The opinion
Digitally signed
by Reporter of
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Appellate Court Date: 2022.08.30
10:04:56 -05'00'
McCaffrey v. Village of Hoffman Estates, 2021 IL App (1st) 200395
Appellate Court PAUL McCAFFREY, MARGARET McCAFFREY, and
Caption CHRISTOPHER McCAFFREY, Plaintiffs-Appellants, v. THE
VILLAGE OF HOFFMAN ESTATES, Defendant-Appellee.
District & No. First District, Second Division
No. 1-20-0395
Filed May 11, 2021
Decision Under Appeal from the Circuit Court of Cook County, No. 19-CH-6258; the
Review Hon. Neil H. Cohen, Judge, presiding.
Judgment Affirmed.
Counsel on Joseph P. Selbka, of Pluymert, MacDonald, Hargrove & Lee, Ltd., of
Appeal Hoffman Estates, for appellants.
Hal R. Morris, Elizabeth A. Thompson, and Thomas A. Laser, of Saul
Ewing Arnstein & Lehr LLP, of Chicago, for appellee.
Panel JUSTICE PUCINSKI delivered the judgment of the court, with
opinion.
Justices Lavin and Cobbs concurred in the judgment and opinion.
OPINION
¶1 Plaintiffs Paul McCaffrey, Margaret McCaffrey, and Christopher McCaffrey appeal from
the trial court’s dismissal with prejudice of their complaint, pursuant to sections 2-615 and 2-
619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615, 2-619 (West 2018)). Plaintiffs
argue that the trial court erred in concluding that defendant, Village of Hoffman Estates, was
not obligated under section 10(a) of the Public Safety Employee Benefits Act (Benefits Act)
(820 ILCS 320/10 (West 2014)) to pay the insurance premiums for Margaret and Christopher
after they became eligible for Medicare coverage. Plaintiffs also argue that the trial court erred
in concluding that they could not seek recovery for the unpaid premiums under the Wage
Payment and Collection Act (Wage Act) (820 ILCS 115/1 et seq. (West 2014)). For the reasons
that follow, we affirm.
¶2 I. BACKGROUND
¶3 Plaintiffs instituted this action by the filing of their complaint in May 2019. In that
complaint, they alleged the following. Paul was a full-time police officer for defendant’s police
department. On July 8, 2002, Paul was severely injured in the line of duty and was disabled as
a result of his injury. Paul applied for and received a disability pension based on his injury. He
also applied for health insurance benefits for him and his family—his wife, Margaret, and his
dependent son, Christopher—under the Benefits Act, which defendant granted on February 9,
2006.
¶4 At some date unspecified in the complaint, Margaret and Christopher became eligible for
Medicare based on disability. For the years 2015 through 2018, Margaret opted out of
Medicare, Part B. On or about May 25, 2018, defendant notified plaintiffs that it would stop
paying insurance benefits for Margaret and Christopher and seek recoupment from plaintiffs’
insurer, Blue Cross Blue Shield of Illinois (BCBS), for the insurance premiums paid from 2015
to 2018. At some point after June 1, 2018, defendant stopped providing insurance to Margaret
and Christopher. Defendant asserted that Margaret’s and Christopher’s Medicare eligibility
relieved it of paying any further insurance benefits for them under the Benefits Act. In addition,
at some point after June 1, 2018, defendant informed BCBS that it had paid premiums in error
for the years of 2017 1 through 2018 and requested reimbursement of all premiums paid for
Margaret and Christopher during those years. In response, BCBS reimbursed defendant for the
premiums at issue and requested and received reimbursement from Margaret’s and
Christopher’s medical providers for medical expenses BCBS had paid on Margaret’s and
Christopher’s behalf. In turn, Margaret’s and Christopher’s medical providers sought payment
of the medical expenses directly from plaintiffs.
¶5 In count I of the complaint, plaintiffs alleged that Margaret’s and Christopher’s Medicare
eligibility was not sufficient to relieve defendant of its obligation to pay their health insurance
premiums under the Benefits Act and requested that the trial court enter a judgment of
mandamus, mandating that defendant pay the health insurance premiums for Margaret and
1
It is unclear whether plaintiffs intended to allege that defendant sought recoupment of premiums
paid between 2017 and 2018 or between 2015 and 2018, as there are multiple references to both time
periods in the complaint. Because the specific years do not affect our decision in this matter, we need
not resolve this discrepancy.
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Christopher from 2015 forward. In count II, plaintiffs sought a declaratory judgment, declaring
that defendant was obligated under the Benefits Act to pay the health insurance premiums of
Margaret and Christopher from 2017 2 forward. Counts III and IV alleged that defendant
violated the Wage Act by failing to pay Margaret’s and Christopher’s health insurance
premiums and by seeking recoupment of health insurance premiums paid to BCBS.
¶6 Before proceeding further, we pause to clarify some of plaintiffs’ factual allegations, so as
to avoid confusion in our discussion of defendant’s motion to dismiss and the parties’
subsequent arguments on appeal. Although plaintiffs alleged in their complaint that defendant
paid insurance premiums on behalf of Christopher from 2015 to 2018, in subsequent filings,
plaintiffs clarified that defendant provided coverage for only Margaret during that time and not
Christopher. Accordingly, the recoupment defendant sought from BCBS was for premiums
paid on behalf of Margaret. It appears, however, that plaintiff contends that defendant did not
provide coverage for Christopher during that time due to his Medicare eligibility, but that
defendant should have.
