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Retiree health insurance: Can Duluth change the rules?

Retiree health insurance changed by city to save money. Retirees sue. Minnesota Supreme Court to rule over retiree health insurance changes.

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The Duluth Aerial Lift Bridge in this 2000 file photo is a symbol of the Minnesota town located on the shores of Lake Superior. In a money-saving move, the city cut retiree health insurance benefits to make it equal to what it was offering current employees. The Minnesota Supreme Court is set to decide whether that's legal.

Andy Nelson/The Christian Science Monitor/File

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The Minnesota Supreme Court is considering whether the City of Duluth can change its retiree health insurance benefits to match those of its current employees.

At issue is as much as $60 million in savings for the city over the next 30 years. The retirees sued the city three years ago, claiming it did not have the authority to change the health benefits it provided them at the date of their retirement.

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The city argues that it's required by contract to provide retirees with the same type of insurance coverage it gives its current employees. District Judge Kenneth Sandvik ruled in October 2009 that the city can modify the benefits whenever the coverage for its current employees is adjusted.

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The retirees appealed the judge's ruling. The Duluth News Tribune says the Court of Appeals largely upheld the lower court's decision.