Four school districts sign on to lawsuit
At least four school districts have signed onto a class-action lawsuit, seeking millions of dollars in health insurance credits owed to them by the Indiana State Teachers Union Insurance Trust.
David Day, an attorney with the Hamilton County firm Church, Church, Hittle&Antrim that is handling the suit, declined to comment.
However, school boards in Delphi and Caston already have voted to join the suit. Delphi superintendent Ralph Walker said the Oregon-Davis and Knighstown school districts also have signed on to the suit, which he said likely would attract “at least 15 school districts.”
The suit, which could be filed as early as next week, revolves around credits that school districts previously enrolled in ISTA’s health insurance plan built up when their claims did not add up to the premiums they paid into the program.
Walker said ISTA has refused to tell his district how much it has earned in those credits since July 2008. He estimated ISTA owes the district at least $500,000.
“We’re pretty much being ignored,” Walker said. “No one who is left down there seems to have any information.”
The National Education Association took over ISTA earlier this year when state regulators learned its insurance trust was facing a potential $67 million deficit.
The insurance trust paid for long-term disability benefits to 650 teachers in 90 of the state’s 300 school corporations and health insurance in 30 districts.
When reached this afternoon, Ed Sullivan, the NEA trustee now charged with running ISTA, did not have an immediate comment on the lawsuit.
In May, when regulators first discovered the trust’s economic woes, Indiana Department of Insurance officials said ISTA was liable for $21 million in health insurance credits to 30 districts.
Dan Clark, ISTA’s deputy director, said in May that if all the districts covered by the union’s health insurance decided to leave the program and cash in their credits, “We don’t have the money.”
ISTA discontinued its health insurance program earlier this year, but remains liable for the credits earned prior to that decision.
Walker said the lawsuit will seek to “garner as much of the money owed to us as we can.”
“The question is whether the NEA is going to come in and do the right thing for its membership,” he said. “This should be quite a big suit when it’s all said and done.”
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