The University of Maine System will pause a planned change to health insurance for its retired employees in light of a class-action lawsuit.

The decision came just hours after 11 retirees filed their complaint Thursday in Cumberland County Superior Court and asked a judge to block the switch. System leaders have said moving from a group benefits plan to a Medicare exchange will expand benefits and save money, while the retired employees have raised concerns about their contractual rights and higher costs.

“While it’s critical that UMS remains a good steward of the limited resources provided to us by the Legislature, it’s equally important that we listen seriously to the concerns we’ve heard from dozens of our retirees,” Chancellor Dannel Malloy said in a statement. “And many legislators have shared the same concerns. We remain committed to our retirees and providing them affordable, quality health care and will conduct our review quickly to resolve the concerns that have been raised to ensure that retirees have a clear decision in time for January 1, 2021 coverage.”

The announcement said system leaders will work with retiree representatives and union leaders to consider the insurance options for next year. It is not clear what the “pause” will mean for more than 1,550 eligible retirees and their spouses who have already signed up for their new plans. A spokesman clarified that people will still be allowed to sign up for the new plans in the meantime, and people should keep their appointments with benefit advisers. It was not clear when a decision would be made.

The plaintiffs are seeking to represent an estimated 2,900 retired employees, spouses and dependents.

“We are pleased to see the University of Maine System finally understand there are serious problems with the switch in health care plans for our most vulnerable retirees,” Jim McClymer, associate professor of physics and president of the faculty unions, said. “This pause in transition is a step in the right direction and the Unions are eager to speak with the administration about the change, its impact on retirees, and ways we hope they can correct the problems this transition is creating for retirees and current staff.”

Lawmakers and retirees raised concerns earlier this fall about the change being made during the COVID-19 pandemic and without input from or communication with those former employees or the unions. They also questioned the impact of moving to a system in which retirees will have to file for reimbursement of health care costs after paying upfront. The Associated Faculties of the Universities of Maine, which has faculty unions across the system, and other Maine Education Association units have also filed grievances over the issue.

“Filing this lawsuit was not the route we wanted to take, but this was the route the University of Maine System’s Board of Trustees pushed us into,” McClymer said. “We have retirees, who under their new plans, can no longer afford the prescriptions they need to stay alive, and others who are making the tough choices to stop taking one medication so they can afford another at a cost of their own health. This change in plan violates the contract and the promise the University of Maine System made with its retirees, and we will now pursue our rights in the courts.”

The system’s human resources head has previously said retirees are not covered by unions and the system was not obligated to negotiate the change.

Malloy wrote a letter to lawmakers in September that said no retiree or family member will lose health benefits as a result of the change. He also highlighted the anticipated annual savings of $2.5 million, which comes amid flat state appropriations for the UMaine System in the coming fiscal year and $80 million in unplanned pandemic-related expenses and lost revenues since March, offset by just $8.5 million in federal coronavirus relief aid.

The system had said former employees would receive up to $2,100 to cover premiums or other expenses, and their spouses and eligible dependents would receive $800.

“Insurance is a complicated business and we understand the uncertainty among retirees,” system spokesman Dan Demeritt wrote in an email Thursday, before the system announced that it would put the switch on hold. “Benefits specialists are holding hundreds of appointments per week to help our former employees and their spouses choose the right plan for their circumstances. The University of Maine System is also engaging an independent insurance ombudsman to assist retirees with the transition and to provide progress reports to the Board.”

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