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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 5848 January 28, 1981 SCHOOLS AND SCHOOL DISTRICTS: Board of education--authority to self-fund nonparticipating health and dental benefits for employees The board of education of a school district may provide, on a nonparticipating basis, partially self-funded health and dental benefits for its employees. The Honorable Gary Corbin State Senator State Capitol Lansing, Michigan You have inquired whether a board of education may provide partially self-funded health and dental benefits for its employees on a nonparticipating basis. The school district would use its own funds to pay health and dental benefits up to prescribed individual and aggregate cost levels. Beyond those prescribed cost levels, the employee health and dental benefits would be paid by an insurance company that had received premium payments from the school district. Initially, it should be observed that boards of education possess only such powers as are conferred upon them by legislative enactments either expressly or by reasonably necessary implication. Senghas v L'Anse Creuse Public Schools, 368 Mich 557, 560; 118 NW2d 975, 977 (1962); Singer Architectural Services Company v Doyle, 74 Mich App 485, 489; 254 NW2d 587, 588, lv app den, 402 Mich 811 (1977). In the School Code of 1976, 1976 PA 451, Sec. 1255; MCLA 380.1255; MSA 15.41255, the legislature has plainly stated that: '(1) In the process of establishing salaries or determining other working conditions, the board of a school district or the board of a local act school district may use general funds of the school district to provide other related benefits of an economic nature on a joint participating or nonparticipating basis with school employees for employees of the school district. . . .' (Emphasis added.) In arriving at the proper interpretation of 1976 PA 451, Sec. 1255, supra, consideration may be given to its predecessor statutory provisions. Crawford v School District No 6, 342 Mich 564; 70 NW2d 789 (1955). The predecessor statute was Section 617 of the School Code of 1955, 1955 PA 269, added by 1956 PA 215, which provided: 'The board of education of any school district . . . is hereby permitted to use money in the general fund . . . to provide insurance protection on a joint participating basis with school employees . . . on any or all of the following at the discretion of the respective school boards: (1) Provide for hospital and surgical benefits for employee and dependents. (2) Provide health and accident type coverage.' 1955 PA 269, Sec. 617, supra, was amended by 1963 PA 96, which inserted 'or non-participating,' added group life insurance coverage and made provision for a payroll deduction program upon request of an employee. The final amendment to 1955 PA 269, Sec. 617, supra, was 1969 PA 27, which was similar to the present statute. This amendment provided: 'The board of education of any school district in the process of establishing salaries or determining other working conditions may use money in the general fund of the school district to provide other related benefits of an economic nature on a joint participating or non-participating basis with school employees for employees of the school district. 'The board at the request of an employee may provide payroll deduction programs.' The history of 1976 PA 451, Sec. 1255, supra, demonstrates that it grants boards of education board authority to provide benefits to school employees. See June 10, 1974 letter opinion to Representative William A. Ryan. These benefits may be provided by the use of the general funds of school districts. Thus, boards of education may expend general fund monies to provide health and dental benefits directly or through the purchase of insurance to provide such benefits to their employees on a nonparticipating basis. In exercising its authority, a board of education must operate the program in such a manner as to provide covered health and dental benefits to their employees as they are needed. Therefore, it is my opinion that a board of education may, on a nonparticipating basis, provide partially self-funded health and dental benefits for its employees. Frank J. Kelley Attorney General
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