WEA Trust is mad as hell and it isn't going to take it anymore, to paraphrase a famous line from the 1976 movie "Network."
The Wisconsin-based insurance company that provides coverage for teachers across the state is threatening a lawsuit if powerful Milwaukee talk radio host Mark Belling doesn't quit with the "racketeering" comments about WEA Trust's business. It wants an apology and a retraction, to boot.
"We're a good, Wisconsin corporate citizen, employing over 500 people here, and Mark Belling is making charges that are false ... they're libelous and slanderous. If someone accused McDonald's of racketeering, they would be upset, and they'd take action. He's got to stop. We've had enough," says Steve Lyons, public affairs director for WEA Trust.
A "cease and desist" letter sent Monday demands that Belling, who works for WISN radio in Milwaukee, stop misrepresenting the relationship between WEA Trust and the Wisconsin Education Association Council (WEAC).
"You have repeatedly misrepresented to your listeners that WEAC 'owns' WEA Trust and that WEA Trust deliberately overcharges its health insurance customers in order to generate 'profits' that WEAC uses for political and union activities," says the letter, sent by Robert Dreps, a Godfrey & Kahnn attorney representing WEA Insurance Trust and WEA Insurance Corp.
The letter goes on: "During your Sept. 1, 2011, broadcast, for example, you told listeners that WEA Trust and WEAC conspired to use the public sector bargaining 'system that we had not only to get this incredible pay and benefits for teachers but then to literally steal from the taxpayers millions that they were taking down into the union's profits without any shame at all,' conduct you characterized as 'racketeering.' These charges are false."
When I spoke late Monday with Lyons, he described Belling's comments on air as "wild accusations," noting that by law, there is a legal firewall between WEA Trust, a Wisconsin-based private group health insurance company, and WEAC, the state's largest teachers union.
The attorney's letter describes the history of the relationship between WEA Trust and WEAC: "In 1970, WEAC created the WEA Insurance Trust with a $5,000 loan that the trustees used to begin operations. In 1985, the trust created a wholly owned, Wisconsin-licensed and regulated insurance company (now named the WEA Insurance Corp.) to underwrite most of the trust's employee benefit plans. The WEA Insurance Corp. is governed by an independent board of directors who have a fiduciary responsiblity exclusively to trust plan members. WEAC neither owns nor profits from the activities of WEA Trust."
According to Lyons, WEA Trust was initially created because it was very difficult for teachers to get health insurance from conventional providers because of their nine-month school year schedule, which put them in the category of part-time employees.
According to Lyons, and the letter sent by Godfrey & Kahn, WEA Trust would be violating federal law if it diverted assets or revenue to WEAC to pay for political or union activities.
The attorney's letter notes, "Insurance is a closely regulated industry, as you should know, and it would not even be possible for WEA Trust to conceal from the Office of the Commissioner of Insurance or the IRS any transfer of 'millions' to WEAC as you claim. Quite the contrary, WEA Trust's annual financial statements are audited and found to be in compliance with U.S. Generally Accepted Accounting Principles. Your false claims that WEA Trust routinely violates state and federal law by funneling money to WEAC are defamatory per se. ...There are no secret payments by the WEA Trust to WEAC in any amount."
Lyons, and the attorney's letter, also say that Belling has repeatedly claimed on air that WEA Trust has deliberately overcharged school districts for insurance coverage.
According to Lyons, that is also false. When I spoke with him several weeks ago about claims that districts were finding millions of dollars in savings in newly negotiated health insurance plans, he explained that many districts are now requiring that employees pay a larger share of the premium price, or accept plans with bigger co-pays or larger deductible amounts.
With no collective bargaining unit to negotiate with school districts on what insurance plans are offered to employees, there have been significant changes in insurance benefits. Many of those changes are bringing savings to school districts, but are costing employees more for their coverage.
"When you are comparing insurance plans, you need to compare apples to apples," Lyons says. Even so, on comparable plans, Lyons claims that WEA Trust is highly competitive, and that Belling's accusations that his company has overcharged school districts is also false.
In fact, in 49 Wisconsin counties, WEA Trust coverage is offered as a Tier One or lowest-cost option in the state group health insurance program, he says.
"We're tired of these false and misleading accusations that are designed to damage our business. Mark Belling makes these claims, people quote him and then these accusations become mainstream and are assumed to be true. He has a responsibility to his listeners to stop telling them things that are false. We're looking at all our legal options," Lyons says.