Your CBA language on retiree benefits may be weaker than you think
On December 9, 2025, Connecticut’s Supreme Court ruled HSAs aren’t retiree coverage under CBAs.
The Connecticut Supreme Court reversed a lower court and held that the Town of Groton is not required to extend employer health savings account (HSA) contributions to retired police officers. In Duso v. Groton, 353 Conn. 667 (No. SC 21082), retirees argued that a 2008 pension agreement promising the “nature and scope of coverages, including but not limited to deductibles” in effect for active officers entitled them to the same HSA contributions the town provides to active officers under a later collective bargaining agreement.
The court disagreed. It drew a firm line between plan terms and funding mechanisms. A deductible, the court explained, is a fixed feature of the health insurance policy – a threshold where the insurer’s obligation begins. A health savings account (HSA) sits outside the policy. It is a separate, tax-advantaged account that does not change the deductible amount, and its funds can be used for purposes other than meeting the deductible. Because of that, HSA contributions are not insurance “coverage” and are not a “deductible” under the pension agreement’s retiree-parity clause.
The facts that framed the dispute are straightforward. Groton and the police union moved active officers from a preferred provider option (PPO) to a high-deductible health plan (HDHP) effective January 1, 2018. Under the 2016-2020 CBA, active officers were required to open and maintain HSAs. The town agreed to fund 50 percent of each active officer’s annual in-network deductible –$1,000 for single coverage and $2,000 for two-person or family coverage – while the HDHP deductibles themselves remained $2,000 and $4,000. For employees legally ineligible to open an HSA, the town provided the same 50 percent amount on a taxable basis. Retirees under age 65 were required to enroll in the HDHP by July 1, 2018, but they did not receive the HSA contributions.
Retirees sued for declaratory relief and damages. The trial court and the Appellate Court agreed with the retirees, reasoning that funding half the deductible for active employees effectively lowered their deductible relative to retirees. The Supreme Court reversed, emphasizing that the deductible levels were identical for both groups and that funding assistance does not alter “coverage” or the deductible itself.
Even if the retiree clause were considered ambiguous, the court said the parties’ own contract language resolved it. The CBA note stated that the town’s 50 percent contribution “is not an element of the underlying insurance plan,” and the town “shall have no obligation to fund any portion of the HDHP deductible for retirees or other individuals upon their separation from employment.” That wording confirmed that the HSA funding was a benefit for active employees, not a plan term that carried over to retirees under the pension agreement.
For HR leaders – particularly in municipal and union settings – the takeaway is practical. Parity language promising retirees the same “nature and scope of coverages” as active employees generally track core plan terms: deductibles, coinsurance, copays, and limits. It does not, without clear words, extend to separate employer funding mechanisms such as HSAs or taxable equivalents. If the intention is to extend those dollars to retirees, that obligation should be stated expressly in the pension agreement or retiree-benefit provisions, and aligned across CBAs and plan documents. When shifting to HDHPs, address retiree impacts directly rather than relying on broad parity clauses.
