Retired employees sue South Lake Tahoe over health benefits |

Retired employees sue South Lake Tahoe over health benefits

Jack Barnwell
Tahoe Daily Tribune

SOUTH LAKE TAHOE — A group of retired city employees is suing South Lake Tahoe over what it claims is a violation of health benefits.

According to Joe Rose, whose firm is representing the South Lake Tahoe Retirees Association made up of 160 members, the city drastically reduced health benefits for them as part of cost-cutting measures that took effect Jan. 1, 2015.

"A lot of these folks' incomes are very finite, with limited cost-of-living adjustments," Rose said. "These are folks who worked for decades on reliance of this promise of certain benefits once they retire."

Rose and his firm filed the lawsuit in U.S. federal court in Sacramento on Dec. 1.

The city's new policy, which the council approved in 2014, overhauled the health care policy for both current and retired employees. It also modified the coverage available for current employees and eliminated retiree health benefits for those not yet retired. The goal would save the city $1.5 million per year for three years. Under the new plan, employees receive coverage with a $5,500 deductible. The city also eliminated vision and dental from its coverage plan.

City Manager Nancy Kerry said she stood by the decision to save taxpayers' money in relation to the policy. She also said she expects the suit to take several years to resolve.

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Among the goals Rose's firm hopes to accomplish are reinstating the previous level of health benefits, and to recoup funds associated with the increased medical costs.

Rose called the city's initial decision "very sad and illegal," noting that the city has an obligation to abide by the original promise to its retired employees.

He said that the city will need to respond, followed by a lengthy court process.

"There's always opportunities for alternatives to court action," Rose said. "Hopefully now they will be inclined to talk."

For more information on the lawsuit and documents, visit

Adam Jensen contributed to this report.