Did Amite have to recover health premiums it mistakenly paid for individual policies?

Plain-English summary

Amite had paid individual health-insurance premiums for an employee and an alderman. An earlier Attorney General opinion said the town could pay for group coverage but could not provide separate individual policies. In 2005, the mayor asked whether the town now had to recover those premium payments. The AG answered not necessarily: assuming the town and both recipients acted in good faith, the town was not obliged to seek reimbursement.

The opinion stopped short of finding good faith as a fact. It said the town should evaluate that question, together with its apparent obligation to provide group coverage and its potential exposure for the cost of that coverage. Its conclusion depended on those circumstances, rather than treating every erroneous premium payment the same.

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.

Common questions

Was Amite allowed to buy separate policies for these two people?

The opinion repeated an earlier AG conclusion that the town could pay for group insurance but was not authorized to provide individual policies to employees or officials.

Did the town automatically have to demand repayment?

No. The AG said recovery was not obligatory if the town and recipients had acted in good faith, but it did not determine whether they actually had.

Why did the missing group coverage matter?

The opinion noted that the two individuals had not received group coverage they otherwise would have been entitled to, and said the town should consider its possible cost of providing that coverage when evaluating recovery.

Background and statutory framework

The opinion considered Louisiana's constitutional restriction on donating public funds alongside earlier Attorney General opinions about erroneous payments and good-faith mistakes. It treated the recovery question as fact dependent and left the town to assess the circumstances.

Citations

• Article VII, Section 14(A) (public-funds restriction discussed in the opinion).
• Opinion No. 05-0049 (earlier group-versus-individual coverage conclusion).

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/05-0227

Original opinion text

July 25, 2005
OPINION NUMBER 05-0227

54 – INSURANCE
71 – MUNICIPALITTIES
90-A-1 – PUBLIC FUNDS & CONTRACTS

Honorable R. E. Goldsby, M.D.
Pertains to the Town of Amite’s responsibility for collection
Mayor, Town of Amite
of the amount paid for individual health insurance policy
premiums paid on behalf of an employee and an alderman
212 E. Oak Street
who were previously provided such policies by the Town.
Amite, Louisiana 70422

Dear Mayor Goldsby:

This office is in receipt of your request for an Attorney General’s Opinion regarding the Town of Amite’s responsibility for the collection of the amount paid for individual health insurance policy premiums paid on behalf of an employee and an alderman who were previously provided such policies by the Town of Amite, in light of Attorney General’s Opinion No. 05-0049 addressed to you on March 18, 2005.

Opinion No. 05-0049 determined that the Town of Amite is authorized 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”. With respect to individual polices Opinion No. 05-0049 states:

“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.”

As noted to you in Opinion No. 05-0049, Article VII, Section 14(A) of the 1974 Louisiana Constitution generally prohibits the loan, pledge and/or donation of public funds, credit and property to any person, association or corporation, public or private. Previous opinions of this office have determined that this constitutional provision requires public bodies to exercise reasonable means to recover erroneous payments, overpayments and the like, when made to public employees. Attorney General’s Opinions Nos. 03-0444; 01-63; 88-169.

On the other hand, Attorney General’s Opinion No. 04-0255 determined that a Levee District did not need to seek reimbursement for payments made to a commissioner who was never confirmed by the Senate. Therein, we stated that the District’s Board of

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Opinion Number 05-0227
Honorable R. E. Goldsby, M.D.
Mayor, Town of Amite
Page -2-

Commissioners was not mandated to seek reimbursement after the end of the legislative session and the Senate’s failure to confirm the commissioner, “…as the payments were made through a mistake of both the board and the appointee…” In reaching that determination Opinion No. 04-0255 referred to Attorney General’s Opinion No. 90-136, which determined that a municipality was not obligated to seek reimbursement of retroactive compensation made to city employees if the municipality and the employees were acting in good faith in making and receiving those payments.

This office has no reason to suspect bad faith on behalf of the Town or Amite or the employee or alderman with respect to the individual policy premiums paid on behalf of the employee and alderman. However, as this office is not a finder of fact, we are not in a position to definitively advise you in that regard. We note that that the Town did not provide the employee or the alderman with the group coverage that they would otherwise have been entitled to, something the Town appears to have been obligated to do.

In our opinion that the Town, perhaps with it’s legal counsel’s assistance, should properly evaluate whether or not it would be in the Town’s best interest to pursue recovery in light of the good or bad faith of the Town and its employee and alderman in providing and receiving individual health coverage, as well as the Town’s potential exposure for the cost of coverage which would otherwise have been provided to these two individuals. Assuming it is determined that all parties acted in good faith with respect to the Town’s provision of individual coverage, it is our opinion that the Town of Amite is not obliged to seek reimbursement of the amounts it paid for health insurance on behalf of the two individuals in question.

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

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Opinion Number 05-0227
Syllabus

54 – INSURANCE
71 – MUNICIPALITTIES
90-A-1 – PUBLIC FUNDS & CONTRACTS

Pertains to the Town of Amite’s responsibility for collection of the amount paid for individual health insurance policy premiums paid on behalf of an employee and an alderman who were previously provided such policies by the Town.

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

Date Received:

Date Released: July 25, 2005

JEANNE-MARIE ZERINGUE BARHAM
Assistant Attorney General