Galenski v. Town of Erving , 471 Mass. 305 ( 2015 )


Menu:
  • NOTICE: All slip opinions and orders are subject to formal
    revision and are superseded by the advance sheets and bound
    volumes of the Official Reports. If you find a typographical
    error or other formal error, please notify the Reporter of
    Decisions, Supreme Judicial Court, John Adams Courthouse, 1
    Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-
    1030; SJCReporter@sjc.state.ma.us
    SJC-11772
    CHARLENE GALENSKI   vs.   TOWN OF ERVING & others.1
    Franklin.     January 6, 2015. - April 17, 2015.
    Present:   Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk,
    Hines, JJ.
    Public Employment, Retirement benefits. School and School
    Committee, Retirement benefits, Group insurance. Municipal
    Corporations, Group insurance, Allocation of insurance
    premiums. Insurance, Group, Premiums. Retirement.
    Civil action commenced in the Superior Court Department on
    November 21, 2012.
    The case was heard by John A. Agostini, J., on motions for
    summary judgment.
    The Supreme Judicial Court on its own initiative
    transferred the case from the Appeals Court.
    Patricia M. Rapinchuk for the defendants.
    Eric Lucentini (Sandra Lucentini with him) for the
    plaintiff.
    DUFFLY, J.    Charlene Galenski retired in 2012 after six
    years of service as a school principal in the town of Erving
    1
    Board of selectmen of Erving and treasurer of Erving.
    2
    (town); she previously had been a long-time public school
    teacher in other municipalities in the Commonwealth.   Galenski
    then sought continued health insurance coverage and contribution
    by the town to the cost of her group health insurance premiums.
    In 2001, the town had voted to adopt G. L. c. 32B, § 9E, which
    required it to contribute over fifty per cent of the health
    insurance premiums of all of its retirees.   Before employing
    Galenski, however, the town had enacted a policy stating that it
    would contribute only to the group health insurance premiums of
    retired employees who had retired after a minimum of ten years
    of employment with the town.   Although Galenski was permitted to
    remain a member of the town's group health insurance plan after
    she retired, the town determined she was not eligible for any
    contribution by the town to her health insurance premiums.
    Galenski filed a complaint in the Superior Court contending
    that the town had violated her right to payment by the town of a
    portion of her group medical insurance premiums, as required
    under G. L. c. 32B, § 9E; she sought declaratory and injunctive
    relief, and also raised a claim of estoppel based on detrimental
    reliance.   A judge of the Superior Court allowed Galenski's
    motion for summary judgment on the first two claims, denied the
    town's cross motion for summary judgment, and issued a permanent
    3
    injunction prohibiting the town from enforcing its policy.2     The
    town appealed, and we transferred the case to this court on our
    own motion.   We conclude that, because the town had voted to
    accept G. L. c. 32B, a local option statute that governs group
    health insurance for municipal employees, the terms of the
    statute govern whether and in what amounts the town must
    contribute to the cost of a retiree's health insurance premiums.
    Accordingly, the town's retirement policy imposing a minimum
    term of service as a prerequisite to premium contributions from
    the town is invalid.
    1.   Factual background.   We recite the facts as set forth
    in the judge's decision, supplemented by undisputed facts in the
    record.   In 1956, the town voted to accept G. L. c. 32B; by
    accepting certain local option provisions of that statute, the
    town was required to make group health insurance coverage
    available to retired employees.   In 2001, the town's voters
    chose to accept G. L. c. 32B, § 9E.3   General Laws c. 32B, § 9E,
    2
    Final judgment was entered only as to the first two
    claims; the claim for detrimental reliance is not before us.
    3
    The town of Erving (town) accepted G. L. c. 32B, § 9E, by
    a majority vote on the following ballot question, the language
    of which is prescribed by the statute:
    "Shall the town, in addition to the payment of fifty
    percent of a premium for contributory group life, hospital,
    surgical, medical, dental, and other health insurance for
    employees retired from the service of the town . . . pay a
    subsidiary or additional rate?"