¶7 In July 2019, defendant filed a motion to dismiss plaintiffs’ complaint under section 2-
619.1 of the Code (735 ILCS 5/2-619.1 (West 2018)). In that motion, defendant argued that
plaintiffs’ claims should be dismissed under section 2-619 of the Code (735 ILCS 5/2-619
(West 2018)) because, under the Benefits Act, defendant was not required to pay the health
insurance premiums for Margaret and Christopher after they became eligible for Medicare
coverage. In addition, defendant argued that plaintiffs’ Wage Act claims should be dismissed
under section 2-615 of the Code (735 ILCS 5/2-615 (West 2018)) because plaintiffs had failed
to plead or attach an employment contract or agreement to their complaint and because
plaintiffs had failed to plead that Paul was not paid “final compensation” under the Wage Act.
¶8 In response, plaintiffs argued that Margaret’s and Christopher’s Medicare eligibility alone
did not relieve defendant of its obligation to pay their health insurance premiums because mere
access to other coverage (without taking advantage of it) was not sufficient to reduce plaintiffs’
health insurance benefits under the Benefits Act. In addition, plaintiffs argued that Medicare
was only a secondary payer for Margaret and Christopher, because Paul retained “current
employment status” with defendant while on disability and, accordingly, their Medicare
eligibility could not be taken into consideration in coordinating benefits. Plaintiffs also
contended that defendant was obligated to provide at least the basic insurance agreed to in the
collective bargaining agreement with the police union. With respect to their Wage Act claims,
plaintiffs argued that they did not need to plead or attach an employment contract or agreement,
and even if they did, an employment agreement was created by law when defendant employed
Paul as a police officer. Finally, plaintiffs argued that they did not need to plead that the
insurance premiums were final compensation, because they qualified under the Wage Act as
wage supplements.
¶9 The parties continued to debate their respective positions in defendant’s reply and
plaintiffs’ surresponse.
¶ 10 On January 27, 2020, the trial court issued its memorandum and order. In that order, the
trial court concluded that plaintiffs’ complaint warranted dismissal with prejudice under
section 2-619 of the Code because defendant was not obligated to pay insurance premiums for
2
Again, this appears to have been a typographical error in the complaint, but it does not affect our
analysis in this matter.
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Margaret and Christopher under the Benefits Act where they were eligible for Medicare. The
trial court rejected plaintiffs’ claim that Medicare was a secondary payer. The trial court
observed that the determination of whether Medicare was a secondary payer turned on the
question of whether Paul had “current employment status” with defendant. The trial court
concluded that he did not have “current employment status” with defendant, because he was
not actively working for defendant and was not associated with defendant in a business
relationship. In so concluding, the trial court noted that Paul’s employment relationship with
defendant terminated upon the award of his line-of-duty disability pension and that the fact
that he was subject to recall for emergency duty under the Illinois Pension Code (40 ILCS 5/3-
116 (West 2018)) did not confer employment status on him, because that condition stemmed
simply from the Pension Board’s jurisdiction over pensions.
¶ 11 Although the trial court concluded that the entire complaint was subject to dismissal under
section 2-619 of the Code for these reasons, it also concluded that counts III and IV were also
subject to dismissal under section 2-615 of the Code on the basis that plaintiffs failed to allege
the existence of an employment contract or agreement under the Wage Act. Additionally, the
trial court concluded that counts III and IV failed because health insurance benefits under the
Benefits Act do not constitute wages or wage supplements under the Wage Act, in that they
are post-employment benefits that are granted only after an employee has been terminated.
¶ 12 Plaintiffs then instituted this timely appeal.
¶ 13 II. ANALYSIS
¶ 14 On appeal, plaintiffs argue that the trial court erred in dismissing their complaint because
(1) Margaret’s and Christopher’s Medicare eligibility alone did not relieve defendant of its
obligations to pay their health insurance premiums under the Benefits Act and (2) the unpaid
premiums constituted wage supplements under the Wage Act and did not require proof of an
employment contract or agreement. We address each of these contentions in turn.
¶ 15 Defendant filed its motion to dismiss pursuant to section 2-619.1 of the Code. Section 2-
619.1 of the Code permits a litigant to combine motions to dismiss pursuant to sections 2-615
and 2-619 of the Code in a single filing. 735 ILCS 5/2-619.1 (West 2018). The section 2-619
portion of defendant’s motion to dismiss was brought pursuant to section 2-619(a)(9) of the
Code (735 ILCS 5/2-619(a)(9) (West 2018)), which provides for the dismissal of a complaint
on the basis that “the claim asserted against defendant is barred by other affirmative matter
avoiding the legal effect of or defeating the claim.” In making such a motion, the movant
admits the legal sufficiency of the complaint but asserts that an affirmative defense or some
other matter defeats the claims contained therein. Van Meter v. Darien Park District, 207 Ill.
2d 359, 367 (2003).
¶ 16 A motion to dismiss under section 2-615 of the Code raises the question of whether the
complaint’s allegations, viewed in the light most favorable to the plaintiff, are sufficient to
state a cause of action upon which relief can be granted. Chandler v. Illinois Central R.R. Co.,
207 Ill. 2d 331, 348 (2003). The complaint should be dismissed only if it is clearly apparent
that the plaintiff can prove no set of facts that would entitle him to relief. Id. at 349.
¶ 17 Whether addressing a motion to dismiss under section 2-615 or section 2-619, a trial court
must accept all well-pleaded facts of the complaint as true and must draw all reasonable
inferences from those facts in favor of the nonmoving party. Edelman, Combs & Latturner v.
Hinshaw & Culbertson, 338 Ill. App. 3d 156, 164 (2003). Our standard of review of motions
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to dismiss brought under either section is de novo. Id.
