Editor’s note: this is the second and final story addressing the Bath Township lawsuit against a self-insured healthcare cooperative.
BATH TOWNSHIP — Bath Township Trustees joined forces with the Stark County Combined General Health District and at least 24 governmental entities in the state in a lawsuit against a self-insured healthcare cooperative that was created to lower healthcare costs for thousands of public employees — but is now millions of dollars in deficits.
Bath Township Trustee Steve Ross pointed out during the Aug. 30 township trustee meeting that Greene County Assistant Prosecutor Stephanie Hayden talked with Paul-Michael La Fayette, an attorney who has been retained by the township, in addition to the Stark County attorneys as she sent an e-mail to the township trustees Aug. 25 addressing the two options available to the trustees.
Hayden said the township trustees could intervene now. However, if they do, the trustees needed to take action by Aug. 28 because the court is far more likely to allow the existing attorney of record add new parties to his roster rather than a new attorney of record, such as herself, to add new parties.
Intervening at this time would also allow the township to be included in whatever the parties negotiate in settlement now. Hayden pointed out that there is a cost associated with taking part in the lawsuit, but the expert legal counsels on board have reduced their rates, making it more economical for intervening parties. Presently, each entity would pay less than $1,000. There is also some concern that the order issued would only apply to the parties that are involved in the lawsuit.
On the other hand, the township trustees could choose not to intervene at all and wait to see what emerges from the Stark County lawsuit. The township could then take any order issued in Stark County, file an action in Greene County, and try to procure the court to agree that the order applies to Bath Township as well. Also in the interim, OPEC-HC may try to pass a shortfall from the settlement they reach with the parties involved in the lawsuit but not those who did not intervene.
“I spoke to the attorney representing the intervening parties, and he is hopeful that they will be done by the end of October,” Hayden stated in her e-mail to the township trustees. “If you choose not to intervene, I would recommend that you do some serious discussion and negotiation prior to paying anything to OPEC-HC in response to a bill they sent. You should be paying under the same terms and conditions that the Stark County group is paying. The alternative, you should only pay that which you actually owe, not preserved deficit that was never funded in the first place.”
After consulting with Hayden, Ross said he thought the township would suffer a greater risk by not intervening because if they did, the township would be a part of a settlement group. Ross also noted that he had spoken with La Fayette on Aug. 26, and the attorney said the $27 million that the Jefferson Health Plan claims OPEC owes is overstated. The amount for claims from all the entities who are members of OPEC-HC is probably more like $17 or $18 million.
“La Fayette thinks that the $17 and $18 million is also overstated because it includes fees and commissions not related to claims. He is pretty sure they will probably be under $10 million. That is significantly less than $27 million,” Ross said. “We were figuring paying out $6,000 per township employee if we pull out of OPEC-HC. Now, we are down to $2,000 per employee. It is a lot better pill to swallow, although it still tastes bad.”
Ross said he told La Fayette that Bath Township would participate in the intervention, but that decision was not official until the trustees voted and approved the action at the Aug. 30 township meeting. As part of the intervention, township employees and their families will be required to switch their insurance coverage from Benovation, which they have been with since July 1, to the Jefferson Health Plan once again.
Township Trustee Tom Pitstick stated that he had come to the same conclusion as Ross after reading the letters from La Fayette and the e-mails from Hayden. However, he was concerned about the potential risk of losing approximately $3,000 that the township invested in a health reimbursement plan for vision and dental coverage through the Ohio Insurance Services Agency.
“There could be some significant savings by participating in the lawsuit. ” Pitstick said. “Since the vision and dental coverage is not a part of OPEC-HC, we need to talk to Stephanie (Hayden) about what we should do regarding that insurance coverage.”
The township is currently looking at quotes from the Burnham and Flower Insurance Group, an agency based in Kalamazoo, Michigan, and the King Agency, which is located in Toledo, Ohio.
“Frank Harmon has treated us well, and things have worked very well with OPEC-HC. However, they have this deficit. If OPEC-HC cannot fund our claims, we cannot go with the plan,” Ross said.