Public v. Las Vegas Metropolitan Police Dept.

• Citation: 179 P.3d 542
• Decision Date: 20 March 2008
• Docket Number: No. 50281.,50281.
• Parties: PUBLIC EMPLOYEES' BENEFITS PROGRAM, a Political Subdivision of the State of Nevada, Appellant, v. LAS VEGAS METROPOLITAN POLICE DEPARTMENT, a Political Subdivision of the State of Nevada; and Clark County, a Political Subdivision of the State of Nevada, Respondents.
• Court: Nevada Supreme Court

179 P.3d 542

PUBLIC EMPLOYEES' BENEFITS PROGRAM, a Political Subdivision of the State of Nevada, Appellant, v. LAS VEGAS METROPOLITAN POLICE DEPARTMENT, a Political Subdivision of the State of Nevada; and Clark County, a Political Subdivision of the State of Nevada, Respondents.

No. 50281.

Supreme Court of Nevada.

March 20, 2008.

Catherine Cortez Masto, Attorney General, and Deonne Enns Contine, Deputy Attorney General, Carson City, for Appellant.

Brownstein Hyatt Farber Schreck, P.C., and Adam P. Segal and Andrew S. Brignone, Las Vegas, for Respondent Las Vegas Metropolitan Police Department.

David J. Roger, District Attorney, and Stephanie A. Tucker Barker, Chief Deputy District

Attorney, Clark County, for Respondent Clark County.

Dyer, Lawrence, Penrose, Flaherty & Donaldson and Michael W. Dyer, James W. Penrose, and Michael K. Chaudhuri, Carson City, for Amici Curiae Clark County Education Association and Nevada State Education Association.

Law Offices of John C. Brown and John C. Brown, Alamo, for Amicus Curiae City of Caliente, Nevada.

Law Offices of Thomas D. Beatty and Thomas D. Beatty, Las Vegas, for Amicus Curiae Clark County Association of School Administrators and Professional-Technical Employees.

Brenda J. Erdoes, Legislative Counsel, Risa B. Lang and Eileen G. O'Grady, Chief Deputies Legislative Counsel, and Scott McKenna, Senior Principal Deputy Legislative Counsel, Carson City, for Amicus Curiae Legislature of the State of Nevada.

James C. Smith, Reno, for Amicus Curiae Retired Public Employees of Nevada.

BEFORE THE COURT EN BANC.

OPINION

By the Court, HARDESTY, J.:

This appeal raises important questions of statutory interpretation, with potentially far-reaching consequences, regarding local government employers' obligation to subsidize the health insurance premiums of their retirees who choose to participate in the State Public Employees' Benefits Program (PEBP). Local government employees may elect to join PEBP upon retirement if the health benefits they obtained during employment fall within a statutorily described health care program.¹ If an employee who was covered by one of those statutory health care programs joins PEBP upon retirement, the former local government employer must, under a different statute, subsidize the retiree's PEBP premiums.²

Given these statutory provisions, the primary question raised here is whether local government employers must pay the subsidy for their retirees who joined PEBP, even though, before retirement, those local government employees' health insurance benefits were provided through a collectively bargained-for health trust. To answer this question, we necessarily determine whether a collectively bargained-for health trust is one of the types of statutorily described health care programs that qualifies local government employees to enroll with PEBP in the first instance. If a collectively bargained-for health trust does constitute such a qualifying health care program, the second issue is whether the statutory subsidy for PEBP premiums applies to retirees who joined PEBP before the subsidy statute's effective date.

According to respondents, Las Vegas Metropolitan Police Department (Metro) and Clark County, they are not required to pay the statutory PEBP subsidy for two reasons. First, they note, the subsidy is required for only those employees who were covered by a statutorily described health care program and who then elected PEBP coverage when they retired. According to Metro and Clark County, since their employees were never covered by a statutorily described program, because the collectively bargained-for health trusts do not qualify as such programs, the employees are not eligible for the subsidy upon retirement. Taken to its logical conclusion, Metro's and Clark County's argument means that these employees were not eligible for PEBP coverage upon retirement in the first instance. Second, they assert, even if the health care programs at issue qualify their retirees for PEBP coverage, the statutory PEBP subsidy does not apply to employees who retired before the statute's effective date, October 1, 2003, because applying the subsidy in that manner would constitute an impermissible "retroactive" application of the statute.

