XENIA — Greene County and 10 employees have agreed to settle a lawsuit over Medicare FICA payments.
The county alleged that the employees owe slightly more than $90,000 in wages they were overpaid due to Medicare withholding omissions made by the auditor’s office between 2007 and mid-2018. The lawsuit says that the auditor’s office “incorrectly believed IRS regulations did not require Medicare FICA payments if an employee retired under the Ohio Public Employee Retirement System and was originally hired by Greene County prior to 1986.”
According to county records, the 10 employees retired and were rehired between 2004-2013, which is considered a “break in service” by the IRS and the employees were required to pay the Medicare portion of the Federal Insurance Contributions Act (FICA) tax, with a match from the county.
Under terms of the agreement, which was reached on Thursday and approved 2-1 by commissioners, the employees will pay the county $13,611. In return, the county will not file any claim with the IRS, Social Security Administrator, or any other agency seeking a refund or mitigation of any sums already paid by the county on behalf of the 10 individuals. The county also agreed to drop the lawsuit.
The employees — Jewel Amburgy, Richard Bowman, Michael J. Brown, Stephen K. Haller, William L. Harden Jr., Teri L. Lajeunesse, John C. La’Rock, Suzanne M. Schmidt, Terry W. Swisshelm, and Stephen Wolaver — were each overpaid between $1,358 to $18,852, according to county records.
Commissioner Tom Koogler cast the lone no vote because he felt the commissioners weren’t being good stewards of taxpayer money.
“I think the taxpayers of Greene County were not served well,” Koogler said.
He also feels the deal was about more than money.
“I think there was some political overtones that came into play,” Koogler said. “All three commissioners, prior to the changing of the guard when (Commissioner Rick) Perales came on board, voted to collect $90,000 from people who had gotten paid and didn’t deserve to get that money. There’s still $90,000 out there. We got halfway or more through the game. It’s not sometimes what you know, but who you know.”
Commissioner Rick Perales said it was about doing the right thing by long-time employees, who had 350 combined years of service and did not do anything wrong.
“The county was at fault,” he said. “There was no way those employees knew about this. It wasn’t premeditated. There’s got to be some respect. Some courtesy. When I got in there in January the cost that we were having to pay lawyers was $30,000, a third of the cost. We were farther away from resolving this than from day one. It’s not always about lawsuits.”
When the county caught the error in early July 2018, it began withholding the required amount later that month. In July 2020, the county paid the IRS around $180,000 to cover the amount due dating back to 2007, which is as far back as reliable records go, Auditor David Graham previously said.
Letters were sent to the employees asking for reimbursement of the amount they owe and County Administrator Brandon Huddleson offered a payment plan. None accepted so the lawsuit was filed Nov. 3, 2020, saying that the employees will be “unjustly enriched by the overpayment of wages and Greene County’s payment to the IRS of their Medicare portion of FICA taxes.”
