LEOFF ‑- PENSIONS ‑- RETIREMENT ‑- FIREMEN ‑- PAYMENT OF MEDICAL INSURANCE PREMIUMS FOR RETIRED FIREMEN
Moneys in a city's paid fireman's pension fund established pursuant to RCW 41.16.050 may not be used to pay medical and dental insurance premiums for retired former firemen not also covered by chapter 41.26 RCW who have only contributed to that prior pension fund; however, moneys in such a paid fireman's pension fund may be used to pay medical and dental insurance premiums for fire fighters under the LEFF system (chapter 41.26 RCW) who have not contributed to the fund established pursuant to RCW 41.16.050 from which the payments in question are made.
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June 10, 1975
Honorable Gary Grant
State Senator, 11th District
25823 132nd S.E.
Kent, Washington 98031 Cite as: AGLO 1975 No. 59
By recent letter you have asked for our opinion on a question which we paraphrase as follows:
Can monies in a city's paid fireman's pension fund established pursuant to RCW 41.16.050 be used for:
(1) Paying medical insurance premiums for retired former firemen not also covered by chapter 41.26 RCW who have only contributed to that prior pension fund;
(2) Paying dental insurance premiums for retired former firemen not also covered by chapter 41.26 RCW who have only contributed to that prior pension fund;
(3) Paying medical insurance premiums for fire fighters under the LEFF system (chapter 41.26 RCW) who have not contributed to the prior pension fund established pursuant to RCW 41.16.050 from which the payments in question are made;
(4) Paying dental insurance premiums for fire fighters under the LEFF system (chapter 41.26 RCW) who have not contributed to the prior pension fund established pursuant to RCW 41.16.050 from which the payments in question are made?
We answer the first two parts of this question in the negative and the second two parts in the affirmative.
By its enactment of the laws now codified in chapter 41.26 RCW, the legislature established a comprehensive new pension system for municipal fire fighters and law enforcement officers. As of March 1, 1970, all such personnel then in active service in either of those capacities were mandatorily transferred from their preexisting pension systems to the new LEFF retirement system. RCW 41.26.040(2). However, those law enforcement [[Orig. Op. Page 2]] personnel or firemen who had already retired in accordance with the applicable preexisting pension laws were left to continue drawing whatever benefits they were entitled to under those earlier laws.
One of the major benefits provided for under the new pension law involved a program of employer-funded medical benefits. See, RCW 41.26.150, which initially provides that:
"(1) Whenever any active member, or any member hereafter retired, on account of service, sickness or disability, not caused or brought on by dissipation or abuse, of which the disability board shall be judge, is confined in any hospital or in his home, and whether or not so confined, requires medical services, the employer shall pay for such active or retired member the necessary medical services not payable from some other source as provided for in subsection (2). . . ."
Subsection (2) of this statute, in turn, states that:
"(2) The medical services payable under this section will be reduced by any amount received or eligible to be received by the member under workmen's compensation, social security including the changes incorporated under Public Law 89-97 as now or hereafter amended, insurance provided by another employer, other pension plan, or any other similar source. Failure to apply for coverage if otherwise eligible under the provisions of Public Law 89-97 as now or hereafter amended shall not be deemed a refusal of payment of benefits thereby enabling collection of charges under the provisions of this chapter."
In addition, subsection (4) of RCW 41.26.150 contains the following authorization to all employers governed by the LEFF law:
"(4) Any employer under this chapter, either singly, or jointly with any other such employer or employers through an association thereof as provided for in chapter 48.21 RCW, may provide for all or part of one or more plans of group hospitalization and medical [[Orig. Op. Page 3]] aid insurance to cover any of its employees who are members of the Washington law enforcement officers' and fire fighters' retirement system, and/or retired former employees who were, before retirement, members of said retirement system, through contracts with regularly constituted insurance carriers or with health care service contractors as defined in chapter 48.44 RCW. Benefits payable under any such plan or plans shall be deemed to be amounts received or eligible to be received by the active or retired member under subsection (2) of this section."
In other words, as a means of defraying its costs for medical benefits under subsection (1),supra, an employer is able to procure group hospitalization and medical aid insurance
". . . to cover any of its employees who are members of the Washington law enforcement officers' and fire fighters' retirement system, and/or retired former employees who were, before retirement, members of said retirement system, . . ."
Then, instead of having to pay all resulting eligible medical benefit costs themselves, the employers who have chosen to exercise the authority provided by subsection (4),supra, will only have to pay such amounts as are not covered by the insurance plans which they have thus procured.
With this background in mind we may now turn to one further part of RCW 41.26.150. As amended by § 10, chapter 6, Laws of 1970, Ex. Sess., this segment relating to hospitalization and medical benefits provides that:
". . . In the case of active or retired fire fighters the employer may make the payments provided for in this section from the firemen's pension fund established pursuant to RCW 41.16.050 where such fund had been established prior to March 1, 1970: Provided, That in the event the pension fund is depleted, the employer shall have the obligation to pay all benefits payable under chapters 41.16 and 41.18 RCW: . . ."
