A $110,000 out-of-court settlement will end a lawsuit filed against the Snohomish Health District by the Washington Counties Insurance Pool in 2003. The insurance pool, the lead...

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A $110,000 out-of-court settlement will end a lawsuit filed against the Snohomish Health District by the Washington Counties Insurance Pool in 2003.

The insurance pool, the lead plaintiff representing 40 of its members, had sued the health district over the district’s decision to leave the group early, which allegedly caused a financial hardship for other members.

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The pool, made up mostly of county governments and supported by tax dollars, maintained that the health district’s early withdrawal, coupled with a high number of health-insurance claims, had forced the other members to pay more than if the district had remained an active member. The group sued in King County Superior Court.

The health district joined the insurance pool in 2001 to provide health insurance for its nearly 200 employees. But by December 2001, district officials decided to withdraw from the program and notified the insurance pool they would leave by April 1, 2002.

According to the suit, the insurance-pool contract called for terminations to coincide with the end of a year and said penalty fees could be assessed against members for terminations at other times.

The insurance pool said in court documents that it had tried to negotiate a fee but that the district had refused to pay.

Both sides met periodically to discuss a settlement, said Rick Mockler, the health district’s deputy director and voting representative on the insurance pool’s advisory board. They eventually agreed on $110,000.

According to court papers, the district filed at least six health-insurance claims totaling $319,000, exceeding premiums the district had paid into the pool during its membership.

“For all that, the settlement amount seems reasonable to us,” Mockler said. “We participated in the pool, so we were responsible for a share of its losses.”

A check for the full amount would be sent immediately, Mockler said.

Attempts to reach the insurance pool’s executive director, Kathleen “Kitty” Wallace, were unsuccessful.

The health district now covers its employees through the Public Employees Benefits Board, which is administered by the Washington State Health Care Authority.

Christopher Schwarzen: 425-783-0577 or cschwarzen@seattletimes.com