More than 13 years have passed since a group of prominent state retirees filed a lawsuit challenging what was then a new state law that required them to start paying for health care benefits they had received free of charge for years as part of their benefits package.
Now, attorneys for the state agencies that oversee the state health plan are asking the state Supreme Court to weigh in on the case one more time before trial — a move that the retirees’ attorneys contend is yet another of many delay tactics.
“While the defendants have delayed this trial interminably through their procedural antics, the members of the retiree class are dying at an ever-increasing rate,” Michael Carpenter, a Gastonia attorney, and Sam McGee, a Charlotte attorney argued in their motion to dismiss the state agency requests. “Many members of the class will never see the benefit of their bargain as promised by the state.”
The latest court battle in the lawsuit comes as many state workers and others across North Carolina are wrestling with uncertainty over health care.
Current North Carolina state employees will be paying more for their health care premiums in 2026 as part of an effort by State Treasurer Brad Briner to chip away at a growing deficit he inherited when he came into office in 2025.
And the U.S. Congress let enhanced subsidies for the Affordable Care Act expire in 2025, leading to premium hikes for many other North Carolinians.
The crux of the lawsuit filed in 2012 by the retirees does not touch on those issues, but they all hinge upon the same thing: rising cost of health care in this country.
Long, winding road to justice
In 2011, the Republican-led General Assembly adopted changes that transferred the State Health Plan for Teachers and State Employees to the state treasurer's portfolio. The new statute also required retirees and some active members of the plan to start paying premiums for their health care, a shift from previous practice where coverage had been offered premium-free for life once they retired.
Part of the implicit bargain generations of state employees entered into as they took state jobs had been the tradeoff of lesser salaries for richer fringe benefits.
Twenty-seven employees, including the late I. Beverly Lake Jr., a former chief justice of the state Supreme Court who died in 2019, said the state had broken a contract with the retirees and sought class-action status.
The case wended its way through many levels of state court. In 2016, Judge Edwin Wilson certified a group of some 220,000 people as having similar enough complaints against the State Health Plan that they could move forward as a group.
In 2022, the state Supreme Court ruled that employees in that group had a vested contractual right to a plan equivalent to what they had when they were vested — meaning some of the employees should not have to contribute more for their premiums as the 2011 law stated.
The state sought to appeal that decision to the U.S. Supreme Court, but those justices declined to hear the case in October 2022, setting the stage for more hearings at the North Carolina trial court level to determine damages and further proceedings.
Expert reports were shared. Depositions and sworn statements were gathered by attorneys in the case.
Representatives for the State Health Plan and agencies overseeing it sought to block the previous state Supreme Court ruling. Even after the state Supreme Court switched from a Democratic majority in 2022 to a 5-2 Republican majority in 2023, the answer was no.
On the eve of trial
The case had been set to go to trial last year, but after several more attempts by the state agencies to change the course of the lawsuit, the judge canceled the trial, pending appellate review.
Now, the state Supreme Court could take up the case again, making it the third appeal to that court.
Attorneys for the retirees filed a motion on Dec. 23 to dismiss the most recent appeal. Attorneys Carpenter and McGee described that request challenging the outcome of the previous class-action ruling “on the eve of trial” as “unfortunately the most recent in a long line of maneuvers to avoid the state’s contractual obligations” to the retirees who sued.
In a March 11 ruling written by Justice Anita Earls in 2022, the state Supreme Court held “that the Retirees who satisfied the eligibility requirements existing at the time they were hired obtained a vested right in remaining eligible to enroll in a noncontributory health insurance plan for life.”
The retirees, Earls continued, “relied on the promise of this benefit in choosing to accept employment with the State. They are entitled to the benefit of their bargain, which includes eligibility to enroll in a premium-free plan offering the same or greater coverage value as the one available to them when their rights vested.”
Earls’ opinion further states that in sending the case back to the trial court for further deliberation on what damages would be appropriate, it was its intent to narrow the issues and “move the parties closer to a just resolution.” Justice Paul Newby did not participate in consideration of the case, according to Earls’ order. Justices Tamara Barringer and Phil Berger concurred in part and dissented in part with the majority opinion.
It’s not clear how quickly the state Supreme Court will weigh in on the latest requests, or whether it will even consider the third appeal before further action in the trial court.
This article first appeared on North Carolina Health News and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
North Carolina Health News is an independent, non-partisan, not-for-profit, statewide news organization dedicated to covering all things health care in North Carolina. Visit NCHN at northcarolinahealthnews.org.