    4
    requires municipalities to contribute to the group health
    insurance premiums of retired employees at a rate determined by
    the municipality, but that rate must exceed fifty per cent of
    the cost of the insurance premiums.4
    In February, 2006, the town enacted a retirement policy
    restricting participation in its group health insurance plan to
    those employees who retired from the town "after a minimum of
    ten (10) years of employment by the [t]own."    The policy further
    provided that "[a]n eligible retiree with less than ten (10)
    years of employment with the [town] may choose to continue
    health insurance coverage through the [t]own's carrier at [one
    hundred per cent] of the retiree's cost."
    Galenski began employment as the principal of Erving
    Elementary School on July 1, 2006.5    At that time, she was a
    long-time educator with over thirty years of creditable service6
    as a public school teacher in the Commonwealth.7    As an active
    4
    During the time frame at issue here, the town's rate of
    contribution under G. L. c. 32B, § 9E, was seventy-nine per cent
    of the cost of a retiree's health insurance premiums.
    5
    Charlene Galenski was informed of the town's retirement
    policy before she commenced employment.
    6
    An employee must have a minimum of ten years of creditable
    service to qualify for superannuation retirement. See G. L.
    c. 32, § 5 (1) (m).
    7
    Galenski spent the first thirty years of her public school
    teaching career in other municipalities, at least some of which
    had accepted G. L. c. 32B, § 9A or 9E.
    5
    employee, Galenski was enrolled in the town's health insurance
    plan, and the town contributed to the cost of her health
    insurance premiums.     Galenski retired in good standing in
    October, 2012, after six years of service to the town.
    At a meeting on October 1, 2012, the town's board of
    selectmen determined that Galenski, although eligible to
    continue to participate in the town's group health insurance
    plan, would be responsible for one hundred per cent of her
    insurance premiums.     After her retirement, Galenski continued to
    participate in the town's group health insurance plan, paying
    the entire amount of the monthly premiums.8
    2.   Discussion.    a.   Standard of review.   We review a grant
    of summary judgment de novo to determine whether, viewing the
    evidence in the light most favorable to the nonmoving party, all
    material facts have been established and the moving party is
    entitled to judgment as a matter of law.      DeWolfe v. Hingham
    Ctr., Ltd., 
    464 Mass. 795
    , 799 (2013).     See Mass. R. Civ.
    P. 56 (c), as amended, 
    436 Mass. 1404
    (2002).
    b.   Statutory framework.    General Laws c. 32B is a local-
    option statute governing various insurance benefits for
    employees of municipalities and other State political
    8
    The judge's order on the town's cross motion for summary
    judgment noted that Galenski was at that time still paying one
    hundred per cent of the then approximately $1,200 monthly
    premium.
    6
    subdivisions.   Cioch v. Treasurer of Ludlow, 
    449 Mass. 690
    , 690
    n.2 (2007).   The purpose of G. L. c. 32B "is to provide a plan
    of group life insurance, group accidental death and
    dismemberment insurance and group general or blanket hospital,
    surgical, medical, dental and other health insurance for certain
    persons in the service of counties . . . , cities, towns and
    districts and their dependents."   G. L. c. 32B, § 1.
    As a local-option statute, G. L. c. 32B "does not take
    effect until a governmental unit accepts it."   Connors v.
    Boston, 
    430 Mass. 31
    , 37 (1999).   "Once accepted, however, it
    provides the exclusive mechanisms by which and to whom the
    [municipality] may provide group health insurance."     
    Id. See Yeretsky
    v. Attleboro, 
    424 Mass. 315
    , 316-317 (1997).    Where a
    municipality has exercised its local option to provide group
    health insurance for its employees through acceptance of G. L.
    c. 32B, "employees are automatically covered by group insurance
    unless the employee 'give[s] written notice . . . indicating
    that he is not to be insured for such coverages.'"    McDonald v.
