Justice Marvin Baxter, pictured on Nov. 10, wrote for the court: “Under California law, a vested right to health benefits for retired county employees can be implied under certain circumstances from a county ordinance or resolution.” (Jeff Chiu / Associated Press)

By Maura Dolan, Los Angeles Times
November 21, 2011, 5:50 p.m.

Health benefits for government retirees may not be eliminated if state and local governments had clearly promised workers those benefits, the California Supreme Court ruled in an Orange County case Monday.

The unanimous ruling is expected to make it more difficult for state and local governments to shave costs by cutting health benefits to retirees if elected officials in previous years made it clear that those benefits would last a lifetime.

The state high court decided that retired Orange County employees may be able to show they had an implied contract that prevented the county from changing a healthcare plan in a way that caused the premiums of many retirees to skyrocket.

“Under California law, a vested right to health benefits for retired county employees can be implied under certain circumstances from a county ordinance or resolution,” Justice Marvin R. Baxter wrote for the court.

Retirees sued Orange County in 2007 after it revamped the health benefit program to save money. A federal trial court sided with the county. An appeals court, which is now considering the case, asked the California Supreme Court to clarify state law in the case.

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