¶ 18 A. Benefits Act
¶ 19 The trial court dismissed plaintiffs’ entire complaint under section 2-619(a)(9) of the Code
on the basis that defendant was not obligated under the Benefits Act to pay the health insurance
premiums of Margaret and Christopher after they became eligible for Medicare. Plaintiffs
contend this was error because Paul retained “current employment status” with defendant even
after receiving his disability pension and, therefore, Medicare was only a secondary payer. As
a secondary payer, plaintiffs contend, Medicare could not be used to reduce plaintiffs’ benefits
under the Benefits Act. We conclude that the trial court correctly found that Paul did not retain
“current employment status,” and, thus, Medicare was not merely a secondary payer for
Margaret and Christopher. Rather, it was primary and thereby relieved defendant of its
obligation to pay insurance premiums for Margaret and Christopher under the Benefits Act.
¶ 20 Section 10(a) of the Benefits Act provides as follows:
“An employer who employs a full-time law enforcement, correctional or correctional
probation officer, or firefighter, who *** suffers a catastrophic injury or is killed in the
line of duty shall pay the entire premium of the employer’s health insurance plan for
the injured employee, the injured employee’s spouse, and for each dependent child of
the injured employee until the child reaches the age of majority or until the end of the
calendar year in which the child reaches the age of 25 if the child continues to be
dependent for support or the child is a full-time or part-time student and is dependent
for support. The term ‘health insurance plan’ does not include supplemental benefits
that are not part of the basic group health insurance plan. If the injured employee
subsequently dies, the employer shall continue to pay the entire health insurance
premium for the surviving spouse until remarried and for the dependent children under
the conditions established in this Section. However:
(1) Health insurance benefits payable from any other source shall reduce
benefits payable under this Section.” 820 ILCS 320/10(a) (West 2018).
It is apparent from the plain language of this provision—and the parties do not dispute—that
defendant’s obligation to provide health insurance benefits for plaintiffs is reduced or
eliminated by health insurance benefits payable from another source. The question here is
whether Margaret’s and Christopher’s mere eligibility for Medicare—as opposed to the actual
receipt of Medicare benefits—relieves defendant of its obligation to provide health insurance
for them. 3
¶ 21 In Pyle v. City of Granite City, 2012 IL App (5th) 110472, the Fifth District addressed the
question of whether the defendant city’s obligation to provide health insurance benefits under
the Benefits Act lasted the lifetime of the injured plaintiff firefighter. The Fifth District
concluded that although the Benefits Act generally contemplates the payment of benefits for
the lifetime of the employee, where the employee lives to become Medicare eligible, the
payment of his or her benefits will be reduced or cease. Id. ¶¶ 23-24. This is because Medicare
benefits are health insurance benefits payable from another source under section 10(a)(1) of
the Benefits Act. Therefore, once an employee is eligible for Medicare benefits, the benefits
3
Defendant’s obligation to provide health insurance benefits for Paul is not at issue in this appeal.
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payable by the employer under the Benefits Act are reduced. Id. ¶ 26. The employee in Pyle
argued that his Medicare eligibility could not completely extinguish his employer benefits
because the Benefits Act provides that those benefits only be “reduce[d]” by benefits payable
by other sources. The Fifth District rejected this argument, stating:
“Pyle argues that the benefits payable to him cannot cease, however, because the
plain language of section 10(a) requires that the benefits payable be ‘reduce[d],’ not
extinguished. If the City had been paying premiums for Pyle and his spouse, and only
Pyle had become Medicare eligible, the benefits payable under section 10(a) of [the
Benefits Act] would have been reduced only by the amount due for Pyle’s premium.
The City would have continued to pay health insurance premiums for his spouse under
the section’s conditions. However, because the City here paid premiums solely for Pyle,
Pyle’s benefits were reduced in their entirety when he became eligible for Medicare
benefits. The City was no longer required to pay the entire premium of the employer’s
health insurance plan on his behalf. The plain language of the statute supports this
conclusion.” Id. ¶ 27.
Under the Pyle decision, health insurance benefits a person receives under the Benefits Act are
reduced in their entirety by that person’s eligibility for Medicare; that person’s eligibility for
Medicare, however, does not reduce the health insurance benefits under the Benefits Act
received by other family members.
¶ 22 Plaintiffs argue that the Pyle decision is inapplicable because it did not address the situation
where Medicare is only a secondary payer of health insurance benefits, which plaintiffs
contend is the situation here. The federal Medicare Secondary Payer Act (Secondary Payer
Act) provides with respect to disabled individuals in a large group health plan, 4
“A large group health plan *** may not take into account that an individual (or a
member of the individual’s family) who is covered under the plan by virtue of the
individual’s current employment status with an employer is entitled to benefits under
this subchapter under section 426(b) of this title.” 42 U.S.C. § 1395y(b)(1)(B)(i)
(2018).
In other words, Medicare is a secondary payer for services that are covered under “[l]arge
group health plans *** and that cover Medicare beneficiaries who are under age 65, entitled to
Medicare on the basis of disability, and covered under the plan by virtue of the individual’s or
a family member’s current employment status with an employer.” 42 C.F.R. 411.100(a)(1)(iii)
(2018). Accordingly, when Medicare is a secondary payer, large group health plans may not
“take into account” an individual’s Medicare coverage by failing to pay primary health
insurance benefits or by terminating coverage. 42 U.S.C. § 1395y(b) (2018); 42 C.F.R.
411.108(c) (2018).
¶ 23 According to plaintiffs, because Paul received health insurance benefits under the Benefits
Act by virtue of his “current employment status” with defendant even after receiving a
disability pension, Medicare was only a secondary payer of benefits for Margaret and
Christopher, and defendant could not refuse to provide primary coverage to them based on
their Medicare eligibility. Pursuant to the applicable regulations, an individual has coverage
by virtue his current employment status if the individual has group health plan or large group
4
There is no dispute between the parties that the group health plan provided by defendant qualifies
as a large group health plan.
