This story was updated at 12:30 p.m. June 22, 2022, to correct a reference to refunds provided by MCPS.

A union representing county teachers alleges that it notified Montgomery County Public Schools in 2020 about problems with its process for refunding prepaid health insurance premiums more than a year before the school district claimed it was first aware of the issue. The union also claims MCPS refused to take steps to correct the problem until it threatened to file a lawsuit.

On Friday, the county’s inspector general released a report that found MCPS owes between $3 million to $13.5 million in prepaid health insurance premiums to hundreds of employees who have either resigned or retired.

The inspector general started investigating the matter after receiving a tip through its hotline in March. The tipster explained that MCPS teacher salaries are paid over a 10-month period and cannot be spread out over 12 months. Because of this, health insurance premiums are prorated over a 10-month cycle in order for coverage to continue throughout the entire year.

“When a teacher retires, their health insurance coverage through the active employee health insurance plan is terminated and they must obtain coverage under a separate retiree plan,” the report reads. “Upon retirement, the prepaid insurance premium is forfeited.”

After interviewing multiple senior managers, the inspector general found that the health insurance premiums practice has been occurring since at least 2000. The inspector general’s report said MCPS Interim Superintendent Monifa McKnight and her administration were only recently notified of the issue. In a community message on Friday, MCPS wrote that it learned of the problem in December.

But leaders of the Montgomery County Education Association, the union representing teachers employed by MCPS, said this week that the union repeatedly raised the issue with district leaders in 2020 and 2021.

“After we became aware that MCPS refused refunds to members who were erroneously charged for insurance plans, we advocated for MCPS to refund overcharges and correct the problem,” the union wrote in a statement to Bethesda Beat on Monday. “… Long after they were made aware of our concerns, MCPS knowingly continued to incorrectly charge those who resigned and retired.”

In a message to its members on Monday, the union said: “This was not an easy win. It took our fierce advocacy and threat of a lawsuit for MCPS to ultimately agree to begin refunding payments to affected employees. Unfortunately, this is just one more example of our union’s constant struggle to have MCPS treat our members with dignity and respect.”

Union leaders provided copies of emails dating to early 2021 showing conversations between them and MCPS human resources officials about the issue.

In an email Tuesday afternoon, MCPS spokesman Chris Cram said, “District leadership is unaware of conversations before this school year raising this as an essential issue.”

“In fact, during this school year, discussions to resolve this with our employee association partners were collaborative and agreeable, which resulted in what was announced throughout the spring to staff and publicly last Friday following the release of the Inspector General’s report,” Cram wrote.

In its message to the community on Friday, MCPS officials wrote that they were implementing “a state-of-the-art human capital management software system to better manage the payment of benefit premiums,” and that they would take further measures to address and correct the impact that the system had on previous employees who retired or resigned from the district.

MCPS officials declined to comment further at that time.

Refunds have been given to employees during the last three years, ranging from $200 to $900 depending on the insurance plan, the inspector general’s report said. An employee would request the refund after retiring or resigning from the system.

The inspector general estimated that if the practice has continued for the last 22 years, then MCPS retained about $136,000 to $615,000 per year. That means in total, the district has held on to about $3 million to $13.5 million in health insurance premiums that should have been refunded to employees.

In its statement to Bethesda Beat on Monday, MCEA wrote the report “makes us optimistic that those who in the past were overcharged will finally receive the refunds they deserve.”

Caitlynn Peetz can be reached at caitlynn.peetz@bethesdamagazine.com