Four ex-state employees sue over lost benefits

By Steve Korris | Jun 16, 2006

Jim Lees

CHARLESTON – No injured workers have sued over benefits they lost in West Virginia's shift from public to private workers compensation, but four former state employees have sued over health benefits they claim they lost in the transition.

Drema Miller of Cross Lanes and Clark Schulz, Nancy Crouch and Della Freshour of Charleston claim the West Virginia Public Employees Insurance Agency would not allow them to return to its health plan after they retire.

They sued in Kanawha County circuit court June 7, alleging that the agency allowed some former Workers Compensation Commission employees to return to the state health plan after retirement while barring them.

Attorney Jim Lees of Charleston asked the court for an order permitting his clients in the future to participate in the state health plan.

The four employees "sold" all the sick days they had not used at the Workers Compensation Commission, under a provision of the 2005 law that closed the commission and opened a private company, BrickStreet Mutual Insurance.

Employees in the transition could either sell sick days for cash or apply the value to future health insurance premiums at the Public Employees Insurance Agency.

Allowing workers to sell sick days and return to the state health plan made no economic sense, but in spring of 2005 the agency told workers they could do it.

At a special session of the Legislature last November, legislators tried to limit the cost of this generosity. They proposed to cap sick leave payouts at $25,000 and set aside the balance for future health care premiums.

The proposal did not pass.

On Nov. 18, Workers Compensation Commission operations specialist Jennifer Piercy-Igo sent employees an agreement to sign, acknowledging that if they sold all their sick leave they would be ineligible for the state health plan as retirees.

Commission employees objected, and on Nov. 21 executive director Greg Burton sent them e-mail "to clarify the situation."

Burton wrote, "If the State buys back your sick leave at a rate of one hour of sick leave equals one hour of pay AND you are allowed to stay in the system it is not a good deal for the state."

He wrote, "If the State is to allow you to stay in the system, then the fair exchange for the sick leave would be the amount you would have to pay as a retiree."

He wrote, "This is based on your years of service – the more years of service the less you pay in monthly premiums. Therefore, you would not have received as much for your sick days."

He wrote, "In fact the amount would be significantly less for those with higher years of service."

On Dec. 27, attorney Lees filed a grievance for Miller, Schulz, Crouch, Freshour and Patricia Kay Propst of Charleston with the West Virginia Education and State Employees Grievance Board.

Lees skipped the first three levels of the grievance process and filed at the fourth level, placing it before Administrative Law Judge Paul Marteney.

On Dec. 30, Marteney dismissed the grievance for lack of jurisdiction. He wrote that state employees cannot file grievances over alleged misapplication of retirement laws or over changes in rights resulting from legislative action.

Marteney gave the workers 30 days to appeal to Kanawha County circuit court.

Instead of an appeal, Lees filed a petition for declaratory judgment.

Lees wrote that his clients, relying on specific representations of the state, "proceeded to make certain career and financial decisions predicated upon such information."

He wrote, "Inasmuch as some former Workers Compensation Commission employees now employed by BrickStreet will be permitted to participate in PEIA health insurance coverage upon retirement and the plaintiffs will not, said actions violate the equal protection clause of both the West Virginia Constitution and the United States Constitution."

The lawsuit did not dampen Gov. Joe Manchin's June 13 press conference on workers compensation.

Manchin said, "Because of the work done by our Legislature to change our workers comp system once and for all, West Virginia's business community in general is now paying $130 million less a year in workers comp premiums."

He challenged employers whose premiums have decreased to expand businesses, create good jobs or provide health care benefits.

A Manchin press release stated that since 2003, the time between injury and first wage replacement benefit has decreased from nearly two months to less than 15 days.

A day before Manchin's press conference, the West Virginia Supreme Court of Appeals ruled that the old Workers Compensation Commission improperly withdrew benefits from widows in 2005.

Years ago the commission had told the widows they would receive dependent death benefits until they died or remarried.

Last year the commission changed its policy and notified each widow that her benefits would end on the day her husband would have turned 65.

Two widows learned of the new policy 45 days before it took effect.

Six widows asked the Supreme Court of appeals for a writ of mandamus that would require the insurance commissioner to restore the benefits.

In April Manchin ordered Insurance Commissioner Jane Cline to restore the benefits.

The widows pursued the writ anyway. Attorneys Scott Marshall and Robert Gillikin of Pittsburgh argued that another governor could revive the policy.

The Supreme Court of Appeals unanimously granted the writ June 12.

Justice Spike Maynard concurred but wrote that he was not sure it was imperative to address the issue.

He wrote, "While it is arguably possible that some future executive might reverse course and change Governor Manchin's decision, that possibility, in reality, is extremely remote and very unlikely."

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