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health plan coverage based on his or her employment and the individual has current
employment status with that employer. 42 C.F.R. 411.104(c) (2018). Under the Secondary
Payer Act, an individual has “current employment status” if the individual “is an employee, is
the employer, or is associated with the employer in a business relationship.” 42 U.S.C.
§ 1395y(b)(1)(E)(ii) (2018). The regulations clarify the definition of “current employment
status” as follows:
“An individual has current employment status if—
(1) The individual is actively working as an employee, is the employer (including
a self-employed person), or is associated with the employer in a business relationship;
or
(2) The individual is not actively working and—
(i) Is receiving disability benefits from an employer for up to 6 months (the first 6
months of employer disability benefits are subject to FICA taxes); or
(ii) Retains employment rights in the industry and has not had his employment
terminated by the employer, if the employer provides the coverage (or has not had his
membership in the employee organization terminated, if the employee organization
provides the coverage), is not receiving disability benefits from an employer for more
than 6 months, is not receiving disability benefits from Social Security, and has [group
health plan] coverage that is not pursuant to COBRA continuation coverage [citation].
Whether or not the individual is receiving pay during the period of nonwork is not a
factor.” 42 C.F.R. 411.104(a) (2018).
¶ 24 B. Associated in Business Relationship
¶ 25 Plaintiffs argue that Paul has “current employment status” with defendant because he is
associated in a business relationship with defendant. In support, plaintiffs rely on section 3-
116 of the Pension Code (40 ILCS 5/3-116 (West 2018)), which provides as follows:
“A police officer whose duty is suspended because of disability may be summoned to
appear before the [Pension Board], and to submit to an examination to determine fitness
for duty. The officer shall abide by the board’s decision. If a police officer retired for
disability, except one who voluntarily retires after 20 years’ service, is found upon
medical examination to have recovered from disability, the board shall certify to the
chief of police that the member is no longer disabled and is able to resume the duties
of his or her position. In case of emergency, a disabled police officer may be assigned
to and shall perform such duty without right to compensation as the chief of police or
chief officer of the municipality may direct.”
According to plaintiffs, because Paul was subject to being called for examinations and to
perform police duties in case of an emergency, he maintained a business relationship with
defendant that conferred on him “current employment status” under the Secondary Payer Act.
As a result, plaintiffs argue that this requirement that Paul be ready, willing, and able to respond
for emergency duty distinguishes this case from Pyle because Pyle involved a firefighter, and
disabled firefighters are subject to different rules regarding their reinstatement to duty
following disability. We acknowledge that the rules for disabled police officers are different
than those for firefighters; however, because we conclude that the fact Paul was subject to
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recall for emergency duty did not constitute a business relationship with defendant, the
distinction between police officers and firefighters in this context is one without a difference.
¶ 26 Although the Secondary Payer Act, the relevant regulations, and the Medicare manual do
not provide any further definition or insight into the term “business relationship,” federal and
Illinois 5 case law provides some assistance in assessing whether Paul was associated with
defendant in a business relationship. First, in the case of Santana v. Deluxe Corp., 12 F. Supp.
2d 162, 169 (D. Mass. 1998), the court was faced with the question of whether a disabled
former employee who continued to receive health benefits from an employer-funded plan was
“associated in a business relationship” with the employer under the Secondary Payer Act.
Ultimately, the Santana court answered this question in the negative. In doing so, the court
first addressed the former employee’s argument that a business relationship existed between
him and the employer because he paid monthly premiums for the health care benefits and his
employer was in the business of providing health coverage. Id. The Santana court rejected this
argument, concluding that the employer (a check and financial form printing company) was
not in the business of providing health care coverage:
“Santana [former employee] did not simply walk off the street and approach Deluxe
[employer] about a business relationship whereby Santana would pay Deluxe
premiums in return for health insurance after shopping around and concluding that
Deluxe’s benefit plan was superior to other health insurers. Santana is entitled to
participate—and in fact does participate—in the Indemnity Plan because he was
enrolled as a former employee receiving LTD benefits, not because he preferred the
way Deluxe runs its benefit plan.” Id.
¶ 27 The Santana court then considered the Secondary Payer Act’s definition of “current
employment status” in relation to other relevant statutes. The court observed that the term
“large group health plan” as used in the Secondary Payer Act means “a plan of, or contributed
to by, an employer or employee organization *** to provide health care (directly or otherwise)
to the employees, former employees, the employer, others associated or formerly associated
with the employer in a business relationship, or their families.” 26 U.S.C. § 5000(b)(2) (2018);
42 U.S.C. § 1395y(b)(1)(B)(iii) (2018) (“In this subparagraph, the term ‘large group health
plan’ has the meaning given such term in section 5000(b)(2) of the Internal Revenue Code of
1986, without regard to section 5000(d) of such Code.”). Although this definition of “large
group health plan” specifically includes former employees as a category separate and distinct
from people associated in a business relationship with the employer, the definition of “current
employment status” does not do the same. Instead, the definition of “current employment
status” mentions only employees, employers, and those associated in a business relationship
with the employer; there is no mention whatsoever of former employees. Relying on the canon
of construction providing that where Congress uses specific language in one section of a statute
but not in another section, the court presumes that Congress acted intentionally and purposely
5
Plaintiffs argue that whether Paul maintained “current employment status” under the Secondary
Payer Act should be determined under federal law and that Illinois principles of what constitutes an
employment relationship are irrelevant. Although we agree that the nature of Margaret’s and
Christopher’s Medicare coverage depends on whether Paul maintains “current employment status” with
defendant as that term is used in the Secondary Payer Act, we also believe that Illinois case law is
relevant in ascertaining the precise nature and characteristics of the relationship between a municipality
and police officer receiving benefits under the Benefits Act, a state statute.
