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AlaskaCare Retiree Health Plan | Legal Update

Posted February 3, 2022

You may have heard about two lawsuits related to the AlaskaCare Retiree Health plans. In 2014, after a competitive procurement process, the AlaskaCare medical third-party administrator transitioned from HealthSmart to Aetna, and the dental third-party administrator transitioned from HealthSmart to Delta Dental of Alaska (Moda). Also in 2014, the Plan Administrator adopted a plan amendment intended to eliminate areas of ambiguity in the plan, provide clarity to members, confirm prior practices and to align with best industry practices while maintaining affordable, valuable, and sustainable benefits for retirees. The 2014 plan amendment and changes impacted both the AlaskaCare Retiree Health Plan and the AlaskaCare Retiree Dental-Vision-Audio (DVA) Plan.

AlaskaCare Retiree DVA Plan Suit
In 2016, a lawsuit was filed against the Division of Retirement and Benefits (Division) alleging the optional retiree DVA plan was diminished through changes made to the plan in 2014. A trial was held in 2018 and the Alaska Superior Court ruled in favor of the plaintiff. The Division appealed the decision to the Alaska Supreme Court. In January 2022, the Supreme Court ruled that the option to buy dental insurance is an accrued, protected benefit, for retiree members. However, the Supreme Court found that the trial court erred by refusing to consider the reduction in premiums paid by retirees. Therefore, the Supreme Court vacated the judgement and sent the case back to the superior court for a new diminishment analysis using the correct legal standard.

AlaskaCare Retiree Medical Plan Suit
In 2018, a second lawsuit was filed against the Division alleging the AlaskaCare retiree defined benefit medical plan was diminished as a result of a 2014 plan amendment. Trial was scheduled for the end of January 2022; however, both parties agreed to attempt to resolve the case through mediation.

The parties agreed to attempt to resolve the DVA lawsuit through the same mediation process as the medical diminishment lawsuit. Mediation of both cases is scheduled for February 11, 2022. Additional information will be provided following the outcome of that mediation as available.

Will my DVA coverage change as a result of the Supreme Court decision or the mediation?
There will be no immediate changes to the AlaskaCare Retiree DVA benefits. The Division will provide any updates to retirees as they become available.

Page Last Modified: 05/12/22 18:53:48

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