The city’s personnel department learned last fall that Steve Merolla, who served the city for 22 years as the Ward 9 councilman, was receiving health care benefits following his retirement although he had not reached his 60th birthday, Mayor Frank Picozzi disclosed Friday.

Last Wednesday, Picozzi’s office announced that Merolla has been taken off the health plan; that city payments were made in error and, as a result, the city is seeking the reimbursement of $43,984.32.

In a telephone interview, Merolla said he was “shocked” when he learned he was being taken off the plan. He said he was disappointed not to have received a call from Picozzi and that, instead, the mayor announced the development on social media and that he is reviewing his legal options. Merolla, an attorney, has retained the firm of Cameron & Mittleman to handle the matter.

Having served as a councilman for six years or more, Merolla had the choice of collecting full pension benefits at age 60 or a monthly reduced rate should he choose to collect earlier. Municipal retirees can collect full pensions and health coverage at age 55.

Like municipal employees, Merolla said he believed he was entitled to full health coverage when he signed all the paper work.

“I went through the process like everyone else,” he said adding, “I’ve been getting it (full health coverage) for two years.

Had he realized he wouldn’t get the health coverage, Merolla said he probably wouldn’t have started collecting reduced pension payments. He said he is especially concerned at this point because a family member is in need of medical attention.

Ironically, Merolla was a member of the council when it approved the ordinance exempting council members from health benefits until the age of 60.

“Per Chapter 48-117 of the Code of Ordinances – any councilman that was elected prior to Feb. 19, 2009, and served three or more two year terms, which Mr. Merolla was and did, is eligible for post-retirement medical benefits at the age of 60. Mr. Merolla was four years away from eligibility when he applied for the benefits,” reads the release issued by the mayor.

Picozzi said Friday the city should have never given the health care benefit to Merolla. He said Merolla is “obligated under Rhode Island law to pay back the money” that was spent on his health coverage. He likened the incident to a bank faultily crediting an account. “It’s not your money, the bank takes it back.”

Picozzi said the personnel department realized the error in September, but he wasn’t informed until just a couple of weeks ago.

“It (removing Merolla from the healthcare plan) should have been done long before that,” he said.

The press release quotes Picozzi as saying, “His ineligibility surfaced recently when another former councilman applied for his post-retirement benefits and it was discovered that the ordinance was incorrectly applied in Mr. Merolla’s case. Once this was brought to my attention I had Mr. Merolla’s coverage stopped. I’m now seeking and intend to get full restitution for the cost to the city for that coverage, $43,984.32.”

The Mayor has also instructed the Personnel Department to do a thorough audit of all pensions and benefit coverage from the date of Feb. 19, 2009, through the present. No other errors were found.