The University of Maine System and unions representing the faculty, support staff and other employees have reached an agreement in a dispute over retiree health benefits.

Under the agreement, retirees will have the option of keeping their group health plan, and the unions that represent them will drop lawsuits fighting changes sought by the UMaine System.

The system had proposed switching retirees’ health plans from a group health plan to individual marketplace plans, a change that would have saved the system about $2.5 million. But retirees and the unions representing them objected. About 50 retirees held a rally in Portland in late October, holding up signs that protested the change.

More than 60 members of the Maine Legislature also got involved in the issue, sending a letter in late September to the chancellor asking for the system to reconsider its decision.

Brian Kaufman, a retiree from UMaine Farmington, speaks at a protest Oct. 29 outside the Portland office of James Erwin, chair of the board of trustees, because of the system’s plans to change retirees’ health insurance. Shawn Patrick Ouellette/Staff Photographer

“The marketplace is changing, and we owe it to Maine’s taxpayers and the university community to find a better, more affordable way to meet the supplemental health insurance needs of our former employees. And we need to find that solution together,” Dannel Malloy, UMS chancellor, said in a statement announcing the agreement Wednesday. “In the upcoming year we will be retaining our group health plan while also providing new exchange-based options with prescription drug protections to make sure our commitment to retiree health coverage is met.”

A joint statement from the three unions said, “University of Maine System retirees are collectively breathing a sigh of relief learning they can keep their group health care plan. This change to restore their group plan means our most vulnerable Mainers do not have to choose which prescriptions to fill or worry they won’t be able to afford to see their doctor.”

The unions are the Associated Faculties of the Universities of Maine; Associated Clerical Office, Laboratory and Technical Staff and the Universities of Maine Professional Staff Association.

The changes, which were planned to take affect by the end of the year, involved moving retirees’ insurance from a group plan to a health care exchange where they would be required to pay for medical expenses upfront and be reimbursed. About 3,000 people are impacted, including some spouses of retired employees.

Retirees can still choose to switch from the group plan to a marketplace-based plan, which may be more affordable and flexible for some, according to a University of Maine System news release. The system will contribute $2,100 for retirees and $800 for a retiree’s spouse into a health reimbursement account if the retiree chooses the marketplace-based plan.

Union representatives have contended that retirees who had already enrolled for 2021 coverage under the marketplace plans were finding that the new plans were more expensive and offered less coverage.