Is a Minnesota school district required to make the same level of health insurance coverage available to retired employees who are 65 or older as to active employees?

Plain-English summary

Independent School District No. 622 (North St. Paul-Maplewood) provided group hospital, medical, and dental insurance to its employees, and let retired employees and dependents continue in the same insurance group after retirement. The district's counsel at Ratwik, Roszak & Maloney asked the AG whether Minn. Stat. § 471.61, subd. 2b required the district to make the same level of coverage available to a retiree 65 or older that the employee had received before retirement.

Assistant AG Kenneth Raschke, signing for AG Hubert H. Humphrey III, said no.

Minn. Stat. § 471.61, subd. 2b said a unit of local government "must allow a former employee and the employee's dependents to continue to participate indefinitely in the employer-sponsored hospital, medical, and dental insurance group that the employee participated in immediately before retirement, under the following conditions" (then listed conditions). Subdivision (b): "Until the former employee reaches age 65, the former employee and dependents must be pooled in the same group as active employees for purposes of establishing premiums and coverage for hospital, medical and dental insurance" (emphasis added).

The opening clause says retirees can participate indefinitely in the same insurance group. Subdivision (b) limits the requirement that retirees be pooled with active employees for premium and coverage to the pre-65 period.

The AG resolved the seeming tension by reading the two parts to give effect to both. Retirees may participate indefinitely in an employer-sponsored group plan, but the premium and level of coverage provided to retirees 65 or older may differ from that provided to active employees. The opening clause talks about continued group participation; subdivision (b) is the more specific provision on what kind of pooling is required, and it limits that pooling to pre-65 retirees.

Two interpretive canons supported this reading. Minn. Stat. § 645.17(2) provides that the legislature intends the entire law to be effective and certain; a construction that gives no effect to part of a statute is to be avoided (State v. Perry (Minn. App. 1994)). Minn. Stat. § 645.26, subd. 1 provides that when a general provision conflicts with a special provision, the two should be construed to give effect to both if possible; if that can't be done, the special prevails. Subdivision (b) is the more specific provision and limits the pooling requirement to pre-65. Reading the statute to require identical coverage for all retirees regardless of age would render subdivision (b)'s pre-65 limitation superfluous.

So school districts were not required under the opinion’s reading of the statute to offer retirees 65 or older the same coverage they had before retirement or the same coverage available to active employees. Their premiums and coverage levels could differ.

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.

Historical context: what the AG concluded

The opinion is short and turns on careful statutory construction.

The statutory language at issue: § 471.61, subd. 2b. The opening clause makes retiree insurance continuation rights indefinite ("must allow a former employee ... to continue to participate indefinitely in the employer-sponsored hospital, medical, and dental insurance group"). Subdivision (b) limits the active-employee pooling requirement to pre-65 retirees ("Until the former employee reaches age 65 ... must be pooled in the same group as active employees for purposes of establishing premiums and coverage").

These provisions could be read in tension. The opening clause might suggest a retiree always participates in the same group with the same terms. Subdivision (b) suggests pooling with active employees is required only until 65, implying that after 65 the retiree is in some other pool.

The AG resolved the tension by treating the opening clause as the general continuation right and subdivision (b) as the more specific rule on what kind of pooling is required. Retiree participation in the group is indefinite. The mandatory active-employee pooling is pre-65 only. The opinion concluded that premiums and coverage for retirees 65 or older could differ from those for active employees and younger retirees.

Two interpretive canons supported the construction:

Effective and certain. Minn. Stat. § 645.17(2): legislature intends the entire law to be effective and certain. State v. Perry: "a construction which would give no effect to [a] part of the statute is to be avoided."

General versus special. Minn. Stat. § 645.26, subd. 1: when a general provision conflicts with a special provision, the two should be construed to give effect to both if possible; if not, the special prevails. Subdivision (b) is the more specific provision.

If the statute were read to require identical post-65 coverage, subdivision (b)'s pre-65 limitation would be superfluous (because the same requirement would apply both before and after 65, making the "until age 65" language meaningless). To give meaning to the limitation, the AG held that post-65 premium and coverage levels may differ.

Common questions

Q: Did the district have to keep retirees 65 or older at active-employee premium and coverage levels?
A: The AG said no. Under the statute as the opinion read it, active-employee pooling was mandatory only until age 65, while participation in an employer-sponsored group could continue indefinitely.

Q: Does the district have to provide the same coverage after a retiree turns 65?
A: The opinion said no. The statute guaranteed continued participation in an employer-sponsored group, while its active-employee pooling requirement applied only until age 65. The opinion did not address individual contract promises.

Q: Does the district have to offer any health coverage to post-65 retirees, or can it just drop them entirely?
A: Minn. Stat. § 471.61, subd. 2b's opening clause requires the district to "allow" retirees to "continue to participate indefinitely" in the employer-sponsored group. So the district must let retirees continue in some form of coverage. Premium and coverage levels for retirees 65 or older could differ from those for active employees.

Q: What about dental and vision coverage?
A: Minn. Stat. § 471.61, subd. 2b covers "hospital, medical, and dental insurance." Vision is not mentioned in the statute; if the district provides vision coverage, the question of retiree continuation rights would turn on the specific contract and any other applicable statutes. Dental is governed by the same rule as medical: indefinite participation, with active-pooling required only pre-65.

