299A.465 Continuation of Health Insurance Benefits and Cash Waivers

In Minnesota, a police officer or firefighter who suffers from a physical or mental condition that limits their ability to perform the normal duties of their position for a period of at least one year, and where that condition is the direct result of an injury or illness arising out of or incurred during the performance of inherently dangerous duties, is eligible for Public Employees Retirement Association (PERA) Police and Fire Plan Duty Disability benefits. In turn, a police officer or firefighter who is determined to be eligible for PERA Duty Disability benefits is also eligible for Continuation of Health Insurance Benefits in accordance with Minn. Stat. § 299A.465. State Troopers, DNR Officers, and BCA Officers who are determined to be eligible for Duty Disability benefits under the Minnesota State Retirement System (MSRS) State Patrol Plan are also eligible for this benefit.

Minnesota Statute 299A.465 Continuation of Health Insurance Benefits

This statute provides, in relevant part, that any peace officer or firefighter who is deemed to be eligible for Duty Disability benefits, is also entitled to Continuation of Health Insurance benefits. In other words, the officer or firefighter’s employer shall continue to provide health insurance coverage for the officer or firefighter, and the officer or firefighter’s dependents if the officer or firefighter had family coverage at the time of injury. The employer is required to continue paying the employer’s contribution for said health insurance coverage until the officer reaches, or would have reached age 65, in the case of dependent coverage.

Given the ever-rising cost of health insurance, this benefit can be worth hundreds of thousands of dollars for a disabled police officer or firefighter. It also means that it can cost hundreds of thousands of dollars for the officer or firefighter’s employer. Notably, an employer does have the right to contest via administrative contested case hearing whether an officer or firefighter is eligible for these benefits, and Meuser Law Office, P.A. is frequently involved in litigation on this type of case.

Health Insurance Cash Waiver Incentive Plans

Health insurance costs have risen exponentially over the last several years, and there is increased uncertainty in the markets given the political maneuvering over subsidized insurance. Some public employers have sought to reduce their health insurance costs by offering their employees incentivized alternatives to health insurance coverage through their group health plans. One such alternative that we are seeing more and more frequently are cash waiver plans.

Cash waiver plans can be offered in a variety of ways. In general, they offer an employee the option of waiving health insurance coverage in exchange for some form of monetary benefit. For example, we have handled cases involving:

• An annual cash benefit offered as an alternative to family coverage for those employees who are eligible for family coverage, but choose to waive it
• A monthly cash benefit, paid as an increase in the employee’s monthly salary, for those employees who waive single coverage and are able to demonstrate coverage elsewhere
• A monthly employer contribution towards a Health Care Savings account on a high deductible plan where the employer required two married officers to waive their respective single coverage plans, and enroll in a family plan

Cash waiver plans invariably also provide that if the person waiving coverage loses their alternative coverage elsewhere, they will have the option of re-enrolling in the employer’s group health plan. These plans also generally allow an employee to opt out of the cash waiver plan and to re-enroll in the employer’s group health plan during annual enrollment.

These types of plans are perfectly legal, and they unequivocally save an employer substantial amounts of money in the form of reduced premium costs for insuring their employees. Since they come with a cash incentive – sometimes worth several hundred dollars a month – it can be financially advantageous for an employee to elect coverage under these types of plans.

Litigation and Case Law Update

The problem with these cash waiver plans; however, is the uncertainty that they generate in the context of statutory § 299A.465 continuation of health insurance coverage eligibility if an officer or firefighter loses his or her job due to a work-related injury. We have been involved in litigation on several cases where the employer has argued that an officer or firefighter who had been enrolled in a cash waiver plan at the time of injury gave up their right to continuation of health insurance benefits under Minn. Stat. § 299A.465 and are therefore not eligible for any ongoing cash payment or insurance coverage.

Unfortunately, the statue itself says nothing about how the law is to apply in this circumstance, but thus far, the courts who have heard cases involving cash waivers have generally held that the policy reasons behind § 299A.465 – providing access to health insurance coverage to disabled police officers and firefighters – should guide how the law applies in these cases. Here’s how a few of these cases have been determined in the courts so far:

