Can employees of JAUNT (a transit corporation whose stock is owned by Virginia cities and counties) participate in Virginia's local health benefits program?

Plain-English summary

JAUNT, Inc. is a public service corporation that provides transit service across Charlottesville and the Counties of Albemarle, Nelson, Louisa, and Fluvanna. It is a stock corporation organized under the general incorporation laws of Virginia (Title 13.1). All of its shares are owned by the five local governments it serves. Its board of directors is appointed by the governing bodies of the shareholder localities. Over 84% of its operating funds come from state, local, and federal sources. It hires its own employees, runs its own office, and provides health and dental insurance through private insurance companies.

Minority Leader Toscano asked whether JAUNT's employees could participate in The Local Choice (TLC), the state-administered health benefits program for local government employees authorized by Code § 2.2-1204. The Attorney General said no.

The statute defines "employees of local governments" in Code § 2.2-1204(D) to cover officers and employees of:

• the governing body of any county, city, or town
• the directing or governing body of any political entity, subdivision, branch, or unit of the Commonwealth
• any commission or public authority or body corporate created by or under an act of the General Assembly specifying its powers, privileges, or authority (excluding generic-statute creations under §§ 15.2-1300 or 15.2-1303)
• specifically deemed-included: social services departments, welfare boards, community services boards, behavioral health authorities, library boards

It expressly excludes "private nonprofit organizations" as governmental agencies.

JAUNT is a public service corporation formed under Title 13.1. Its employees work for the corporation and do not fall within the categories listed in § 2.2-1204(D). The opinion cites the Supreme Court of Virginia's holding in Appalachian Power Co. v. Greater Lynchburg Transit Co. (1988): municipal ownership of a public service corporation's stock does not make it a governmental entity or instrumentality. The Attorney General concluded that local-government ownership likewise does not bring JAUNT's employees within the statute. The opinion adds that the General Assembly could have expressly included employees of locally owned public service corporations, but did not.

Currency note

This opinion was issued in 2018. 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.

Background and statutory framework

The Local Choice (TLC) program was established by 1989 Va. Acts ch. 475 (predecessor to Code § 2.2-1204) to make the Commonwealth's group health insurance plans available to local government employees, teachers, and retirees. The Department of Human Resource Management administers the program. Eligibility turns on the definition of "employees of local governments" in subsection (D), which is structured around governmental status rather than functional public service.

A public service corporation is defined in Code § 56-1 to include entities "created ... under the general incorporation laws of this Commonwealth" to conduct business as public service corporations, including "transport[ing] passengers or property as a common carrier." JAUNT fits that definition; it transports the general public, agency clients, the elderly, and people with disabilities as a common carrier.

Section 2.2-1204(D) expressly deems officers and employees of social services departments, welfare boards, community services boards, behavioral health authorities, and local library boards to be local-government employees. The Attorney General found no corresponding provision for employees of a locally owned public service corporation formed under Title 13.1.

The opinion cites Appalachian Power Co. v. Greater Lynchburg Transit Co. (1988) for the holding that municipal stock ownership does not make a public service corporation a governmental entity or instrumentality of the municipality.

Common questions

Why is JAUNT not a government agency?
Because it is organized as a corporation under the general business incorporation laws, not as a political subdivision created by a specific Act of the General Assembly. The fact that its stock is owned by local governments does not change its corporate form. It hires its own employees, runs its own office, and has its own corporate identity.

Are JAUNT employees eligible for any state benefits at all? The opinion addresses only TLC eligibility under Code § 2.2-1204. JAUNT provides its own employee benefits through private insurance carriers. State and federal grants help fund JAUNT's operations, including its compensation structure, but JAUNT employees are not state or local government employees in the technical statutory sense.

Does the opinion identify a way for JAUNT employees to become eligible? No. The Attorney General concluded that employees of a locally owned public service corporation formed under Title 13.1 are ineligible under § 2.2-1204. The opinion observes that the General Assembly could have expressly included them in the statute.

Do CSB and BHA employees get TLC coverage?
Yes, expressly. Code § 2.2-1204(D) deems them employees of local government even though community services boards and behavioral health authorities have their own legal identities separate from the localities that created them. The General Assembly chose to include them by name in the deemed-included list.

