March 9, 2022

(Anchorage, AK) – The State of Alaska and the Retired Public Employees of Alaska, Inc. (RPEA) recently agreed to settle two long-running lawsuits arising from changes made in 2014 to the retiree medical and dental plans.

The settlement followed mediation between the State and RPEA last month.

“The agreement ends nearly a half-decade of litigation between the parties,” said Alaska Attorney General Treg Taylor. “While the State was confident in its position, the settlement saves the parties the time and expense of many more months -- potentially years -- of litigation. We appreciate RPEA’s willingness to engage in a conversation outside of a courtroom.”

The agreement protects health care benefits from diminishment, as mandated by the Alaska Constitution, and it marks an end to years of costly litigation. Most importantly, it ushers in a new era of cooperation between RPEA and the State for the benefit of all retirees.

“This is a positive outcome for both sides. It affirms the State’s commitment to its retired workers and will facilitate a productive working relationship between the State and RPEA going forward,” said Commissioner of Administration Paula Vrana. “The settlement helps transform the dynamic from adversarial to cooperative — something that will benefit all retirees, present and future.”

Background

In 2016, RPEA sued the State alleging that a 2014 amendment to the AlaskaCare Dental, Vision and Audio (DVA) plan diminished the value of benefits to retirees. In 2018, RPEA filed a similar suit alleging that the 2014 amendment diminished the value of the AlaskaCare retiree medical plan. Years of litigation ensued.

Recently, the Alaska Supreme Court reversed a trial court’s finding that the 2014 amendment had diminished the DVA plan. In the wake of that decision, the parties mediated the claims in both lawsuits. The mediation, ultimately, was successful.

Notable terms of the agreement

• Retirees will continue to have access to the Legacy DVA plan as long as the plan remains financially viable.
• DRB will amend the medical plan to clarify terms related to medical necessity determinations.
• DRB will adopt a policy that provides for additional coverage for maintenance care related to musculoskeletal disorders.
• DRB will support the continuation and expansion of the Retiree Health Plan Advisory Board and Board subcommittees, adding seats for RPEA members.
• DRB will draft regulations formalizing the process for public notice, review, and comment on plan changes.

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Department Media Contact: Communications Director Aaron Sadler.