Maryland Law Ending State Retiree Drug Benefits Upheld on Appeal

Maryland’s elimination of prescription drug benefits for Medicare-eligible state retirees survived a legal test when the Fourth Circuit ruled Tuesday that the relevant statutory language doesn’t create a contract with state workers.

The American Federation of State, County and Municipal Employees, Council 3, argued that state statutes in effect between 2004 and 2011 created a binding contractual right for Maryland’s retired state workers to receive subsidized prescription drug benefits. The US Court of Appeals for the Fourth Circuit disagreed, saying that the relevant statutes fail to include “unmistakable contract language.”

The statutes don’t use terms like “contract,” “covenant,” or ...