Illinois Supreme Court Strikes Down Ordinance Modifying PSEBA

by Karl R. Ottosen and Hayley Loufek

In International Association of Firefighters v. City of Peoria, 2022 IL 127040, the Illinois Supreme Court recently held that a Village’s home rule ordinance cannot supersede its prior interpretations of the Public Safety Employee Benefits Act (“PSEBA”) (820 ILCS 320/1 et seq.).

PSEBA requires public employers to pay the entire premium of its health insurance plan for full-time firefighters and police officers who suffer a “catastrophic injury” during a qualifying event. In addition, PSEBA requires employers to pay the premiums of the employee’s spouse and dependent children. As a result, the costs of these benefits can be very expensive.

Unfortunately, PSEBA does not define the term “catastrophic injury.” Thus, the meaning of that phrase has repeatedly been the subject of litigation. In 2003, the Illinois Supreme Court held that “catastrophic injury” means an injury that results in a line-of-duty disability pension. Krohe v. City of Bloomington, 204 Ill. 2d 392 (2003). This interpretation has been unpopular with municipalities and fire protection districts since it requires them to intervene in pension board proceedings if they wish to contest that a firefighter or police officer is “catastrophically injured.” However, the Illinois General Assembly has not legislatively disturbed the Supreme Court’s definition since.

Recently, the City of Peoria attempted to use its home rule powers to define “catastrophic injury” differently. Local governments with home rule authority are allowed to enact laws by passing ordinances. These ordinances can even overrule laws passed by the General Assembly, unless the Assembly expressly says they cannot.

Reasoning that it had the power to modify the Illinois Supreme Court’s definition of “catastrophic injury” via its home rule authority, Peoria adopted an ordinance the defined a “catastrophic injury” as one resulting in the employee no longer being able to perform any gainful work. As a result, a firefighter or police officer in Peoria would have to carry a heavier burden in applying for PSEBA benefits than those in a neighboring community.

The Illinois Supreme Court struck down this effort. The Court relied on the fact that, in passing PSEBA, the General Assembly specifically included a provision prohibiting home rule communities from passing ordinances that were inconsistent with the Act’s text. When the Illinois Supreme Court interpreted “catastrophic injury” in Krohe, it became an integral part of the Act. Therefore, Peoria did not have the authority to redefine PSEBA’s terms.

The Peoria case highlights an important rule about interpreting statutes: unless the General Assembly has amended a statute that has been interpreted by courts, a court’s interpretation is part of the law (especially when the interpretation is from the Illinois Supreme Court). Over the course of at least eight General Assembly sessions since the Krohe decision, attempts to change the definition of “catastrophic injury” to include an injury that prevents a public safety employee from performing gainful work have been unsuccessful. So, Krohe’s definition is still the law, and not even a home rule ordinance can change that.

The Peoria case confirms that changes to PSEBA will need to be made by the General Assembly. Until then, public employers should continue to defend themselves appropriately by screening line-of-duty injuries and intervening in pension board proceedings if warranted.