Thursday, June 15, 2017

PSEBA Eligibility Ordinance Upheld By Court

It’s a pretty big deal when a court rules on an issue that has never been decided by a court before (or as we lawyers say “a case of first impression”). It’s also a pretty big deal to be the lawyer that wins a “case of first impression” as it means that you have convinced the court to “make new law”. One of our very own Ancel Glink lawyers, Britt Isaly, did that this week when he prevailed on a case involving one of the most vexatious statutes for municipalities, the Public Safety Employee Benefits Act, fondly referred to as PSEBA in our circles.

PSEBA provides that public safety employees, generally police, fire and paramedics, who suffer a catastrophic, career or life ending injury or illness as a result of performing certain duties of their job (generally responding to an emergency, not falling on the way to the fridge in the fire house), are entitled to lifetime free health insurance to them and their dependants, limited only by Medicare eligibility. Aside from the cost of this benefit to public employers, is the problem of how to administer it. PSEBA eligibility is generally considered to be application of a two part test. The first component has been made easy enough by the courts so that award of a line of duty disability will suffice to show eligibility. The second component of eligibility requires that the disabling injury was sustained while the employee was responding to an emergency situation, such as pursuing a suspect, carrying someone out of a burning building, etc. You get the picture.

The problem for public employers is how to determine whether the disabled employee meets the second prong of the test for eligibility for PSEBA benefits. After all, it’s not fiscally prudent to hand out free lifetime health insurance benefits willy-nilly, but it’s equally unfair to deny them to those who are truly eligible. And, as it turns out, it’s not so easy all the time to determine whether an employee was actually responding to an emergency when they sustained injury or illness. Is hitting your head on your car as you’re getting into it to respond to a call part of the emergency response, for example? And the PSEBA statute doesn’t prescribe a procedure for doing this, so some municipalities have established administrative procedures for making these determinations.

Here’s where Britt Isaly comes in. He assisted the City of Charleston in establishing just such a procedure, and they enacted an ordinance creating an application and hearing process whereby they determine whether an employee is PSEBA eligible. After all, depending on the age and family status of the employee, free lifetime health insurance can cost an employer over a million dollars. Charleston wanted to do it right. Specifically, the procedure was established after the City received a request for PSEBA benefits from one of its patrol officers, Steve Englum.

Englum had sustained a hand and shoulder injury when he was returning to the police station and slipped on ice and fell. The reason he was at the station was that he had responded to a call from his police chief to meet him at a gas station to investigate possible suspicious activity. When Englum arrived at the gas station, he saw nothing suspicious and also did not find the police chief there. He sustained the injury while he was looking for the police chief in further response to the call.

Englum claimed that the City did not have the authority, as a home rule municipality, to establish its administrative procedure for PSEBA claims. As local government law geeks know, non-home rule municipalities are limited in their powers to only those which are granted by statute. Englum argued that Charleston exceeded its authority in establishing an administrative process to determine PSEBA benefits because the statute itself didn’t allow for it. He filed suit, and the trial court agreed with him, finding not only did the City go beyond its authority, but awarding benefits to Englum.

The Fourth District Appellate Court disagreed. It held that because the PSEBA statute itself required benefits to be paid to eligible employees, but did not provide a procedure to determine eligibility so that the statute itself did not limit an employer’s authority to create a benefit application process. Furthermore, the court found that the Municipal Code allows municipalities to enact ordinances “in regard to the relation between all municipal officers and employees in respect to each other, the municipality and the people.” Award of PSEBA benefits, according to the court, involves not only the relation between municipal officers and employers, but also taxpayers, as they will ultimately fund the benefit.

This decision is important because it confirms the authority of municipalities to establish an orderly and uniform process for determining PSEBA eligibility, which can be an extremely contentious issue for both sides. Municipalities, whether home rule or non-home rule, should consider enacting an ordinance for the orderly determination of PSEBA benefits.