Untitled Texas Attorney General Opinion

The Attorney General of Texas December 31, 1982 MARK WHITE Attorney General Mr. Kenneth H. Ashworth Opinion No. NJ-592 Supreme Court Building I? 0. BOX 12546 Coordinating Board Austin, TX. 76711. 2546 Texas College and University System Re: Whether a public institu- 5121475-2501 P. 0. Box 12788, Capitol Station tion of higher education may, Telex 9101674.1367 Austin, Texas 78711 consistent with article 3.50-3 Telecopier 5121475-0266 of the Texas Insurance Code, self-insure its employees 1607 Main St., Suite 1400 without purchasing a group Dallas, TX. 75201-4709 insurance policy 2141742.6944 Dear Mr. Ashworth: 4624 Alberta Ave.. Suite 160 El Paso. TX. 79905.2793 You inquire as to the ability of a public senior college or 9151533.3464 university to establish a self-insurance fund to provide life, accident, and health coverage to its employees. 1220 Dallas Ave., Suite 202 Houston, TX. 77002-6966 In 1977, the Texas State College and University Employees Uniform 7131650-0666 Insurance Benefits Act was enacted to provide, inter alia, uniformity in the basic group life, accident, and health insurance coverages for all employees of Texas state colleges and universities. Tex. Ins. 606 Broadway. Suite 312 Code art. 3.50-3. A public senior college or university is an Lubbock. TX. 79401.3479 6061747-5236 institution required by the act to provide basic insurance benefits for its employees. Tex. Ins. Code art. 3.50-3, 83(a)(B). Only "qualified carriers" are eligible to bid on the insurance coverage to 4309 N. Tenth, suite s be provided according to the act. Tex. Ins. Code art. 3.50-3, McNen, TX. 76501-1665 §4(b)(4)CD)(0. Pursuant to section 3(a)(ll) of the act, a "qualified 5121662.4547 carrier" is: 200 Main Plaza, Suite 400 (A) any insurance company authorized to do San Antonio. TX. 76205-2797 business in this state by the State Board of 5121225-4191 Insurance to provide any of the types of insurance coverages. benefits, or services provided for in A” Equal OpportunityI this Act under any of the insurance laws of the Affirmative Action Employer State of Texas, which has an adequate surplus, a successful operating history, and which has had successful experience in providing and servicing any of the types of group coverage provided for in this Act as determined by the State Board of Insurance; p. 2201 Mr. Kenneth H. Ashworth - Page 2 (Mw-592) (B) any corporation operating under Chapter 20 of the Texas Insurance Code which provides any of the types of coverage, benefits, or services provided for in this Act, which has a successful operating history, and which has had successful experience in providing and servicing any of the types of group coverage provided for in this Act as determined by the State Board of Insurance; or (C) any combination of carriers as herein defined, upon such terms and conditions as may be prescribed by the administrative council. The act further provides that an institution may select and contract for services performed by health maintenance organizations that have authorization to offer health care services to eligible employees in a specific area of Texas. Tex. Ins. Code art. 3.50-3, §4(b)(4)(D)(iv). A self-insured state college or university is not a qualified carrier under the act nor a licensed H.M.O. Therefore, a self-insurance arrangement as described in your request would be impermissible. Conditioned upon a negative response to your first inquiry, you ask whether a public senior college or university may establish a self-insurance fund in conjunction with the purchase of a stop-loss insurance policy from an insurance company to provide its employees and their dependents with the basic health, life, and accident coverages. We interpret you as asking whether the stop-loss (or excess) policy with a qualified carrier would, in combination with a self-insurance program, assure employees and dependents of the provision of required coverages. In light of the act's clear requirement that -the basic coverage be provided by a "qualified carrier," our opinion is that a self-insurance program may not be used to provide any or all of the minimum required coverage. SUMMARY A self-insurance fund may not be used by a -_ state senior college or university to provide any or all of the uniform life and accident and health benefits required by article 3.50-3 of the Texas Insurance Code. z&&7 Attorney General of Texas p. 2202 Mr. Kenneth H. Ashworth - Page 3 @lw-592) JOHN W. FAINTER, JR. First Assistant Attorney General RICHARD E. GRAY III Executive Assistant Attorney General Prepared by Catherine B. Fryer Assistant Attorney General APPROVED: OPINION COMMITTEE Susan L. Garrison, Chairman Jon Bible Catherine B. Fryer Rick Gilpin Jim Moellinger p. 2203