Leo Mueller retired from the Akron Fire Department in 1978 after 28 years on the job. When he signed up to brave smoke, fire, and other on-the-job hazards, he did it knowing he could have made more money working at the Firestone factory. But he took the job with the understanding Akron would providing free healthcare benefits even after he retired.
“Police and fireman weren’t that well compensated at the time,” says Mueller, now 86 and an active city councilman. “I expected the hospitalization [coverage] for myself and my family to offset the wages I was being paid as a fireman.”
But for the last 20 years, the city hasn’t been living up to its end of the bargain, says Akron attorney Larry Shenise — and the state of Ohio agrees. The cash-strapped city could be on the hook for up to $5 million in annual insurance premiums and possibly back-premiums as high as $50 million.
Last month, the state Department of Insurance ruled that Akron’s administration of health-care benefits for retired firefighters and police “constitute[s] unfair and deceptive acts under Ohio Revised Code.”
The union contract with Akron requires the city to provide primary insurance to active and retired firefighters and police. Akron requires retired safety workers to register for insurance via the Ohio Police & Fire Pension Fund before they’re eligible for the city’s health coverage; if retirees are eligible for Medicare, Akron becomes a tertiary provider.
Through the 1990s, OP&F premiums were negligible, but they’ve since grown to over $500 a month in some cases. Shenise sued Akron on behalf of retired municipal workers in 2004, as high premiums became inescapable. The Department of Insurance ruling says the city’s arrangement violates Ohio’s coordination of benefits law.
“The city has been illegally piggybacking on Ohio Police and Fire,” says Shenise.
Shenise says his clients understand healthcare has changed drastically over 30 years, and they’re not opposed to paying premiums — but the city won’t even discuss a settlement. Akron can still appeal the insurance department’s ruling, but an end is finally in sight.
“We’ve been at it six years,” says Shenise. “We’re not going to be at it much longer.” — D.X. Ferris