Does this opinion decide eligibility for employees of other types of public bodies? It applies the statutory definition to a public service corporation organized under Title 13.1 and owned by local governments, such as JAUNT. It quotes other categories in § 2.2-1204(D) but does not decide whether employees of a particular airport commission or community development authority qualify.

Citations

• Va. Code § 2.2-1204 (TLC program)
• Va. Code § 56-1 (public service corporation definition)
• Va. Code §§ 13.1-620, 13.1-627, 13.1-825 (general incorporation framework)
• Appalachian Power Co. v. Greater Lynchburg Transit Co., 236 Va. 292 (1988)
• Cummings v. Fulghum, 261 Va. 73 (2001) (plain meaning rule)
• 1 Va. Admin. Code § 55-20-20 (TLC eligibility definitions)
• 1989 Va. Acts ch. 475 (TLC predecessor statute)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/opinions/2018/18-040Toscano-issued.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Mark R. Herring
Attorney General

December 7, 2018

The Honorable David J. Toscano
Minority Leader, House of Delegates
211 East High Street
Charlottesville, Virginia 22902

Dear Delegate Toscano:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented
You have asked whether a public service corporation owned by local government entities is eligible to participate in the Commonwealth's healthcare program as set forth in § 2.2-1204 of the Code of Virginia.

Background
Your specific question relates to JAUNT, Inc. ("JAUNT"), a public service corporation organized under the general incorporation laws of the Commonwealth.[1] JAUNT transports "the general public, agency clients, the elderly, and people with disabilities" throughout its Central Virginia service area.[2] It is a stock corporation owned by the City of Charlottesville and the Counties of Albemarle, Nelson, Louisa and Fluvanna.[3] JAUNT is governed by a Board of Directors appointed by the governing bodies of its five shareholder local governments.[4] In 2017, over 84% of its operating funds were provided by state and local funds and federal assistance.[5] JAUNT is responsible for the selection and hiring of its employees.[6] JAUNT maintains its own business office and provides workers' compensation and general liability insurance for its operations.[7] Eligible employees receive health and dental insurance from private insurance companies.[8] JAUNT administers its own deferred compensation plan, available to all employees.[9]

Applicable Law and Discussion
Section 2.2-1204 of the Code of Virginia establishes a health insurance program for employees of local governments, local officers, teachers, retirees, and their dependents.[10] Subsection (D) of
§ 2.2-1204 defines "employees of local governments" to include

all officers and employees of the governing body of any county, city, or town, and the directing or governing body of any political entity, subdivision, branch, or unit of the Commonwealth or of any commission or public authority or body corporate created by or under an act of the General Assembly specifying the power or powers, privileges, or authority capable of exercise by the commission or public authority or body corporate, as distinguished from § 15.2-1300, 15.2-1303, or similar statutes, provided that the officers and employees of a social services department, welfare board, community services board or behavioral health authority, or library board of a county, city, or town shall be deemed to be employees of local government. For purposes of this section, private nonprofit organizations are not governmental agencies or instrumentalities.[11]

JAUNT is a public service corporation as defined in § 56-1 of the Code of Virginia, which includes corporations "created ... under the general incorporation laws of this Commonwealth" to conduct business as public service corporations, including the "transport[ation] [of] passengers or property as a common carrier."[12] Applying the § 2.2-1204(D) definition of "employees of local governments" to the employees of such a public service corporation owned by local government entities, I am of the view that such employees are not employed by "the governing body of any county, city, or town," or by "the directing or governing body of any political entity, subdivision, branch, or unit of the Commonwealth or of any commission or public authority or body corporate created by or under an act of the General Assembly specifying the power or powers, privileges, or authority capable of exercise by the commission or public authority or body corporate."[13]

JAUNT's employees are employed by a public service corporation formed under the general incorporation provisions of Title 13.1 of the Code of Virginia.[14] The fact that its shareholders are political subdivisions of the Commonwealth does not render the public service corporation a political entity, public authority, commission, or body corporate created under an act of the General Assembly as described in
§ 2.2-1204(D),[15] nor is it "a social services department, welfare board, community services board or behavioral health authority, or library board of a county, city, or town."[16] Accordingly, JAUNT's employees are not eligible for participation in the state's healthcare program.[17]

