City attorney, judge joust on Medicare matter

A state appellate judge and a city attorney sparred Thursday about whether assurances made to city workers decades ago regarding their health care were essentially lifelong, unbreakable promises. 

The exchange took place during a hearing by a State Supreme Court Appellate Division panel considering the city’s appeal of a court decision blocking the Adams administration from switching municipal retirees to a private health plan from their government-administered Medicare. 

Just as the city attorney, Richard Dearing, began his statement, Associate Justice Ellen Gesmer interrupted him to ask whether the city disagreed with a former municipal official’s affidavit that the city’s promise of Medicare and a city-paid supplemental plan was an “‘essential recruiting and retention tool.’”

“I didn't see anything in your papers that disputed that that was an essential recruiting and retention tool. Could you show me where, if anywhere, in the record, you refuted that,” Gesmer said to Dearing. 

“We refute, I think, the premise that that promise was made,” Dearing, the executive assistant corporation counsel for appeals, replied. He suggested that the affidavit, submitted by Lilliam Barrios-Paoli, herself a retired longtime city official who headed several departments, including that charged with personnel, “hinges on a passage” from a summary program description of health benefits offered to municipal employees. 

That did not satisfy Gesmer, who along with three colleagues from the State Supreme Court’s Appellate Division, First Department, are considering the city’s appeal of a Manhattan Supreme Court justice’s decision that blocked the Adams administration’s plan to usher the retirees into a Medicare Advantage plan. 

“I understood her affidavit to rely on her statement of the city policy with regard to recruiting and retaining employees, not limited to what was in the [summary program description], but rather limited to what it was her policy as director of HRA, among other things, to convey to new employees,” the justice said. 

Dearing said he did not dispute that the city’s promise of free health care into retirement was intended as a recruiting tool. The issue, he said, was whether those assurances met a legal standard. He argued that the city’s guarantees to its employees as outlined in the summary plan description “do not equate to any such promise or to any such clear and unambiguous promise under the court's precedents.” 

Taking up his court colleague’s line of questioning, Justice John R. Higgitt asked Dearing why there was no evidence in the record, such as an affidavit, refuting the promises of lifetime benefits alleged by the retirees and Barrios-Paoli. “There wasn't one individual in city government over that course of 57 years who could say such a promise was not made?” Higgitt asked. 

“I don't think there's not such a person,” the city’s attorney replied. “I think we looked at the record and we concluded that the evidence of that promise, under the standard of New York law, was not sufficient.” 

But the attorney representing the retirees, Jake Gardener, said there was “a very simple answer” to the justice’s question, namely “because no one would say, under penalty of perjury, that there was no promise made, nor would they say that any promise made was unauthorized.” 

Conversely, Gardener said, the hundreds of affidavits from city retirees and others, attest to “the clear and unambiguous promise delivered by city officials in virtually every setting, verbally, in person, and then also in HR documents and [summary program description].”

Adams had disapproved

Gardener also noted that Mayor Eric Adams himself had disapproved of the proposed switch when he was running for office, calling the plan, first put into motion during the de Blasio administration, as a bait-and-switch tactic.

Shifting the retirees to the privately run plan would save the city anywhere from $500 million to $600 million annually, which the retirees have argued would be equal to less than 1 percent of the city’s $107 billion budget this fiscal year.

The city would derive the savings through federal subsidies available to Medicare Advantage plans. The savings would help replenish the city’s Health Stabilization Fund, which supplements employee welfare funds.

The hearing, lasting just under 25 minutes, followed Justice Lyle Frank’s finding last August that switching the retirees to a private plan and stripping them of their no-cost supplemental coverage would in fact break long-ago guarantees the city made to employees.

“The petitioners have shown that numerous promises were made by the City to then New York City employees and future retirees that they would receive a Medicare supplemental plan when they retired, and that their first level of coverage once that retired would [be] Medicare,” he wrote in his five-page decision. 

Frank dismissed the city’s arguments that the promises “were not definite and were not forward looking,” by noting that “[w]hen words such as ‘will’ are used, that is to this Court a promise that is future looking.”

The decision marked the third time in two years the courts sided with the retirees. Soon afterward, the city said it would appeal his ruling. A decision from the Appellate Division could take anywhere from a few days to as long as several months. 

Marianne Pizzitola, the president of the New York City Organization of Public Service Retirees, one of the lead plaintiffs in the lawsuit that led to Frank’s decision, called out the city’s tactics. 

“Retirees know what we were promised and that was Medicare and a city supplemental plan when we became Medicare eligible," she said in a statement following the hearing. "A promise made should be a promise kept, and we relied on that when choosing to spend our lifetime working for the city. It is shameful that the mayor’s Office of Labor Relations would encourage unions to sell off retirees for their raises."

richardk@thechiefleader.com

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