The Court said the benefits are protected under the Illinois Constitution. The state wants to cut the benefits to save money on the state's pension liabilities.
The Wall Street Journal: Illinois Supreme Court Rules Against Cuts In Retiree Health Benefits
A ruling by the Illinois Supreme Court Thursday is casting new doubts on an overhaul of the public employee retirement system that passed last year to prop up the state's deeply underfunded pensions. The court ruled health-insurance subsidies for retired state workers are protected under the Illinois Constitution, siding with public-sector unions who challenged cuts to the benefits passed by lawmakers two years ago. The decision set off renewed debate over the constitutionality of a larger overhaul of the retirement system, which passed last fall and is being challenged by state workers and retirees on similar grounds (Peters, 7/3).
Reuters: Illinois High Court Rules Constitution Protects Retiree Health Benefits
The Illinois Supreme Court decided Thursday that health care for retired state workers is a constitutionally protected pension benefit, a ruling with implications for pension reform legislation passed by the state legislature earlier this year. The 6-to-1 decision allows the continuation of class-action challenges to a 2012 Illinois law that gave the state the right to impose health care insurance premiums on its retired workers. The challenge to the state effort to change health care benefits centered on a constitutional provision that membership in any public sector pension or retirement system "shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired” (Plume, 7/3).