    Town Manager of Southbridge, 
    39 Mass. App. Ct. 479
    , 480 (1995),
    S.C., 
    423 Mass. 1018
    (1996), quoting G. L. c. 32B, § 4.
    Under the "default" provision of G. L. c. 32B, § 9, if
    group health insurance is offered to a municipality's active
    employees, such insurance coverage "shall be continued [for
    retired employees] and the retired employee shall pay the full
    7
    premium cost, subject to the provisions of [G. L. c. 32B, § 9A
    or 9E,] whichever may be applicable."   See Yeretsky v.
    Attleboro, supra at 317.   In lieu of the default provision under
    G. L. c. 32B, § 9, a municipality adopting G. L. c. 32B may opt
    to accept one of these two local options, which require
    contributions by the municipality to a retiree's group insurance
    premiums.   By adopting G. L. c. 32B, § 9A, a municipality
    chooses to pay fifty per cent of a retiree's insurance premiums;
    if a municipality adopts G. L. c. 32B, § 9E, the municipality
    then "may elect to pay 'a subsidiary or additional rate' greater
    than fifty per cent of a retiree's health insurance premium."
    Somerville v. Commonwealth Employment Relations Bd., 
    470 Mass. 563
    , 565 (2015).   In addition, G. L. c. 32B, § 9E, mandates that
    "[n]o governmental unit . . . shall provide different subsidiary
    or additional rates to any group or class within that unit."
    c.   Validity of the town's term of service requirement.
    The town contends that its term of service policy, restricting
    the town's obligation to contribute to retirees' health
    insurance premiums to those retirees who were employed by the
    town for a minimum of ten years, is consistent with the language
    and purpose of G. L. c. 32B, § 9E.   The town relies on Cioch v.
    Treasurer of 
    Ludlow, 449 Mass. at 696-697
    , for the proposition
    that a town policy or regulation permissibly may limit a
    retiree's eligibility for insurance coverage under G. L. c. 32B,
    8
    § 9E.    The town construes the prohibition in G. L. c. 32B, § 9E,
    against affording different premium contribution rates to "any
    group or class" as meaning only that groups such as teachers,
    fire fighters, and police officers cannot, through collective
    bargaining, negotiate different rates of contribution for their
    members.    The town argues that such collective bargaining by
    separate groups could expose a municipality to expensive
    administrative costs, thereby defeating what it views to be the
    Legislature's purpose of cost containment.
    "[A] statute must be interpreted according to the intent of
    the Legislature ascertained from all its words construed by the
    ordinary and approved usage of the language, considered in
    connection with the cause of its enactment, the mischief or
    imperfection to be remedied and the main object to be
    accomplished, to the end that the purpose of its framers may be
    effectuated."   Worcester v. College Hill Props., LLC, 
    465 Mass. 134
    , 139 (2013), quoting Harvard Crimson, Inc. v. President &
    Fellows of Harvard College, 
    445 Mass. 745
    , 749 (2006).     In
    interpreting a statute, we look first to its plain language.
    Worcester v. College Hill Props., LLC, supra at 138.
    Municipalities accepting G. L. c. 32B, § 9E, "shall . . .
    in addition to the payment of fifty per cent of a premium for
    contributory group life, hospital, surgical, medical, dental and
    other health insurance for employees retired from the service of
    9
    the town, and their dependents, pay a subsidiary or additional
    rate" that is determined by vote of the municipality.    "The word
    'shall' is ordinarily interpreted as having a mandatory or
    imperative obligation."    Hashimi v. Kalil, 
    388 Mass. 607
    , 609
    (1983).   The statute, by its terms, is mandatory, and "once
    accepted the municipality must comply with the statute's
    unambiguous mandates," notwithstanding that the statute was
    adopted voluntarily.     Adams v. Boston, 
    461 Mass. 602
    , 609
    (2012).   Because the town chose to adopt G. L. c. 32B, § 9E, the
    plain language of that section mandates that the town contribute
    more than fifty per cent of the premiums of "employees retired
    from the service of the town."
