James Cobb (left) and Michael Caplan. (Photo: John Disney/ALM)

The Athens-Clarke County government has agreed to pay $3 million to settle a federal class action claiming the municipality shortchanged retirees who were promised “no cost” health care benefits as part of their pay package.

The motion for settlement filed late Thursday in the U.S. District Court for the Middle District of Georgia provides for retrospective settlement checks to be mailed to about 500 retirees and their survivors and bumps the monthly sums they and future retirees in the class will receive to pay for health insurance going forward.

When the suit was filed, the retirees were receiving $150 a month to pay for supplemental insurance. They’ll get $228 a month, starting next July, and the settlement requires Athens-Clarke County to make annual adjustments.

One-third of the $3 million settlement will go to the plaintiffs’ attorneys, and the four class representatives—among them Athens’ former fire chief and deputy county manager—will each receive an additional $5,000.

The plaintiffs are represented by Michael Caplan, James Cobb and T. Brandon Waddell of Caplan Cobb and Dustin Marlowe and Spence Johnson of Athens’ Johnson Marlowe. They declined to comment.  

Athens-Clarke County is represented by R. Read Gignilliat, Patrick Lail and Tracy Glanton of Ellarbee Thompson and Gregory Sowell of Athen’s Cook & Tolley. Neither they nor Athens-Clarke County Attorney Bill Berryman Jr. immediately responded to a request for comment Friday.

The case began in 2014 when a group of retirees, including former Fire Chief Wendell Faulkner, former Deputy County Manager Bobby Snipes, former senior electrician David Wood and former administrative assistant Nancy Cochran sued the unified government.

Athens and Clarke County formed a unified government in 2001. The complaint said the unified government promised to honor guarantees that employees hired before 2002 would receive “no cost” health insurance, provided they worked for 10 years or more.

The agreements also stipulated that they would be provided “the same level of health insurance coverage during retirement that they had on the last day of employment” at no cost, it said.  

But the unified government ”is not honoring the deal,” the complaint said. “It reneged on its ‘no cost’ promise by forcing retirees over age 65 to enroll in and pay the premiums associated with Medicare Part B as a condition to receiving any benefits under the Unified Government’s health plan. And it has failed to provide the retirees the level of indemnification for their medical costs that it promised to provide.”

In 2016, Athens-Clarke County sought to have the bulk of the complaint dismissed on statute of limitations grounds. Judge Clay Land, also of Georgia’s Middle District, complied, then the Eleventh Circuit Court of Appeals reversed him and revived the claims.

Both sides moved for summary judgment, but Land said in January there were factual issues at play that should be addressed by a jury.

The case went to mediation before former Fulton Superior Court Judge Susan Forsling with Miles Mediation earlier this year.

After what a September status report termed “dozens of hours of follow-up work over the course of two months,” the parties agreed to the framework of the settlement proposal filed yesterday.