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in omitting that language. In Santana, the court concluded that the exclusion of “former
employees” in the definition of “current employment status,” in light of its specific inclusion
in the definition of “large group health plan” was intentional. Therefore, “[a]s a result,
Congress did not intend that [a large group health plan] treat ‘former employees’ as individuals
who are ‘active’ or have ‘current employment status’ for purposes of Medicare coverage.”
Santana, 12 F. Supp. 2d at 170.
¶ 28 The Santana court also went on to observe that the term “associated in a business
relationship” was ambiguous, given that one could have a business relationship without ever
having worked or performed services for an employer, which would be inconsistent with
having “current employment status.” Id. Accordingly, the court turned to the legislative history
of the Secondary Payer Act. In doing so, the court found persuasive that in discussing the 1986
amendments to the Secondary Payer Act, the original Senate proposal would have specifically
included “former employees under age 65” in the secondary payer provision. That language,
however, was later removed. Id. at 170-71. The court observed that this triggered the
interpretation principle that “[w]here Congress incorporates inclusionary language in an earlier
version of a bill but deletes it prior to enactment, it may be presumed that the inclusion was
not intended.” Id. at 171. Despite the employee’s attempt to include former employees still
participating in an employee benefit in the definition of “associated in a business relationship,”
the Santana court concluded that Congress simply did not write it that way. Id. Instead, “[l]ogic
dictates that if Congress intended to include former employees in the definition of *** ‘current
employment status,’ then it would have done so expressly, just as it did in defining [a large
group health plan].” Id.
¶ 29 Finally, the court discussed the regulations issued by the Department of Health and Human
Services’ Health Care Financing Administration (HCFA) on the Secondary Payer Act. First,
the court observed that although the HCFA’s definition of “current employment status”
included people who were not actively working for the employer for up to six months after
receiving disability benefits, it did not include former employees whose employment had been
terminated and who had received disability benefits for more than six months. Id. at 171-72.
Most telling, however, was the court’s discussion of the HCFA’s rejection of a proposal that it
define “associated in a business relationship” to include individuals who received health care
benefits from an employer, regardless of whether they are employees. Id. at 172.
“The HCFA responded that it did ‘not agree that a definition of the term “individual
associated with the employer in a business relationship” is necessary in the regulations
… [because a]ny individual who qualifies for LGHP coverage because of a business
relationship with the employer (for example, suppliers and contractors who do business
with the employer) is included within the term.’ [Citation.] The agency considered that
‘[d]efining the term in the manner proposed would bring many former employees,
including retirees, who receive benefits from an employer within the scope of the
[Secondary Payer Act] provision for the disabled.’ [Citation.] The HCFA concluded,
and this Court agrees, that ‘Congress clearly did not intend the [Secondary Payer Act]
provision for the disabled to extend to retirees and other former employees, since the
term “former employee under age 65” was specifically deleted from an early draft of
legislation on [the Secondary Payer Act] for the disabled.’ [Citations.]
Instead, the HCFA reasoned that ‘[t]he inclusion of individuals “associated with
the employer in a business relationship” (that is, individuals whose relationship to the
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employer is based on business rather than on work) demonstrates that the Congress
intended that the term “current employment status” be given the broadest possible
application.’ [Citation.] The agency stated that the latter term ‘encompasses not only
individuals who are actively working but also individuals under contract with the
employer whether or not they actually perform services for the employer, such as
attorneys on retainer, tradesmen and insurance agents.’ ” Id.
¶ 30 Based on this extensive review and discussion of the Secondary Payer Act, its legislative
history, and administrative interpretation and regulations, the Santana court concluded that
“associated in a business relationship” was not intended to encompass former employees
receiving health insurance benefits from the employer. Id. Instead, the court concluded:
“Congress included ‘associated with the employer in a business relationship’ to define
employees broadly so that disabled employees would continue to be covered by an
employer’s health benefit plan during periods, because of their disabilities, when they
were not presently performing any work for the employer but still maintained the
benefits and indicia of employment and anticipated returning to work in the future
(after, for example, a temporary layoff or sick leave).” Id. at 172-73.
¶ 31 Given the lack of a clear definition of “associated in a business relationship” in the
Secondary Payer Act or its related regulations, we find the in-depth analysis of Santana
persuasive. Accordingly, we, too, conclude that an employee whose active employment with
an employer has ended because of disability is not associated in a business relationship with
the employer simply by virtue of the receipt of employer-funded health benefits.
¶ 32 During oral arguments on this matter, plaintiffs contended that Santana is distinguishable
from the present case because in Santana, the only connection between the former employee
and the employer was the former employee’s receipt of disability health benefits. In contrast,
plaintiffs argue, here Paul and defendant are connected not just by the receipt of disability
benefits, but also by Paul’s requirement that he respond for emergency duty and his retention
of employment rights. As will be discussed below, however, neither of these confer “current
employment status” on Paul.
¶ 33 Plaintiffs argue that Paul’s claim to being associated in a business relationship with
defendant is not based solely on his receipt of health insurance benefits under the Benefits Act
but also on his ongoing obligation to respond to Pension Board examinations and emergency
duty. He attempts to characterize his obligation in this respect as a business exchange with
defendant, in which he remains available for examinations and emergency duty in exchange
for health insurance benefits under the Benefits Act. The problem with plaintiffs’ position,
however, is that Paul’s obligation to respond is not the price he pays in exchange for his health
insurance benefits under the Benefits Act. Instead, Illinois courts have repeatedly made it clear
that this obligation to respond is merely a condition placed on Paul’s receipt of health insurance
benefits under the Benefits Act by virtue of the Pension Board’s jurisdiction over recipients of
those benefits. See, e.g., Greenan v. Board of Trustees of the Police Pension Fund, 213 Ill.
