A LETTER FROM BOB RESNIKOFF ON MAYOR WIEGMAN'S TAXPAYER FUNDED HEALTH INSURANCE

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Please take a moment to read a letter, which also appears in the 7/17 edition of THE GAZETTE, from Bob Resnikoff. While lengthy, Mr. Resnikoff raises interesting questions about the mayor's taxpayer funded health insurance. To date, he has not had a response from the village.

A LETTER FROM BOB RESNIKOFF

To the editor and residents of Croton-on-Hudson:

The ongoing discussion about the Village's decision to pay Mayor Wiegman's medical insurance premiums prompted me to personally investigate the requirements of the Affordable Care Act (aka Obamacare) with respect to our mayor.  What I have learned is that the ACA specifically excludes "bona fide" volunteers who work for local governments even though they may receive some nominal compensation (see below).  In addition, if the worker is not a volunteer and works fewer than 30 hours per week, then that worker is also excluded from the ACA coverage mandate. 

If the mayor believes he is a part-time worker and not a volunteer, then his compensation of $5000 per year (as set by the Village Code) covers about 12.5 hours of work per week (on average) assuming his hourly wage is no more than the New York State minimum wage of $8 per hour.  This means that the Village would be breaking NY's  minimum wage law by allowing him to work more than 12.5 hours per week.

My personal opinion is that the mayor (and each trustee) is a volunteer, and that the $5000 annual compensation he receives is a stipend or honorarium--how else to explain the low annual compensation compared to other Village employees?

Below is the text of the email I sent Village Manager Zambrano a week ago, laying out some of these facts and asking for his opinion.  As of the writing of this letter, I have received no response from Mr. Zambrano.

Dear Mr. Zambrano,
 
As I'm sure you're aware, there is a great deal of strong  feeling in our community about Mayor Wiegman's position that he's entitled to Village-paid health care. What I've read is that he believes it's mandated by the Affordable Care Act because of the number of hours per week he works as Mayor of the Village.

However, my reading of the text below (an excerpt from the IRS final ruling issued 2/12/2014 and published in the Federal Register) indicates that the Mayor is not required by the ACA to have employer-paid health insurance because he is a "bona fide" volunteer employee (not a regular employee) who receives a $5000 stipend. The ruling makes a specific exception for volunteer employees working for non-taxable entities such as a local government who recieve a stipend or similar payment.

The Village Code (as published on the Village website) sets the amount paid to the Mayor, and lists it as "compensation." The fact that the amount is so low in comparison to other Village employee salaries is a strong indication that this "compensation" is not a salary but a stipend or honorarium. In fact, it seems to me that in order for the Village to pay for his health insurance, the Village Code will have to be amended to raise the amount currently specified at $5000.

I'm bringing this to your attention because as the Village Manager, I believe you are the person who has final responsibility for making the decision in this matter.

Fyi, the full text of the IRS ruling in the Federal Register can be found at:

https://www.federalregister.gov/articles/2014/02/12/2014-03082/shared-responsibility-for-employers-regarding-health-coverage#h-4

The excerpt below is from section VI of the ruling (you can do a search on "volunteer employees" in the full ruling text).

Please let me know your thoughts on this.

Best regards,

Bob Resnikoff

Excerpt from the IRS ruling as published in the Federal Register dated 2/12/2014:

1. Volunteer Employees

Commenters requested that hours of service performed in the capacity of a volunteer for a government entity or tax-exempt organization not be counted as hours of service for purposes of section 4980H. Under the definition of hour of service outlined in these regulations, an hour of service is generally defined as an hour for which an employee is paid or entitled to payment. Accordingly, hours worked by a volunteer who does not receive (and is not entitled to receive) compensation in exchange for the performance of services are not treated as hours of service for purposes of section 4980H.

Commenters noted, however, that some volunteers receive compensation in the form of expense reimbursements, stipends, contributions to employee benefit plans, or nominal wages. Local governments, for instance, noted that many volunteer firefighters or other emergency responders are paid a salary or an hourly wage, generally at a rate lower than the rate paid to non-volunteers performing services in a similar capacity. Other volunteer firefighters or emergency responders may receive expense reimbursements or other fees each time they respond to a call. Commenters generally expressed concern that volunteer service would be discouraged if volunteer hours were required to be counted when determining whether the individual is a full-time employee for purposes of section 4980H.

In response to these concerns, the final regulations provide that hours of service do not include hours worked as a “bona fide volunteer.” For this purpose, the definition of “bona fide volunteer” is generally based on the definition of that term for purposes of section 457(e)(11)(B)(i), which provides special rules for length of service awards offered to certain volunteer firefighters and emergency medical providers under a municipal deferred compensation plan. For purposes of section 4980H, however, bona fide volunteers are not limited to volunteer firefighters and emergency medical providers. Rather, bona fide volunteers include any volunteer who is an employee of a government entity or an organization described in section 501(c) that is exempt from taxation under section 501(a) whose only compensation from that entity or organization is in the form of (i) reimbursement for (or reasonable allowance for) reasonable expenses incurred in the performance of services by volunteers, or (ii) reasonable benefits (including length of service awards), and nominal fees, customarily paid by similar entities in connection with the performance of services by volunteers.