Request By:
Richard F. Casey, Esq., General Counsel
Kentucky Higher Education Student Loan Corporation
Opinion
Opinion By: Gregory D. Stumbo, Attorney General; James M. Herrick, Assistant Attorney General
Opinion of the Attorney General
KRS 18A.225 establishes Kentucky's state-sponsored health insurance program for public employees. As noted in OAG 98-4, many former state employees are eligible to receive health coverage under the state program through the Kentucky Retirement Systems. KRS 18A.225(13) states as follows:
Any employee who is eligible for and elects to participate in the state health insurance program as a retiree, or the spouse or beneficiary of a retiree, under any one (1) of the state-sponsored retirement systems shall not be eligible to receive the state health insurance contribution toward health care coverage as a result of any other employment for which there is a public employer contribution. This does not preclude a retiree and an active employee spouse from using both contributions to the extent needed for purchase of one (1) state sponsored health insurance policy for that plan year.
It is the first sentence of this subsection that is currently at issue.
The Kentucky Higher Education Student Loan Corporation ("KHESLC") is an independent de jure municipal corporation and political subdivision of the Commonwealth, created and established by KRS 164A.050 and described in OAG 82-282 as a "hybrid public bod[y]"; cf.
City of Louisville Municipal Housing Comm'n v. Public Housing Administration, 261 S.W.2d 286, 288 (Ky. 1953). KHESLC, which participates in the state employee health insurance program, has requested an opinion regarding the application of KRS 18A.225(13) to a former state employee who receives a retirement allowance and health insurance coverage through the Kentucky Employees Retirement System ("KERS") but is currently employed by KHESLC.
The question is whether a state retiree, presently employed by a participating entity such as KHESLC, can receive both the state health insurance coverage through KERS and the employer contribution for the benefit plan offered by KHESLC, provided he waives the state health coverage under his current employment and instead requests that the employer contribution be directed to other benefits in KHESLC's cafeteria plan, such as dental insurance, vision coverage, and dependent care. A "cafeteria plan" is a benefit plan authorized by 26 U.S.C. § 125 under which an employee may elect between qualifying benefits and their cash equivalent, where the payroll deduction for benefits is excluded from gross income but the cash option is taxable as income. OAG 87-48; OAG 83-151.
It is our opinion that an employee in the situation described would not be eligible for the employer contribution from KHESLC. "[A]ny statutory analysis must begin with the plain language of the statute. In so doing, [the] ultimate goal is to implement the intent of the legislature."
AK Steel Corp. v. Com., 87 S.W.3d 15, 17 (Ky.App. 2002). The evident intent of KRS 18A.225(13) is to prevent a retiree from receiving both health benefits under a state retirement plan while also receiving the state health insurance contribution as a result of subsequent public employment.
The statutory language does not state merely that such an employee may not " use the state health insurance contribution for health care coverage, " but rather that he may not " receive the state health insurance contribution toward health care coverage. " (Emphasis added.) The fact that the "contribution toward health care coverage" can be applied to other items in KHESLC's cafeteria plan does not change the fact that it is the same employer contribution the General Assembly intended to prevent such employees from "receiv[ing]."
This is not to imply that an employee receiving health coverage through KERS would, by virtue of KRS 18A.225(13), be ineligible to participate in the other benefits available through KHESLC's cafeteria plan. The statute merely provides that such an employee may not receive additional public funds for that purpose.