Union County’s Promise To Provide Health Coverage For Life In Exchange For Early Retirement Not Binding

In Rodbart v. County of Union, 2009 N.J. Super. Unpub. LEXIS 3084 (December 21, 2009), Union County was sued by three retirees who expected the County to pay their Medicare Part B premiums for life if they accepted early retirement. Two of the retirees were former Union County assistant prosecutors and the other served as a prosecutor’s detective. All had served for more than twenty-five years and had retired in reliance upon an early retirement incentive program offered by the County. In explaining why they expected their Medicare Part B premiums to be paid for life, plaintiffs said that they relied on a survey that was sent to potential employees addressing, among other benefits, fully paid health benefits for life (family, parent/child, husband/wife, or single as applicable).  This was followed by an application sent to the employees which included the following language describing the medical benefits the employees would receive in return for accepting early retirement: “[r]emoval of the existing cap on the retiree health benefit subsidy to provide fully paid health benefits for life.”

Relying on this documentation, the plaintiffs sought summary judgment against the County. The County cross-moved for summary judgment. The trial judge ruled against the plaintiffs, finding the record did not support an express or implied promise for payment of Medicare Part B premiums. On appeal, the Appellate Division affirmed the decision of the trial judge, relying, first, upon N.J.S.A. 43:8C-2(c), the enabling legislation that permitted the creation of the retirement incentive program. That statute permitted the County to pay for the retirees health benefits coverage after retirement, but only for up to five years, or until Medicare Part B became available to the retirees, whichever occurred first. Second, the Appellate Division characterized the appeal as exposing “an interpretive rift” between a county government and retired government lawyers and law enforcement officers over a contract providing incentives for early retirement. The Court said that:

The reference to lifetime health benefits is plainly modified by and subservient to the opening phrase dealing with the “[r]emoval of the existing cap on the retiree health benefit subsidy.” It was not a blank check for free Medicare Part B health insurance for the retirees’ lifetime.

The case is attached here – Rodbart v. County of Union