App. 3d 179, 186-87 (1991) (“These obligations [to submit to medical examinations and be
subject to emergency recall] do not arise from plaintiff’s employment status with the police
department but rather from the [Pension] Board’s jurisdiction over one receiving disability
pension benefits. If plaintiff refuses to comply with the [Pension] Code’s provisions, the
[Pension] Board may terminate his benefits.”); Hahn v. Police Pension Fund, 138 Ill. App. 3d
206, 213 (1985) (“[T]he duty of the pension recipient to respond under section 3-116 of the
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Pension Code must be based on the right of the disabled officer to receive the pension funds.
Should he refuse to submit to a board examination or perform emergency duties, it seems
apparent that his disability pension payments may be terminated.”); see also Iwanski v.
Streamwood Police Pension Board, 232 Ill. App. 3d 180, 191 (1992). In other words, Paul and
defendant did not negotiate an agreement under which Paul agreed to provide emergency
services in exchange for health insurance coverage in the same way that an employee contracts
to provide work in exchange for wages and benefits. Instead, Paul was awarded health
insurance benefits under the Benefits Act pursuant to statute, due to his line-of-duty disability.
In turn, Paul’s obligation to respond to requests for examination or recall for emergency duty
is simply a statutory condition of his continued receipt of those statutory benefits. Nothing
about this interaction suggests any sort of business relationship between Paul and defendant.
¶ 34 Plaintiffs point to two examples from the Medicare Secondary Payer Manual to support
their position that Paul retained “current employment status” with defendant. First, plaintiffs
point to the Medicare Manual provision regarding volunteers:
“Volunteers are considered to have current employment status when they perform
services or are available to perform services for an employer and receive remuneration
for their services. *** Also, remuneration may be of a monetary or nonmonetary
nature. Benefits, including health benefits that a volunteer receives, are considered
remuneration.” Ctrs. for Medicare & Medicaid Servs., Medicare Secondary Payer
(MSP) Manual § 50.1(D) (Mar. 22, 2019), https://www.cms.gov/regulations-and-
guidance/guidance/manuals/downloads/msp105c01.pdf (last visited Apr. 29, 2021)
[https://perma.cc/NKS5-7LLD].
We find this provision unpersuasive here because even volunteers under this provision have
current employment status only if they receive remuneration for their services. As discussed
above, Paul’s receipt of health insurance benefits under the Benefits Act is not payment for his
being available to respond to Pension Board requests for examination and emergency duty; it
is a condition of his receipt of those benefits, which are awarded to him under statute as a result
of his line-of-duty disability.
¶ 35 Second, plaintiffs point to the provision titled “Re-employed Retirees and Annuitants,”
which provides:
“If a retiree or annuitant returns to work even for temporary periods, the employer
is required to provide the same coverage under the same conditions that is furnished to
other employees (i.e., non-retirees). Thus, an employer is required to provide primary
coverage for a re-employed retiree if the amount of work the individual performs (based
on hours, productivity, etc.) would be sufficient to earn the employee coverage from
the employer had the employee not retired.” Id. § 50.1(H).
Again, we do not believe that this provision has any bearing on the question before us. This
provision relates to retirees who return to active employment and who meet all the standard,
employer-imposed requirements for obtaining employment-based health benefits. This is not
the same as Paul, who remains retired and is simply subject to potentially having to respond
for medical examinations and emergency duty as a condition of his receipt of health insurance
benefits under the Benefits Act. Certainly, if Paul were to return to active employment with
defendant and meet all the qualifications for obtaining health benefits through defendant based
on that employment, then this provision would apply. Until then, however, it is irrelevant.
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¶ 36 C. Retained Employment Rights
¶ 37 In addition to arguing that Paul had “current employment status” with defendant because
he was associated in a business relationship with defendant, plaintiffs also argue that Paul had
“current employment status” with defendant because he retained employment rights in the
industry in order to carry out police duties if recalled for emergency duty. We disagree.
¶ 38 As discussed above, under the applicable regulations, a person has “current employment
status,” even if he is not actively working, if he (1) retains employment rights in the industry,
(2) has not had his employment terminated, if the employer provides the health insurance
coverage, (3) is not receiving disability benefits from the employer for more than six months,
(4) is not receiving disability benefits from Social Security, and (5) has group health plan
coverage that is not provided under COBRA continuation coverage. 42 C.F.R.
411.104(a)(2)(ii) (2018). The regulations further provide:
“(b) Persons who retain employment rights. For purposes of paragraph (a)(2) of this
section, persons who retain employment rights include but are not limited to—
(1) Persons who are furloughed, temporarily laid off, or who are on sick leave;
(2) Teachers and seasonal workers who normally do not work throughout the year;
and
(3) Persons who have health coverage that extends beyond or between active
employment periods; for example, based on an hours bank arrangement. (Active union
members often have hours bank coverage.)” 42 C.F.R. 411.104(b) (2018).
¶ 39 Although plaintiffs argue that Paul retained employment rights in the industry, they make
no argument whatsoever regarding the other requirements that must be met to have “current
employment status” based on a retention of employment rights. One does not have “current
employment status” simply because he has retained employment rights in his industry; rather,
he must meet all of the requirements identified in the regulations. Notably, with respect to at
least two of these other requirements, the record affirmatively belies any claim that Paul met
them. First, Paul’s employment with defendant has certainly been terminated 6—there is no
dispute that he retired as a result of his line-of-duty injury and that the health insurance benefits
he receives under the Benefits Act are post-employment benefits. See, e.g., Nowak v. City of
Country Club Hills, 2011 IL 111838, ¶¶ 16-17 (explaining that once a line-of-duty disability
pension is awarded, a police officer’s employment is terminated, and it is at that point that the
officer becomes eligible for the postemployment benefits under the Benefits Act). Second, he
has been receiving his disability pension benefits for much longer than six months. According
to Paul’s affidavit submitted in response to defendant’s motion to dismiss, he was awarded his
line-of-duty disability pension benefits in November 2005. In the complaint filed in May 2019,
plaintiffs alleged that Paul was still receiving his line-of-duty disability pension benefits. For
these reasons, even if it is true that Paul retained employment rights in the industry, plaintiffs’
claim that he had “current employment status” with defendant on that basis fails.
