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Dismissal of Chicago retiree health care lawsuit in hands of judge


(Reuters) — An Illinois judge said on Monday he will rule no later than Dec. 11 on motions by Chicago and its four pension funds to dismiss a lawsuit that could greatly increase the cash-strapped city's retiree health care costs.

Cook County Circuit Court Judge Neil Cohen heard nearly three hours of arguments by Clint Krislov, a lawyer representing Chicago retirees, who claimed his clients are entitled to lifetime health care coverage, and Richard Prendergast, the city's attorney, who contended the lawsuit should be tossed because it is based on faulty facts.

If Judge Cohen allows the lawsuit to continue, the retirees are seeking refunds for rising health insurance premiums because of a phaseout of a city subsidy. Mr. Krislov said the refunds would date back to 2013 and total about $110 million. He added that Chicago Mayor Rahm Emanuel included $31 million in retiree health care savings in his budget for the fiscal year that begins Jan. 1.

That budget includes a record $543 million phased-in property tax hike dedicated to public safety worker pensions.

The Illinois Supreme Court, in its rulings, determined that health care is a retirement benefit for public sector workers and that pension benefits are protected from cuts by the state constitution.