Could Louisiana's state employee benefits board risk rate school board premiums under its one-year rule?

Plain-English summary

The State Employees Group Benefits Program asked which of two statutes governed higher health insurance premiums for school boards entering the state plan. Its rule under La. R. S. 42:851(A)(5)(b)(iii) limited risk rating to one year. The Attorney General concluded that La. R. S. 42:881 controlled because it applied to an entering “entity,” expressly overrode contrary law, and covered a school board.

The board's failure to promulgate a final rule implementing § 42:881 did not prevent the statute from applying. The opinion tied the higher premium to an entity's entry into the plan on or after July 1, 1993 and its employees' HMO elections. Its description of the numerical threshold is inconsistent: the statutory discussion says “50 percent or more,” while the conclusion says “more than 50 percent.”

Currency note

This opinion was issued in 2000. 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

Did the word “entity” include a school board?
Yes. The AG said a school board was a political subdivision and an entity within § 42:881.

Did the older one-year premium rule control?
No. The AG concluded that § 42:881 controlled risk-rated premiums for school boards over the rule adopted under § 42:851(A)(5)(b)(iii).

Did the absence of a final board rule make § 42:881 inapplicable?
No. The opinion said the board's failure to promulgate such a rule did not displace the statute.

What percentage of HMO enrollment triggered the higher rate?
The opinion's statutory discussion says “50 percent or more”; its concluding sentence says “more than 50 percent.” The text does not resolve that difference.

Background and statutory framework

The request contrasted a board rule that limited risk rating to one year with a 1992 statute governing entities that first entered the plan on or after July 1, 1993. The AG treated the statute's “notwithstanding” clause and coverage of school boards as decisive. The opinion also noted the board's prior steps toward replacing its one-year rule.

Citations and references

• La. R. S. 42:881: the controlling provision for entering entities and risk-rated premiums.
• La. R. S. 42:851(A)(5)(b)(iii): the authority under which the older board rule was adopted.
• Wood v. Wood, 424 So.2d 1143 (La. App. 1st Cir. 1982): cited for the legislative expression of law.

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/00-0022

Original opinion text

March 3, 2000
OPINION NUMBER 00-22

Mr. Thomas D. Benoit 54 INSURANCE
97 SCHOOLS & SCHOOL DISTRICTS - Property,
Special Counsel
Contracts
Board of Trustees
La. R. S. 42:881; La. R. S. 42:851 (A)(5)(b)(iii)
State Employees Group Benefits Program
La. R. S. 42:881 is controlling statute on the issue of risk
P. O. Box 44036, Capitol Station
rated premiums for school boards.
Baton Rouge, LA 70804

Dear Mr. Benoit:

We received your request for an opinion concerning the application of La. R. S. 42:851(A)(5)(b)(iii) and 42:881, which address risk-rated premiums, to school boards.

La. R. S. 42:851(A)(5)(b)(iii) provides that the Board of Trustees of the State Employees Group Benefits Program may charge a higher premium rate for school boards which elect to participate in the State Group Health and Accident Insurance Program after participating in another group health and accident program. The Board adopted and promulgated a rule to this effect which limited such risk rating to one year.

La. R. S. 42:881 was enacted in 1992. This statute provides that, “Notwithstanding any other provision of law to the contrary...”, if 50 percent or more of the employees of “an entity” which initially becomes a participant on or after July 1, 1993 elect to participate in a health maintenance organization, the remaining employees of the entity who participate in the plan shall be charged a premium rate. As stated in your request, the Board never promulgated this statute as a final rule. The question then becomes whether La. R. S. 42:881 supersedes La. R. S. 42:851(A)(5)(b)(iii).

We do not believe that because La. R. S. 42:881 refers to an “entity” rather than expressly referring to a school board that it does not apply to a school board. A school board is a political subdivision of the state. An entity is nothing more than that which exists independently. Clearly, a school board is an entity and would be included in the statute. Also, the fact that the Board never promulgated a rule which encompassed La. R. S. 42:881 does not make the statute inapplicable. On the contrary, the “law” is the solemn expression of the legislative will. Wood v. Wood, 424 So.2d 1143 (La. App. 1st Cir. 1982).

While we recognize that the two statutes are somewhat ambiguous to the extent that one refers to school boards and the other entities, La. R. S. 42:881 specifically states notwithstanding any other provisions of law to the contrary. Further, after reviewing

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Mr. Thomas D. Benoit
OPINION NUMBER 00-22
Page -2-

the legislative history of both statutes, we note that the Board opposed and /or questioned the legislation at various committee meetings. The Board initiated promulgation of a rule to encompass La. R. S. 42:881 and abolish the one year risk rated rule which indicates it viewed La. R. S. 42:881, at least at that point, as overriding La. R. S. 42:851(A)(5)(b)(iii).

Therefore, it is our opinion that La. R. S. 42:881 is controlling on the issue of risk rated premiums, specifically for school boards. As such, the Board may only charge a higher premium for those entities/school boards which become a participant on or after July 1, 1993 and have more than 50 percent of its employees electing to participate in an HMO. Please see Atty. Gen. Op. 00-44 which also addresses this very same issue.

We trust that this adequately responds to your request. If you have any questions or comments, please do not hesitate to contact our office. With kindest regards,

Yours very truly,

RICHARD P. IEYOUB
ATTORNEY GENERAL

BY:
TINA VICARI GRANT
Assistant Attorney General

RPI:TVG:jv

OPINION NUMBER 00-22
Syllabus

Page 3

54 INSURANCE
97 SCHOOLS & SCHOOL DISTRICTS - Property, Contracts La. R. S. 42:881; La. R. S. 42:851 (A)(5)(b)(iii)

La. R. S. 42:881 is controlling statute on the issue of risk rated premiums for school boards.

Mr. Thomas D. Benoit
Special Counsel
Board of Trustees
State Employees Group Benefits Program
P. O. Box 44036, Capitol Station
Baton Rouge, LA 70804

DATE RECEIVED: 1/11/00
DATE RELEASED: March 3, 2000

TINA VICARI GRANT, ASSISTANT ATTORNEY GENERAL