The Pataki administration’s reinterpretation of a health insurance provision was ruled “arbitrary, capricious and contrary to the law” by an upstate New York appeals panel that found the state had no right to impose additional costs on state workers and retirees.

In a 5-0 decision, the Appellate Division, 3rd Department, has shot down a January 2006 rule that ultimately increased health insurance costs for current and former employees. Five labor unions representing current and retired state workers had challenged New York’s break with a 40-year practice, but were rejected at the trial level. They were vindicated last week by the 3rd Department.

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