• Administrative law decision – An officer with PTSD primarily due to traumatic incidents experienced while employed by a major metropolitan city, subsequently became employed by a smaller city in outstate Minnesota. The symptoms did not become disabling until the officer had been employed by the smaller city police department for a few years. The officer was determined to be eligible for PERA Duty Disability benefits, and PERA ordered the current department to pay health insurance. The current employer appealed and joined the officer’s prior employer to the litigation. Both cities argued about the cause of the PTSD – in other words, which of the employers was “more” responsible for the officer’s PTSD.  But, the current employer also pointed out that the officer opted for a cash waiver benefit and waived health insurance coverage, and that therefore, they were not required to continue offering insurance. The current employer moved for summary judgment on this issue. After a summary judgment hearing, the administrative law judge held that the employee electing a cash waiver plan rather than health insurance coverage did not waive eligibility for insurance, and that the employer was required to continue to offer the opportunity to enroll in their group health plan. The parties, including both of the officer’s employers, subsequently reached a settlement on a cash basis.
• District court decision – An officer with PTSD had been deemed to be eligible for Duty Disability benefits by PERA. The employer enrolled the officer in single coverage and had continued said coverage for a number of years. Prior to termination from employment, the officer had elected to waive eligibility for family coverage in exchange for an annual cash incentive. The employer argued the officer was not entitled to either the cash payment on an ongoing basis, or the family coverage. The District Court held that the City was not required to pay the cash payment, as Minn. Stat. § 299A.465 did not specifically describe cash payments as “insurance;” however, the Court did hold that the City was required to offer the officer the opportunity to elect family coverage, rather than just single coverage.
• Consolidated district court cases – three cases involving police officers and firefighters from the same employer were consolidated for the district court to address the cash waiver issue. In all three of the cases, the officer or firefighter had enrolled in a cash waiver plan prior to their disabling injuries, meaning they received a monthly cash payment from the employer rather than health insurance coverage through the City. There was no dispute that all three were disabled as the result of injuries in-the-line-of-duty. The City argued that by having waived coverage in exchange for the cash incentive, each of the employees had given up their right to claim continuation of health insurance benefits in accordance with Minn. Stat. § 299A.465. In this heavily contested case, both parties moved for summary judgment. The district court found in favor of the disabled officers and firefighter. The judge found that the disabled officers and firefighters had not waived their rights to benefits in accordance with Minn. Stat. § 299A.465 but left it up to the employer as to whether to pay the cash incentive or to offer the officers and firefighters the opportunity to enroll in coverage.

If you are a Minnesota police officer or firefighter who has experienced a significant work-related injury, contact Meuser Law Office, P.A. for a free, no-obligation case evaluation and consultation. The knowledgeable attorneys at Meuser Law Office, P.A. take the time with each client to help determine which benefits under the Minnesota Workers’ Compensation Act you are entitled as well as discuss PERA Duty Disability benefits and Healthcare Continuation Benefits under Minnesota Statute § 299A.465 and help guide you through the complex process to ensure your rights are protected. Call us today at 1-877-746-5680.

by Jen Yackley
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Continuation of Health Insurance Benefits for Disabled Minnesota Firefighters and Police Officers

In addition to workers’ compensation and PERA disability benefits, Minnesota’s police officers and firefighters who suffer disabling injuries while performing inherently dangerous duties are also eligible for continued health insurance coverage.

Minnesota statute § 299A.465 requires that an employer of a police officer or firefighter who has been awarded PERA Duty Disability benefits continue to pay their share of the police officer or firefighter’s health insurance premiums until the officer or firefighter reaches age 65. If the officer or firefighter’s dependents had coverage through the employer at the time of the officer or fighter’s injury, the employer must also continue to pay its share of the insurance premiums for those dependents.

In plain English, that means that if you are a Minnesota police officer or firefighter, and you suffer a career-ending injury that was incurred while you were performing inherently dangerous duties, your employer has to continue to offer you the same health insurance and continue to pay their share of the premium, as though you remained on the payroll through age 65.

Although this statute seems pretty straight-forward, Meuser Law Office, P.A. has seen a huge increase in the frequency of litigation on these claims. Given the rising costs of health insurance, more and more employers are trying to deny these types of claims, and we are seeing more and more situations where it isn’t 100% clear how this statute should apply.

Here are a few of the situations the attorneys at Meuser Law Office, P.A. have seen recently and how the courts have been deciding these issues. Notably, we are seeing different courts arrive at different conclusions.

Employer Contested Case Hearings

After an officer or firefighter is awarded PERA Duty Disability benefits, an employer has the right to “appeal” that determination by requesting a Contested Case Hearing at the Office of Administrative Hearings in front of a neutral Administrative Law Judge within 60 days of notice of PERA’s Duty Disability approval. Usually “appeals” in this context are based on an employer’s argument that the police officer or firefighter doesn’t meet the Duty Disability criteria for one reason or another. We have litigated several of these cases to a favorable conclusion in front of an Administrative Law Judge, and we have settled several other contested cases for a lump sum cash settlement. A Contested Case Hearing is like an informal trial, at which evidence and testimony will be submitted, and the Administrative Law Judge makes a decision as to whether the officer or firefighter is eligible for benefits. This is considered a final determination, and either side can appeal to the Minnesota Court of Appeals.

