Osceola Schools’ lawsuit against insurance consultant can go on, judge rules

Asceola School a lawsuit against his former health insurance consultant won a court battle in court.

U.S. District Judge Anne Conway last week rejected a consultant’s motion to dismiss the lawsuit.

For seven years, Gallagher Benefit Services helped the Osceola school district navigate the insurance industry by analyzing and making recommendations on which carrier should hire the district.

In return, Gallagher was paid annual contributions from insurance companies, but the school district set a limit on the Gallagher commission of $ 195,650, “to avoid selfish incentives that could accompany this financial arrangement,” the judge wrote in his ruling.

In a lawsuit filed last year, the county accused Gallagher of violating the agreement and paying more than $ 2 million in “secret commissions from insurance companies, which he recommended to the board,” the order said.

“Gallagher sold himself as a company that had a good position to provide advisory and brokerage services to the Board. He also stated that he would (remain) impartial during all business transactions, disclose all compensation received ”and represent the interests of the Council in all ongoing interactions,” the judge wrote.

The judge ruled that the district lawsuit against Gallagher could continue despite Gallagher’s objections on several issues, including a lawsuit that did not provide specific details on how much and which insurance companies paid Gallagher’s alleged secret payments.

For Gallagher’s lawsuit, the School District is demanding at least $ 2 million of Gallagher’s alleged secret payments to create a fund for county teachers.

“The district is also seeking damages for Gallagher’s breach of fiduciary duties and fraud,” the judge wrote. “In this case, the factual allegations of the school board give reasonable grounds to believe that Gallagher committed an intentional offense. These fraud claims are sufficient to claim damages. … Greed, as the school board notes, is a factor relevant to punishment. ”

“Penalty damages are a big equalizer, the only thing that can hurt corporate America if it does the wrong thing,” the district attorney said. Tucker Byrd said when asked for comment on Wednesday.

Gallagher recommended Osceola schools hire Cigna as an insurance company.

The relationship between the Cigna and Osceola schools eventually fell apart and led to new litigation in Osceola County District Court.

The school district argued that Cigna “failed to conservatively approve treatment, and the lack of negotiations on competitive prices for prescriptions and medical procedures forced the school board to overpay health workers and pharmacies.”

Cigna, on the other hand, denies the allegations. Cigna sued the district, arguing that the district did not properly conduct competitive bidding on new contracts after the school system decided not to renew the contract with Cigna.

Cigna North Florida Market President Dean Mirabella told Florida Politics last year: “Previously, we provided health plan management to Aceola County School District staff for nearly 20 years. During this relationship, our contract was continually evaluated and voted on by the county procurement and insurance committee based on our successful success in making health care accessible, predictable, and easy for teachers, administrators, and staff. … As a valued partner for nearly two decades, we have negotiated preferential rates that have been fair and competitive for the customers we serve. ”

Gallagher could not be reached for comment on Wednesday.

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