Judges: JOHN ASHCROFT
Filed Date: 11/9/1982
Status: Precedential
Modified Date: 7/5/2016
Dear Representative Mead:
This letter is in response to your question asking as follows:
Can the teachers fund of a school district be used to provide a self-funded health benefits program for teachers or must it be used only for an insured program in which premiums are paid?
You also state:
The Missouri School Boards Association is contemplating establishment of insurance programs for member districts. The program contemplates a self-funded health benefits package in which premiums would not be paid to an insurance company but would be placed in a fund from which benefits are to be paid. There would be a stop clause provision to ensure that the district would not spend more than the amount budgeted in the insurance trust.
We have also been furnished with a copy of the administrative services agreement which is proposed between the school districts and the administrator. We will not attempt to pass upon all of the provisions respecting such agreement, however, we point out a few problems which we believe clearly exist.
That portion of the proposed plan calling for deposit and disbursement of plan funds appears to violate several statutory provisions forbidding the handling of school funds by anyone but the treasurer. Section
One could interpret the single payment by the school district to the administrator each month, covering all the costs of the plan, as the only disbursement of school district funds, and thus, the only one necessary to be made by the treasurer. However, because the agreement emphasizes the agency of the administrator, and because medical claims are paid on behalf of the school district, it appears that at least a percentage of these funds remain school district funds and are used to pay the indebtedness of the school district, within the meaning of subsections 2 and 4 of Section
Another potential problem is presented by Section
Therefore, it appears that the proposed agreement violates state law in several ways. While it may be possible to make technical modifications correcting the difficulties mentioned, the difficulties in drafting a plan which would meet the precise requirements of existing state law appear to be numerous. Therefore, it appears that legislative authorization to effect and implement such a plan should be sought.
In addition, the enactment of Section
Such section provides:
1. the governing body of any political subdivision may utilize the revenues and other available funds of the subdivision, as a part of the compensation of the employees of the subdivision, to contribute to the cost of a plan, including a plan underwritten by insurance, for furnishing all or part of hospitalization or medical expenses, life insurance or similar benefits for the subdivision's employees.
2. No contract shall be entered into by the governing body of the political subdivision to purchase any insurance policy or policies pursuant to the terms of this section unless the contract is submitted to competitive bidding and the contract is awarded to the lowest and best bidder.
We enclose a copy of our Opinion No. 9, to Wilson, dated October 12, 1982, in which we discussed the procedure to be followed pursuant to Section
It seems clear that the enactment of Section
It, therefore, seems clear that we are not in a position to recommend implementation of such a plan in the absence of specific legislative authority.
Very truly yours,
JOHN ASHCROFT Attorney General
Enclosure: Opinion No. 9-1982