Request By:
Honorable Sherman Dean, Jr.
Judge/Executive
Courthouse
Nicholasville, Kentucky 40356
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Asst. Deputy Attorney General
Your questions relate to hospitalization insurance for county employees:
Question No. 1:
"Does the fiscal court have the authority to pay all the cost of group hospitalization insurance for county road employees including their families?"
KRS 79.080(2) expressly authorizes counties to pay the cost of such hospitalization coverage. Such a plan could require the county employees to pay a percentage of the cost, or the fiscal court may authorize the county's payment of the entire cost of the hospitalization insurance. The payment of such insurance premiums would be a fringe benefit in consideration of public service, and would be in the public interest. See § 3, Kentucky Constitution; and
Talbott v. Thomas, 286 Ky. 786, 151 S.W.2d 1 (1941). See also KRS 67.080 and 67.083.
As relates to the employee's families, KRS 79.080(2) expressly provides that such group medical insurance can be paid for by the county as relates to county employees and their immediate families. While the constitutional problem of whether the county's payment of insurance for the employees' immediate families emerges (see §§ 3 and 171, Kentucky Constitution), and we entertain doubts as to the validity of that county paid for coverage, we believe it would be up to the Courts to determine under the fringe benefit concept and the question of public purpose. See
Ezelle v. City of Paducah, Ky., 441 S.W.2d 162 (1969).
Question No. 2:
"Is it lawful to pay group insurance for part of the employees and not all of the county employees? "
The answer is "no". All the county employees must be treated alike. For purposes of hospitalization insurance, all county employees would be in the same class. Discrimination cannot be made against persons in the same class. See §§ 2, 3, and 59, Kentucky Constitution; and
Markendorf v. Friedman, 280 Ky. 484, 133 S.W.2d 516 (1939) 519. Also see the Fourteenth Amendment to the Federal Constitution, prohibiting the denial of equal protection to any person. Such discrimination would be arbitrary, unreasonable, and unconstitutional.
Question No. 3:
"Is it lawful for the fiscal court to pay group insurance costs for the families of the employees?"
We have answered that under question No. 1.
Question No. 4:
"Would any discrimination result if employees are given the choice of insurance benefits or a monetary raise in pay?"
There would be no discrimination, provided that the premium cost to be borne by the county is precisely equal to the proposed salary raise in the case of all county employees.
Question No. 5:
"If the employee benefits are paid by the county, does taxable compensation result to the employee?"
Such payment of insurance premiums by the county would not, in our opinion, constitute "income", subject to taxes. The payments involve "official expenses" of the County under KRS 79.080. They are fringe benefits that serve as some inducement to competent persons to enter and remain in the county service. See