Posted on 01/05/2012 3:52:18 AM PST by afraidfortherepublic
WEA Trust, a nonprofit health insurer with ties to the state's largest teachers union, wants a federal court to validate its action denying federal funds to Wisconsin school districts that dropped the company.
The issue stems from funds received through the federal Early Retiree Reinsurance Program. WEA Trust applied for and received $18 million from the federal program created to offset insurance costs for early retirees, but it only shared the money with districts that still participated in its insurance program, the Milwaukee Journal Sentinel reported Wednesday ( http://bit.ly/wkLdBP).
At least 14 school districts that dropped WEA Trust are considering legal action to recover what they believe is their share of money.
One district administrator is Glenn Schilling, the superintendent of the Hartland-Lakeside School District in Waukesha County. He said the districts expect to decide by Friday whether to sue to recover the nearly $3 million.
As a pre-emptive move, WEA Trust filed a lawsuit Friday against 14 districts whose officials have publicly said they want to be involved in a legal action, said Steve Lyons, a spokesman for the insurance firm. He said districts that choose not to litigate could be removed from the court action.
WEA Trust was created 40 years ago by the Wisconsin Education Association Council, the state's largest teachers union. As of last year, about two-thirds of districts received health insurance from the nonprofit.
But a number of changes made to state law last year gave school districts more control over spending, and teachers unions less control, and many districts dropped the trust as a health insurer.
In a bid to encourage renewals, WEA Trust offered to share money from the federal reinsurance program
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