting a declaratory judgment in the city’s favor.

“It is declared that the city has no contractual obligation to pay or reimburse the Medicare Part B premiums for plaintiffs and similarly situated retirees,” NeMoyer said.

The 10 retirees, formerly members of the AFSCME Local 264 bargaining unit, filed the suit in March 2013 against the city and Mayor Byron W. Brown on behalf of themselves and between 300 and 500 of their former colleagues, all of whom retired before Jan. 1, 2009. The suit also included the spouses of living retirees.

The suit said the plaintiffs retired with clear agreements with the city that they were to receive lifetime health insurance benefits “without any cost to them.”

But a letter sent by health insurer BlueCross BlueShield on Aug. 1, 2008, stated that the company would begin enforcing a provision of the policy that requires Medicare-eligible customers to enroll in the federal program.

Medicare-eligible retirees and their eligible spouses were asked to enroll in Medicare Part B, which requires a premium of approximately $1,200 per person.

“The effect of this mandate is a clear diminution of the guaranteed lifetime retiree health insurance benefit contained within various [collective-bargaining agreements] negotiated between the city and union,” the suit said.

It said the effect of the change is that the city is no longer paying the policy’s full bill.

Collective-bargaining agreements in effect at the time the plaintiffs retired said that upon retirement and until they die, employees would receive the health plan in effect on the last day of their service to the city, the suit said.

The retirees sought compensation to make up for the health insurance payments they have made.

Joseph E. O’Donnell, the retirees’ attorney, said he will discuss the judge’s ruling with his clients before deciding whether to appeal.