4
The Attorney General of Texas
. Hay 18, 1982
MARK WHITE
Attorney
General
XonorablcHenry Wade opinionlo. NW-473
supr.me burl sulidlng CriminalDistrictAttorney
P. 0. Box m42
Third Floor, ServicesBuilding Re: Authority of the com-
Ausm. TX 73711-2545
51w75zso1 Dallas,Texas 75202 missioners court to initiate
Tdsx Olw57C1357 a plan to pay group health
1olempw 5w475-0255 claims vithout purchasing a
group insurancepolicy
1601 M*ln St..sultr1400
osll**lx. 75al4702 Dear l4r.Wade:
2141?42#44
You ask several questionsconcerningthe authorityof the Dallas
County CommissionersCourt to establish a group insuranceprogram for
4524*IbertaAm,5ulte1w
county employees and their dependents without purchasing a group
El Pmo. TX. 792052792
01- insurancepolicy from an insurancecompany.
h co=iasioners court may uercise only such povera as the
127.0mlal Am. SlAts2P2 constitutionor etatutes have epecificallyconferredupon them, or
N6uston.Tx. 77w2a55
71-
which may reasonably be implied frum express powers. Canales V.
Laughlin,214 S.W.Zd451 ‘(Tex.1948); Rcnfro v. Shropshire,566 S.W.2d
688 (Tcx. Civ. App. - Eastland 1978. writ ref’d n.r.e.1. There is
SO5 Broadw~y.Sult.312 statutory authorityfor a comissioners court to adopt an insurance
_ LubOock.Tx. 79401.3472 plan to provide hospitalizationinsurance for county officials and
wM47.5235
employees. V.T.C.S.art. 2372h-2. Further authorityis also found in
the Texas InsuranceCode in articles 3.51 and 3.51-2. Hovever. these
4302 N. Tenlh.SulloB statutes do not authorize the implementationof a plan to provide
McAllm. TX. 76501.105 self-insurance or to provide group insurance that would be in
512a52a47 contraventionof the Texas InsuranceCode.
200 MaIn Plaza.sui1e400 You are specificallyconcerned with whether there is authority
San Anlonlo.TX. 7-2797 for such a plan to be self-fundedby the county, rather than through
512/225-4101 the purchase of insurancefrom an insurancecompany. We have found
only oae etatutoryprovisionthst would empower a commissionerscourt
An Equal Opportunilyl
to do this. A cosanissioners court of a county having a populationof
AfllmmllveAcllon Employer SOO.000 or more is authorized to adopt rules and regulations to
establisha hospitaland insurancefund for county employeesas a part
of their employment contract. V.T.C.S.art. 2372h. 12. Claims are to
be paid from a fund consistingof contributionsby employeesand the
county. Benefits receivedunder the plan are consideredpart of the
employee’s compensation. However. you indicate that you intend to
have dependentscovered under the same proposal,and we find nothing
in article 2372h that would permit such dependentsto come within the
p. 1658
HonorableHenry Wade - Paga 2 (m-473)
statute. To the extent the county attempts to collect premiums from
the employees for the benefit of their dependents,such self-funded
plan would not be authorizedby article 2372h and vould contravenethe
Texas InsuranceCode.
The Texas Insurance Code requires authorizationby the State
Board of Insurance before a person or entity can engage in the
business of insurence. Ins. Code art. 1.14. 91. The business of
insuranceis defined as the commissionof one or more acts set forth
in article 1.14-1. section 2(a). subsection4 of the InsuranceCode
which include:
The receiving or collection of any premium,
c&ssion, membershipfees, assessments.dues or
other considerationfor any insuranceor any part
thereof.
The receiving or collection of employee contributions for
dependents to participate in the proposed plan would constitute
collectionof a premium.
Althougha cosssiseioneracourt may adopt rules and regulationsto
implement a self-insurancefund as authorized under section 2 of
article 2372h. such fund must comply vith the restraintsset forth in
thst statute. We have found no other authoritywhich would permit a
county to implementa self-fundedprogram to pay health claims of its
employees. Bowever. a county may not collect premiums from employees
to pay for the participationof dependents in the self-insurance
program, since such would constitute the unauthorizedbusiness of
insurancein violationof article 1.14-1of the Texas InsuranceCode.
SUMMARY
A eossnissioners court may establish a
self-insurancefund under article 2372h. saktioa
2, V.T.C.S., for the benefit of county officials
and employees. but the county may not collect
premiums from employees for the inclusion of
dependentsin the self-insurancefund.
MARK WHITE
Attorney Generalof Texas
JOHN W. FAINTER,JR.
First AssistantAttorney General
p. 1659
HonorableHenry Wade - Page 3 (MW-473)
RICHARDE. GRAY III
RxecutiveAssistantAttorneyGeneral
Preparedby Thomas tl.Pollan
AssistantAttorney General
APPROVED:
OPINION COMMITTEE
Susan L. Garrison,Chairman
Jon Bible
Rick Gilpin
PatriciaIiinojosa
Jim Moellinger
Thomas H. Pollan
p. 1660