¶ 40 We are also unconvinced that Paul has retained any employment rights in the industry.
Although the regulations do not provide an exhaustive list of those who retain employment
6
It should be noted that the fact that Paul is not actively employed by defendant does not, in and of
itself, speak to whether he has “current employment status” with defendant, as that term is used in the
Secondary Payer Act.
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rights, Paul is not similarly situated to those listed as examples in one very important way:
there is no intent by Paul to return to active employment with defendant or by defendant to
return Paul to active employment. Paul’s injury, his receipt of a line-of-duty disability pension,
his receipt of postemployment health insurance benefits under the Benefits Act, and his long-
term absence from employment with defendant all strongly indicate that there exists no
expectation—by Paul or defendant—that Paul will return to work with defendant. The fact that
Paul could be temporarily recalled for duty in an emergency situation does not change this, as
his recall is a mere possibility, not an expectation. In contrast, the examples given in the
regulations are all employees who would fully expect to return after a temporary break in active
work—teachers, seasonal workers, furloughed employees, employees on sick leave, and union
employees between assignments/jobs.
¶ 41 D. Additional Benefits Act Contentions
¶ 42 Plaintiffs next argue that because Margaret opted out of her Medicare Part B coverage from
2015 through part of 2018, her expenses were not payable from another source, such that her
health insurance benefits were subject to reduction under the Benefits Act. This argument fails,
of course, for the reasons discussed above. Under Pyle, Margaret’s eligibility alone is sufficient
to relieve defendant of its obligations to provide health insurance benefits for her under the
Benefits Act. Pyle, 2012 IL App (5th) 110472, ¶ 27. Accordingly, because Margaret remained
eligible for Medicare, despite the fact that she chose not to take advantage of that coverage,
our conclusion that defendant was relieved of its obligation to pay her health insurance benefits
under the Benefits Act remains unchanged.
¶ 43 Finally, plaintiffs contend that the Benefits Act requires defendant to “provide insurance
for anything below basic coverage” and that “basic coverage” should be defined by the
collective bargaining agreement between defendant and the patrol officers’ union. According
to plaintiffs, although defendant’s obligation under the Benefits Act may be reduced by
payments from another source, it cannot be completely eliminated. As discussed above, the
plaintiff in Pyle made a similar argument—that Medicare benefits reduce but do not eliminate
his benefits from the municipality—and the court rejected it. See id. The Pyle court reached
this conclusion by pointing out that if the municipality paid benefits for both the plaintiff and
his wife, but only the plaintiff became Medicare eligible, then the municipality’s obligation to
pay the plaintiff’s insurance premiums would be reduced in its entirety, but its obligation for
the plaintiff’s wife’s premiums would not be affected. Id. In this way, the Pyle court attempted
to give effect to the term “reduce” in section 10(a)(1) of the Benefits Act, while also
eliminating of the municipality’s obligation to provide any benefits for Medicare eligible
recipients.
¶ 44 We are not convinced that such a broad reading of the term “reduce” is correct. Reduce has
a commonly understood meaning: “to diminish in size, amount, extent, or number.” Merriam-
Webster Online Dictionary, https://www.merriam-webster.com/dictionary/reduce (last visited
Apr. 29, 2021) [https://perma.cc/QBN2-ZXXL]. Accordingly, the provision that benefits
payable from another source “reduce” benefits payable under the Benefits Act suggests, in our
opinion, that the municipality’s obligation to provide coverage is diminished (i.e., lessened),
but not completely eliminated. Certainly, if the legislature intended to completely relieve a
municipality of its obligation to provide coverage once a recipient had other coverage—no
matter the quality or cost of that coverage—it was capable of stating as much.
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¶ 45 The Pyle court attempted to give effect to the common understanding of the term “reduce”
by stating that the municipality’s total obligation to a recipient family is reduced (i.e., lessened
but not eliminated) when one family member is Medicare eligible, but others are not. We find
this construction problematic in that it gives effect to the term “reduce” only when the
municipality is obligated to provide coverage to more than one member of the family and
where fewer than all members are Medicare eligible. In situations where there is only one
recipient of municipal benefits under the Benefits Act and that recipient becomes eligible for
Medicare, then, under Pyle, the municipality’s obligation to provide coverage to that recipient
is not reduced, it is completely eliminated. Likewise, in situations where multiple family
members receive benefits under the Benefits Act and they all become eligible for Medicare,
then, under Pyle, the municipality’s obligation to provide coverage to that family is not
reduced, it is completely eliminated. We believe that the term “reduce” should be construed
consistently across differing factual situations.
¶ 46 Nevertheless, we observe that although the Benefits Act calls for the benefits provided by
a municipality to be reduced by benefits payable from another source, the Benefits Act fails to
provide any instruction or guidance on how that reduction is to be calculated. Despite
plaintiffs’ contention, the Benefits Act does not provide for any minimum level of coverage or
direct that a minimum level of coverage is defined by collective bargaining agreements, such
that the municipality’s obligation to provide benefits might be calculated by subtracting the
coverage provided by a second source from the baseline minimum. Even if the standard
coverage provided by a municipality to its employees is construed as the baseline level of
coverage that must be provided to a recipient under the Benefits Act, the framework for
comparing the value/quality of coverage under the municipality’s plan with the value/quality
of coverage from the second source is absent from the Benefits Act. This lack of framework
leaves a plethora of unanswered questions, the answers to which are necessary to assess to
what extent a municipality’s obligation under the Benefits Act is reduced by a second source
of coverage. Is the municipality’s payment of premiums reduced by the premium cost of the
second source? What if the second source does not require the payment of premiums, such as
Medicare or Medicaid? Is the coverage provided by the municipality only required to
supplement the coverage provided by the second source? To what extent? Is the amount of
supplementation to be provided by the municipality determined by comparing the plans’
deductibles, out-of-pocket maximums, lifetime maximums, coverage for certain procedures or
examinations, or some function of all of these?
