*1 [4]
The Attorney General of Texas Hay 18, 1982 .
MARK WHITE Attorney General opinion lo. NW-473
Xonorablc Henry Wade supr.me burl sulidlng Criminal District Attorney P. 0. Box m42 Third Floor, Services Building Re: Authority of the com- Ausm. TX 73711- 2545 Dallas, Texas 75202 missioners court to initiate 51w75zso1 a plan to pay group health Tdsx Olw57C1357 claims vithout purchasing a 1olempw 5w475-0255 group insurance policy 1601 M*ln St.. sultr 1400 Dear l4r. Wade: osll**lx. 75al4702
2141?42#44 You ask several questions concerning the authority of the Dallas County Commissioners Court to establish a group insurance program for 4524*IbertaAm,5ulte1w employees and their dependents without purchasing a group El Pmo. TX. 792052792 insurance policy from an insurance company. 01-
h co=iasioners court may uercise only such povera as the 127.0 mlal Am. SlAts 2P2 constitution or etatutes have epecifically conferred upon them, or N6uston.Tx. 77w2a55 which may reasonably be implied frum express powers. Canales V. 71- Laughlin, 214 S.W.Zd 451 ‘(Tex. 1948); Rcnfro v. Shropshire, 566 S.W.2d
688 (Tcx. Civ. App. - Eastland 1978. writ ref’d n.r.e.1. There is statutory authority for a comissioners SO5 Broadw~y.Sult.312 court to adopt an insurance _ LubOock.Tx. 79401.3472 plan to provide hospitalization insurance for county officials and wM47.5235 employees. V.T.C.S. art. 2372h-2. Further authority is also found in
the Texas Insurance Code in articles 3.51 and 3.51-2. Hovever. these statutes do not authorize the implementation of a plan to provide 4302 N. Tenlh. Sullo B to provide group insurance that would be in self-insurance or McAllm. TX. 76501.105 contravention of the Texas Insurance Code. 512a52a47 You are specifically concerned with whether there is authority 200 MaIn Plaza. sui1e 400 such a plan to be self-funded by the county, rather than through San Anlonlo.TX. 7-2797 the purchase insurance from an insurance company. We have found 512/225-4101 only oae etatutory provision thst would empower a commissioners court to do this. A cosanissioners court of a county having a population of An Equal Opportunilyl SOO.000 or more is authorized to adopt rules and regulations to Afllmmllve Acllon Employer establish a hospital and insurance fund for county employees as a part V.T.C.S. art. 2372h. 12. Claims are to
of their employment contract. be paid from a fund consisting of contributions by employees and the county. Benefits received under the plan are considered part of the employee’s compensation. However. you indicate that you intend to have dependents covered under the same proposal, and we find nothing in article 2372h that would permit such dependents to come within the *2 Honorable Henry 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 authorized by article 2372h and vould contravene the Texas Insurance Code.
The Texas Insurance Code requires authorization by 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 insurance is defined as the commission of one or more acts set forth in article 1.14-1. section 2(a). subsection 4 of the Insurance Code which include:
The receiving or collection of any premium, c&ssion, membership fees, assessments. dues or other consideration for any insurance or any part thereof.
The receiving or collection of employee contributions for dependents to participate in the proposed plan would constitute collection of a premium.
Although a cosssiseionera court may adopt rules and regulations to implement a self-insurance fund as authorized under section 2 of article 2372h. such fund must comply vith the restraints set forth in thst statute. We have found no other authority which would permit a county to implement a self-funded program to pay health claims of its employees. Bowever. a county may not collect premiums from employees to pay for the participation of dependents in the self-insurance program, since such would constitute the unauthorized business of insurance in violation of article 1.14-1 the Texas Insurance Code.
SUMMARY A eossnissioners court may establish a self-insurance fund under article 2372h. saktioa 2, V.T.C.S., the benefit of county officials and employees. but the may not collect premiums from employees for the inclusion of dependents in the self-insurance fund. WHITE
MARK General of Texas Attorney
JOHN W. FAINTER, JR.
First Assistant
Honorable Henry Wade - Page 3 (MW-473)
RICHARD E. GRAY III
Rxecutive Assistant Attorney General
Prepared by Thomas tl. Pollan
Assistant
APPROVED:
OPINION COMMITTEE
Susan L. Garrison, Chairman
Jon Bible
Rick Gilpin
Patricia Iiinojosa
Jim Moellinger
Thomas H. Pollan