    As stated, an "employee" within the meaning of G. L.
    c. 32B, is defined as "any person in the service of a
    governmental unit . . . who receives compensation for any such
    service, whether such person is employed, appointed or elected
    by popular vote, . . .    provided, however, that the duties of
    such person require not less than [twenty] hours, regularly, in
    the service of the governmental unit during the regular work
    week of permanent or temporary employment."    G. L. c. 32B, § 2.
    As a public school principal, Galenski held a position that
    falls within this definition.    As an employee with more than
    thirty years of creditable service, Galenski was eligible to
    receive retirement benefits.    See G. L. c. 32, § 5 (1) (m); note
    10
    
    6, supra
    .   Because she was a member of the town's group health
    insurance plan while employed as the principal of Erving
    Elementary School, Galenski was statutorily entitled to
    continued group health insurance as a retiree.   See G. L.
    c. 32B, § 9.   Cf.   Lexington Educ. Ass'n v. Lexington, 15 Mass.
    App. Ct. 749, 752 (1983) (rejecting town's "self-imposed and
    super-statutory" minimum hours requirement for eligibility for
    health insurance benefits as inconsistent with statutory
    definition of "employee").
    In describing contributions by a municipality to its
    retirees' insurance premiums, G. L. c. 32B, § 9E, further
    mandates that "[n]o governmental unit . . . shall provide
    different subsidiary or additional rates to any group or class
    within that unit."   Identical language appears in G. L. c. 32B,
    § 7A, which governs contributions to insurance premiums of
    active employees.
    On the date of Galenski's retirement, the town's retirement
    policy provided, in pertinent part:
    "For a retiree . . . to qualify for participation in
    the [t]own's group insurance . . . [t]he employee must
    qualify for county or teacher's retirement and must retire
    from the [town] after a minimum of ten (10) years of
    employment by the [t]own . . . , having been eligible for
    health insurance for all of the ten (10) years . . . .
    ". . .
    "An eligible retiree with less than ten (10) years of
    employment with the [town] may choose to continue health
    11
    insurance through the [t]own's carrier at [one hundred per
    cent] of the retiree's cost."
    The requirement that a retiree "must retire from the [town]
    after a minimum of ten (10) years of employment by the [t]own"
    in order to receive contribution towards insurance premiums is
    not consistent with G. L. c. 32B, § 9E.    The town's requirement
    of a minimum term of service places retirees like Galenski into
    a subclass of retirees who are not entitled to contribution to
    their health insurance premiums, despite otherwise qualifying
    for superannuation retirement benefits.
    "[A] municipality may not enact a bylaw, policy, or
    regulation that is inconsistent with State law."    Cioch v.
    Treasurer of 
    Ludlow, 449 Mass. at 699
    .    The town's retirement
    policy is inconsistent with G. L. c. 32B in two significant
    respects and, accordingly, is invalid.    First, the retirement
    policy establishes different insurance premium contribution
    rates for different groups of employees, despite the "literal
    mandate of equal treatment for all groups of employees with
    respect to employer contributions toward insurance costs."     See
    Swampscott Educ. Ass'n v. Swampscott, 
    391 Mass. 864
    , 867 (1984)
    (interpreting identical language in G. L. c. 32B, § 7A [d],
    which governs insurance premium contribution for active
    employees, where "town has undertaken voluntarily to pay more
    than [fifty per cent] of one group of employees' insurance
    12
    costs").   Second, the retirement policy seeks to exempt the town
    from contributing to any portion of the insurance premiums for
    one group of employees, notwithstanding that the town has
    adopted G. L. c. 32B, § 9E, which by its plain language
    obligates the town to contribute more than fifty per cent of the
    costs of that group's insurance premiums.
