Could a Louisiana town buy one alderman an individual health policy instead of group coverage?

Plain-English summary

In 2005, the Louisiana Attorney General concluded that the Town of Amite could not pay for a separate individual health-insurance policy for one alderman in place of the group plan offered to officials and employees. Amite's Ordinance No. 4-2003 authorized group coverage, and the AG read LSA-R.S. 33:5151 as allowing public contributions for group insurance policies. Neither source authorized the individual Blue Cross policy at issue, even if it cost no more than the town's group coverage.

The alderman already had United Healthcare coverage through the sheriff's office; Amite separately paid a Blue Cross premium for him while other covered town employees used Amite's group plan. The AG also noted that giving one official a benefit unavailable to similarly situated officials could raise equal-protection questions. It did not decide a separate equal-protection claim.

Currency note

This opinion was issued in 2005. 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

Could Amite buy one alderman an individual health policy? A: The AG said no under the ordinance and statute then in force, both of which it read as authorizing group coverage instead.

Would a cheaper individual policy change the answer? A: No. The opinion said the individual policy was unauthorized even if its cost was equal to or less than group-plan coverage.

Did the opinion say town contributions to all health insurance were forbidden? A: No. It said LSA-R.S. 33:5151 allowed contributions toward group insurance for employees and officials.

Did the AG find an equal-protection violation?
A: It raised the possibility of an equal-protection question from singling out one official, but did not decide such a claim.

Background and statutory framework

Mayor R. E. Goldsby asked about an alderman's separate Blue Cross policy. The AG quoted Amite's ordinance allowing “group health insurance coverage” and LSA-R.S. 33:5151's authorization for group policies. It concluded that the town was “not authorized to provide, either in whole or in part, a separate or individual policy” for an official or employee. The PDF refers to an ordinance attachment but its extracted pages do not include the attachment itself; the opinion quotes the relevant ordinance language.

Citations

• LSA-R.S. 33:5151 (municipal group-insurance authority quoted in the opinion).
• Amite Ordinance No. 4-2003 (group coverage language quoted in the opinion).

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/05-0049

Original opinion text

March 18, 2005
OPINION NUMBER 05-0049

54 – INSURANCE
71 – MUNICIPALITTIES
90-A-1 – PUBLIC FUNDS & CONTRACTS
Fourteenth Amendment of the United States Constitution Article I, Section 3 of the 1974 Louisiana Constitution Honorable R. E. Goldsby, M.D. Article VII, Section 14(A) of the 1974 Louisiana Constitution
Mayor, Town of Amite
LSA-R.S. 33:5151
212 E. Oak Street
Town of Amite is not authorized to provide, either in whole or in
Amite, Louisiana 70422
part, a separate or individual policy of health insurance for any of its
employees or officials, even if the cost of the individual policy is equal to or less than the cost of providing the employee or official
Dear Mayor Goldsby: with coverage under the Town’s group policy.

This office is in receipt of your request for an Attorney General’s Opinion regarding the Town of Amite’s provision of an individual health insurance policy for one of its alderman.

According to your correspondence, the Town of Amite’s Board of Aldermen enacted Ordinance No. 4-2003, copy attached, which authorizes the Town to “…offer group health insurance coverage…” (emphasis supplied) for its employees and officials. In accordance with Ordinance 4-2003, the Town entered into an agreement with United Healthcare for its employees’ insurance coverage. Pursuant to the Ordinance, 100% of each Town aldermen’s premiums with United Healthcare are paid by the Town.

One alderman, a former employee of the Tangipahoa Sheriff’s Office, already had coverage with United Healthcare through the Sheriff’s Office. Since the alderman did not need coverage with United Healthcare, the Town’s insurance agent arranged for a policy for that alderman with Blue Cross (which policy was in addition to the United Healthcare coverage the alderman was already receiving from the Sheriff’s office), and the Town has paid this alderman’s premiums to Blue Cross, even though all other employees who chose to have health coverage were covered by United Healthcare.

