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City paid $600K in health costs for ineligible retirees

Illegal payouts may be result of ‘shoddy’ record-keeping

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The City of Glen Cove paid nearly $491,000 in health premiums for six retirees who did not qualify for coverage based on their personnel files, according to a February audit by the Manhattan-based accounting firm Marks Paneth. The men were covered by the New York State Health Insurance Program, but were found to be “ineligible … based on eligibility requirements and resolutions passed by the city,” the report said.

A report by the city controller based on the audit indicated that the city also issued roughly $125,700 in reimbursements of Medicare Part B for the six retirees from 2007 to 2018. As a member of NYSHIP, the city is required to submit monthly premium payments and reimburse Medicare Part B payments for its retirees, the controller’s report said.

Marks Paneth reviewed 191 personnel files, and determined that 88 percent of them “did not have the appropriate supporting documentation to support the retiree and/or their dependents’ eligibility,” according to the report.

The audit lists the retirement dates of the ineligible employees. The most recent retiree, Vincent Taranto, a former city attorney, left in March 2014, and the earliest, Gilbert Gallego, a former public information consultant, left in December 1973 (see box, Page X).

On May 28, the City Council unanimously approved three resolutions to correct the decades-old error. The first terminated all health, vision and dental insurance for the six men, effective June 1. The second implemented new procedures for the city to follow in determining benefit eligibility for retirees, and the third changed the city’s Medicare Part B reimbursement payment date to once a year instead of biannually, beginning next January.

Mayor Tim Tenke said the measures would “save the city more than $41,000 for the rest of 2019, and more than $71,000 a year in perpetuity.”

The resolutions require the city’s personnel officer to maintain a file for each employee participating in New York state pension and health care plans, Tenke said. A checklist in each file will detail the employee’s eligibility, he added, by noting his or her position, salary, insurance premiums paid and the date of separation. The resolutions also mandate the creation of a digital database of benefits recipients.

Additionally, “Any decision to grant insurance benefits in retirement or separation from employment shall require the approval of the personnel officer and the city controller,” Tenke said. The city will also conduct an audit every five years, focusing on the eligibility of employees and retirees to receive health benefits from NYSHIP.

“The distinct reasons for the ineligibility were not necessarily the same for all the people involved,” Taranto told the Herald Gazette. “No one did anything wrong; we were acting on the advice of the city.”

NYSHIP requires retirees to have worked for the city for a minimum of five years to be eligible for benefits, a requirement three of the men did not meet. Leonard Baron, a former building department administrator, worked for the city for 2.6 years; Francis Deegan, a former city attorney, 4.1 years; and Anthony Maurino, a former building department administrator, 4.8 years.

Gallego, who worked for the city for six years, was paid $600 per year. He did not meet NYSHIP’s eligibility requirements, because his position was not an elective one and he made less than $2,000 a year.

Taranto and Anthony Jimenez, a former city councilman, were also deemed ineligible because of a 2011 resolution that suspended health benefits for City Council members, the city attorney and the city historian.

“The recipients of these benefits were offered [them] in their retirement packages,” Tenke said. “They had no intent to defraud the city, and the city paid these benefits willingly. The problem became whether or not they were eligible.”

The misappropriation of benefits over decades and a number of administrations may not have been intentional, but rather a result of poor record-keeping. U.S. Rep. Tom Suozzi, who was mayor of Glen Cove from 1994 to 2001, declined to comment. His cousin Ralph Suozzi, the city’s mayor from 2005 to 2013, could not be reached for comment.

Reginald Spinello, who was mayor from 2014 to 2017, said the city was considering a similar audit near the end of his administration. “There has to be a system of checks and balances in place, and a review of who made the decisions,” Spinello said. “… The most important thing here is accountability.”

“I think it’s a combination of two factors: those mayors who allowed recipients to illegally receive benefits, and the shoddy record-keeping,” said resident Steve Gonzalez, who was a member of the City Council in the 1990s. “The report said they weren’t keeping records over 20-something years ago. I was stunned.”

The audit noted that the city’s personnel office did “not utilize a checklist in each personnel file to ensure that the files [were] complete … [and] there [was] no evidence documenting a supervisory review and sign off of the files to ensure completeness.”

The city sent letters to 169 retirees who did not have supporting documentation proving their eligibility status. Of those, 158 have responded. “To this date [11] individuals have not responded to that letter,” Gonzalez said, “and the city has to go after them as well.”

Baron, Gallego and Jimenez declined to comment and Deegan and Maurino could not be reached by press time.