The district court agreed with Metro's and Clark County's arguments and granted them declaratory relief. PEBP then filed the instant appeal, asserting that the district court erred with respect to both issues, since Metro's and Clark County's retirees were indeed covered by a statutorily described health care program and the subsidy requirement applies to employees who retired before October 2003.

We conclude that the district court misinterpreted the subsidy requirement and, consequently, improperly granted declaratory relief to Metro and Clark County. Several statutes describe local government employer-sponsored health care programs, participation in which allows local government employees to join PEBP upon retirement and receive the statutory PEBP subsidy. One of those statutes, NRS 287.010(l)(a), governs systems of group health insurance. Because NRS 287.010(l)(a) could be read as narrowly applying only to local government employer-run health care, as the district court concluded, or as broadly applying to any type of local government employer action taken to provide its employees with health care coverage, the statute is ambiguous. Using well-established rules of statutory construction to interpret this ambiguous provision, we ultimately conclude that NRS 287.010(l)(a) must be read in its broad sense as generally granting to local governments authority to provide health insurance to their employees. Consequently, collectively bargained-for health trusts fall within that statute's scope. Since such health trusts are statutorily authorized health insurance programs, local government retirees who were previously covered by health trusts and who elect PEBP coverage upon retirement are entitled to the statutory subsidy.

Further, with respect to the second issue, pre-October 2003 retirees are entitled to the subsidy for three reasons: (1) applying the statute to those retirees simply is not "retroactive" treatment; (2) the legislative history indicates that the subsidy applies as of October 1, 2003, to current retirees; and (3) the Legislature has resolved any remaining doubt by clarifying its intent through a 2007 legislative amendment to NRS 287.023. Accordingly, we reverse the district court's order.

BACKGROUND

NRS Chapter 287 governs public employee programs, including local government employer-sponsored heath care coverage. The Legislature first enabled local government employers to provide health care coverage to their employees in 1947, when it enacted NRS 287.010, which describes systems of group health insurance.³ Over the years that followed, the Legislature further developed this area of Nevada law, amending NRS 287.010 to include additional features related to group health insurance coverage and adding provisions that contained descriptions of, and requirements regarding, certain other types of health care programs that local government employers may provide for their employees. Today, in addition to NRS 287.010's coverage of group health insurance systems, three other statutes govern local government health care coverage, including collectively bargained-for health trusts,⁴ systems of medical or hospital service through nonprofit membership corporations,⁵ and participation in another entity's health care program.⁶

Meanwhile, in 1969, local government employers became subject to another set of statutory provisions: the Local Government Employee-Management Relations Act.⁷ Under the Act, local government employers are required to negotiate with employee organizations over certain terms of employment. One of the employment terms subject to mandatory bargaining is insurance benefits.⁸

Metro and Clark County collectively bargain for health trusts

As a result of NRS Chapter 288 negotiations over insurance benefits, Metro and Clark County agreed to help fund heath and welfare trusts to cover their employees' health care needs. Under these collectively bargained-for health trusts, which do not mention NRS Chapter 287, Metro and Clark County pay for (or a substantial amount towards) their employees' health insurance premiums and medical benefits. The health trust's trustees are selected from both labor and management, and the health trusts apparently qualify as voluntary employees' beneficiary associations under federal law (I.R.C. § 501(c)(9)). The trust funds must be used for health and welfare benefit purposes, and the trustees possess the sole power to create, adopt, and manage employee health care plans.

Metro's and Clark County's employees join PEBP upon retirement and, arguably, thereby become eligible for a statutory subsidy

Under NRS 287.023(1), local government employees who were covered by one of the four types of health care programs described above may choose, upon retiring, either to continue with that program or to join the State's Public Employees' Benefits Program (PEBP).⁹ Several Metro and Clark County employees chose to join PEBP when they retired.

Until 2003, local government employees who joined PEBP for the first time upon retirement were wholly responsible for the coverage costs.¹⁰ During the 2003 legislative session, however, several PEBP-participating local government retirees voiced concerns about large increases to the health insurance premiums that PEBP charged them.¹¹ As a result, the Legislature enacted legislation mandating that local government employers subsidize their PEBP-participating retirees' premiums at the same rate as the State subsidizes its retirees' premiums, starting on October 1, 2003.¹² The subsidy requirement was codified in NRS 287.023(4), which, at the time of its enactment, stated that local government employers must subsidize PEBP premiums "for...