FOREST CITY | The Winnebago County Board of Supervisors has accepted a $5,712 settlement from the Two Rivers Insurance Company as restitution for undisclosed fees.

The supervisors voted 2-1 on Aug. 15 to sign the settlement agreement, with Mike Stensrud casting the lone dissenting vote.

"This whole thing is surreal in my opinion," he said, noting he doesn't understand why there wasn't more of an investigation into Two Rivers, which has agreements with some of Iowa's counties and cities to administer Wellmark insurance plans for their employees.

However, County Attorney Adam Sauer recommended the supervisors sign the settlement because of the costs and uncertainty involved in seeking damages against Two Rivers in court.

The Iowa Insurance Division negotiated the settlement with Two Rivers to end an investigation into the Burlington-based company's practices when dealing with 33 counties, cities and other public entities.

The settlement amount of $1.3 million is being distributed among those entities, all of them former or current members of the Iowa Governmental Health Care Plan.

The controversy arose from the Iowa Insurance Division’s allegation that, beginning in 2005, Two Rivers used the actual premium amount from Wellmark and then recalculated a premium which also included additional Two Rivers’ compensation and failed to disclose to the IGHCP members the amount of this additional compensation.

Two Rivers denied any wrongdoing but agreed to change its practices as part of the settlement.

Although he voted to accept Winnebago County's share of the settlement, Supervisor Bill Jensvold did so reluctantly.

"The whole thing, it just makes you wonder what's really going on," he said. "They want to hush everything up."

Stensrud said one of his unanswered questions is why the Iowa Insurance Division has the right to make a settlement on behalf of cities and counties. 

"I don't think we will ever get some of those answers," Sauer said.

He advised the supervisors to accept the settlement because the potential cost of taking Two Rivers to court.

Sauer said both Hancock and Pottawatomie County officials initially were "on the fence" as to whether to accept the settlement.

Pottawatomie County in particular has "quite a bit (of money) at stake," he said.

Sauer said he contacted Assistant Pottawatomie County Attorney Maggie Popp Reyes, who was researching the possibility of a civil suit against Two Rivers.

She told Sauer an attorney in Des Moines she consulted advised her to recommend the Pottawatomie County Board of Supervisors accept the settlement because of the cost as well as the difficulty in proving damages.

"There's nothing I can't stand more than not being able to afford to get what you probably deserve," Jensvold said.

He said if it was his own money, he would stick with his principles. However, he said the taxpayers might have different principles.

The Hancock County Board of Supervisors also agreed last week to accept that county's share of the settlement, which amounted to nearly $51,000.

Iowa Insurance Division spokesman Chance McElhaney said member-specific restitution amounts were calculated by taking the total amount of undisclosed fees and commissions charged by Two Rivers to the specific member and reducing this number to allow for a percentage commission to Two Rivers. 

"We then applied a uniform percentage to each member’s specific undisclosed amount to arrive at individual restitution amounts for each member," he said.

Sauer said Winnebago County, which is still a member of the IGHCP, can consider other options next year for employee health insurance.

The Hancock County Board of Supervisors voted in 2015 to leave the IGHCP and join the Iowa Community Trust instead.

Sauer said when he asked the Iowa Insurance Division commissioners how they came up with the settlement figure, they told him their communications with Two Rivers were confidential.

Sauer said his whole conversation with the commissioners was "weird," noting he "got a lot of run-around answers" when he asked questions.

Sauer said the commissioners wouldn't even say if the settlement was a good deal or a bad deal for the county.

Jensvold also asked if the supervisors would be stuck with their decision to accept the settlement if someone later were to "find the Watergate tapes."

Durby said if it was discovered that Two Rivers deliberately misled the governmental entities it dealt with, they might be able to break the agreement. 

"Good luck," Sauer said.

He said he doesn't think any of the current or former members of the IGHCP has rejected the settlement, which was announced in May.

Some of the entities signed the settlement agreement right away and didn't even want to meet with the Iowa Insurance Division, according to Sauer.

"They just wanted to be a part of IGHCP," he said.


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