Traverse City Record-Eagle

Michigan

November 9, 2013

Ishpeming dealing with insurance investigation

EDITOR’S NOTE: This is the first of a three-part series by the Mining Journal in Marquette that details the city of Ishpeming’s overpayment of health insurance premiums for two and a half years under the watch of Jered Ottenwess, currently the city manager for Traverse City.

ISHPEMING — The city of Ishpeming has changed the way it processes and pays insurance bills after an investigation into the city’s overpayment of health insurance premiums for more than two years at a cost of nearly $200,000 revealed severe problems with the way payments were handled in the past.

In a report filed Sept. 16 by Alan Bakalarski, a former Ishpeming city manager who acted as an adviser to Jon Kangas in Kangas’ interim city manager duties, Bakalarski detailed the findings of his investigation into the health insurance overpayments made by the city to the Michigan Employee Benefits Services, the city’s health insurance provider, from May 2010 until the end of November 2012, when they were discovered by the Ishpeming City Council during union contract negotiations.

Kangas said Bakalarski was hired by the city to assist him in “administrative tasks” while he juggled workloads for both the interim city manager position and his regular duties as superintendent of the Department of Public Works. Bakalarski was assigned to conduct the investigation, Kangas said, because he no longer worked for the city and wasn’t employed by the city during the years in question, he could do so with an “unbiased eye.”

No names were included in the report, which Kangas said was to protect the privacy of the employees as provided by the Health Insurance Portability and Accountability Act.

According to the report, which The Mining Journal obtained through the Freedom of Information Act, the health insurance overpayments began in May 2010, when an Ishpeming police officer retired and should have been removed from the city-paid health insurance plan. A total of eight former and current employees were involved.

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