Opinion ID: 1636952
Heading Depth: 1
Heading Rank: 1

Heading: Did the district have authority to contract with WEAIT?

Text: As a governmental agency, a school board has only those powers expressly granted or necessarily implied in governing statutes. McFarland v. Board of Education, 277 N.W.2d 901, 906 (Iowa 1979). The general grant of authority enabling a school district to provide health and life insurance benefits for its employees is contained in the following excerpt from Iowa Code section 279.12: The board ... may establish and pay all or any part thereof from school district funds the cost of group health insurance plans, nonprofit group hospital service plans, nonprofit group medical service plans and group life insurance plans adopted by the board for the benefit of employees of the school district.... A similarly general grant of authority pertaining to group insurance for all public bodies, including school districts, is found in the following language from Iowa Code section 509A.1: The governing body of the ... school district ... may establish plans for and procure group insurance, or health or medical service for the employees of the... school district.... The school district concedes that the more specific statutory language pertaining to public employee insurance contracts found at section 509A.6 does not contemplate contracts with organizations such as WEAIT. WEAIT is neither a nonprofit corporation operating under chapter 509A or chapter 514 nor an insurance company or health maintenance organization authorized to transact business in this state. Nevertheless, the district argues that the restrictions contained in section 509A.6 have no bearing on the contract at issue in this case. It adamantly asserts that the health benefits for which the district has contracted are a form of teacher compensation, not insurance, and therefore fall outside the regulatory scope of chapter 509A. In support of this argument, the district relies heavily on a 1980 attorney general's opinion which held that sections 279.12 and 279.13(1), [2] taken together, imply that teachers and administrators are free to mutually agree upon and contract for a self-funded medical insurance program notwithstanding the restrictions of section 509A.6. 1980 Op. Iowa Att'y Gen. 840, No. 80-10-11. We find the district's reliance on the attorney general's opinion misplaced and its overall argument unpersuasive when viewed in the light of fundamental rules of statutory interpretation and strong public policy considerations favoring the BPI's position. Preliminarily we note that the attorney general's opinion, while entitled to our respectful consideration, is not binding on this court. Unification Church v. Clay Central School District, 253 N.W.2d 579, 581 (Iowa 1977); Ashby v. School Township of Liberty, 250 Iowa 1201, 1215, 98 N.W.2d 848, 858 (1959). Because it addressed a proposal by a school district to establish a plan of self-insurance, we find it of limited value in assessing the legality of a plan calling for premium payments to an out-of-state entity unregulated by the Iowa Insurance Commission. Moreover, the cases relied upon for the opinion's conclusion that no disability is placed upon the freedom of contract outside of the statutory required terms all involved the authority of a school district to contract for a particular benefit or term of employment not otherwise limited by statute. See generally Bettendorf Education Association v. Bettendorf Community School District, 262 N.W.2d 550 (Iowa 1978) (lump sum payment of accrued sick leave benefits on retirement); Barnett v. Durant Community School District, 249 N.W.2d 626 (Iowa 1977) (reimbursement of tuition for approved graduate studies); Ashby v. School Township of Liberty, 250 Iowa 1201, 98 N.W.2d 848 (Iowa 1959) (allowance for contract termination if enrollment too low); Miner v. Lovilia Independent School District, 212 Iowa 973, 234 N.W. 817 (1931) (contract termination at will upon twenty days notice by teacher or school district). The issue in the case before us, however, is not whether the district may provide group insurance for its employees. That authority is clearly granted by sections 509A.1 and 279.12. The issue is whether there is any limitation on that authority once the decision to provide insurance has been made. We are convinced that section 509A.6 answers that question affirmatively. Because the section speaks specifically to the issue of group insurance providers, it must prevail over the general authority to furnish insurance granted by section 279.12 and the mutual agreement language of section 279.13. Iowa Code § 4.7 (1985); Doe v. Ray, 251 N.W.2d 496, 501 (Iowa 1977); 2A N. Singer, Sutherland Statutory Construction § 51.05, at 315 (Sands 4th ed. 1984). Our interpretation is consistent with other commonly applied principles of statutory construction. By its listing of specific entities with whom a public body may contract for group insurance, the legislature has implied the exclusion of other possible insurers such as WEAIT. Casteel v. Iowa Department of Transportation, 395 N.W.2d 896, 898 (Iowa 1986) (citing In re Estate of Wilson, 202 N.W.2d 41, 44 (Iowa 1972)). Equally important is the rule that a statute should not be construed so as to render part of it superfluous. Casteel, 395 N.W.2d at 899. To accept the district's non-exclusive interpretation of section 509A.6 would have precisely that effect. The district's interpretation would also be contrary to what we perceive to be the underlying legislative intent of chapter 509A: to assure public employees that their fringe benefits, paid by employee contributions and tax funds, will be afforded the protection provided by the insurance commissioner's regulation of insurance providers. Recent amendments to chapter 509A and the adoption of a new act regulating self-insurance plans underscore this legislative concern for insurance commissioner oversight whatever the nature of the plan or the sponsoring entity. See 1985 Iowa Acts ch. 251. In summary we conclude, as did the BPI and the district court, that the restrictions contained in section 509A.6 precluded the district from contracting with WEAIT for group health insurance.