Q: Is the AG opinion binding on the school district?
A: AG opinions are advisory. The 1998 opinion states how the Attorney General read the quoted statute; it does not predict the outcome of any court challenge.

Background and statutory framework

Minn. Stat. § 471.61 governs group insurance for officers and employees of public employers (counties, cities, school districts, towns, hospital districts, and other local government units). Subdivision 2a authorizes employers to provide retiree group insurance and pay all or part of the premium. Subdivision 2b sets the indefinite-continuation right for retirees, with the active-employee pooling requirement limited to pre-65 retirees (the subject of this opinion).

The opinion interpreted the continuation right and the active-employee pooling clause in subdivision 2b.

The opinion applied Minn. Stat. § 645.17(2) and Minn. Stat. § 645.26, subd. 1 to give effect to the continuation right and the more specific age limit on pooling.

The opinion was signed for Attorney General Hubert H. Humphrey III by Assistant Attorney General Kenneth E. Raschke, Jr.

Citations and references

Statutes:

• Minn. Stat. § 471.61, subd. 2b (retiree health insurance continuation; pre-65 active-employee pooling requirement)
• Minn. Stat. § 645.17(2) (legislature intends entire law to be effective and certain)
• Minn. Stat. § 645.26, subd. 1 (general/special provision conflict resolution)

Cases:

• State v. Perry, 524 N.W.2d 21 (Minn. App. 1994) (statutory construction; effective and certain canon)

Related AG opinions (cross-references in the header):

• Op. Atty. Gen. 59a-25 (general; related city authority over insurance)
• Op. Atty. Gen. 469a-7 (related public employee benefit question)

Source

• Landing page: https://www.ag.state.mn.us/Office/Opinions/
• Original PDF: https://www.ag.state.mn.us/Office/Opinions/161b7-19981215.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

SCHOOL DISTRICTS: INSURANCE: RETIRED EMPLOYEES: School district is not required to make available same level of insurance coverage to retired employees 65 years of age and older as that provided to active employees. Minn. Stat. § 471.61, subd. 2b.

161b-7
(Cr. ref. 59a-25, 125a-28, 469a-7)
December 15, 1998

Patricia A. Maloney
Amy E. Mace
Ratwik, Roszak & Maloney, P.A.
300 Peavey Building
730 Second Avenue South
Minneapolis, MN 55402

Dear Ms. Maloney and Ms. Mace:

In your letter to Attorney General Hubert H. Humphrey III, you submit substantially the following:

FACTS

Independent School District No. 622, North St. Paul-Maplewood provides group hospital, medical and dental insurance coverage to its employees. The school district also allows former employees and their dependents to continue to participate in the same hospital, medical and dental insurance group that the employee participated in immediately before retirement.

You then ask substantially the following:

QUESTION

Is the school district required by Minn. Stat. § 471.61, subd. 2b to make available to an eligible employee who is 65 years of age or older the same level of coverage that the employee received prior to retirement?

OPINION

We answer your question in the negative. Minn. Stat. § 471.61, subd. 2b provides in part:

A unit of local government must allow a former employee and the employee's dependents to continue to participate indefinitely in the employer-sponsored hospital, medical, and dental insurance group that the employee participated in immediately before retirement under the following conditions:

(a) * * *

(b) Until the former employee reaches age 65, the former employee and dependents must be pooled in the same group as active employees for purposes of establishing premiums and coverage for hospital, medical and dental insurance.

(Emphasis added.) We note that the statute does not by its terms entitle retired employees to retain any particular level of coverage. Rather it entitles them to continue to participate in the group in which they previously participated. However in that respect, these provisions are not a model of clarity. The initial clause indicates generally that the retired employee may participate in the same employee sponsored insurance "group" indefinitely, while the second requires inclusion in the same "group" as active employees for premium and coverage purposes only until age 65.

Resolution of this seeming contradiction, pursuant to established rules of statutory construction, leads to the conclusion that, while retired employees may participate indefinitely in an employer-sponsored group plan, the premium and level of coverage provided to retired employees 65 years of age and over may differ from that provided to then-active employees.

Minn. Stat. § 645.17(2) provides that the legislature intends the entire law to be effective and certain. As noted by the Court in State v. Perry, 524 N.W.2d 21 (Minn. App. 1994), "a construction which would give no effect to [a] part of the statute, is to be avoided." Id. at 23.

Minn. Stat. § 645.26, subd. 1 provides that "when a general provision in a law is in conflict with a special provision of the same or another law, the two shall be construed, if possible, so that effect may be given to both." If that cannot be done then the special provision will prevail.

In this situation subparagraph (b) plainly is more specific and limiting than the initial clause of the subdivision. Furthermore, if subdivision 2b were interpreted to require that the same coverage be made available to retired employees before and after age 65, no effect would be given to that part of subparagraph (b) which limits the mandatory inclusion with the active employee group to retired employees under 65 years of age. To have meaning subparagraph (b) must be interpreted to imply that premium and coverage levels for employees 65 years of age and older may differ from those for active employees and younger retirees.

Thus it is our opinion that local government employers including District 622 are not required to make available to retired employees 65 years of age or older the same coverage as that provided at the time of retirement, or that available to currently active employees.

Very truly yours,

HUBERT H. HUMPHREY III
Attorney General

KENNETH E. RASCHKE, JR.
Assistant Attorney General