DuPage Township, IL. (ECWd) -
DuPage Township Supervisor Felix George, and Trustees Maripat Oliver and Ken Burgess, voted at their last township meeting to ignore IRS rules and state law as it relates to former Supervisor Mayer's W-2 tax form - obviously forgetting that no local government can override IRS rules or state law.
The W-2 at issue involves the reporting of alleged "pre-tax" payments for health insurance for former Supervisor Bill Mayer.
So here are the questions we will answer one at a time:
- What did the compensation-setting Resolution authorize as compensation for the township supervisor?
- Was Bill Mayer authorized to participate in DuPage Township health insurance plans at the start of this term of office?
- What change was made to the Employee Handbook and when was that change made?
- Can insurance be added to an elected official's compensation package during the term of office?
- What about the IRS rules on "pre-tax" health insurance - Does it apply to "employer-sponsored" insurance, or can a person simply purchase their own health insurance and write it off as "pre-tax"?
What did the compensation-setting Resolution authorize as compensation for the township supervisor?
August 23, 2016, is the date where Resolution 16-03 is passed setting the compensation of DuPage Township Officials for the four-year term beginning May 20, 2017, and it is abundantly clear:
- Supervisor's salary: $29,000
- Assessor's salary: $90,000 with various increases each year
- ASSESSOR WILL RECEIVE INSURANCE BENEFITS
- No mention of insurance benefits for the Supervisor
Was Bill Mayer authorized to participate in DuPage Township health insurance plans at the start of this term of office?
No, he was not authorized to participate in the township's health insurance plan (See Resolution 16-3) when he started this term of office - as evidenced in the alleged change of the employee manual in January of 2018 (during his term of office).
What change was made to the Employee Handbook and when was that change made?
During the January 2018 township board meeting, the board voted on a new (change) policy manual. This change included a clause allowing elected officials and family members to participate in the health insurance program at their own cost.
The following month, Mayer added himself and family members to the township's insurance plan (here).
Even if that clause was in the handbook prior to his term of office (which it wasn't), it was not included in the compensation setting resolution, therefore, it was unauthorized.
Can insurance be added to an elected official's compensation package during the term of office?
No, an elected official's compensation cannot be increased or decreased during their term of office (IL Constitution, Art VII, Section 9(b)). Adding anything (like insurance) to the compensation (salary) of an elected official during their term of office is unlawful.
Some people might say "but he paid for it out of his own pocket" and we would reply that the fact that he participated in the insurance program constituted an increase in compensation - no matter who paid the premiums - because it was not set as part of his compensation in the compensation setting resolution. Could the general public participate in the township's insurance? Could the general public participate and claim pre-tax insurance payments? The answer to both is "no."
What about the IRS rules on "pre-tax" health insurance - Does it apply to "employer sponsored" insurance, or can a person simply purchase their own health insurance and write it off as "pre-tax"?
"Employer-sponsored" health insurance can be considered "pre-tax" - meaning not taxable as income. The KEY and operative words here are "employer sponsored" - and in order to be employer sponsored, the employee's participation must be authorized by the employer to be legally eligible to participate in the insurance program. Bill Mayer was not legally eligible to participate - the only elected official eligible to participate was the Township Assessor (See Resolution 16-3) - any "policy" change is moot and invalid when involving elected officials and their family members.
We understand the IRS has been notified of this and are awaiting their response.