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HomeMy WebLinkAbout04-513 ErieDaniel P. Plaisted, Supervisor Andrew Erie, Supervisor Center Township 419 Sunset Drive Butler, PA 16001 ADVICE OF COUNSEL February 23, 2004 04 -513 Re: Conflict; Public Official /Employee; Township; Supervisor; Participation in Township -paid Health Insurance Plan; Self- insurance; Deductible. Dear Supervisors Plaisted and Erie: This responds to your letter of January 13, 2004, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Ha.GS. § 1101 et seq., presents any prohibition or restrictions upon a township supervisor who was covered under the township's former health insurance plan as to participating in the township's current insurance plan. Facts: The Township of Butler ( "Township ") recently changed insurance carriers o alth care and the way benefits are administered. Previously, all health insurance claims were processed through the Township's insurance company. Due to rising insurance costs, the Township elected to change to another insurance provider in order to obtain a high deductible plan. So as not to put an undue hardship on the Township employees, the Township also decided to self- insure through an independent third -party administrator for the deductible for all employees. You participated in the Township's former health insurance plan. You ask whether you may now participate in the Township's current health insurance plan. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107 (11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requestor based upon the facts which the requestor has submitted. In issuing the advisory based upon the facts which the requestor has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts which liave not been submitted. It is the burden of the requestor to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. Plaisted /Erie 04 -513 February 23, 2004 Page 2 As Township Supervisors, you are public officials as that term is defined in the Ethics Act, and hence you are subject to the provisions of that Act. Section 1103(a) of the Ethics Act provides: § 1103. Restricted activities (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. § 1103(a). The following terms are defined in the Ethics Act as follows: § 1102. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. "Authority of office or employment." The actual power provided by law, the exercise of which is necessary to the performance of duties and responsibilities unique to a particular public office or position of public employment. 65 Pa.C.S. § 1102. In addition, Sections 1103(b) and 1103(c) of the Ethics Act provide in part that no person shall offer to a public official /employee anything of monetary value and no public official /employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official /employee would be influenced thereby. Reference is made to these provisions of the law not to imply that there has been or will be any transgression thereof but merely to provide a complete response to the question presented. Section 1103(j) of the Ethics Act provides as follows: § 1103. Restricted activities (j) Voting conflict. - -Where voting conflicts are not otherwise addressed by the Constitution of Pennsylvania or by any law, rule, regulation, order or ordinance, the following procedure shall be employed. Any public official or public employee who in the discharge of his official duties would be required to vote on a matter that would result in a conflict of interest shall abstain from voting and, prior to the vote being Plaisted /Erie 04 -513 February 23, 2004 Page 3 taken, publicly announce and disclose the nature of his interest as a public record in a written memorandum filed with the person responsible for recording the minutes of the meeting at which the vote is taken, provided that whenever a governing body would be unable to take any action on a matter before it because the number of members of the body required to abstain from voting under the provisions of this section makes the majority or other legally required vote of approval unattainable, then such members shall be permitted to vote if disclosures are made as otherwise provided herein. In the case of a three - member governing body of a political subdivision, where one member has abstained from voting as a result of a conflict of interest and the remaining two members of the governing body have cast opposing votes, the member who has abstained shall be permitted to vote to break the tie vote if disclosure is made as otherwise provided herein. 65 Pa.C.S. § 1103(j). In each instance of a conflict, Section 1103(j) requires the public official/ employee to abstain and to publicly disclose the abstention and reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes or supervisor. In the event that the required abstention results in the inability of the governmental body to take action because a majority is unattainable due to the abstention(s) from conflict under the Ethics Act, then voting is permissible provided the disclosure requirements noted above are followed. See, Mlakar, Advice 91- 523 -S. In applying the above provisions of the Ethics Act to the instant matter, pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official/ public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. Although the State Ethics Commission does not have the statutory jurisdiction to interpret laws other than the Ethics Act, such other laws become relevant when it is necessary to determine whether a public official /employee may receive a pecuniary benefit under the Ethics Act. In such cases, other laws must be considered to determine whether the pecuniary benefit is permitted under the Ethics Act as authorized in law or is prohibited as a private pecuniary benefit without authorization in law. A financial gain to a public official /public employee that is other than compensation provided for by law is a private pecuniary benefit. Thompson, Opinion 99 -005, at 3 -4. In the instant matter, certain provisions of the Second Class Township Code must be reviewed in order to properly apply the Ethics Act to your inquiry. Section 65606 the Second Class Township Code provides in pertinent part: § 65606. Compensation of supervisors (c) In addition to the compensation authorized under this section, supervisors while in office or while in the employ of the township may be eligible for inclusion in township -paid insurance plans, as follows: Plaisted /Erie 04 -513 February 23, 2004 Page 4 (1) Supervisors, whether or not they are employed by the township, and their dependents are eligible for inclusion in group life, health, hospitalization, medical service and accident insurance plans paid in whole or in part by the township. Their inclusion in those plans does not require auditor approval, but does require submission of a letter requesting participation at a regularly scheduled meeting of the board of supervisors before commencing participation. The insurance shall be uniformly applicable to those covered and shall not give eligibility preference to or improperly discriminate in favor of supervisors. 