Did Kentucky retirees have to receive the same health benefits as the 1994 Kentucky Kare Standard plan?

Plain-English summary

A Kentucky firefighters' representative asked in 1998 what level of health coverage the Kentucky Retirement Systems had to provide retirees. The Attorney General read KRS 18A.225(2) to require eligible retired state employees to receive coverage with benefits at least equal to those in the Kentucky Kare Standard plan as of January 1, 1994.

The opinion distinguished the benefits in a health plan from the money used to buy one. It said the statute set a floor for the package of covered entitlements, without requiring the retirement system to use a particular insurer or provide a specified dollar amount. A different plan could satisfy the statute if it provided the same benefits.

The Attorney General did not determine whether any plan then offered met that floor. Comparing the actual plans required facts the requester had not supplied. The opinion also called its statutory interpretation a forecast of how a court might decide a question the courts had not yet resolved.

Currency note

This opinion was issued in 1998. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did Kentucky's 1998 law guarantee eligible retirees the original Kentucky Kare insurance plan? A: No. The Attorney General said the statute used that plan's 1994 benefits as a comparison point. The retirement system could offer a different company's plan if its benefits met the statutory floor.

Q: Was a payment equal to the old plan's cost enough under the opinion?
A: The opinion rejected treating “benefits” as a fixed sum of money or premium. It read the word to mean the entitlements a health plan provided.

Q: Did the Attorney General find the retirement system's 1998 plans unlawful? A: No. It expressly declined to compare the plans then offered with the 1994 benchmark because that was a factual question beyond the information provided.

Background and statutory framework

The opinion treated qualifying retirees as “state employees” under KRS 18A.225(1) and applied the health coverage provision in KRS 18A.225(2). Because the statute did not define “benefits,” it used KRS 446.080(4)'s ordinary-meaning rule and read the word as referring to a plan's package of entitlements. It also cited Hatchett v. City of Glasgow for the rule against adding words to a statute that the legislature did not write.

The conclusion was about the statute's meaning. The opinion said a compliance finding would require comparing actual plans with the 1994 Kentucky Kare Standard benefits, which it did not do.

Citations and references

Statutes: KRS 18A.225(1); KRS 18A.225(2); KRS 446.080(4).

Case: Hatchett v. City of Glasgow, 340 S.W.2d 248, 251 (Ky. 1960).

Source

• Landing page: https://kdla.access.preservica.com/uncategorized/IO_406ed67b-b5c2-4e64-bc8d-5759db370a98/
• Original PDF: https://kdla.access.preservica.com/download/file/IO_406ed67b-b5c2-4e64-bc8d-5759db370a98

Original opinion text

OAG 98-4
March 9, 1998
Subject:

Type and level of health insurance coverage that
must be provided to retired state employees

Requested by:
fighters

Mike Kurtsinger, Kentucky Professional Fire-

Written by:

Bill Pettus, Assistant Attorney General

Syllabus:

KRS 18A.225(2) requires that Kentucky Retirement
Systems offer retired state employees health insurance benefit plans with “the same benefits as provided under Kentucky Kare Standard as of January 1, 1994.” This statutory subsection does not mandate a particular form of health insurance coverage and does not require that the state provide funds for a retired employee to purchase a particular plan.

Statutes construed:

KRS 18A.225

OPINION OF THE ATTORNEY GENERAL
Your February 5, 1998, letter to this Office requests an Attorney
General’s opinion on “whether the Pension Board is required to provide
a certain level of benefits for health care to retirees.” You state that
KRS 18A.225 provides that state employees’ benefits, at a minimum,
are to be at the 1994 Kentucky Care standard level of benefit.
Although your question is somewhat ambiguous, it is assumed
that you are asking whether the Kentucky Retirement Systems is required to provide a retired state employee health insurance coverage

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Page 2

equal to or greater than the level provided by Kentucky Kare Standard
as of January 1, 1994. The answer is yes.
This presents a difficult question yet to be addressed by our
courts. As such, we must apply rules of statutory construction to determine the meaning of an ambiguous term subject to varying meanings. Of course, the overall effect of the statute is dependent on the meaning of that term. Thus, our opinion is only a forecast of how a court may answer this question and as a forecast, it must be accepted that a court presented with this issue may well provide a different interpretation. ANALYSIS KRS 18A.225(2) provides in part as follows:
. . . Health insurance coverage provided to state employees under this section shall, at a minimum, contain the same benefits as provided under Kentucky Kare Standard as of January 1, 1994. . . . The phrase “state employee,” as used in KRS 18A.225, includes the following:
[A] person, including an elected public official, who is regularly employed by any department, board, agency, branch of state government, or any municipal urban-county, charter county, or county government, whose legislative body has opted to participate in the state health insurance program pursuant to KRS 79.080 and who is a contributing member to any one (1) of the retirement systems administered by the state and including any federally-funded timelimited employee. It shall also include a person who must fulfill the requirements established by the Kentucky Board of Education for eligibility and a person who is a present or future recipient of a retirement allowance from any of the Kentucky Retirement Systems who either satisfies the re-