    Our interpretation of the clear statutory language is
    consistent with the Legislature's manifest purpose in enacting
    G. L. c. 32B, which is to provide group health insurance for
    municipal employees.   See G. L. c. 32B, § 1.   The statute
    provides local governments "with a volume of purchasing power
    sufficient to assure that their employees will receive the
    highest possible level of benefits at the lowest possible cost."
    Connors v. 
    Boston, 430 Mass. at 39
    , quoting 1967 Senate Doc.
    No. 1174, at 4.   The town argues that its retirement policy
    simply furthers the cost containment goals of G. L. c. 32B.
    This argument is unavailing.   The purpose of the statute is to
    create "a 'comprehensive scheme of coverage' for governmental
    employees" by "gather[ing] them in large groups so as to effect
    economies of scale" (citation omitted).     McDonald v. Town
    Manager of 
    Southbridge, 39 Mass. App. Ct. at 480
    .    The goal of
    cost containment does not, however, permit the town to seek
    further reduction of its costs through a policy that eliminates
    its obligation to contribute to the insurance premiums of a
    13
    certain subset of retirees.
    Invalidation of a town regulation is appropriate where "the
    purpose of the statute cannot be achieved in the face of the
    local by-law" (citation omitted).   Connors v. Boston, supra at
    35.   The town's term of service policy is inconsistent with the
    "comprehensive scheme of coverage" established by G. L. c. 32B,
    because it treats retired employees differently based on their
    years of service to the town, and precludes them from receiving
    benefits to which they are statutorily entitled.   See McDonald
    v. Town Manager of Southbridge, supra at 481.
    The town's reliance on Cioch v. Treasurer of 
    Ludlow, 449 Mass. at 696-697
    , is misplaced.   In that case, we addressed the
    validity of a municipality's policy requiring a retiree to have
    been enrolled in a group health insurance plan while an active
    employee in order to continue that coverage during retirement.
    
    Id. at 696.
      The plaintiff was a retiree who had been enrolled
    in her husband's health insurance plan while she was an active
    employee of a municipality.   Three years after her retirement,
    when her husband retired, she sought to enroll in one of the
    municipality's health insurance plans.   
    Id. at 692-693.
      We
    noted that the statute "accords municipalities substantial
    latitude in the adoption of 'such rules and regulations, not
    inconsistent with [G. L. c. 32B], as may be necessary for [its]
    administration.'"   
    Id. at 697-698,
    quoting G. L. c. 32B, § 14.
    14
    We upheld the municipality's policy because "[n]othing in the
    plain language of G. L. c. 32B, §[] 9 or 16, requires a
    municipality to permit a retiree who has not enrolled in a
    municipal health insurance plan while employed, to enroll in a
    municipal health insurance plan after she has retired, or
    precludes it from doing so."    Cioch v. Treasurer of Ludlow,
    supra at 698.   We concluded that, while a municipality
    permissibly could limit enrollment to active employees, it
    remained obligated by the statute to "provide[] for continued
    coverage of those employees during their retirement."     
    Id. at 699.
    Finally, we reject the town's assertion that its "policy is
    not unlike pension benefits that are calculated based on years
    of service," and its suggestion that its policy furthers
    reasonable cost containment efforts because it should not be
    held "responsible for paying a significant portion of [an]
    employee's health insurance premium in retirement [who had
    worked for other municipalities]."9   To the contrary, the
    9
    The town also claims that its policy is a valid exercise
    of its power under the Home Rule Amendment, which provides that
    a town may "exercise any power or function which the general
    court has power to confer upon it, which is not inconsistent
    with the constitution or laws enacted by the general court."
