The state’s highest court ruled in favor of the Alabama Education Association (AEA) on Friday in a lawsuit that challenged the legitimacy of an insurance premium increase approved by the board of the Public Education Employees’ Health Insurance Plan (PEEHIP) in 2016.
As Lagniappe has previously reported, a Montgomery County Circuit Court has previously held that the PEEHIP board violated the Alabama Open Meetings Act when it deliberated a proposed premium increase to its individual and family plans on April 27, 2016.
While the increase was approved during a regular advertised meeting, the board discussed — and according to the court, deliberated — the issue during an “educational” meeting held earlier that same day. That first meeting was not advertised and wasn’t open to the public.
On Friday, the Alabama Supreme Court confirmed the lower court’s ruling, finding that the board had violated the Open Meetings Act by conducting the morning session in private. The decision has effectively invalidated the 2016 increases for individual and family PEEHIP plans.
In the ruling, the court said it didn’t agree with PEEHIP’s argument that the private meeting was merely a “training session,” which would exempt it from provisions of the open meetings act that require public entities to publish a prior notice of their meetings and conduct them publicly.
The board has maintained the private meeting held on April 27, 2016, only consisted of informational presentations from its staff to inform the board about matters it would be voting on during the public meeting including premium increases for certain PEEHIP plans.
The court said the record proves otherwise.
“It is clear that the staff presentation regarding the same matters that would be considered for a vote later in the day and that included proposals to increase insurance premiums does not fall within the ‘training-program’ exception,” the court’s 7-0 ruling concluded. “Under the circumstances of this case, it is clear that there was only one ‘meeting,’ which began during a closed morning session and continued during the open afternoon session.”
Felicia Mason, executive director of the Alabama Press Association, told Lagniappe the ruling could help strengthen the Open Meetings Act going forward because it firmly identifies what constitutes a “training Meeting” for the first time since the law passed in 2005.
“Any time you have a comprehensive piece of legislation like the Open Meetings Act, it’s impossible to define everything when it’s written. Definitions come along over time when issues are litigated,” Mason said. “This is a case that, in our opinion, has actually helped put more teeth in the law because it defines something that had not been fully interpreted until this point.”
As for teachers in Alabama’s public schools, the ruling means they’ll actually be receiving refunds for the higher premiums they paid between 2016 and 2018. Since the lawsuit was filed, the PEEHIP board has approved a new insurance premium structure that took effect last May.
That funds will be coming from an account set up to hold money generated by the 2016 premium increase while the matter was litigated. After a year in circuit court and nearly two waiting on the supreme court, it’s estimated more than $130 million is currently held in escrow.
“Tens of thousands of Alabama’s educators will finally see some of the long overdue 2016 pay raise, plus a refund of illegal health insurance premiums!,” the AEA wrote in a post following the court decision on Friday “At this time, we do not have any information about how or when refunds will be issued. Over the coming weeks, we will offer our assistance to determine the most efficient and effective means of refund distribution for members.”
So far the PEEHIP board’s only public response has been to say that it’s still reviewing the supreme court’s decision. It’s unclear how the redistribution of the revenues from those 2016 premium increases might affect the program’s overall finances.
The increases were originally pitched as a way to avoid expected shortfalls in 2017 and 2018.
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