MCPS Kept Millions From Prepaid Health Insurance Premiums, Report Says

MONTGOMERY COUNTY, MD — Montgomery County Public Schools has withheld prepaid health insurance premiums from some retiring or resigning employees for at least 22 years, a report from the Inspector General of Montgomery County says.

The premiums were withheld from employees who are paid on a 10-month pay cycle and retire prior to their last month of health insurance coverage, resulting in between $3 million and $13.5 million in overpayments that were never refunded to retiring employees, the report says.

"We recommend MCPS identify the extent of overpayments, including the period of time during which this occurred, the individuals impacted, and the specific amounts owed to each," the report says. "We further recommend that MCPS develop an equitable and effective plan to compensate affected individuals and develop policies to ensure that future employees who separate from MCPS receive proper compensation for prepaid health insurance premiums."

MCPS made changes so that employees retiring this June won't be affected, the district said in a statement.

Here are the changes MCPS said it made:

In January of 2022, and in collaboration with our three employee associations, any employee retiring on June 30 of this year would be offered extended coverage until September 30 or receive a refund.

From February through May, employees were informed of this change in multiple communications, including Zoom information sessions, emails, retirement correspondences and via our ePaystub notification system.

The district said it would look into how it should address the impact on employees who have resigned or retired in previous school years.

"School system leadership and the Inspector General’s office have collaborated on these measures to benefit MCPS employees by changing an unintentionally unfair practice," the district's statement says. "The school district is pleased to make these improvements so that our valued staff receives the benefits they have earned at the expected cost."