In a decision that is likely to impact pension reforms adopted in 2013, the Illinois Supreme Court reversed a lower court ruling on changes in the state’s health insurance benefits for retirees.
In a 6-1 ruling on July 3, the state’s high court said state health insurance benefits for retirees are protected by the Illinois Constitution’s pension protection clause.
Although the ruling focused on a July 2012 law that reduced health insurance benefits for retired state employees, the court’s finding was widely viewed as providing a clear signal on whether or not pension changes approved in December 2013 would be held constitutional.
Those pension changes are currently under review by a lower court, but the case was expected to be ultimately decided by the state supreme court. The ruling in the health insurance case is likely to be used as guidance by the judge deciding the pension case.
A central issue is a provision in the Illinois constitution which states that pension benefits are “an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”