California Supreme Court to Decide “Vesting” Issue Regarding Retiree Health Benefits
Retired Employees v. County of Orange (9th Cir. 09-56026 6/29/10) Since approximately 1966, Orange County has provided health care benefits to its retired employees. In 1985, the County began “pooling” the retired employees with the active employees in the rate-setting process. Because retirees generally require more health services than active employees, who are generally younger and healthier, pooling the two groups allowed retirees to pay lower premiums and receive greater coverage than they otherwise would. As the cost of health care continued to rise over the years, the County found its employee health plans underfunded and needing adjustment. On September…