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Sauk County insurance contributions exceeded limit by $1M over 3 years

Over the last three years, Sauk County government has contributed nearly $1 million more toward employee health plans than what legal staff say is allowed under an ordinance.

For reasons that remain unclear, Sauk County government contributed nearly $1 million more than its own ordinance allowed to employee health plans over the last three years, an analysis shows.

Sauk County Finance Director Kerry Beghin said about 8 percent of that was funded by state or federal grants, meaning the portion from local property taxes was about $918,010.

County administrative staff verified that dollar figure, but dispute that it should be characterized as an overcontribution.

They say it’s likely that until recently, the county calculated its contributions based on an interpretation of the ordinance that differed from that of current legal counsel. However, they have not provided evidence to support that suggestion.

The issue came to light in November after county employees noticed dramatic changes to their monthly insurance premiums and contacted members of the Sauk County Board.

Several board members pressed administrative staff for answers, and learned that they had recently changed the way the county calculates its contributions to employee health plans.

County contributions to employee insurance premiums

Tom Kriegl of Baraboo, one of the supervisors who uncovered the change, said it’s concerning that high-level staff did not disclose the matter to the county board until they were asked about it.

“To just assume that they could make the change and not explain it was irresponsible,” Kriegl said.

Change exposed issue

An ordinance says the county’s contribution to monthly premiums shall be limited to 88 percent of the least expensive standard policy option.

The county offers employees three options: An HMO with copay plan, an HMO plan and a point of service plan. Of those three, the one with a copay is the least expensive.

However, the county has until recently based its 88 percent contribution on the HMO plan, which is more expensive than the one with a copay.

Therefore, the county’s contributions in recent years have exceeded 88 percent of the least expensive policy.

On Oct. 30, Interim Sauk County Corporation Counsel Deb O’Rourke presented Administrative Coordinator Alene Kleczek Bolin with a legal opinion on the matter.

“The language of the ordinance is clear: the county pays its percentage of the least expensive plan premium,” O’Rourke wrote. “The least expensive plan is the HMO with copay. Thus, the county should pay 88% of the premium for the HMO copay plan.”

Despite the fact that the county has previously based its contribution on a more expensive plan, Kleczek Bolin said in an email that the ordinance “was followed in the past.”

To explain that, she said the county previously did not base its 88 percent contribution on the copay plan because of a legal interpretation that it was not a “standard policy option,” as specified in the ordinance.

When questioned about that claim, Kleczek Bolin, who was an attorney in the corporation counsel’s office until early 2016, acknowledged she was making an assumption.

She has not been able to locate evidence of a prior legal opinion — oral or written — to show that staff interpreted the ordinance differently in the past.

“I don't know what happened,” Kleczek Bolin said. “Based on everything that I have seen, my educated guess is that they did read and know the ordinance. However, I don't know for sure. It is speculation on my part.”

In September, the county board approved a new three-year deal with Unity Health Insurance. This time, staff budgeted the county’s 88 percent contribution on the copay plan, the least expensive one.

The change caused the county’s contribution toward that plan — which also is the most popular — to decrease, and the employee's share to increase. Full-time employees on the copay plan saw an 82 percent increase in their monthly premiums.

In 2017, employees on the family copay plan paid $99.17 a month. Under the new calculation, they pay $180.66.

Explanations unclear

During a November meeting, Personnel Director Michelle Posewitz provided her oversight committee with a lengthy and complicated explanation of the change that left several supervisors in attendance confused.

Her explanation was that decade-old union contracts, a statewide anti-collective bargaining bill, a 2014 wage study, and requirements of the Affordable Care Act conflicted with requirements of the ordinance.

After a brief discussion, the Personnel Committee decided the next step should be a comprehensive review of the ordinance.

Kriegl said Kleczek Bolin's explanation of an alternate legal interpretation seems to involve semantics. If there was a prior interpretation that differed from the current one, he does not recall that it ever was brought to the attention of the board.

At a minimum, Kreigl said, it's clear the discrepancies occurred because of a lack of transparency.

Although he said it’s not likely that the nearly $1 million contributed in excess of the ordinance limit can be recouped, there should at least be an acknowledgement among high-paid staff that a mistake was made.

“Unfortunately, this is the way Sauk County government has operated,” Kriegl said. “There’s always this tendency to cover things up.”

Board Chair Marty Krueger of Reedsburg is scheduled to give fellow supervisors an update on the insurance contributions issue during his report to the board Tuesday night. He has not returned messages this week.

Follow Tim Damos on Twitter @timdamos

Reporter for the Baraboo News Republic.