Traverse City Record-Eagle

Michigan

November 9, 2013

Ishpeming dealing with insurance investigation

(Continued)

From that point on, “things got progressively worse,” Bakalarski said in the report, with July 2010 the first of a number of late premium payments and in amounts that didn’t correspond with what was billed.

“The billings were not just paid late occasionally, billings were paid late just about every month and late by a significant time period of up to 62 days,” the report stated. “The late payments were so severe that the city’s health insurance provider threatened to cancel the city’s health insurance at least twice.”

Anita Keto, then-city treasurer who retired in February, was responsible for reviewing the bills and making premium payments, as well as enrollment changes and the administration of benefits from the Consolidated Omnibus Budget Reconciliation Act, commonly known as COBRA.

Bakalarski concluded in the report that while Keto’s prior job performance had been “excellent,” his investigation revealed that beginning in 2010 her work became “unsatisfactory, characterized with careless mistakes, lack of follow-up, disregard to deadlines, and failure to perform required job assignments.”

Keto responded in an email to The Mining Journal that the transition to a new city manager — Jered Ottenwess — gave her an overwhelming amount of new responsibilities.

“A new city manager was hired, my workload increased and continued to increase,” she said. “I was asked to do items that previous city managers had completed.”

Bakalarski’s investigation revealed that six of the eight employees had opted out of the city’s insurance plan because they were covered under their spouses’ insurance, and received a monthly opt-out allowance through the city payroll system. However, the report states in addition to the allowance, the city continued to pay health insurance premiums for these employees until late 2012.

After discovering the overpayments, it was initially thought that Keto had not sent in health insurance change forms for these employees, instead simply crossing out the employees’ names on the monthly billings. However, the report said, “A review of the health insurance file reveals that this assumption is not totally accurate.”

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