Court rules against state in health-benefits case

OLYMPIA, Wash. — The state Supreme Court on Thursday unanimously upheld a lower court’s ruling that says that damages to be paid to part-time state employees who were wrongfully denied health benefits must take into account more than actual out-of-pocket costs.

The high court’s unanimous ruling sided with a class-action group’s stance on such damages, and it rejected the Washington Health Care Authority’s argument that the state should only pay for actual costs paid by class members during the time they were denied benefits.

“People without health benefits are less likely to seek and obtain medical treatment, especially preventive care,” the opinion, written by Justice Susan Owens, reads. “The State would use this fact as a reason to use a lower estimate of the damage it caused to the employees to whom it improperly denied health benefits. But those lower short-term medical costs have significant long-term consequences, both medical and financial, to uninsured individuals.”

The employees proposed three options to measure the damages due to them: what the state should have paid in health benefits per employee as part of overall compensation; the amount the state saved by failing to provide benefits to the employees; and the amount the state would have paid in health-care costs for employees as a group had they been covered.

The King County Superior Court ruling found in favor of the plaintiffs in December 2012, but the court held off on ruling on an award because of questions that remained, including about the size of the class. The case now heads back to King County.

The high court noted that while they affirmed the King County’s court’s decision to reject the state’s method to measure damages, they were not prescribing any means on how to ascribe value to health benefits.

“Instead, trial courts have discretion to select the most appropriate method for calculating damages depending on the facts presented,” the court wrote.

Steve Festor, an attorney for the class, said that the next step is that they will finalize who is in the class and determine the eligible months, and multiply that by the premium that the state should have paid in each case. Festor said that thousands of employees who worked in multiple state agencies and higher education are eligible.

“The decision emphatically tells the State that it cannot profit from unlawfully denying employees health insurance,” Festor wrote in an email to The Associated Press. “The Supreme Court ruled that the State’s conduct directly resulted in the lost health and longevity of its employees, and the State’s proposed measure of damages would both understate the damages suffered by the employees and be unworkable.”

Officials with the Health Care Authority said they were still reviewing the ruling and would comment later in the day.

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