Our office recently had an interesting case involving two employers. Arguably, the officer’s post-traumatic stress disorder was caused by his traumatic exposures at two different law enforcement agencies, and arguably, both are partially responsible for his health insurance coverage. One employer requested a Contested Case Hearing, and the other did not. The employer who did not request a Contested Case Hearing filed a Motion for Summary Judgment, arguing that he had waived his right to future health insurance coverage via Minn. Stat. § 299A.465 because he had signed an employment law release in exchange for a severance when he left that department. The Court disagreed. In fact, the Court held that employer had no right to even contest this officer’s eligibility health insurance coverage since it failed to request a Contested Case Hearing within the statutory time frame.

Suing an Employer in District Court

Even though Minn. Stat. § 299A.465 says that an employer has to request a Contested Case Hearing within 60 days of PERA’s notice of approval for Duty Disability benefits, often employers don’t do that. Instead, they admit that the disabled officer or firefighter meets the eligibility requirements for Duty Disability, but they argue that the disabled officer or firefighter is ineligible for Continued Health Insurance benefits for other reasons. Usually, these cases must then be sued out in district court. We have a couple cases currently pending in district court involving these issues, and we’ve been able to settle a few cases as well. Usually, the issues involved in cases in district court revolve around whether the disabled officer or firefighter is barred from health insurance because of a gap in coverage, because they were covered as a dependent on a spouse’s policy, or because they waived coverage in exchange for a cash benefit.

Cases Involving More Than One Employer

As mentioned, we now have a handful of cases involving multiple employers. Two cases involved post-traumatic stress disorder that was caused by an officer’s exposure to traumatic events at two different agencies, and a third case involved an officer who suffered a back injury that was re-injured with a different agency. In one of the post-traumatic stress disorder cases, notwithstanding both employers’ arguments to the contrary, the Administrative Law Judge held that even though Minn. Stat. § 299A.465 doesn’t explicitly address that situation, that a court may equitably apportion responsibility for continued health insurance coverage to two or more employers who may both be responsible for the officer’s underlying disabling condition. The second post-traumatic stress disorder case is still in litigation. On the case involving the back injury, even though two employers were both arguably responsible for the officer’s back injury, his most recent employer voluntarily agreed to pay his ongoing health insurance coverage.

Cash Incentive Insurance Waivers

With ever-rising health insurance costs, we are seeing litigation involving cash incentive waiver plans much more frequently because we are seeing more and more public employers offering such plans. Employers can offer a variety of different types of cash waiver plans, but the concept is that an officer or firefighter waives health insurance coverage through their public employer in exchange for a monthly, quarterly, or annual cash benefit. For example, an officer may have the option of waiving health insurance coverage through his employer, go on his spouse’s family plan as a dependent, and receive $250 per month from his employer as an incentive for waiving coverage. Sounds like a pretty good deal, right? Well, not necessarily. In almost every case we have seen with a cash waiver plan, the employer has argued that the officer or firefighter is ineligible for health insurance benefits. What if that officer or firefighter’s spouse loses his or her job and insurance? What if the officer or firefighter goes through a divorce or their spouse dies? What if the officer or firefighter’s spouse retires? Who pays for that officer or firefighter’s insurance?

At this point, it is unclear. We have had different results in different courts on this issue. There is a Court of Appeals case our office handled a few years ago which found that a disabled firefighter who was a dependent on his spouse’s insurance policy was eligible for Continued Health Insurance Benefits in accordance with Minn. Stat. § 299A.465, even though he was not individually covered on the city’s health insurance plan.

We also recently had an Administrative Law case where the officer had elected to waive his coverage in exchange for cash benefit, and he was a dependent on his wife’s family policy. The employer argued that he gave up his right to benefits under Minn. Stat. § 299A.465 because he accepted the cash benefit and waived coverage. The court disagreed, holding that the employer was required to continue to offer him coverage.

We currently have a case in District Court involving three officers/firefighters from the same employer that all elected the cash waiver plan offered by their employer. We expect that this case will go to the Minnesota Court of Appeals to hopefully definitively answer whether an employer is required to “continue” health insurance for a disabled officer or firefighter who waived coverage.

Occasionally run into other types of cases involving disputes over exactly what benefits are provided by Minn. Stat. § 299A.465, including a case involving a cash incentive for waiver of family coverage, cases involving HSA contributions, and cases involving reimbursement for COBRA coverage.

This is a very complex and evolving area of law. If you are a Minnesota police officer or firefighter with questions about your rights under Minn. Stat. § 299A.465, we are happy to help.

There are a variety of benefits available for Minnesota’s disabled police officers and firefighters, including, but not limited to, workers’ compensation benefits, PERA disability benefits, Continuation of Health Insurance benefits, and third-party liability claims. Contact the knowledgeable attorneys at Meuser Law Office, P.A. to learn more about your rights. Call us today at 1-877-746-5680.

by Jen Yackley
More posts by Jen