If you want to know what poor oversight looks like, consider the retirees of the Rancho Santiago Community College District in Santa Ana, CA. Until last year, RSCCD retirees enjoyed a district-paid health plan that offered identical coverage to that of active employees. RSCCD advised their retirees not to sign up for Medicare because they wouldn’t need it.
Until they did.
RSCCD was the only California community college that had a lifetime healthcare benefit for its retirees. With little warning in 2022, RSCCD pushed its retirees off the district-paid health plan and onto Medicare. The move saved the district millions of dollars in healthcare costs and brought RSCCD in line with the rest of the state’s community colleges.
But the Medicare enrollment process was nowhere near smooth for RSCCD retirees who had long blown past their Medicare enrollment period. You see, retirees who have paid into Social Security and Medicare have a relatively narrow window during which they can claim the lowest-possible monthly Medicare premiums. The enrollment period begins three months before the worker’s 65th birthday and closes 3 months afterward. (The enrollment period lasts a total of seven months.) Miss the window, and you’ll be paying higher monthly Medicare premiums for the rest of your life.
There is no way to re-open the enrollment period, and no conditions under which the Centers for Medicare and Medicaid Services will make exceptions. The longer you wait to enroll, the higher the premium penalty will be. And you’ll pay the penalty every single month.
Community college officer not the only problem
For the RSCCD retirees who had been told that they’d have lifetime healthcare through the community college district, the late Medicare enrollment has been brutal. So far, the community college has paid the late penalties on behalf of the retirees, but many former employees aren’t convinced that this largesse will last forever.
So, how did this happen? RSCCD’s former Chief Financial Officer switched the College’s insurance provider shortly after he arrived on campus. The new provider, the Alliance of Schools for Cooperative Insurance Programs (The Alliance) served mostly K-12 districts. RSCCD has two campuses with nearly 50,000 students between them. It’s not small.
What the Chief Financial Officer failed to disclose was that he sat on the Board of the Alliance. And that he frequently accepted gifts from the Alliance and other vendors. There is also no evidence to suggest that the switch to Alliance was the result of a competitive bidding process. The CFO wasn’t the only one raising questions. Many members of the RSCCD Board went on to higher elected office.
No one was minding the store.
When the Chief Financial Officer retired, he became a leader in the RSCCD’s retiree groups. He also continued to serve of the Board of Trustees for the Alliance. So, when RSCCD made moves to leave the Alliance healthcare package, RSCCD’s former finance man sued the RSCCD. For a while anyway. The group had to halt their lawsuits, lacking the funds to continue.
It is an interesting case study of what happens when community college leadership fails, and the Board isn’t around to catch it. Real people can get hurt. And the institution can pay millions more for goods and services on no-bid contracts, while only a select few benefit.
