PEEHIP proposes method of repayment

April 05, 2019 12:00 AM



By Theron Stokes, AEA Associate Executive Director


It has now been confirmed by the Alabama Supreme Court that we have won the PEEHIP lawsuit. The deadline to appeal the ruling on its merits has passed. I know that many of you remain as excited as I am about our victory. 


We also know that you have many questions regarding the status of the litigation. PEEHIP has filed what is called an “Application for Rehearing” only to address the procedure in which the refund will be returned to you. 


They are asking the Court to allow them to return the funds to active employees through the local employer’s payroll systems. AEA is concerned with the procedure that PEEHIP is asking the Court to allow it to implement. Your local employer was not a party to the lawsuit. If the amount you receive from your local employer is incorrect, where do you go for relief? It places a burden on the local school districts, specifically the payroll department to disburse the refunds to the many PEEHIP members that are involved. 


If things proceed the way PEEHIP is proposing, many hours of work will be imposed on staff of the payroll departments of the local school systems and other PEEHIP participating entities. 


The PEEHIP staff and AEA have agreed to work as cooperatively as possible in getting your refunds returned to you as soon as possible. Although we have agreed to work together, AEA recognizes the fact that since we won the lawsuit, we are responsible for trying to ensure PEEHIP members receive the correct refund due to them. 


Also, many of you have raised questions regarding the income tax implications of the refunds in this case. We have retained experts to explore how we might minimize any tax payments for our members. 


Just as we said about the initial ruling from the Alabama Supreme Court, we have no way of knowing when they will rule on PEEHIP’s Application for Rehearing. While we don’t expect the process to take nearly as long as the initial appeal, it is always at the Court’s discretion when they will issue a ruling. 


Our request is that the case be returned to the Montgomery County Circuit Court for the parties to work out an advantageous method to issue the refunds. If the case is returned to the Montgomery County Circuit Court, we will work expeditiously to get the refunds to you. 


We are grateful that Dr. David Bronner and Donald Yancey, the PEEHIP leadership, have focused on moving the process forward. We hope to continue our progress and that we can not only continue to work together in this case, but with other endeavors that are most beneficial to Alabama educators. 


NOTE: Any current retiree who paid in the illegal rates on or after October of 2016 and before May of 2018, should be included in the ordered refund. AEA is working to ensure any retirees or former employees affected by the illegal rates are issued their due amounts. Though the Application for Rehearing submitted by PEEHIP concerns the involvement of local school boards for current employees, we did discuss the issue relating to retirees. PEEHIP recognizes that affected retirees will be able to receive refunds directly through PEEHIP/TRS.