NEW ROCHELLE, NY -- New Rochelle Board of Education President David Lacher ran up a five-figure debt to the school district over the past two years by failing to make timely payments for medical insurance he obtained through the District's Group Health Insurance program. Lacher was late paying his bills for all but one one of the twenty-one months he has had coverage through the District going back to August, 2012.
Under New York State law, elected School Board members are permitted to purchase medical insurance coverage in the New York State Health Insurance Program (NYSHIP) through their local school district's group health insurance plans but are required to pay 100% of the premium, in advance, at the start of each month.
Rather than pay his premiums on a timely basis, the District paid Lacher's premiums for him, using taxpayer dollars, and then sought reimbursement, according to records obtained by Talk of the Sound under a Freedom of Information request. Lacher never paid interest on what amounts to an unauthorized, interest-free revolving line of credit with the time value of the money subsidized by taxpayers.
Lacher has enrolled in the the District's Group Health Insurance three times since he was first elected to the Board of Education. Lacher was enrolled from April 1993 to December 1999 and July 2003 to November 2004. He enrolled for a third time in August 2012 and is currently enrolled today.
Despite his claims to the contrary, the District has stated that a review of records going back 20 years shows that Lacher is the only board member to participate in the District health insurance plan.
Lacher is currently billed for the full premium cost of his Health Insurance coverage which is $1,714.19.
A review of District records shows that Lacher has rarely been current on his account since his insurance coverage went into effect in August, 2012. The last time Lacher was current on his insurance was November, 2012. He has been in arrears continuously since then and remains so to this day.
On average, Lacher was $6,342.30 in arrears each month since his current coverage began and often exceeded $10,000. He was not charged interest.
As a result, the IRS may treat Lacher's outstanding balance as a demand loan subject to imputed interest payments and thus a form of taxable compensation.
Typically, a medical insurance policy terminates immediately when the policyholder fails to make the required monthly premium payment. With some policies there is a grace period, anywhere from 10 to 31 days. Lacher almost never paid the monthly premium payment on time and was often well beyond a month past due.
Lacher was only able to avoid termination by NYSHIP because the District paid Lacher's premiums for him and then invoiced Lacher for the amount paid to NYSHIP.
Over a period of years, the District sought without success to receive reimbursement from Lacher to bring his account current. By July 2013, when Lacher was elected President of the Board by his board colleagues, he was more than $10,000 in debt to the District.
Health insurance invoices from the District to Lacher routinely contained handwritten warnings noting that his account was seriously delinquent.
On January 8, 2014, Lacher was sent one such note stating that the District would terminate his coverage going back six months if he did not make a payment by January 31, 2014.
January 8, 2014 Invoice here.
When he did not make payment, the District sent Lacher a certified, return receipt, letter on January 17, 2014, demanding payment, again threatening to terminate his medical insurance retroactively six months.
Lacher ignored the payment demand but continued to be covered under the District's Group Health Insurance.
On February 7, 2014, the District sent Lacher another certified, return receipt, letter demanding payment in full by February 14, 2014 and threatening to "terminate his medical insurance retroactively seven months".
Dear Mr. Lacher:
We sent you a certified, return receipt, letter on January 17, 2014, in regard to your health insurance premiums, and have not received the return receipt back, nor have you responded.
There has been a request on each monthly statement asking you to remit payment for your past
due balance, and to date we have not received anything. You are now seven months in arrears,
and one current.
If we do not receive payment, in full, by February 14, 2014 we will terminate your coverage
back seven months. We look forward to receiving your payment so we don't have to take this
February 7, 2014 letter here.
February 14th came and went. Lacher continued to ignore the demand for payment. The District did not terminate his insurance, retroactively or otherwise.
By February of this year, when Lacher was asked about his medical insurance at a school board meeting, he was seven months behind on his payments. As of February 26th, Lacher owed $13,488.06 to the District and had ignored repeated payment demands from the District sent by certified mail.
After the February 26th board meeting, Lacher made a $3,000 payment, another $3,000 payment was made on March 6th and four payments totaling $9,202.25 on April 10th, the day records related to his account were released by the District under an amended Freedom of Information Law request dating back to November, 2013.
Lacher has not made his April payment, due on April 1st, so he is currently in arrears on his account for a total of $1,714.19.
Board President David Lacher declined to comment for this article. Board Vice President Lianne Merchant and Dee Polow, the longest serving member of the Board, did not respond to voice mails and emails seeking comment.
In our next article, Lacher's Medical Insurance Woes: The Story Behind the Story, Talk of the Sound provides the context for this article including the back story on a six-month long Freedom of Information request and a video of Lacher responding to questions about his medical insurance.