Original Author: Hemsley, Sid
Date of Material: 08/31/2001
Personnel--Laws and regulations
Reviewed Date: 05/12/2021
MTAS was asked whether a city can provide health insurance to the department heads and/or their families, to the exclusion of all other city employees?
FROM: Sid Hemsley, Senior Law Consultant
DATE: August 31, 2001
RE: Insurance for the Municipal Department Heads
You have the following question: Can the City provide health insurance to the department heads and/or their families, to the exclusion of all other city employees?
The answer is no.
The authority of a municipality to provide health insurance to its officers and employees must rest upon legislative authority. Some cities provide such insurance under their charters. However, the City has no provision in its charter authorizing such insurance. For that reason, it would have to provide such insurance under the authority of Tennessee Code Annotated, § 6-27-601 et seq. Under that statute, “All municipal corporations and special school districts are expressly authorized to provide group life, hospitalization, disability, or medical insurance for all employees and officers...” Tennessee Code Annotated, § 8-27-602 also speaks of the approval by the governing body of “the policy or policies of group insurance...”
The intent of the Legislature is the cardinal rule of statutory construction. If that statute ended there, its very wording would indicate that Legislature intended that such insurance was to be “group” insurance for all officers and employees, not insurance provided to only a select group of officers or employees.
Tennessee Code Annotated, § 8-27-603 supports that conclusion. It provides that “When a municipal corporation or special school district shall so approve and make available to its employees and officials such insurance protections, the employees and officials shall still have the option of accepting or rejecting such coverage.” Note that the words “employees” and “officials” are plural and inclusive of both categories of city personnel, and that the statute clearly implies that all the city’s employees and officials have the right to accept or reject the coverage. Similar language in other parts of the statute pluralize “employees” and “officials.”
In my opinion, if the city provided health insurance only to department heads to the exclusion of other employees, those excluded employees would have a legitimate legal complaint.
Provision of Insurance to Municipal Employees public.doc