¶ 47 These are questions that cannot be answered consistently and fairly by a municipality
across all of the recipients of its provided health insurance benefits, much less across the many
municipalities in Illinois that are subject to the terms of the Benefits Act. The answers to these
questions should be provided by the legislature, not this court. As a court, we are not permitted
to read into a statute exceptions, limitations, or conditions that are not expressed in the plain
language of the statute. Evanston Insurance Co. v. Riseborough, 2014 IL 114271, ¶ 23. To
formulate and impose a framework by which to calculate the extent to which a municipality’s
obligation to provide health insurance benefits under the Benefits Act is reduced by coverage
from a second source would go far beyond simply reading into a statute a limitation or
condition. Accordingly, we decline to do so and conclude that, absent a legislatively approved
framework under which we and municipalities can assess the extent to which a municipality’s
obligations under the Benefits Act is reduced by coverage from a second source, we must
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assume that the legislature intended a recipient’s eligibility for Medicare to reduce to zero a
municipality’s obligation to provide health insurance benefits to that recipient.
¶ 48 In sum, because Paul is not actively working as an employee for defendant, is not
associated with defendant in a business relationship, and has not retained employment rights
or met the other requirements for current employment status on that basis, Paul does not have
“current employment status” with defendant. Absent “current employer status” for Paul,
Medicare is not a secondary payer for Margaret and Christopher, and defendant was entitled
to take their eligibility for Medicare into consideration when determining whether their
medical expenses were payable from another source. As a result, once Margaret and
Christopher became eligible for Medicare, defendant was no longer required to provide health
insurance benefits for them under the Benefits Act.
¶ 49 E. Wage Act
¶ 50 Because plaintiffs were not entitled to have defendant pay health insurance benefits under
the Benefits Act for Margaret and Christopher after they became eligible for Medicare, their
claims under the Wage Act also fail as a matter of law. The Wage Act provides a mechanism
under which employees may recover unpaid or underpaid “wages, final compensation, or wage
supplements” and damages from an employer who does not make timely payment of those
monies pursuant to the Wage Act. 7 820 ILCS 115/14(a) (West 2014). It goes without saying
that a person cannot recover wages, final compensation, or wage supplements to which they
were not entitled or that the employer was not obligated to pay. Here, as discussed in depth
above, plaintiffs were not entitled to have defendant pay health insurance benefits under the
Benefits Act for Margaret and Christopher after they became eligible for Medicare.
Accordingly, plaintiffs’ Wage Act claims for defendant’s failure to pay Margaret’s and
Christopher’s health insurance premiums following their Medicare eligibility are precluded.
¶ 51 We note that the parties spend a fair amount of time debating whether the health insurance
benefits under the Benefits Act qualified as wages, final compensation, or wage supplements
under the Wage Act and whether plaintiffs were required to demonstrate the existence of an
employment contract or agreement between Paul and defendant. These contentions relate to
the trial court’s supplementary conclusion that, pursuant to section 2-615 of the Code, plaintiffs
failed to state a cause of action under the Wage Act because the health insurance benefits under
the Benefits Act did not qualify as wages or wage supplements and because plaintiffs failed to
allege the existence of an employment agreement. Because we conclude that the trial court
properly dismissed these claims under section 2-619 of the Code because defendant was not
obligated to pay Margaret’s and Christopher’s health insurance benefits under the Benefits Act
following their Medicare eligibility, we need not address this alternative basis for dismissal
under section 2-615 of the Code.
¶ 52 In sum, defendant was not obligated to provide health insurance benefits for Margaret and
Christopher under the Benefits Act after they became Medicare eligible. Accordingly,
plaintiffs’ claims for mandamus, declaratory judgment, and relief under the Wage Act were
7
As plaintiffs’ counsel correctly pointed out during oral arguments, the Wage Act should not be
confused with the Attorneys Fees in Wage Actions Act (705 ILCS 225/1 (West 2018)), which applies
only to “wages earned and due and owing according to the terms of the employment” and not other
employment benefits.
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properly dismissed with prejudice under section 2-619(a)(9) of the Code. We are very much
aware of and sympathetic to the fact that this result will likely have a significant negative
impact on the plaintiffs. We are, however, constrained by the law as reflected in the Secondary
Payer Act, regulations related to the Secondary Payer Act, the Benefits Act, and case law
interpreting all three. We are also bound by principles of statutory interpretation and the
separation of powers between the judiciary and legislature. The trial court’s decision and our
decision reflect, in our opinion, the correct application of these laws and principles, as
unfortunate as the result may be for the plaintiffs.
¶ 53 Finally, we recognize that plaintiffs allege that it is their medical providers who are seeking
recoupment of costs from plaintiffs. However, to the extent that there remain premiums that
defendant has paid on behalf of Margaret and Christopher but has not yet recouped from BCBS,
we encourage the parties to negotiate and reach a compromise on the resolution of those
premiums. In doing so, we urge defendant to take into consideration plaintiffs’ good faith
reliance on their coverage in seeking medical treatment.
¶ 54 III. CONCLUSION
¶ 55 For the foregoing reasons, the judgment of the circuit court of Cook County is affirmed.
¶ 56 Affirmed.
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