53 P.S. § 65606(c). The issue of medical insurance benefits for second class township supervisors was addressed by the Commission in Akely, Order 976. The Commission reviewed the question of the entitlement to such medical benefits both prior and subsequent to the Code amendment in 1992 which modified such coverage. The Commission provided the following general commentary concerning post - 1992 eligibility for such benefits: The Code provides that a supervisor is eligible for benefits even if he is not an employee. The Code also requires that insurance plans shall be "uniformly applicable" and shall not "improperly discriminate," which must also have a meaningful application. As to a township where there is one benefit package for all who are eligible, the above interpretation must be reached in order for both of the above two provisions to be operative. If we conclude that a supervisor, be he full time, part time or nonemployed, is not entitled to benefits in a township where there is only one benefit package for eligible participants, we would negate the provision in the Code that allow ' Supervisors ... [to be] eligible for insurance plans paid in whole or in part by the township . . ." If there are two or more plans in a township with one of the plans providing quantitatively or qualitatively better benefits to the supervisor so that there is a discrimination which in improper in favor of the supervisors or is not uniformly applicable as to those who are eligible, then we believe under such facts that those types of plans would be contrary to the Code and the Ethics Law. Akely, at 32, 33. Per the foregoing provisions of the Second Class Township Code, township supervisors are eligible for township -paid group life, health, hospitalization, medical service, and accident insurance coverage. 53 P.S. § 65606(c). Therefore, to the extent that the Township Board of Supervisors has contracted with an insurance provider for Township -paid group life, health, hospitalization, medical service, and accident coverage for you, as Township Supervisors, you may receive such coverage at the Township's expense without transgressing Section 1103(a) of the Ethics Act. It is factually assumed that the policy is "uniformly applicable" and does not "improperly discriminate" in favor of the Supervisors. Turning to the matter that the township also decided to self- insure through an independent third party administrator for the deductible for all employees, an additional Plaisted /Erie 04 -513 February 23, 2004 Page 5 question arises as to whether a township supervisor is entitled to have the township pay for his deductible. This similarly depends upon whether such payment by the Township constitutes a pecuniary benefit as authorized in law or a private pecuniary benefit without authorization in law. In this regard, it is not clear whether, pursuant to the Second Class Township Code, a supervisor is entitled to township -paid coverage for his deductible. The Commission's jurisdiction is limited to the Ethics Act and only peripherally involves other laws to determine whether a particular pecuniary benefit is not authorized or "private." Therefore, until a court of final jurisdiction interprets the relevant portion of the Second Class Township Code, it is not clear whether a township supervisor is entitled to township -paid coverage for his deductible. Assuming a court of final jurisdiction decides that as per the Second Class Township Code, a township supervisor is not entitled to have his deductible paid for by the township, a township supervisor who would accept such payment by the township would be receiving a private pecuniary benefit contrary to Section 1103(a) of the Ethics Act. Conversely, assuming a court of final jurisdiction decides that as per the Second Class Township Code, a township supervisor is entitled to have his deductible paid for by the township, a township supervisor who would accept such coverage would not be receiving a private pecuniary benefit. The propriety of the proposed conduct has only been addressed under the Ethics Act; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Act. Conclusion: As Supervisors for the Township of Center ("Township"), you are public officials subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Section 1103(a) of the Ethics Act would not prohibit you as Supervisors from receiving Township -paid health care coverage under the Township's current insurance plan conditioned upon the assumptions that: 1) the insurance plan must be "uniformly applicable" to those covered; and 2) the insurance plan must not "improperly discriminate in favor of" the Supervisors. Under Section 1103(a) of the Ethics Act, a township supervisor may or may not be entitled to have the township pay for his deductible depending upon a court of final jurisdiction determining whether such coverage is permitted under the Second Class Township Code. Assuming a court of final jurisdiction decides that as per the Second Class Township Code, a township supervisor is not entitled to have the township pay for his deductible, a township supervisor who would accept such coverage would be receiving a private pecuniary benefit contrary to Section 1103(a) of the Ethics Act. Conversely, assuming a court of final jurisdiction decides that as per the Second Class Township Code, a township supervisor is entitled to have the township pay for his deductible, a township supervisor who would accept such coverage as a township supervisor would not be receiving a private pecuniary benefit. Pursuant to Section 1107(11), an Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, provided the requestor has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. This letter is a public record and will be made available as such. Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within thirty (30) days of the date of this Plaisted /Erie 04 -513 February 23, 2004 Page 6 Advice pursuant to 51 Pa. Code § 13.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717 -787 -0806. Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, Vincent J. Dopko Chief Counsel