Retired public employees and state settle long-running legal dispute over medical, dental benefits

AlaskaCare mailers
In 2014, the state sent a variety of information to AlaskaCare members, including retirees, on changes to their health care plan. In 2016, the Retired Public Employees of Alaska sued the state, saying the changes to the benefits violated the state constitution. (Photo by Casey Kelly/KTOO)

Retired public employees and the state government recently settled two lawsuits over changes in 2014 to the medical and dental plans for retirees. The settlement was announced on Wednesday.

The Alaska Constitution says that public employee retirement benefits “shall not be diminished or impaired.” But the state and retirees have differed on how to interpret this guarantee.

The Retired Public Employees of Alaska, or RPEA, represents more than 4,000 former state and municipal workers. It sued the state in 2016, alleging that changes to dental and other benefits violated the state constitution. It later filed a second, related lawsuit over medical benefits. 

RPEA President Randall Burns said his group is pleased with the settlement. He said it addresses his members’ biggest concern, the lack of notice of changes.

“What gave rise to the lawsuits in the first place was the lack of really any notice when the retiree health plans were changed back in 2014,” he said. “And I mean, literally no notice and no chance to comment, no idea that this was coming. And this agreement gives us an absolute ability to participate and to be aware of about any future changes.”

Emily Ricci is the chief health administrator with the state Division of Retirement and Benefits. She worked on the settlement. She said it will help both those who pay for and receive benefits in the long term. 

“The division believes that the work that we’ve done to date really reflects changes in process, improvements in communications that have benefited both the health trusts, the plans and the retirees,” she said.

State leaders said the agreement will usher in a new era of cooperation between the retirees and the state. 

Under the terms of the settlement, retirees will have access to the older of two plans that offer dental, vision and hearing benefits as long as the plan remains financially viable. 

The state agreed to draft new regulations for how public notice is given on plan changes.

Andrew Kitchenman

State Government Reporter, Alaska Public Media & KTOO

State government plays an outsized role in the life of Alaskans. As the state continues to go through the painful process of deciding what its priorities are, I bring Alaskans to the scene of a government in transition.

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