Facts about the mandated PEEHIP refund

May 21, 2019 12:00 AM


By Theron Stokes, AEA Associate Executive Director


On March 8, 2019, the Alabama Supreme Court ruled, 8-0, to uphold Montgomery County Circuit Court Judge Johnny Hardwick’s earlier decision in favor of AEA, finding that PEEHIP had violated Alabama’s Open Meetings Act at its April 27, 2016 meeting in which the vote was originally taken to increase insurance premiums and spousal surcharges. The decision was a historic victory for AEA.


This is a fight that we have led since early 2016. The decision will result in PEEHIP participants getting their money back for any increases that were improperly deducted by PEEHIP from the date of that original meeting through May 2018. In May 2018, PEEHIP held a second meeting regarding increased premiums and surcharges and voted again, at a proper meeting this time, to increase these items. 


The total amount to be refunded is significant. 


Thank you for your steadfast support during the extremely tough battle, all the way to this state’s highest court, to secure this refund. AEA could not have done it without you!  


We are now moving to the next phase of this battle. And, it is an important one. The reason we noted above that the refund will be “significant” is because, so far, PEEHIP has been unwilling to provide us with the information and documents we have been requesting which would allow us to determine the precise amount of money in the account in which PEEHIP is holding the refund money.  


We do not understand why that very important information is not being shared with us.  However, it is a factor that it is slowing down the process in returning the refunds to you. 


AEA has been making demands for the information and documents which would allow us to not only determine the exact amount of money in the account, but also allow us to monitor the refund process and verify the calculations being done by PEEHIP staff. It is crucial that we have such information so that we can identify those to whom refunds are owed, identify the amount of each person’s payments, calculate the amount of interest each person will receive and otherwise ensure every affected person gets an accurate refund. We will continue to fight through this process until we know that members are getting what they are owed.  


We do not want any further delay by PEEHIP.  We want PEEHIP to share the information we have requested and involve us, the winning party, in an immediate refund process.


Instead, following the recent ruling in March by the Alabama Supreme Court, PEEHIP filed an application for rehearing with the Alabama Supreme Court.  By filing the application for rehearing, PEEHIP has caused additional delay.


PEEHIP is asking the court for permission to just send the money to local school systems for the local systems to then distribute to their employees.  We are not convinced that is the most appropriate and efficient way to repay the premiums and surcharges.  


We are asking the Supreme Court not to create a nightmare by allowing PEEHIP staff to return the money to the school districts and other educational entities that have employees who will receive the PEEHIP refunds. The massive problems it will cause local educational entities are numerous. 


For example, we are concerned that sending the money all across the state to hundreds of local systems, instead of PEEHIP sending the refunds out themselves, greatly increases the chance that errors occur in the process. It would also greatly increase the chance that people might be treated differently depending upon which local system their money is sent to and how and when that local system decides to actually do the refund. 


The school systems should not be required to search for employees who have retired, transferred, or left their school districts. Plus, the PEEHIP proposal would require school districts to pay an additional tax when they return the money to employees in their districts. The local districts should not be punished for the mistake that was made by PEEHIP. 


In short, there would be no uniformity in the process. Also, we are concerned because the local systems were not parties to our lawsuit and we do not believe they want to be burdened with having to administer the refunds, which are necessary because of PEEHIP’s illegal meeting, not because of anything the local systems did. We have many more concerns, but these are some of the primary ones.


PEEHIP’s application for rehearing has not been ruled on by the Alabama Supreme Court at this time.  There is no timetable for the Alabama Supreme Court to rule, but we will immediately notify everyone via the Journal and social media when we receive word. Our goal is to make sure that the refund process is the most appropriate and efficient process available, and that the refund and interest calculations are accurate for your refunds.  


Thank you, AEA members, for making this fight possible!


This column was originally published in the May 20, 2019 edition of the Alabama School Journal, a publication of the Alabama Education Association.