News and Tribune

January 30, 2013

New Albany council members take insurance fight to court

Benedetti, Zurschmiede and Caesar stripped of coverage last year

By DANIEL SUDDEATH
daniel.suddeath@newsandtribune.com

NEW ALBANY —  

 The three New Albany City Council members that lost their health insurance have filed a lawsuit seeking to have the coverage restored. 

In October, the council voted to abolish its health insurance. Like other city employees, the council members that accepted the coverage had 90 percent of their premiums covered by public funds. 

At the time of the vote, Councilmen Kevin Zurschmiede and Bob Caesar, along with Councilwoman Diane McCartin-Benedetti, were the three members accepting the insurance. 

The ordinance was sponsored by Councilman Dan Coffey, who authored the measure to state that only part-time employees would lose their coverage. However only council members were considered part-time workers in Coffey’s ordinance. 

Those opposed to the measure stated that according to Indiana Code, public officials cannot have their compensation reduced to an amount lower than the previous year. 

Coffey countered that health benefits aren’t compensation, but Caesar said his measure “clearly violates Indiana Code.”

The lawsuit filed Jan. 18 in Floyd County Circuit Court is against the city, not the council, as the city is the entity that distributes the benefits. 

Zurschmiede said Tuesday the attorney retained by the three council members, William Moyer, advised them not to speak publicly about the case. 

City Attorney Shane Gibson said how the insurance is defined will be key to the case.

“I think that’s where the controversy is — whether [the insurance] is compensation or not,” he said.

He added that he thought it was somewhat strange that the council was not also named in the lawsuit, since it’s the body that abolished the coverage.

This is far from a new issue for the council. Coffey sponsored a similar ordinance to repeal health insurance for council members in 2010. He pulled the measure after it received criticism based on the same section of Indiana Code, 36-4-7-2. The 2010 measure also called for the council member’s salaries to be reduced. 

In a legal opinion originally issued in 2003 then updated in 2005, then-Indiana Attorney General Steve Carter addressed salaries of public officials. 

“The compensation of a city officer may not be reduced or increased in the year fixed, nor may it ever be reduced to less than the salary of the prior year, regardless of timing,” Carter wrote. 

The issue that spawned Carter’s opinion was over whether a local clerk treasurer’s salary could be lowered. For the New Albany case, the lawsuit will likely hinge on the definition of “compensation.”

As of Tuesday, a hearing date for the case hadn’t been scheduled. 

Councilman John Gonder proposed a measure in November that would have given a health insurance option to permanent part-time employees. The measure failed on final reading 7-2.