City of Gadsden v. Boman

104 So. 3d 882, 2012 WL 4040405, 2012 Ala. LEXIS 119
CourtSupreme Court of Alabama
DecidedSeptember 14, 2012
Docket1111273
StatusPublished
Cited by4 cases

This text of 104 So. 3d 882 (City of Gadsden v. Boman) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Gadsden v. Boman, 104 So. 3d 882, 2012 WL 4040405, 2012 Ala. LEXIS 119 (Ala. 2012).

Opinion

WOODALL, Justice.

The City of Gadsden (“Gadsden”) appeals from an order of injunctive relief in favor of John Boman, a retired Gadsden police officer. We reverse the judgment and remand this cause with directions.

I. Factual and Procedural Background

According to the undisputed facts underlying this appeal, John Boman worked as a Gadsden police officer from 1965 until he retired in 1991. At the time of his retirement, police officers were operating under provisions of the “City of Gadsden Employee Handbook: Police Department (ed. 1989-1992)” (“the handbook”). In § 26, entitled “employee benefit plan,” the handbook listed “Major Medical benefits — 80% UCR [usual, customary, and reasonable charges] for the first $10,000 with 100% of covered expenses ... each year after $2,000 annual out-of-pocket per person.” The employee-benefit plan was issued and administered by Blue Cross and Blue Shield of Alabama (“Blue Cross”).

In 2000, Gadsden elected to join the “Local Government Health Insurance Plan” (“the plan”), a “self-insurance health benefit plan administered by the State Employees’ Insurance Board” (“the Board”). The claims administrator for the plan was Blue Cross. The plan stated, in pertinent part:

“Retired Employees
“Health benefits will be modified when you or your dependent becomes entitled to Medicare. Coverage under this plan will be reduced by those benefits payable under Medicare, Parts A and B.... “The [plan] remains primary for retirees until the retiree is entitled to Medicare. Upon Medicare entitlement, the member’s coverage under the [plan] will complement his/her Medicare Parts A and B coverages. Medicare will be the primary payer and the [plan] will be the secondary payer. A Medicare retiree and/or Medicare dependent should have both Medicare Parts A and B to have adequate coverage with the [plan].”

[884]*884(Some emphasis added; some emphasis omitted.)

When Boman turned 65 in 2011, he was receiving medical care for “congestive heart failure” and “severe osteoarthritis of the spine.” After his 65th birthday, Blue Cross began denying his claims for medical treatment based on the failure to provide Blue Cross with a “record of the Medicare payment.” However, Boman had no Medicare credits. Relying on Internal Revenue Service Publication 963 (rev. Nov. 2011), Federal-State Reference Guide: Providing guidelines for social security and Medicare coverage and tax withholding requirements for state, local and Indian tribal government employees and public employers, Gadsden explains Boman’s lack of Medicare credits as follows:

“Boman and similarly situated officers were considered ‘employees under [42 U.S.C. § 418 (codifying Section 218 of the Social Security Act) (hereinafter referred to as “§ 218”)]’ (may or may not be in a public retirement system, and may be extended ‘voluntary’ [Medicare] coverage). Coverage, however, can only extend to groups of employees, and there are two types of coverage groups. [Boman] was in a ‘retirement system coverage group,’ consisting of employees working in positions covered by a public retirement system. Such a group can be provided ... Medicare coverage only after a referendum is held as set forth in the statute. In Alabama, this would be a majority vote referendum: a majority of those eligible to vote (not just those voting) must favor obtaining coverage.
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“12. ... Before April 1, 1986, the only way for state and local governmental employees — regardless of membership in a retirement system — to get on Medicare was through the voluntary § 218 agreement amendments as discussed above. Following the COBRA Act of 1985, however, virtually all state and local employees hired after March 31, 1986, were required to be covered by Medicare and to pay Medicare taxes regardless of their membership in a retirement system. Those hired before March 31, 1986, remained exempt — they were not covered by Medicare and Medicare taxes were not deducted from their wages.”

Affidavit of Roger Kirby, city attorney for Gadsden (footnote omitted) (some emphasis added).1 Boman was hired before March 31,1986, and, although Gadsden did begin participation in the Medicare program in 2006, Boman’s employee group had not opted to obtain Medicare coverage before Boman retired. Consequently, Bo-man never paid Medicare taxes and does not claim to have Medicare coverage.

When the dispute over coverage arose, Boman sought review by the Board. In response, he received a letter dated March 30, 2011, from James J. Bradford, general counsel for the Board, which stated, in pertinent part:

“The [plan] becomes secondary when a retiree becomes entitled to Medicare. In order to have no gaps in coverage a retiree must have both Parts A and B. This requirement is published in the benefits handbook that every employee and retiree receives each year. All employees and retirees are, therefore, on notice of this requirement.
“Although I can appreciate Mr. Boman’s situation, the [Board] must strictly en[885]*885force the plan provisions. If the [Board] granted an exception to the [plan’s] Medicare secondary provisions for retirees of units, who for their own financial purposes decided not to participate in Medicare, it would result in all units who do participate in Medicare subsidizing the cost of the retirees of those units who do not participate. As fiduciaries of the [plan] the [Board] cannot allow such a practice. Accordingly, your request for the [plan] to remain Mr. Boman’s primary coverage cannot be granted. “Appeals are limited to exclusions or exceptions to coverage based on extenuating or extraordinary circumstances or policy issues not recently addressed or previously contemplated by the [Board]. The Medicare secondary provisions of the [plan] have been in place since the inception of the plan in 199B and have been enforced without exception since that time, regardless of whether the employer unit participates in Medicare. The fact that the City of Gadsden did not begin its participation in Medicare until 2006 does not meet the criteria necessary to allow an appeal of the application of the [plan’s] Medicare secondary provisions. Mr. Boman’s request for an appeal is, therefore, denied.”

Meanwhile, as early as November 3, 2009, Boman and 18 other active and retired Gadsden police officers sued Gadsden, alleging, among other things, that they had “been deprived of Social Security and Medicare protection which other police officers have been provided” and that, after 20 years of service, they were being required to pay a higher pension charge or percentage of base pay than their counterparts who were hired after April 1, 1986. On May 2, 2011, Boman filed a “motion for immediate relief for medical care.” He alleged that, when he was hired, Gadsden “provided police and firemen a 20 year retirement program whereby police and firemen would receive 50% retirement benefits after 20 years of service and lifetime medical care.”

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Related

Boman v. City of Gadsden
220 So. 3d 298 (Supreme Court of Alabama, 2016)
City of Birmingham v. Thomas
220 So. 3d 333 (Court of Civil Appeals of Alabama, 2016)
City of Gadsden v. Boman
143 So. 3d 695 (Supreme Court of Alabama, 2013)

Cite This Page — Counsel Stack

Bluebook (online)
104 So. 3d 882, 2012 WL 4040405, 2012 Ala. LEXIS 119, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-gadsden-v-boman-ala-2012.