The state Attorney General’s Office said Friday that Gov. Bobby Jindal needs to get legislative approval before hiring a private company to manage state employee health plans.
The legal opinion — issued at a north Louisiana legislator’s request — disputes the Jindal administration’s earlier contention that no legislative input is necessary on the multimillion-dollar hiring of Blue Cross and Blue Shield of Louisiana.
“Escaping Legislative oversight ... appears to be contrary to the logic and presumed fair purpose the Legislature had,” state Assistant Attorney General Michael J. Vallan wrote in an eight-page opinion.
The Office of Group Benefits provides health and life insurance to about a quarter-million current and retired state employees and their dependents. The transition means a new health insurance provider for thousands of current and retired state workers. For dozens of state workers, the hiring likely means a pink slip.
Opinions by the Attorney General’s Office do not carry the weight of law, but they still are considered influential.
Michael DiResto, spokesman for the Division of Administration, said in a prepared statement that the Jindal administration disagrees with the opinion but will comply with it. The administration would seek legislative committee approval for hiring Blue Cross and Blue Shield, rather than delay implementation of the plan for litigation, he wrote.
The state Civil Service Commission already has approved the hiring.
At issue is the Jindal administration’s plan to shift duties handled by state workers at the Office of Group Benefits to Blue Cross and Blue Shield of Louisiana. The transition is scheduled to take effect in January.
The contract would result in 177 positions being eliminated from the Office of Group Benefits’ 327-member workforce. However, many of the workers in the impacted positions are eligible for retirement.
Further approval will be needed from the Civil Service Commission before layoffs are final.
The Jindal administration contends that hiring Blue Cross will save state government, state workers, school boards and other entities at least $20 million a year.
Most of the savings stem from the job eliminations.
The Office of Group Benefits offers a PPO, or preferred provider organization, and an HMO, or health maintenance organization.
The PPO is managed by state workers at the Office of Group Benefits and covers 62,010 insured lives. A PPO is a group of doctors, hospitals and others providing health care at reduced rates.
Blue Cross and Blue Shield of Louisiana administers the HMO, which places patients under the care of a primary care physician. The HMO covers nearly 165,000 insured lives.
Under the reorganization, Blue Cross and Blue Shield will administer a package of programs, including the PPO.
Blue Cross and Blue Shield stands to receive $37.8 million a year to serve as administrator of health plans covering more than 200,000 people.
State law maintains that contracts for basic health care services “shall be subject to review and final approval by the appropriate standing committees of the legislature.” The Jindal administration contended the statute did not apply to Blue Cross’ hiring, prompting state Rep. Katrina Jackson, D-Monroe, to seek an attorney general’s opinion.
In his opinion, Vallan said the law is clear that the contract is subject to review and approval by the Louisiana House Appropriations Committee and the state Senate Finance Committee.
Jackson did not respond to an email requesting comment Friday. Her phone’s mailbox was full.
In a statement, Jackson said she hopes legislators reject the Blue Cross contract.
“The Office of Group Benefits does not cost the state any money,” she said. “It is a healthy plan that has always remained viable.”