SC Supreme Court mulling state health premium suit

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COLUMBIA — The South Carolina Budget and Control Board violated the constitution when it voted to split the cost of increases in public workers’ health insurance premiums between employers and employees, an attorney argued before the state Supreme Court on Wednesday.

“The General Assembly alone has the power to tax and spend,” Allen Nickles told justices, saying the panel infringed on the separation of powers when it raised rates on both by 4.6 percent.

Nickles represents public workers who are suing the Budget and Control Board over its August vote to split the cost of the increases. Lawmakers had already agreed to fully cover the premium hikes as part of a larger compromise on worker pay, seeking to provide workers who had gone four years without a raise with an increase in their paychecks.

The final budget increased most state workers’ salaries by 3 percent, but also required them to contribute more toward their retirement. It also distributed the necessary $20.6 million to agencies, school districts and public colleges to fully cover premium hikes.

But Gov. Nikki Haley, chairwoman of the board, convinced a majority to disregard the budget and split the cost of the hikes between employers and workers. The board ultimately voted 3-2 to raise rates on both by 4.6 percent starting Jan. 1. On average, agencies will pay an extra $19 monthly, while employees and retirees will pay $7 more.

Some public employees sued, saying that the panel lacked the authority to raise premiums in spite of lawmakers’ action.

“The Budget and Control Board is empowered only to act within its delegated authority,” Nickles said Wednesday. “Where the heck do the Budget and Control Board ... get the authority to substitute their judgment for the General Assembly?”

If the board’s vote is deemed invalid, the ruling would automatically apply to the more than 234,000 public workers and retirees who have health insurance through the state health plan, Nickles has said. More than 400,000 residents are covered, when including spouses and children.

Mitchell Brown, an attorney representing the Budget and Control Board, told the court that lawmakers could have submitted a proviso directing the money to be spent in a certain way but didn’t.

“There is a pot of money available to spend, but there is not a mandate to spend it,” Brown said.

Chief Justice Jean Toal questioned Brown, wondering that, if the court ruled that the Budget and Control Board could reconfigure state spending in the absence of such specific instructions from state lawmakers, then millions of dollars in funds could be called into question.

Justices have blocked the increase from taking effect until they decide the case, which will likely be in several months. Proposed legislation would keep premiums the same throughout 2013 regardless of the board’s decision.


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