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Health Insurance: Is it Opt Out or Cop Out?

By Darryl McPherson

Left to right: Council Members Anderson, Choolokian, Mayor Dyster, Council members Grandinetti, Fruscione and Walker

Last December, the Niagara Falls Reporter broke the story of how Niagara Falls Council member Kristen Grandinetti was wrongfully overpaid for health insurance opt-out money as a result of being misclassified. By being listed as married (she’s single with no dependents), she was paid $6,186 more than she was entitled to.

Now Grandinetti is putting forth a resolution that will eliminate the opt-out payments for herself and other Council members. The practice will continue to exist for all other City employees.

"The reason I filed the resolution is because we’re in dire straits now and, in my opinion, every little bit will help. And there are a couple of Council people who do accept the health insurance, as they deserve to, but there are three of us who have access to very good health insurance at our other positions and, I think, it would show the public that we are willing to take a hit, just as we’re asking other people to do, during this financial crisis," Grandinetti explained.

How sincere is this plan to cut opt- out payments for herself and her two cohorts? Is this resolution a scheme to cover her earlier opt-out scandal?

Niagara Falls city employees who have health insurance coverage through their spouse or from another job may accept a monetary payment if they opt- out of the city's health insurance plan.

The opt-out payment is $9,713 for a family plan. For singles it is $3,526.

Grandinetti has health insurance coverage provided through the Niagara Falls School District and she chose to take the opt-out payment from the city.

According to City Controller Maria Brown, Grandinetti is paying back the $6,186 she was overpaid and will have paid back the entire overage by the end of 2012 through payroll deductions.

So is this new Grandinetti opt-out story, a story of personal sacrifice meant to offset the Grandinetti opt-out story of taking too much money?

Grandinetti's overpayment came to light after the Reporter obtained an email written by City Controller Maria Brown, dated Dec. 2, 2011, with the subject heading, "Confidential: opt out information." It read: "I just notice Kristen's amount is wrong. It is at FAMILY. I guess everyone just assumed she is married. Her amount should be $3,276.04 Health and $252 Dental for a total of $3,527.04 not $9,713.16."

After the Reporter published the leaked email, other media pounced on it and it got widespread attention. The DA was asked to look into it. Mayor Paul Dyster and corporation counsel Craig Johnson rushed to Grandinetti’s defense. Dyster said the error was due to "an oversight in the city's Human Resources Department."

"I was very surprised when I found out about it," Grandinetti said at the time, "I'm upset and concerned that people would think I would do something like this purposely."

The DA declined to pursue an investigation, but talk around town for weeks was that, as a council person in charge of city finances, it was odd that she didn’t notice she was being overpaid by more than $500 per month.

The Reporter wrote an editorial at the time, opining that, based on available information, including the way the opt out forms were written, that it likely was a clerical error.

At the very least, the experience – it could be called a scandal at the time - left an impression on Grandinetti.

Providing health insurance opt out payments is a common practice with governmental entities, but still stings in light of ever-tightening budget constraints. The Reporter previously reported on Niagara County Legislators Dennis Virtuoso and Jason Zona electing not to take opt out payments, though they were eligible to do so.

"We have to lead by example. Government costs too much and this is, let’s face it, an excess," Zona said.

If Grandinetti’s resolution passes, Grandinetti will forgo $3,526 a year.

For the two council members who are also affected, Chairman Sam Fruscione and Glenn Choolokian, both with family plans, they will forgo opt out payments of $9,713 each.

Grandinetti, a staunch supporter of the Mayor, is not allied with Fruscione or Choolokian and last summer wrote a blistering editorial in the Niagara Gazette about their politics.

Whether or not the resolution passes the Council, Grandinetti insists she will never be personally enriched through this program. She currently is paying back the overpaid amount, and, when that is satisfied, she said she will not accept additional funds.

Theoretically, she could switch to the City’s health insurance plan and receive opt out payments from the School District, but she says she would not consider that option.

She maintains her experience with the overpayment debacle is secondary. "That has absolutely nothing to do with (this resolution). That was a clerical error; that is something that is being taken care of. It has to do with the fact that we can save $22,000 that could be put towards another person’s salary."

The resolution will have to get through the other members of the Council in order to become reality. Council member Charles Walker did not see the value. "It’s not something I’m in support of,” he said. “I don’t take the opt-out, but that’s my choice. I think it’s a person’s right to become a City employee [as a Council member]; they should have the same opportunity as any employee."

A more jaded view was held by Council member Robert Anderson Jr., who “nearly spat out his coffee” upon reading the resolution. "It’s a mockery; it’s a joke. I laugh. It’s unbelievable."

Anderson doubted the sincerity of Grandinetti’s resolution, criticizing her for getting her hand caught in the cookie jar. "It’s amazing how people can be so two-faced. I think about the hundreds of thousands dollars every year; she’s the first one who votes in favor of Hard Rock support, and then this Holiday Market… and she voted for that adamantly too. And now you’re going to sit down and talk about a few dollars, as if it was a few dollars that would save us."

When asked whether he would vote for the resolution, Anderson ruefully expressed, "If I could use my middle finger, that’s what they’ll get."

While Walker and Anderson do not receive the opt out payments, so their positions against the resolution are not based on personal enrichment, the two Council members that do receive them, Fruscione and Choolokian, did not return calls for comment.

As it stands, it seems unlikely that the resolution will pass.

For Grandinetti, it is an unfortunate turn of events. "I think at this particular juncture, we need to show the public that we’re a team and that everyone is willing to take a hit financially, so that we can get this budget processed and move forward."
Grandinetti is expected to run for re-election next year, along with Walker and Fruscione.

Niagara Falls pays the highest opt out amounts in western New York, according to study of municipalities conducted by the Buffalo News. While Niagara Falls city employees get up to $9,713 per year for not taking health insurance, most other municipalities pay between $1,000 and $3,000 per year for opt outs. There are about 45 employees in the city who get opt out payments. It costs the city $16,900 to provide health insurance for a city employee with a family plan.

 

 

Niagara Falls Reporter www.niagarafallsreporter.com Oct 16, 2012