Free medical coverage through Avon Twp.? It's complicated

Avon Township Trustee Chris Ditton says there was good reason to drop his private medical insurance plan and obtain family coverage through the government he represents.

"Like anybody else, I'm always looking at what's the best deal," said Ditton, a Grayslake attorney.

After two months, Ditton said, the best deal no longer was the township, so he canceled that insurance in favor of another private option that was cheaper.

But Ditton never had to pay a $1,362 monthly premium for his health coverage that was legally obtained through a state agency by Township Supervisor Sam Yingling. In the end, the township didn't have to cover the tab, either.

It is a transaction that was first questioned by township trustees Marc Feldstein, Sherry Ridge and William McNeill when it surfaced during a bill-paying session in June, according to official minutes.

Since then, it has been criticized by a local government watchdog.

Not long after the questions arose, Avon received credit for three payments totaling $4,086 it made for Ditton from April to June. The rebate was applied to an account Avon had with many local governments pooling money in a group health insurance reserve fund handled by the Illinois Department of Central Management Services.

Agency spokeswoman Alka Nayyar said central management services agreed to secure the $4,086 credit for the township after being told Ditton was "erroneously enrolled" for group insurance coverage. She said what happened isn't common.

"It's not state money is the bottom line," Nayyar said. "It's (Avon's) money and they got it back."

Nayyar further explained it was as if Ditton's medical coverage never existed because it was canceled retroactive to its April 1 start date, so no one lost money. Ditton said he would have paid if the township didn't receive the rebate.

State officials confirmed Avon Township made a proper purchase of Ditton's coverage from the local government health insurance pool. Yingling said he doesn't know why the state now maintains it was told Ditton was mistakenly enrolled for the medical coverage.

Yingling said he followed proper internal procedure in directing an administrative assistant to notify Central Management Services to discontinue Ditton's coverage, but never claimed it was obtained erroneously.

Despite the explanations, Joseph Calomino, director of the Illinois chapter of Americans for Prosperity, a government watchdog group, says Ditton's insurance deal seemed questionable.

Calomino compared the insurance Ditton received without cost to an interest-free loan that someone else paid off.

"Avon Township needs to be held accountable for how they're spending taxpayers' money," he said.

Documents obtained by the Daily Herald through the Freedom of Information Act show Ditton had family health, dental and vision insurance purchased by the township. Instead of paying $1,362 per month, Ditton said, he had agreed to pay the bill quarterly.

Yingling said he had no choice but to follow Illinois law when Ditton asked to buy health coverage through central management services' group insurance division. He said other trustees could have made the same request.

"At the end of the day, the township didn't sustain any sort of cost for (the insurance). And had it, Ditton would have been responsible to reimburse the township," Yingling said.

Full-time township employees such as Yingling are entitled to government paid medical benefits. That's not the case for the trustees, who are considered part time and typically meet once a month.

Bryan Smith, executive director of Township Officials of Illinois, said a trustee would not have been allowed under the law to start receiving government paid medical benefits this year unless they were included in compensation established for elected boards in April 2008. Officials said Avon Township trustees did not have paid benefits as part of their compensation.

When asked about the general concept of part-time trustees buying health insurance from a township, Smith said: "While they do not have to report this kind of information to us, I'm not aware of this being a common practice."

Ditton's coverage was canceled June 1, but made retroactive to April 1 for rebate purposes, according to documents. Ditton, his wife and two children were on the plan.

Central Management Services documents issued June 23 for Ditton's policy termination included the words "never eligible" only so Avon Township could receive the $4,086 credit it requested, Nayyar said.

Nayyar said Ditton didn't make any claims while he was insured through the township. She said if there had been any claims while he was covered in April and May and they were paid, the insurance vendor would have had the right to recover the cost directly from Ditton.

How Ditton began receiving coverage through Avon Township and intended to pay for it differed from what would have been required of him if he had dealt directly with a major health insurance provider.

Ditton would have had to pay his first month's premium for coverage to be activated at Blue Cross Blue Shield of Illinois. The requirement is for individual policies sold to those 65 or younger, spokeswoman Mary Ann Schultz said.

Blue Cross Blue Shield does not offer billing at three-month intervals, which was Ditton's plan with Avon Township. Schultz said Blue Cross Blue Shield offers a 30-day "free look period," allowing a full refund if a customer is not satisfied and no claims were filed.

While Ditton's Avon Township coverage was allowed under state law, McNeill said it bothers him that his board colleague didn't have to pay upfront to start the insurance.

"I think, hopefully, they have learned their lesson, that you can't do that stuff," said McNeill, a political foe of Yingling and Ditton.

Yingling led the Avon Forward political slate that included Ditton in the 2009 election. McNeill ran with the Avon One team headed by former township supervisor Shirley Christian.

Avon Township encompasses all or part of Grayslake, Hainesville, Round Lake, Round Lake Beach, Round Lake Park, Round Lake Heights, Third Lake and unincorporated Lake County.