Employer Required To Pay Retiree’s Medicare Supplement Premium

Employer Required To Pay Retiree’s Medicare Supplement Premium

Written on 09/20/2019
Will Aitchison

James Gallagher was employed as a police officer by the Town of Fairfield, Connecticut until October 9, 1986. On that date, the Fairfield Police and Fire Retirement Board approved his request for disability retirement benefits. Gallagher’s disability retirement at age 35 was the result of a serious injury he sustained during the course of his employment.

On the date of his retirement, Gallagher was a member of the Fairfield Police Union. Pursuant to the collective bargaining agreement which was in effect in October of 1986, the Town of Fairfield was required to pay premiums for health insurance coverage. The operative clause in the contract read, “Employees who retire under the disability provisions of the retirement plan and their enrolled dependents shall also be entitled to Town paid health insurance coverage.”

In 2016, Gallagher turned 65 and became eligible for Medicare benefits. The Town told Gallagher that he would be moved to a Medicare Supplement Plan, effective July 1, 2017. However, while the Town continued to pay for Gallagher’s primary health insurance coverage, it refused to pay Medicare Part B premiums of $536 per month.

A Connecticut court ordered the Town to reimburse Gallagher for the cost of the premiums. The Court found that “the collective bargaining agreement in effect when Gallagher retired obligates the Town to defray the cost of Town paid health insurance coverage. Nothing in the language of the contract seeks to condition that coverage upon the payment by the Employee, of a Medicare Supplement Plan premium.

“The fact that Medicare Plan A and Plan B are specifically referenced in the current collective bargaining agreement – as opposed to the one in effect when Gallagher retired – seems both purposeful, and deliberate. The new contract unambiguously and wrongly places a new burden on Gallagher which he did not have at the time of his retirement.”

Gallagher v. Town of Fairfield, 2019 WL 3248579 (Conn. Super. 2019).