As indicated in AGO 1971 No. 16 [[to Robert V. Graham, State Auditor on May 6, 1971]], copy enclosed, the firemen's pension fund referred to in this 1970 amendatory provision (in the case of each city or town which had provided coverage for its firemen under either chapter 41.16 or chapter 41.18 RCW) is the fund provided for by the following terms of RCW 41.16.050:
[[Orig. Op. Page 4]] "There is hereby created and established in the treasury of each municipality a fund which shall be known and designated as the firemen's pension fund, which shall consist of (1) all bequests, fees, gifts, emoluments or donations given or paid thereto, (2) forty-five percent of all moneys received by the state from taxes on fire insurance premiums, (3) taxes paid pursuant to the provisions of RCW 41.16.060, (4) interest on the investments of the fund, (5) contributions by firemen as provided for herein. . . ."1/
Thus, in essence, what the 1970 legislature did was to make the monies in any such fund (previously preserved for the payment of benefits to eligible municipal firemen who had retired prior to March 1, 1970)2/ available to defray the costs of medical services required to be paid to active or retired fire fighters covered by the new LEFF system. Accord, AGO 1971 No. 16,supra, in which we specifically concluded that:
". . . such monies may be used to pay for the costs of hospitalization and other medical expenses incurred by fire fighters covered by the law enforcement officers' and fire fighters' retirement system, and payable by their employers under RCW 41.26.150."
Notably, however, no distinction was drawn in the legislature's 1970 amendment to RCW 41.26.150,supra, between fire fighters participating in the LEFF system who were previously covered by chapter 41.16 or 41.18 RCW and those who were not. Accordingly, to the extent that the medical insurance premiums referred to in the question you have now posed cover insurance provided for by an employer under RCW 41.26.150(4), supra, it would appear to be proper for those premiums to be paid from the chapter 41.16 RCW pension fund maintained by that employer insofar as the medical or dental insurance involved covers LEFF fire fighters employed by the employer in question. See, in this regard, our memorandum opinion of May 10, 1974, to the law enforcement officers' and fire fighters' retirement system, a copy of which is also [[Orig. Op. Page 5]] enclosed, in which essentially this same conclusion was reached with particular reference to dental insurance.
Thus, based upon the foregoing analysis of the applicable laws and emphasizing the point last made with respect to the absence of any distinction between fire fighters previously participating in their city's earlier pension program for paid firemen and those not so covered, we must answer the third and fourth parts of your question in the affirmative. Pursuant to RCW 41.26.150,supra, as amended by chapter 6, Laws of 1970, Ex. Sess., monies in a city's paid firemen's pension fund pursuant to chapter 41.16 RCW may be used for the payment of medical or dental insurance premiums in accordance with RCW 41.26.150(4) for all firemen covered by the LEFF system, including those who, in the words of your question, ". . . have not contributed . . ." to such pension fund because they did not have earlier membership in a pension program requiring such contributions.
On the other hand, we are likewise compelled to answer the first two parts of your question in the negative. In the case of those municipal firemen who had retired before March 1, 1970, and thus did not become members of the LEFF system, the only benefits which may be legally paid to them out of a municipality's chapter 41.16 RCW firemen's pension fund are those payable in accordance with either chapter 41.16 or chapter 41.18 RCW, as the case may be; i.e., the particular pre‑1970 pension program by which a particular fireman was covered at the time of his retirement. While both of those pension laws include provisions for the payment of disability pensions in one form or another, as well as certain medical costs related to the particular disability in question, neither law has anything in it comparable to the medical insurance program provided for by RCW 41.26.150(4),supra. Therefore, while monies in the subject "old" firemen's pension funds may be used to pay, directly, for such medical services as are contemplated and provided for by the earlier pension laws,3/ no legal authority exists for any disbursement of those monies for the payment of either medical or dental insurance premiums to provide insurance against the costs of those medical services provided by the prior acts.
[[Orig. Op. Page 6]] We trust that the foregoing will be of some assistance to you.
Very truly yours,
PHILIP H. AUSTIN
Deputy Attorney General
*** FOOTNOTES ***
1/Note should be made here of the fact that not all cities or other municipalities employing paid firemen were covering these personnel under a paid firemen's pension system; some such municipalities were, instead, covering these personnel under the volunteer firemen's pension system provided for in chapter 41.24 RCW. See, AGO 65-66 No. 104 [[to Richard Taylor, State Representative on September 22, 1966]]for an explanation of the basis for this coverage.
2/See, § 4(3), chapter 209, Laws of 1969, Ex. Sess.
3/See, RCW 41.16.130 and 41.16.140 together with the comparable provisions of RCW 41.18.060 and 41.18.080.