I do not find § 2.2-1204 or the related administrative code provision[18] ambiguous. In Virginia, "[w]hen the language in a statute is clear and unambiguous, [a court is] bound by the plain meaning of that language."[19] Moreover, "[w]hen interpreting and applying a statute, [a court] 'assume[s] that the General Assembly chose, with care, the words it used in enacting the statute, and [a court is] bound by those words.'"[20] Had the General Assembly wished to include officers or employees of a public service corporation owned by local government entities, such as JAUNT, it could have done so expressly.[21]

Conclusion
Accordingly, it is my opinion that the employees of a public service corporation organized under
§ 13.1 and owned by local government entities, such as JAUNT, Inc., are not eligible for participation in the state health benefits program authorized by § 2.2-1204. With kindest regards, I am, Very truly yours,

Mark R. Herring
Attorney General

1. Articles of Incorporation of JAUNT, Inc., at 1 (Oct. 28, 1982) [hereinafter Articles of Incorporation] (on file with the Virginia State Corporation Commission).

2. JAUNT, INC. FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2016, at 9 [hereinafter JAUNT 2015-2016 FINANCIAL REPORT] (on file with the Office of the Attorney General).

3. Id.

4. See JAUNT, INC., Board of Directors, http://ridejaunt.org/board-of-directors/ (last visited Dec. 5, 2018).

5. FEDERAL TRANSIT ADMINISTRATION, JAUNT, INC. 2017 ANNUAL AGENCY PROFILE, https://www.transit.dot.gov/sites/fta.dot.gov/files/transit_agency_profile_doc/2017/30045.pdf (last visited Dec. 5, 2018).

6. See JAUNT, INC., Jobs at JAUNT, http://ridejaunt.org/employment/ (last visited Nov. 7, 2018).

7. JAUNT 2015-2016 FINANCIAL REPORT, supra note 2, at 17.

8. Id.

9. Id. at 18.

10. VA. CODE ANN. § 2.2-1204 (2017). The predecessor statute to § 2.2-1204 was enacted in 1989, see 1989 Va. Acts ch. 475, and designated the Virginia Department of Personnel and Training (now the Department of Human Resource Management) to establish the plan or plans necessary to effect the goals of the legislation. See § 2.2-1204(A). It is popularly known among administrators and participants as "The Local Choice" or "TLC Program." See COMMONWEALTH OF VIRGINIA, About the Local Choice, THE LOCAL CHOICE HEALTH BENEFITS PROGRAM, http://www.thelocalchoice.virginia.gov/about.html (last visited Nov. 7, 2018).

11. Section 2.2-1204(D).

12. VA. CODE ANN. § 56-1 (Supp. 2018); see Articles of Incorporation, supra note 1, at 1 (stating that the purpose of JAUNT is "to provide mass transportation service by motor vehicle as a public service corporation").

13. VA. CODE ANN. § 2.2-1204(D).

14. See supra notes 1, 12 and accompanying text; VA. CODE ANN. § 13.1-620 (2016); § 13.1-627 (2016); § 13.1-825 (2016).

15. See Appalachian Power Co. v. Greater Lynchburg Transit Co., 236 Va. 292, 296-97, 374 S.E.2d 10, 12-13 (1988) (holding that a public service corporation whose stock is owned by a municipality is not itself a governmental entity or instrumentality of the municipality).

16. Section 2.2-1204(D).

17. The Virginia Administrative Code carefully tracks the eligibility provisions of the statute; it provides a specific definition for "employer" as meaning "the entity with whom a person maintains a common law employee-employer relationship." See 1 VA. ADMIN. CODE § 55-20-20.

18. Id. (1 VA. ADMIN. CODE § 55-20-20).

19. Cummings v. Fulghum, 261 Va. 73, 77, 540 S.E.2d 494, 496 (2001).

20. Kiser v. A.W. Chesterton Co., 285 Va. 12, 19 n.2, 736 S.E.2d 910, 914 n.2 (2013) (quoting Halifax Corp. v. First Union Nat'l Bank, 262 Va. 91, 100, 546 S.E.2d 696, 702 (2001)).

21. Section 2.2-1204(D) sets out specific boards, authorities, and departments whose officers and employees "shall be deemed to be employees of local government" who would otherwise be excluded (or potentially excluded) by the statute's plain language. See supra, note 16 and accompanying text.