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A finance company has paid less than $300,000 of $1-million that officials say the schools are owed.
By ROBERT KING
© St. Petersburg Times, published November 17, 2001
BROOKSVILLE -- The School Board gave its attorney approval this week to sue a Canadian finance company that has taken more than a year to pay a $700,000 backup insurance claim.
Sun Life Financial has paid less than $300,000 of the $1-million school officials say the county schools are due. After trying to work things out, board members gave attorney Karen Gaffney permission to file a lawsuit to collect the money.
In 1999, the School Board was trying to find a way to control the costs of its employee health insurance plans. Private insurers were proving costly and tough to deal with, so the board decided the school district would create its own self-insurance fund.
That idea gave the board control over its own health plan but also made it solely liable for the plans' costs, which were covered by tax dollars and employee contributions.
As a safeguard, the district bought a backup insurance plan with Sun Life.
In simple terms, Sun Life would pay the first $1-million in any cost overruns incurred by the plan. It proved to be a good move for the district.
In a year the district expected to pay $5.7-million, school workers actually racked up $7.1-million in health claims. School officials expected to cover the overrun with the $1-million "reinsurance" plan and $400,000 of local tax money.
Jeff Landis, a spokesman for the Toronto-based Sun Life, had no comment on the potential for a lawsuit other than to say, "Sun Life Financial has been working closely with the Hernando County School Board and will continue to do so in trying to resolve the issues surrounding their claim."
Edd Poore, the school district's personnel director, said Sun Life is contesting more than $600,000 in claims that were paid out on behalf of 14 employees with catastrophic illnesses.
Poore said Sun Life contends it wasn't made aware of those patients' existing illnesses before the deal was made. But Poore said it was clear that those employees were members of the district's health plan when Sun Life agreed to provide the reinsurance.
-- Times staff writer Robert King covers education in Hernando County and can be reached at 754-6127. Send e-mail to rking@sptimes.com.