Sequoia Healthcare District alters health insurance subsidies for Directors and employees
Original post made by Jack Hickey on Apr 8, 2013
At their April 3, 2013 board meeting Web Link
the majority approved agenda item 5c:
A subcommittee of the Board consisting of Directors Kane and Faro and Mr. Michelson, conducted additional research regarding the premium amount allowed for health care and dental insurance for directors and staff. The subcommittee's recommendations are as follows:
1. Medical and dental premiums are to remain at a maximum of $1,500 per month as approved in December 2012; however, effective July 1, 2013 participating directors and staff will be required to pay 10% of the premium expense with the District paying 90%. In the instance of CalPers Health premiums paid monthly by the District, directors and staff will reimburse the District 10% of their individual premium cost.
2. Effective July 1, 2013 the inlieu benefit offered to employees who opt out of the District's benefit plan shall be reduced from $400 to $200 per month. (Employee Policy 5.05)
3. Effective July 1, 2013 Employee Policy 5.10 providing reimbursement of $40 per month for gym membership shall be eliminated.
4. Effective July 1, 2013, the District shall offer employees a paid term life insurance policy valued at $50,000 at no cost to the employee. Employees cannot increase the value of this policy by paying an additional premium. This benefit will cease upon termination of employment from the District.
Upon approval of the above recommendations, Board Policy 15.2 and Employee Policy 5.05 will be amended accordingly; Employee Policy 5.10 will be eliminated; Term Life Insurance
Benefit will become Employee Policy 5.11.
Effectively, this reduced the subsidy for Directors from the recently (January 2013)raised cap of $1500/month to $1350/month, with the exception of yours truly. I had chosen coverage with Kaiser with premiums <$800/month. The new policy now would require me to reimburse the District 10% of my premium.
Ironically, this reduction in benefit was determined by District counsel Hudak to only apply to newly elected directors. At my request, Mr. Hudak provided me with an Attorney General's Opinion supporting that determination. He has yet to provide similar support for a determination that the December_increase_was immediately applicable to current directors.
When I first was elected to the Sequoia Healthcare District Board of Directors, some Directors were costing the district more than $2,000/month for their health insurance.
Several years later, the District changed its policy and put a $1200/month cap on the subsidy.
At our December meeting, that cap was raised to $1500/month. I challenged the applicability of that increase for current Directors.
District counsel, Mark Hudak, was tasked to research the issue.
________MINUTES FROM DECEMBER MEETING
5.e. Consider Increasing Premium Amount Allowed for Health Care
Insurance for Directors and Staff
Director Kane reported she surveyed several special districts and in an environment of increasing healthcare premiums, to add dental and vision coverage she suggests raising the amount reimbursed to directors and staff to $1,500 a month.
Motion: To approve an increase in amount reimbursed to directors and staff to $1,500 a month effective January 1, 2013. By: Director Kane
Seconded by: Director Faro
Director Hickey asked that the maker of the motion amend it to no reimbursement for healthcare premiums for directors and that they receive a stipend for meeting attendance.
The suggested amendment was not accepted by the maker of the motion.
Vote: 3-1-1 with Director Shefren abstaining and Director Hickey opposed.
Additional research will be conducted by a subcommittee of the Board and item shall be placed on the February 6, 2013 meeting agenda for re-evaluation. Mr. Hudak will research to determine if increase is applicable to current directors.
The increased cap of $1500 was applied to Directors effective January 1, 2013.
No item reporting on the research conducted by the subcommittee was placed on the agenda for the February meeting Web Link, nor do the minutes show any determination by Mr. Hudak as to the applicability of the increased cap on board health insurance subsidy.
on Apr 9, 2013 at 12:37 pm
No documentation supporting the opinion of District counsel Hudak suggesting that current Directors did not have to wait for their next election to take advantage of the increased subsidy. That opinion was discussed at board meetings but not recorded in the minutes. Audio of those meetings may be reviewed at the District office upon request. The Board has repeatedly refused to place those recordings on the District website as I have requested.
I am awaiting a response from Mr. Hudak regarding citations supporting his opinion, which I question.
on Apr 10, 2013 at 4:29 pm
I have just received a Mememorandum from Mark Hudak to Lee Michelson dated 6 December. This memo was NOT included in the meeting information posted on the District's website. I have requested that it be uploaded to that website. I will post a link when it is available.
I totally disagree with the opinion of District Counsel. Sitting Directors must not benefit from increased compensation upon which they have voted. Mr. Hudak suggests that it is not "compensation".
The facts suggest otherwise.
on Apr 13, 2013 at 9:10 am
Here is an LTE published in yesterdays Daily Post:
"Editor, your article, "Health District awards $1.3 million in grants" has an error which prompts my response.
It states "Board members themselves are reimbursed for up to $1200 a month for both medical and dental insurance." A history of board member compensation follows.
After my election to the Sequoia Healthcare District Board in 2002, I discovered that some Directors were costing the District >$2000/month for health insurance. I proposed that a stipend for meeting attendance (6 regularly scheduled meetings/year) would be more appropriate compensation. My proposal was rejected. Several years later, under public pressure, the Board put a cap of $1200/month on the Directors health insurance subsidy. For several years the majority of Directors, whose premiums far exceeded that cap, had to make up the difference out-of-pocket.
Emboldened by her re-election in Nov. 2012, Katie Kane placed an agenda item on the Dec. 2012 board meeting which resulted in an increase of the cap to $1500/month. I questioned the legality of such increased compensation accruing to sitting board members. The following day a memorandum was issued by District counsel, Mark Hudak, which states "I researched the issue of whether an increase in the amount reimbursable for health care premiums can take effect during each board member's current term. The answer is not entirely clear, but I think it can be done."
The District put the new cap into effect beginning January 2013.
At it's April 2013 meeting, the board did a flip-flop on the cap by imposing a 10% reduction. This reduced the maximum subsidy for directors with high-end policies to $1350/month. Yours truly, who has chosen the less expensive (<$800/month) Kaiser coverage will be required to pony up 10%.
Fortunately, and confusingly, counsel has deemed that the reduction can not be imposed on sitting Directors. Go figure!"
_____Directors Katie Kane and Kim Griffin could cost the District $28,800 over the next 4 years if the increased cap of $1500 for which they voted is allowed.