March 23, 2012: School district joins class action lawsuit

Talk about it

The Hudson Board of Education voted unanimously last week to join 45 other Wisconsin school districts in a class action lawsuit against the Wisconsin Education Association Trust.

The suit seeks to recover funds from a federal program called the Early Retirement Reinsurance Program (ERRP) being held by the WEA Trust on behalf of school districts formerly insured through the trust.

According to district Financial Services Director Tim Erickson, the money, $172,000 for Hudson, was intended to help reduce health insurance costs of employees of eligible employers, both private and public.

The trust, which applied for and received the ERRP funds for districts they insured, has refused to forward the money to Hudson and other districts no longer being insured by them. They have indicated that they intend to redistribute the money among districts still insured by them.

The Hudson School District opted out of the WEA Trust insurance plan last fall for a plan through Health Partners.

Erickson said the lawsuit contends that the funds are due the district and cannot be reallocated by the trust. The money the trust received was allocated to cover members of the trust during the 2010-11 school year. WEA contends that they followed federal law and that the money can only be paid out to districts currently enrolled in their plan.

He told the board that the firm representing the districts, Foley & Lardner LLP of Milwaukee, will be paid only if they win the lawsuit and from any proceeds awarded to the Hudson School District, generally around 33 percent of the recovered money.

Tags: news, education, money