By Steve Gunn
EAGnews.org

MADISON, Wis. – The ugly period of Wisconsin public school history stained by WEA Trust is not completely over.

About 150 school districts are still fighting to receive about $28 million in federal funds being withheld by WEA Trust, an insurance company with close ties to the Wisconsin Education Association Council (WEAC), the state’s largest teachers union.

MORE NEWS: From Classroom to Consulate Chef: Culinary Student Lands Dream Job at U.S. Embassy in Paris

The school districts have filed a lawsuit to recover the money and WEA Trust has requested that a federal court judge dismiss their action.

The school districts clearly deserve this money and the courts should make sure they get it.

In 2010, WEA Trust applied for the money through the federal Early Retiree Insurance Program, on behalf of the 150 school districts. The program is designed to reimburse employers or plan sponsors for certain retiree medical insurance claims, according to a report from LivingLakeCountry.com.

At the time all of the school districts were clients of WEA Trust, meaning they purchased employee health insurance through the company.

But that all changed in 2011, when Gov. Scott Walker’s Act 10 took public employee health insurance off the collective bargaining table. The 150 districts (and many more) suddenly had the freedom to shop for less expensive health insurance without union interference, and they dropped WEA Trust coverage at the first possible date.

That part of the story has a happy ending. The new atmosphere of open bidding and competition drove insurance prices down across the state, and hundreds of schools saved six or seven figures per year on employee health coverage.

MORE NEWS: Know These Before Moving From Cyprus To The UK

In the meantime WEA Trust had received the $28 from the federal government to disperse to the districts. But suddenly the company announced that it would only share the funds with districts that maintained WEA Trust health insurance.

As one attorney put it, WEA Trust started using the federal money to “coerce” schools into remaining their clients and buying their product.

The school districts responded with their lawsuit, which WEA Trust is currently trying to have dismissed.

As the news report explained it, “WEA Insurance is arguing that it applied for the federal aid, meant to offset the cost of health insurance for early retirees, in its own name and has no legal obligation to share that money with the districts.

“Because the districts have no right to the funding, the insurance provider argues, the courts should dismiss the district’s claims and declare that WEA was in compliance with federal regulations.”

What utter nonsense.  WEA Trust clearly applied for the grant money on behalf of the specific school districts, and those districts have a right to it, regardless of what insurance company they choose to do business with.

One school superintendent, Glenn Schilling of the Hartland-Lakeside district, claimed in court deposition earlier this year that his district was prepared to apply for the funding on its own, but WEA Trust volunteered to take care of it.

That’s probably true for any number of district officials who trusted the insurance company to follow up on its promise to secure and disperse the funds.

School districts are hurting for resources and need every penny they can get. According to a 2011 tax document, WEA Trust had $643 million in total assets and a $221 million surplus. It clearly doesn’t need the money.

We fail to see how any judge could rationalize WEA Trust’s claim that it has the right to use federal money as a financial incentive for school districts to purchase its coverage. The fund was created to help employers –like the 150 school districts – cover their insurance costs. It was awarded to those districts and it should be transferred to them, as soon as possible.