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Unanimous N.C. Appeals Court panel overturns decision in health care dispute involving government retirees

A three-judge panel of the N.C. Court of Appeals has agreed to overturn a 2017 court ruling that benefited state government retirees in a dispute involving health care benefits.

The original ruling was expected to cost the state $100 million, along with the ongoing costs of providing health benefits these retirees enjoyed before retiring.

The case involves roughly 220,000 government retirees, led by former N.C. Supreme Court Chief Justice Beverly Lake, who challenged a change in State Health Plan rules. The change forced retirees under a particular health care plan to pay a new premium.

The retirees argued that “the State and Plaintiffs had entered into a nonamendable contract, which entitled Plaintiffs to premium-free, noncontributory static health benefits” under that plan “for the remainder of their lives,” according to Judge John Tyson’s opinion.

Tyson and his Appeals Court colleagues disagreed. “An objective reading of the State Health Plan statute, and the extensive statutory amendments since 1981, indicates retired state employees are promised nothing more than equal access to health care benefits on an equal basis with active state employees,” Tyson wrote.

“Making available and providing access does not create any specific contractual financial obligation,” Tyson continued. “Without a showing of a valid contractual financial obligation, Plaintiffs’ claims under either the Contract Clause of the Constitution of the United States or the Law of the Land clause of the North Carolina Constitution fail.”

Mitch Kokai / Senior Political Analyst

Mitch Kokai is senior political analyst for the John Locke Foundation. He joined JLF in December 2005 as director of communications. That followed more than four years as chie...

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