UMaine System Pauses Retiree Health Insurance Change After Employees Sue

Nov 19, 2020

Retired University of Maine system employees filed a class-action lawsuit Thursday over the system’s proposed changes to health benefits, and in response the system announced that it will “pause” to speak with representatives and address their concerns.

In August, the university system announced that it would transition its nearly 3,000 retired employees off of a group health insurance plan, and instead provide them with stipends on an insurance exchange. Officials touted flexibility and cost savings in the new plan, but it was met with outcry from many former employees who say they’ll face huge, unexpected increases in health expenses.

On Thursday, 11 retirees filed a lawsuit calling for a halt to the changes and said the move violated their rights under a union contract.

“We are hearing story after story of people that have substantially more expenses, that they hadn’t planned for, because they’re not going to have the same insurance that we say was guaranteed to them at the time that they retired,” said Ben Grant, an attorney representing the retirees.

In response, the system said that it will pause to address concerns, and work with union leaders and retiree representatives to determine whether they would be better served on their current group plan.

“We remain committed to our retirees and providing them affordable, quality health care and will conduct our review quickly to resolve the concerns that have been raised to ensure that retirees have a clear decision in time for January 1, 2021 coverage,” UMS Chancellor Dannel Malloy said in a statement.

“We are pleased to see the University of Maine System finally understand there are serious problems with the switch in health care plans for our most vulnerable retirees,” said Jim McClymer, an associate professor of physics and president of the Associated Faculties of the Universities of Maine. “This pause in transition is a step in the right direction and the unions are eager to speak with the administration about the change, its impact on retirees, and ways we hope they can correct the problems this transition is creating for retirees and current staff.”

System officials have said that the new plan will offer more flexibility for many retirees, and Malloy said it could save the system $2.5 million per year and provide some relief from the financial strain of the pandemic.

Earlier this week, officials announced that the Board of Trustees had hired an independent ombudsman to assist retirees with the new system and help them with any issues.

Democratic legislators have criticized the switch and pledged to introduce legislation to protect retiree health benefits.

Updated 5:42 p.m. Thursday, Nov. 19.