Osceola schools settle lawsuit over insurance consultant’s ‘secret commissions’
Florida Politics | By Gabrielle Russon | February 17, 2023
The two sides reached a settlement in January that said Gallagher doesn’t admit to any wrongdoing.
The Osceola school district collected a $582,000 settlement from the district’s 2021 lawsuit against a consultant whom the district accused of taking $4 million in secret payments from insurance carriers, according to public documents.
The school district alleged that Chicago-based Gallagher Benefit Services kept quiet about the commissions it received from insurance companies while Gallagher was supposed to be guiding the district in finding the best insurance provider, the district’s original lawsuit said.
“Gallagher breached its agreements and, worse, the School Board’s trust, leaving the unmistakable taint on Gallagher’s fealty given that the School Board had engaged a consultant getting paid more from the carriers it was to scrutinize and supervise than from the School Board itself,” the original lawsuit said which added the district capped an annual fee up to $195,650 to Gallagher.
The two sides reached a settlement in January that said Gallagher doesn’t admit to any wrongdoing. The district and Gallagher, which worked with the district from 2012 to 2019, declined to comment further when Florida Politics reached out this week.
“Apparently, the School Board believes attaching the description ‘secret’ to commissions somehow makes the commissions nefarious,” Gallagher said in a motion to dismiss the lawsuit last year.
Gallagher argued Osceola School Board members approved contracts that spelled out Gallagher was in fact allowed to receive such commissions.
“How can the School Board allege that Gallagher could not earn these commissions when it signed contracts to the contrary? That is not plausible and therein lies the heart of one of the School Board’s pleading failures,” Gallagher said in court documents.
Meanwhile, the school district is still in a legal fight with its former insurance company, Cigna.
Cigna sued the district in 2020 after the insurance company said the district didn’t properly competitive bid out for new contracts after the school system decided not to renew Cigna’s contract, according to the lawsuit.
Osceola schools has accused Cigna of not negotiating competitive prices for medical procedures and prescriptions, according to court documents.
After Florida Politics reported the school district was suing Gallagher, Cigna North Florida Market President Dean Mirabella said in a statement, “We are not a party to the Gallagher lawsuit, and in that lawsuit, there is no allegation that our company paid any improper commissions. Unfounded and misleading public comments have been made about payments for specific procedures that do not take into account or accurately reflect how complex medical procedures are paid. As a valued partner for nearly two decades, we negotiated discounted rates that were fair and competitive for the customers we served.”