i
The Attorney General of Texas
JIM MAlTOX
Dexmber 23, 1985
Attorney General
SupremeCourt Building Honorable Randall L. Sherrod Opinion No. JM-,406
P. 0. BOX 12548 Criminal District Attorney
Austin, TX. 78711. 2548 Randall County Courthouse Re: Whether a county may join
51214752501
Canyon, Texas 79015 with other governmental entities
Telex 9101874.1367
Telecopier 512f475-0286
in a pool for the operating of a
self-funding health plan
714 Jackson, Suite 700 Dear Mr. Sherrod:
Dallas, TX. 7520245M
2141742.S944
You inform us that the majority of the Randall County Commis-
sioners Court and ,somemembers of the governing body of the city of
4824 Alberta Ave., Suite 160 Amarillo are interested in forming a self-funded health plan pool,
El Paso, TX. 799052793 consisting of Anarillo and Randall County employees and their
9151533-34&(
dependents, to provide health, medical, and hospital insurance to all
members of this cLass and their dependents. You also inform us that
1001 Texas, Suite 700
the governing bodies of other entities such as nearby Potter County
Houston, TX. 77002-3111 may also become interested in contracting with the other members of
71312235888 such a pool under the Interlocal Cooperation Act. The pool would be
formed by contract among parties.
806 Broadway, Suite 312
Lubbock, TX. 794013479
In that regard, you ask:
SCW747-5238
Does ,the Randall County Commissioners Court
have the power to join the city of Amarillo or any
4309 N. Tenth. Suite S
McAllen, TX. 78501.1885
other nr:srby state governmental entity in forming
512lSS2.4547 a pool f'ora self-funding health and hospitalira-
tion p:.e!n in the nature of self-insurance,
receiving voluntary premiums from employees and
200 Main Plaza, Suite 400
elected officials of those entities to cover
San Antonio, TX. 782052797
512f2284191
themselves and their dependents?
A county commissioners court has only the powers conferred either
An Equal Oppatunityl expressly or by necessary implication by the constitution and statutes
Affirmative Action Employer of this state. See:Tex. Const. art. V, 918; Canales v. Laughlin, 214
S.W.Zd 451, 453 TKk. 1948). The limited authority granted to local
political subdivisions under article 3.51-2 of the Insurance Code does
not encompass y0c.r particular arrangement; such authority must be
found elsewhere. Id. This office has held on numerous occasions that
the Interlocal CofyGation Act, article 4413(32c), in sections 4(a)
and 4(b), V.T.C.S., authorizes a county to contract with other
counties or local political subdivisions for the performance of
p. 1859
Honorable Randall L. Sherrod - Page 2 (J&4,06)
, as defined in section 3(Z), which
governmental services and :iunctions
all parties to the contra:t are legally authorized to perform. See
Attorney General Opinions NW-347 (1981); E-392 (1974); E-28 (197x
~-1278 (1972). Therefore, the Interlocal Cooperation Act authorizes
Randall County to contract with other local entities only if there is
independent statutory or :onstitutional authority for the county to
provide a self-funded insurance plan for its department heads,
employees, and their dependents.
In Attorney General Opinion MW-473 (1982). this office further
held:
There is statutory authority for a comissioners
court to adopt an insurance plan to provide
hospitalization ::nsurancefor county officials and
employees. V.l'.C.S. art. 2372h-2. Further
authority is allw found in the Texas Insurance
Code in articles 3.51 and 3.51-2. However, these
statutes do not authorize the implementation of a
plan to provide wlf-insurance or to provide group
insurance that rculd be in contravention of the
Texas Insurance Code.
Id. at 1658. Article 2372h, section 2, V.T.C.S., suthorizes a
colnmissionerscourt of a county having a population of 500,000 or more
to adopt rules and regulat,ionsto establish a hospital and insurance
fund for county employees 11sa part of their employment contract. You
inform us that Randall County currently has a population of
approximately 76,000 inhab:.t:ants.Since there is a particular statute
authorizing a plan by certain counties, but no statute regarding
Randall County, we conclude that there is no authority for Randall
County to join a self-fund:.nghealth plan for its employees.
Article 3.51-2 of tha Insurance Code authorizes any county or
political subdivision of s county to procure certain group insurance
policies covering officers, employees, and their dependents. However,
the provision does not pruvide for the self-funded health plan you
describe in this request. Article 3.51-2, part (a) of the Insurance
Code only authorizes the county to "procure contracts" or purchase
insurance from an insurwce company as opposed to specifically
alloving the entities to rielf-fund a health insurance plan as the
legislature has provided :.n another statute amended during the same
session. See Ins. Code art. 3.50-3, 14(d) (governing boards of
colleges an~niversities 'nay provide self-funded insurance plans for
employees).
We can find no other independent statutory basis authorizing the
Randall County Commissione:rsCourt to provide a self-funded insurance
plan for its employees, deIla.rtment
heads, and their dependents. It is
p. 1860
Eonorable Randall L. SherrDd - Page 3 ,(~&486.)
our opinion that the county may not contract with the entities
described above under the Interlocal Cooperation Act.
SUMMARY
The Randall County Commissioners Court is not
authorized to contract with nearby state govern-
mental entities to form a pool for a self-funding
health and hospit.slisationplan for its employees,
department heads, and their dependents.
JIM MATTOX
Attorney General of Texas
JACK HIGHTOWKR
First Assistant Attorney General
MARY KELLER
Executive Assistant Attorney General
ROBERT GRAY
Special Assistant Attorney 'General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Tony Guillory
Assistant Attorney General
p. 1861