La. AG: Privatization plan requires legislative OK

Jessica M. Karmasek Sep. 17, 2012, 12:00pm


BATON ROUGE, La. (Legal Newsline) - Louisiana Attorney General James "Buddy" Caldwell says any contract to privatize the state's Office of Group Benefits must be approved by state lawmakers.

Caldwell released his opinion, requested by state Rep. Katrina R. Jackson, Friday.

In August, the State Civil Service Commission -- with Gov. Bobby Jindal's encouragement -- approved the privatizing of OGB, a state employee health insurance plan, by a narrow vote.

The Civil Service Commission is a seven-member body that has final authority over the administration of Louisiana's civil service system.

According to its website, the commission serves as an "impartial review board" that enacts and adjudicates civil service rules to regulate state personnel activities, and hears appeals from state employees and agencies.

Jackson, a Democrat, questioned the authority to privatize without legislative approval and requested Caldwell's opinion on the matter.

She argues that the move did not come before the Legislature nor any of its committees for a vote, and would eliminate nearly 200 positions.

"The Office of Group Benefits does not cost the state any money. It is a healthy plan that has always remained viable, while currently offering health insurance to more than a quarter of a million (255,950) Louisiana citizens at a reasonable cost," Jackson said in a statement Friday.

"A reading of this statute clearly indicates that La. R.S. 42:802 (B)(8)(d) requires that any such contract be approved by the appropriate legislative committee and/or body."

Assistant Attorney General Michael Vallan, writing for Caldwell, agreed.

Vallan said the proposed contract is subject to "review and final approval" by those committees with jurisdiction.

Jindal, a Republican, wants to hire Blue Cross Blue Shield to run the insurance plan.

But Jackson says the contract will leave too many unemployed.

"It is my pray that all of my fellow members will join with me and others in not approving this proposal," she said.

From Legal Newsline: Reach Jessica Karmasek by email at

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