The Jindal administration did not meet legal requirements for making changes to health insurance plans sponsored by state employees, teachers and retirees, the state attorney general’s office concluded in an advisory opinion issued Tuesday.
The state Office of Group Benefits is mandated by law to go through an approval process known as the Administrative Procedures Act as it changes the rules for the benefit plan structures, the attorney general opined. Group Benefits failed to do so.
“Louisiana jurisprudence has found that rules unlawfully adopted are invalid and unenforceable,” assistant Attorney General Emily Andrews wrote in response to a request filed by Democratic state Rep. John Bel Edwards.
In a prepared statement released late Tuesday, Commissioner of Administration Kristy Nichols said: “While we disagree that the schedule of benefits meets the legal requirement of a rule, we take the precedent set in previous years seriously and will issue emergency rules to protect continuity of coverage for our members.”
About 230,000 Group Benefits members are scheduled to make decisions on new health plan offerings during October with the new coverage starting in January. While no premium increases are included, there are increases in deductibles, co-pays, co-insurance and other out-of-pocket expenses.
Edwards, an Amite lawyer who is running for governor, alleged that Group Benefits was illegally implementing the changes as he sought the attorney general’s opinion earlier this month.
“In this case, the administration chose not to promulgate these changes according to the law not out of incompetence, but in a willful attempt to evade public comment and legislative oversight,” Edwards said in an interview Tuesday.
He said until 2010 plan changes were consistently made through the rule promulgation process of the APA, which spells out the process for creating administrative laws.
Edwards noted that Group Benefits announced Friday that it would soon submit the benefit plan changes for APA approval.
Group Benefits said it was doing it in “an abundance of caution” in a news release about the move. The same news release said Group Benefits would not alter its plan for October enrollment.
“The idea that they can do it after the fact is just wrong,” Edwards said. “It is inexcusable on their part that they would refuse to uphold the law until made to do so.”
Edwards said it is also “very clear” that the plan alterations Group Benefits adopted in August making pharmacy program and other changes were illegal because benefits changed and people were made to pay considerably more out of pocket without promulgating a new rule.
“It is just a terrible way to run government,” Edwards said. “If this causes a delay or causes problems it’s not anyone’s fault but the administration. The administration made a conscious decision.”
Frank Jobert, executive director of the Retired State Employees Association, said the group would consider going to court to block the Group Benefits changes.
“It’s a good opportunity to slow the train down and have a look at what’s being proposed,” Jobert said. “It will give us an opportunity to weigh into the discussion. … Our goal is to save the plan and make it more affordable.”
State Treasurer John Kennedy, who had questioned Group Benefits procedures, said the attorney general’s opinion affirmed his fears.
“This gives us the perfect opportunity to go back to the drawing board. Let’s work together to fix the problems with the Office of Group Benefits fairly and transparently,” Kennedy said in a statement.