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Allen Park Retirees Association, Inc. v. City of Allen Park

Court of Appeals of Michigan

August 13, 2019

ALLEN PARK RETIREES ASSOCIATION, INC., and RUSSELL PILLAR, on behalf of himself and others similarly situated, Plaintiffs-Appellants,
v.
CITY OF ALLEN PARK and JOYCE A. PARKER, Defendants-Appellees.

          Wayne Circuit Court LC No. 14-003826-CZ

          Before: Sawyer, P.J., and Cavanagh and Servitto, JJ.

          PER CURIAM.

         Plaintiffs appeal from an order of the circuit court granting summary disposition on plaintiffs' claims for retiree health care benefits under a collective bargaining agreement. We affirm in part, reverse in part, and remand.

         Plaintiff Pillar was a command officer employed by the Allen Park Police Department and a member of the Allen Park Police Lieutenants and Sergeants Association collective bargaining unit. He retired from employment in July 1993. At the time of his retirement, Pillar's employment was governed by a collective bargaining agreement (CBA) in effect for the period July 1, 1991 to June 30, 1994. That CBA provided for retiree health insurance benefits. The CBA provided for specific coverages, though those coverages varied somewhat depending upon the age at retirement and date of hire. The CBA provides that the city "reserves the right to change any and/or all insurance company(ies) and/or plan(s), providing the replacement program is equal to or better than the program available from the present company, subject to the mutual agreement of the City and the Union."

         Defendant Parker was appointed Emergency Manager ("EM") of the city before March 28, 2013. At that time, the EM's rights and duties were governed by the Local Government Fiscal Responsibility Act, formerly MCL 141.1201 et seq. The Local Financial Stability and Choice Act (LFSCA), 2012 PA 436 ("PA 436"), became effective March 28, 2013. MCL 141.1541 et seq. EM Parker continued her duties as the city's EM under the new legislation. EM Parker notified city retirees in correspondence dated March 8, 2013, that she was "proposing changes in our health care program in an effort to reduce our expense, while making every effort to minimize the impact on retirees." She requested the retirees' "support of the changes that are proposed and outlined in this letter." The letter stated:

Effective July 1, 2013, the health insurance for all retirees and dependents will be changing. The coverage you will be afforded as of our fiscal year is Blue Cross Blue Shield of Michigan (BCBSM) Community Blue PPO Option 2. Community Blue PPO features an extensive network of doctors, hospitals and other health care providers that agree to accept BCBSM's benefit and payment policies. The Blue Cross PPO operates nationwide and allows members to receive services from any health care provider that accepts the Community Blue PPO ID card. This plan does not require the selection of a primary care doctor or other health care provider. Your out-of-pocket expenses are less when health care services are rendered by PPO network providers
Parker issued Order No. 2013 - 015 ("Order 15"), which declared:
1. All Medicare Part A and B enrolled/eligible retirees and their Medicare enrolled/eligible spouses and dependents.
Section 1. Health Coverage
Effective July 1, 2013, the City will provide enrolled/eligible retirees and dependents the following health coverage plan:
i. Blue Cross Blue Shield of Michigan Medicare Plus Group PPO with a $100.00 annual deductible, $1, 000.00 annual In-Network out-of-pocket maximum, and with $10/20/30 copay prescription drug coverage.
ii. Plan coverage will be subject to the coverage terms and regulations of the carrier[.]
2. All Non-Medicare enrolled/eligible retirees and their enrolled/eligible ...

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