    Art. 89, § 6, of the Amendments to the Massachusetts
    Constitution. Because Massachusetts has "the strongest type of
    home rule," municipal action is presumed to be valid unless
    preempted by State law. Connors v. Boston, 
    430 Mass. 31
    , 35
    (1999). The town argues that its policy is not inconsistent
    15
    Legislature was cognizant of the potential consequences to a
    town which, because it has chosen to accept G. L. c. 32B, § 9E,
    must, as the last employer in a retiree's long-term public
    service career, contribute to the premiums of such retirees.
    The Legislature enacted G. L. c. 32B, § 9A½, specifically to
    address those concerns.    Where a retiree has served a number of
    municipalities, G. L. c. 32B, § 9A½,10 creates a reimbursement
    scheme between those employing municipalities, and allows the
    municipality from which the employee retired to recover its
    proportional share of contributions from other municipalities
    with G. L. c. 32B, which establishes only a "sparse framework,"
    and, therefore, that the Legislature did not intend to preempt
    municipal action such as the town's retirement policy. Our
    determination that the town's policy is in conflict with the
    language and intent of G. L. c. 32B, §§ 9 and 9E, disposes of
    this claim. Cf. Connors v. Boston, supra at 39-40, citing
    Boston Gas Co. v. Newton, 
    425 Mass. 697
    , 699 (1997) (addressing
    question of preemption, and holding that local executive order
    expanding definition of dependent was inconsistent with language
    and intent of G. L. c. 32B).
    10
    Pursuant to G. L. c. 32B, § 9A½,
    "Whenever a retired employee or beneficiary receives a
    healthcare premium contribution from a governmental unit in
    a case where a portion of the retiree's creditable service
    is attributable to service in [one] or more governmental
    units, the first governmental unit shall be reimbursed in
    full, in accordance with this paragraph, by the other
    governmental units for the portion of the premium
    contributions that corresponds to the percentage of the
    retiree's creditable service that is attributable to each
    governmental unit. The other governmental units shall be
    charged based on their own contribution rate or the
    contribution rate of the first employer, whichever is
    lower."
    16
    where the retiree had been employed.
    The plain language of this provision supports our
    interpretation of G. L. c. 32B, § 9E, as reflecting the
    Legislature's intent that a municipality that has chosen to
    adopt that section must contribute to the premiums of all of its
    retirees, regardless whether, as active employees, their years
    of creditable service were performed largely in other
    municipalities.11   We give effect to all provisions of a statute,
    which "must be viewed 'as a whole.'"   Wolfe v. Gormally, 
    440 Mass. 699
    , 704 (2004), quoting 2A N. Singer, Sutherland
    Statutory Construction § 46.05, at 154 (6th ed. 2000).    The
    town's interpretation of the statutory scheme is inconsistent
    with G. L. c. 32B, § 9A½,, which reflects the Legislature's
    understanding that the last employer in line will be required to
    contribute to the insurance premiums of its retirees,
    notwithstanding that the retiree may have spent a substantial
    11
    The town argues that, notwithstanding G. L. c. 32B,
    § 9A½, it should be permitted to exclude retirees who served the
    town for fewer than ten years from its insurance premium
    contributions, arguing, essentially, that G. L. c. 32B, § 9A½,
    does not do enough to contain costs. The town contends that it
    should be permitted to further reduce costs by limiting the
    class of retirees eligible for premium contributions to those
    employed by the town for longer periods of service. The town
    notes, for example, that although it may seek reimbursement from
    other municipalities under G. L. c. 32B, § 9A½, it first must
    contribute to the premiums, and may seek reimbursement only the
    following year. It notes also that it must seek reimbursement
    based on the lower of the municipalities' rates of contribution.
    Concerns that the cost containment measures established by the
    statute are inadequate may be addressed to the Legislature.
    17
    portion of her career working for a different municipality.
    Judgment affirmed.
    

Document Info

Docket Number: SJC 11772

Citation Numbers: 471 Mass. 305

Filed Date: 4/17/2015

Precedential Status: Precedential

Modified Date: 1/12/2023