On behalf of the Town, you have requested the opinion of this office as to whether it is legal for the Town to provide a separate or individual health insurance policy for one of the Town’s aldermen, with a different company than the company that provides group health coverage for all other Town employees. Additionally, you seek our opinion with respect to the legality of such a policy if the coverage provided is more costly than that provided to other Town employees.

Before addressing the issues of state law raised by your request, we note that Ordinance 4-2003 only authorizes the Town to offer ‘group’ coverage to its employees

Page 2

Opinion Number 05-0049
Honorable R. E. Goldsby, M.D.
Mayor, Town of Amite
Page -2-

and officials. In our opinion, Ordinance 4-2003 does not provide authority for the Town to provide any employee or official with a separate or individual health insurance policy. With respect to state law, we call your attention to Article VII, Section 14(A) of the 1974 Louisiana Constitution. This constitutional provision generally prohibits the loan, pledge and/or donation of public funds, credit and property to any person, association or corporation, public or private. However, constitutional exceptions to this prohibition are found in Section 14(B) which provides, in pertinent part, the following:

“Nothing in this Section shall prevent… (2) contributions of public funds to pension and insurance programs for the benefit of public employees…”

Cleary, the Constitution enables state and local entities (e.g., the Town) to fund “insurance programs” for its employees and/or officials. This authority has been implemented by the Louisiana Legislature, with respect to political subdivisions such as the Town of Amite, at LSA-R.S. 33:5151, which provides:

“A. Any municipality or political subdivision of the state may make contracts of insurance with any insurance company legally authorized to do business in this state insuring their employees and officials under policies of group insurance covering hospitalization, and retirement, for such employees and officials, and may agree to match the payments of the employees and officials for the premiums or charges for any such contracts payable out of the funds of such municipality or political subdivision, respectively.

B. Nothing in this Section or in R.S. 42:851 shall be construed to limit the contribution of a local governmental subdivision toward the payment of premiums for accident and health protection for its employees or their dependents, or both.” (Emphasis added).

In our opinion, this provision of law authorizes the Town to pay all or a portion of the premiums for health insurance for its employees and officials, including its aldermen, but only with respect to “policies of group insurance”. The Town of Amite is not authorized to provide, either in whole or in part, a separate or individual policy of health insurance for any of its employees or officials, even if the cost of the individual policy is equal to or less than the cost of providing the employee or official with coverage under the Town’s group policy.

We also note that the situation contemplated by your request, whereby one official is given the privilege of an individual health insurance policy, a privilege not extended to all other similarly situated employees and officials, may also invoke questions under constitutional provisions requiring equal protection. See: Article I, Section 3 of the 1974 Louisiana Constitution and the Fourteenth Amendment of the United States Constitution. Under the equal protection clauses of the state and federal constitutions,

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Opinion Number 05-0049
Honorable R. E. Goldsby, M.D.
Mayor, Town of Amite
Page -3-

differential treatment must be reasonable in light of the governmental purpose for which the laws authorizing same were enacted.

We trust the foregoing to be of assistance. If you have any questions, please do not hesitate to contact us.

Yours very truly,

CHARLES C. FOTI, JR.
Attorney General

BY: _________
JEANNE-MARIE ZERINGUE BARHAM
Assistant Attorney General

CCF, jr./JMZB/dam

Attachment

Page 4

Opinion Number 05-0049
Honorable R. E. Goldsby, M.D.
Mayor, Town of Amite
Page -4-

Opinion Number 05-0049
Syllabus

54 – INSURANCE
71 – MUNICIPALITTIES
90-A-1 – PUBLIC FUNDS & CONTRACTS
Fourteenth Amendment of the United States Constitution Article I, Section 3 of the 1974 Louisiana Constitution Article VII, Section 14(A) of the 1974 Louisiana Constitution LSA-R.S. 33:5151

Town of Amite is not authorized to provide, either in whole or in part, a separate or individual policy of health insurance for any of its employees or officials, even if the cost of the individual policy is equal to or less than the cost of providing the employee or official with coverage under the Town’s group policy.

Honorable R. E. Goldsby, M.D.
Mayor, Town of Amite
212 E. Oak Street
Amite, Louisiana 70422

Date Received:

Date Released: March 18, 2005

Jeanne-Marie Barham
Assistant Attorney General