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quirements of KRS 61.559 or who is board authorized under KRS 61.702(1), including a beneficiary of a retired employee as defined in KRS 61.542 who is receiving a retirement allowance from any of the Kentucky Retirement Systems and includes members of the Legislators’ Retirement Plan as provided in KRS 18A.2287. (Italics added.) The definition of “state employee,” as used in KRS 18A.225(2), includes a person who is (a) receiving a retirement allowance from any of the Kentucky Retirement Systems and (b) meets either the requirements of KRS 61.559 or is board authorized under KRS 61.702(1). Consequently, a retired “state employee,” as used in KRS 18A.225(2) and as defined by KRS 18A.225(1), is entitled to health insurance coverage equal to or greater than the level provided by Kentucky Kare Standard as of January 1, 1994. The critical issue to determine in answering the question is in defining the term “benefits” and defining the phrase “same benefits as provided under Kentucky Kare Standard as of January 1, 1994” as used in KRS 18A.225(2). One interpretation that has been advanced is that this subsection merely requires the state to provide retirees with the same funds or money, adjusted by inflation, that it cost to purchase Kentucky Kare Standard as of January 1, 1994. Under this interpretation, “benefits” is effectively defined as a specific amount of money and it is irrelevant whether retirees can purchase any specific health insurance plan with the amount of money provided by the state for the purchase of an health insurance plan. An alternative interpretation is that “benefits” means the actual “package of entitlements” received with the purchase of a health insurance plan, specifically the “package of entitlements” available under Kentucky Kare Standard as of January 1, 1994. Obviously, whichever meaning is selected provides the answer to the question posed. As such, this again is our best effort at statutory construction.

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KRS 18A.225(2) as presently written was part of HB 250. It was
enacted in 1994 and became effective July 15, 1994. The term “benefits” as used in this subsection is not statutorily defined by KRS Chapter 18A. There are no published court decisions construing the term “benefits.” Consequently, this presents an issue of first impression. Without a statutory definition of “benefits” or common law precedent, the legal analysis in this opinion will necessarily have to be guided by principles of statutory construction. All words and phrases shall be construed according to the common and approved usage of language, but technical words and phrases, and such others as may have acquired a peculiar and appropriate meaning in the law, shall be construed according to such meaning. KRS 446.080(4). The word “benefits” is not a technical word and has not acquired any particular meaning in the law. Consequently, “benefits” must be construed according the “common and approved usage of language” pursuant to KRS 446.080(4). “Benefit” is defined as “[p]ayments made or entitlements available in accord with a wage agreement, insurance contract, or public assistance program.” Webster’s II New Riverside University Dictionary (2nd ed. 1988) (Italics added). KRS 18A.225(2) does not, of course, require the Kentucky Retirement Systems to provide retired state employees with health insurance coverage from Kentucky Kare. There is absolutely no language in the statute that requires Kentucky Retirement Systems to offer any specific health insurance benefit plan from any specific company. Nor can such language be supplied by a court or other adjudicatory body.
[W]here a statute on its face is intelligible, the courts are
not at liberty to supply words or insert something or make
additions which amount . . . to providing for a casus omissus, or cure an omission, however just or desirable it might

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be to supply an omitted provision. It makes no difference
that it appears the omission was mere oversight.
Hatchett v. City of Glasgow, 340 S.W.2d 248, 251 (Ky. 1960). (Italics in
original.)
The General Assembly clearly used the level of benefits available under the 1994 Kentucky Kare Plan as the point of comparison for future benefits that would be provided. It did not mandate a particular form of coverage and did not require that the state provide a specific dollar amount for a retired employee to purchase a particular plan. KRS 18A.225(2) merely requires Kentucky Retirement Systems to provide state employees with health insurance coverage containing “the same benefits as provided under Kentucky Kare Standard as of January 1, 1994.” (Italics added.) Kentucky Retirement Systems may offer retired state employees health insurance benefit plans from other companies that contain “the same benefits as provided under Kentucky Kare Standard as of January 1, 1994,” and thereby satisfy the requirements of KRS 18A.225(2). “Benefits” as used in KRS 18A.225(2) is commonly understood to mean the package of entitlements available under a particular health insurance plan. Webster’s II New Riverside University Dictionary (2nd ed. 1988). “Benefits” is not commonly understood to mean the cost, premium, or value of the entitlements available under a particular health insurance plan. This statutory interpretation is implicitly supported by statements contained in “A Citizen’s Handbook: Kentucky’s Health Care Reform,” a publication of the Legislative Research Commission published in May 1994 to explain HB 250. In this publication, at page 10, it is stated that HB 250 “[r]equires that health insurance provided to state employees contain at least the same coverage as Kentucky Kare Standard as of January 1, 1994.” The publication, at page 11, also states that the Kentucky Health Purchasing Alliance is required “to offer a

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plan that is exactly the same as Kentucky Kare Standard as of January
1, 1994.”
The health insurance coverage plans presently provided by Kentucky Retirement Systems to retired state employees includes Kentucky Kare insurance benefit plans (budget high, economy low, standard low, standard high, and enhanced high). Some of these plans may offer benefits that provide “the same benefits as provided under Kentucky Kare Standard as of January 1, 1994,” and some of these plans may not. If the Kentucky Kare plans presently offered to retired state employees do not provide “the same benefits as provided under Kentucky Kare Standard as of January 1, 1994,” without additional cost to retired state employees, this would not necessarily be a violation of KRS 18A.225(2). If retired state employees are offered other health insurance plans that provide “the same benefits as provided under Kentucky Kare Standard as of January 1, 1994,” then the requirements of KRS 18A.225(2) would be satisfied. A factual comparison and analysis of the various Kentucky Kare health insurance benefit plans (budget high, economy low, standard low, standard high, and enhanced high) and other health insurance plans presently offered to retired state employees to determine which of the present plans offer the “same” or greater benefits with the Kentucky Kare Standard plan offered state employees in January 1, 1994, is beyond the scope of this opinion. This is necessarily a factual determination that can only be made on the basis of factual information that has not been provided. The purpose of this opinion is to provide guidance in interpreting the statutory language of KRS 18A.225(2) on its face, not to adjudicate any factual dispute that may occur concerning whether the statute is being properly applied by the Kentucky Retirement Systems. Sincerely, ALBERT B. CHANDLER III ATTORNEY GENERAL

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BILL PETTUS
ASSISTANT ATTORNEY GENERAL