For many years, REMC directors were provided with lifetime health insurance benefits at Clark County REMC’s cost as part of the company’s policy. Several years ago, this policy was eliminated due to rising health care costs, and a desire by the board of directors to be wise stewards of the membership’s money.
Following that policy change, four former directors sued Clark County REMC, claiming that REMC was obligated to pay the cost of their health insurance for the rest of their lives. The case was argued in Clark Circuit Court, the Indiana Court of Appeals, and finally at the Indiana Supreme Court. In December 2021, by unanimous decision, the Indiana Supreme Court ruled in REMC’s favor, confirming that the former directors were not entitled to lifetime insurance benefits.
“This decision is important to all Indiana corporations, especially member-owned electric cooperatives like REMC,” said Paul Graf, who serves as the current president of the board. “It stands for the principle that policies like ours are not contracts. Our corporate policies were always meant as an amendable guide to director compensation. The policy has always been changeable. It was never meant to form a lifetime contract.”
Litigating any case can be expensive, especially one that takes several years to decide and makes it all the way to the Indiana Supreme Court. However, all court costs were covered by REMC’s insurance provider, so no financial burden was laid on the members or their rates. Candy Meyer, who recently retired after serving for 36 years as a director, stated “We’re sorry this ever had to result in litigation, but we had to stand up for our members and stand on the cooperative principles that make us successful.”
Full details on this case, and the Supreme Court’s ruling, can be found at clarkremc.coop/board-update.