State health benefits offered to another part-time governing board

October 2, 2020

Investigative Reports

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By RICK BRUNDRETT

Another governing board of a state-created agency is under scrutiny over whether some board members are receiving state health-insurance benefits in violation of the law, The Nerve has learned.

Two members of the S.C. Ports Authority Board of Directors participate in the state health plan, authority spokeswoman Liz Crumley said Tuesday when contacted by The Nerve, though the law doesn’t allow part-time board members to be covered through the agency.

In a Nerve story last week, the S.C. Public Employee Benefit Authority (PEBA) – the agency in charge of managing the state health plan – acknowledged it had found cases of ineligible part-time employees who were offered benefits. But PEBA spokespersons couldn’t provide any details on those cases, though agency records show that unidentified members of the part-time governing board of state-owned utility Santee Cooper have been receiving benefits in violation of the law.

State law doesn’t require PEBA to do audits of the more than 700 covered groups to ensure compliance with state law. The Nerve last week reported that PEBA audited 54 employers last fiscal year, which, at that pace, would take the agency nearly 14 years to audit every group just once.

PEBA is governed by an 11-member board of directors, three of whom are appointed by the governor, with the majority of appointments controlled by Senate and House leaders.

Generally under state law, full-time employees – defined by PEBA as working at least 30 hours a week – in covered groups are eligible to receive state health benefits. In an email response Tuesday to The Nerve, PEBA spokeswoman Angie Warren said although there are a “few exceptions to that 30-hour requirement, none of those exceptions apply to the State Ports Authority Board of Directors.”

Warren said if PEBA “determines that the State Ports Authority has erroneously offered coverage under the State Health Plan to part-time board members or other part-time employees, the appropriate corrective action will be taken to terminate the coverage of the ineligible recipients.” She didn’t respond to follow-up questions, including whether PEBA launched an investigation following The Nerve’s inquiry.

Most members of the Ports Authority’s nine-member governing board, including board chairman Bill Stern, each reported receiving $11,700 in compensation last year as a board member, according to their annual income-disclosure statements filed with the State Ethics Commission. Board members are appointed by the governor and confirmed by the Senate; a 10-member legislative committee qualifies board candidates.

In an email response Tuesday to The Nerve, Ports Authority spokeswoman Crumley said two board members participate in the state health plan and “pay their own premiums.” She declined to identify them, noting, “We do not share details of personal health matters,” and didn’t answer follow-up written questions.

The Nerve on Thursday attempted to contact board chairman Stern about whether he receives state health benefits. In a subsequent email response, Crumley said Stern is “not on the plan and never has been.”

Contacted Tuesday, board secretary Willie Jeffries, the former longtime head coach of South Carolina State University’s football team and who was appointed to the board in 2010, told The Nerve he was offered state health benefits by the Ports Authority early on during his board tenure. But he said he turned it down because he already receives state retiree health benefits as a former educator.

“If I took it (the Ports Authority’s offer), I would have to pay it,” he said, adding the quoted full-monthly premium then was $300.

Jeffries said the Ports Authority board is a part-time panel, meeting once a month.

Besides Jeffries and Stern, other voting board members include vice-chairman David Posek, treasurer Kurt Grindstaff, Whitemarsh Smith, Pamela Lackey, William (Wes) Jones, Kenneth Jackson and Mark Buyck. Christy Hall and Bobby Hitt, who head the state departments of Transportation and Commerce, respectively, serve as non-voting board members.

In Santee Cooper’s case, PEBA allowed ineligible board members to continue receiving state health benefits through the end of this year, contending it didn’t want to impose an “undue hardship” on those members, according to an August email from PEBA to Santee Cooper, a copy of which was provided to The Nerve.

Most members of the 12-member Santee Cooper Board of Directors each reported receiving $9,999.60 in annual compensation last year as a board member, plus $2,000 in “travel, insurance and meeting reimbursement,” their annual income-disclosure statements show.

Board members are appointed by the governor after candidates are found qualified by a 10-member, legislatively controlled committee that exerts considerable authority over the regulation of utilities in South Carolina. The Santee Cooper board is supposed to be advised by a separate panel made up of five elected state officials: the governor, attorney general, comptroller general, treasurer and secretary of state.

The Nerve revealed in 2018 that the advisory panel raised no concerns about the failed $9 billion V.C. Summer nuclear project, in which Santee Cooper and then-South Carolina Electric & Gas were partners.

By law, the state health-insurance system not only covers state and local government agencies, but also a variety of other groups, including regional tourism-promotion commissions, regional councils of government, special-purpose districts, government employee organizations and legislative caucus committees.

A separate state budget proviso allows State Transportation Infrastructure Bank (STIB) board members and S.C. Lottery commissioners to participate in the state health plan by paying the full premium.

Budget provisos are in effect for one year and are not considered permanent state law, but the proviso dealing with STIB board members and lottery commissioners has been annually renewed by lawmakers for at least 19 fiscal years, records show.

Brundrett is the news editor of The Nerve (www.thenerve.org). Contact him at 803-254-4411 or rick@thenerve.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.

Nerve stories are free to reprint and repost with permission by and credit to The Nerve.

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