Court Rules that Lower Premium Health Care Plan Meets Requirements of PSEBA

November 26, 2019

The Appellate Court in Esser v. Peoria, 2019 IL App (3d) 180702 (November 20, 2019), resolved a nagging PSEBA dispute regarding the obligation of a municipality to pay the entire premium of a basic health insurance plan. The City of Peoria had two separate health insurance programs, one with a low deductible (higher premiums) and one with a high deductible (lower premiums). The plaintiff, a disabled police officer, qualified for PSEBA benefits and elected the low deductible plan. The City claimed it did not have to pay the entire premium of the low deductible plan because the higher deductible plan satisfied the City’s obligation to pay the basic health insurance premium. The Officer filed a declaratory judgement action seeking a declaration that the City had to pay the entire premium of the more expensive plan. The Third District Appellate Court ruled in favor of the City, reasoning that the mandate of 820 ILCS 320/10 required payment of the entire premium of a basic health insurance plan. Even though the City chose to pay the entire premium of the lower deductible plan for the family of an officer who had been killed in the line of duty, the disabled police officer in this case still had no claim to the entire premium of the lower deductible plan. Esser is instructive and helpful to municipalities with multiple health insurance plans and appears to sanction the payment of a basic health insurance plan as satisfying the mandate of PSEBA.

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