RNEY GENERAL 

OF TEXAS 

CR*wP”RD c. MAHTIN AUSTIN, Texan 787ll 

AT-rORNEY GENER*L 

May 15, 1969 

Dr. John Kinross-Wright 

Commissioner of Texas 

Department of Mental 

Health and Retardation 

Box S, Capitol Station 

Austin, Texas 78711 

Opinion No. M-394 

Re: The legality of a state department head’s decision to withhold insurance premium payments from the salaries of 

Dear Dr. Kinross-Wright: 

employees for only one insurance 

company. 

Reference is made to your letter in which you request an opinion 

from this office as to the captioned matter. We quote from your letter, 

in part, as follows: 

“By . . . letter dated February 27, 1969, all 

superintendents of institutions under control and management of this Department were notified of my decision adopting the Northeastern Life Insurance Company 

of New York as the official insurance carrier of this Department and that this carrier would be the only insurante company to whom premium payments would be 

made on a payroll deduction basis. The payroll of all 

institutions of this Department are prepared and processed by the Central Office of the Department. My 

decision and action was a culmination of several weeks’ 

study by a committee of employees appointed by me to 

study and report to me an insurance program which would 

be the best for all of the employees of our Department . . 

1, 

. . . Wherefore, your opinion and advice as 

to the legality of withholding insurance premium payments from the salaries of employees of this Depart- 

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. . . 

Dr. John Kinross-Wright, page 2 M-394 

ment and its institutions for one insurance company 

only is respectfully requested. ‘I 

It is noted from materials furnished by you that the Department’s 

proposed insurance program consists of group life, health and accident 

insurance. The statutory provision regulating group life insurance for 

State employees, Subsection (3) of Section 1, Article 3. 50, Texas Insurance 

Code, reads, in part, as follows: 

“(3) A policy issued to . . . any association of 

state employees . . . and any department of the state 

government which employer or association shall be 

deemed the policyholder to insure the employees of . . 

any such department of the state government, members 

of any association of state . . 

‘l(b) The premium for the policy may be paid 

in whole or in part from funds contributed by the policyholder or in whole or in part from funds contributed by 

the insured employees . , , and provided further, that 

the employer may deduct from the employee’s salaries 

the employee’s contributions for the premiums when 

authorized in writing by the respective employees so to 

do ~ ~ . ” (Emphasis added. ) 

Subsection (Z), Section 1, Article 3. 51 of the Texas Insurance Code 

is the applicable provision relating to group health and accident insurance 

for State employees. It provides, in part, as follows: 

“Sec. l(a) The State of Texas and each of its 

. . departments, agencies, associations of public employees . . are authorized to procure co~ntracts insuring their respective employees . ~ under a policy or 

policies of group, health, accident, accidental death and 

dismemberment, disability income replacement and hospital, surgical and/or medical expense insurance . . 

The employees contributions to the premiums for such 

insurance issued to the employer or to an association 

of public employees as the policyholder may be de- 

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. . 

Dr. John Kinross-Wright, page 3 M-394 

ducted by the employer from the employee’s salaries 

when authorized in writing by the respective employees 

so to do. The premium for the policy may be paid in 

whole or in part from funds contributed by the employer 

or in whole or in part from funds contributed by the insured employees. ” 

When the requis,ites of Articles 3. 50 and 3. 51 have been met and 

the state employee has consented there is no question but that the department head has the authority to make the payroll deductions for the payment of the group insurance premiums. Attorney General’s Opinion No. 

V-1374 (1951). The question is now presented: Do Articles 3. 50 and 

3. 51 of the Insurance Code allow the department head to restrict payroll deductions for group insurance premium payments to only those employees having coverage with one particular insurance company? 

We answer this question in the affirmative. 

Articles 3. 50 and 3. 51, with regard to the payroll deduction aspect 

respectively read “the employer may deduct from the employee’s salaries” 

and “the employee’s contributions to the premiums . . may be deducted 

by the employer. ‘I (Emphasis added. ) In discussine the meanine of “mav”. 

the Court in Kleck v. Zoning Board Civ. of Adjustment of the City of San 

I 

Antonio. 319 S. W. 2d 406 (Tex. Civ. App. 1958, error ref. ) stated: 

“The ordinary meaning of the word rmay” is 

merely permissive in character . . . In Samuel v. 

American Mortgage Corp., Tex. Civ. App., 78 S. W. 

2d 1036, 1039, affirmed 130 Tex. 107, 108 S. W. Zd 

193, the Court said: 

‘Where the word “may” occurs 

in a statute, it is to be construed as merely permissive, and not as mandatory, except for the purpose of sustaining or enforcing a right -- either public or private -- 

but is never construed as mandatory for the 

purpose of creating a right ’ ” (Emphasis added. ) In accord, 67 C. J. S. 401, 

Officers, Sec. 113. 

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Dr. John Kinross-Wright, page 4 M-394 

The two pertinent Articles, 3. 50 and 3. 51 of the Insurance Code, 

when read in their entirety, reflect that the making of payroll deductions 

for state employees in payment of group insurance premiums, is a matter within the discretion of the department head and does not create a 

contractual right or obligation. Statutes directed to public officers concerning modes of procedure methods, and systems are construed as discretionary only, provided no mandatory duty is imposed. 67 C. J. S. 399, 

Officers, Set, 113, As was stated in Attorney General’s Opinion No. 

V-1374 (1951), with particular reference to Article 3. 51: 

“We think it is within the discretion of each 

department head to decide whether and with whom he 

will contract for insurance covering his employees. ” 

(Emphasis added. ) 

To rule that it is mandatory for the department head to make payroll deductions for employee’s contributions for a group insurance program, wherein an association of public employees is the policyholder, 

might impair the department heads’ authorization to procure the best group 

insurance program available for his employees. 

Therefore, t.he decision of the Texas Department of Mental Health 

and Mental Retardation to withhold grot-p insurance premium payments 

from the salaries of its employees, when authorized by such employees, 

for only one insurance company, is not in violation of the applicable provisions of the Insurance Code. It is within the discretion of the department head to make such a decision. The right of a stat.e employee to contract with any group insurance carrier and pay the necessary premiums 

thereto is not affected by whether the statutory payroll deduction authorization is permitted by a department head. However, once the depart,- 

ment head has exercised his discretion and provided for the payroll deduction, certifying his payroll to the State Comptroller of Public Accounts, 

the latter is required to make the proper payroll deduction. Attorney 

General’s Opinion No. V- 1374, supra. 

The employee is merely given an option under the statute t:o have 

payroll deductions for group coverage where his employer may aut:horize 

his participation in the group plan in such manner. The employer, who 

is the state department head, is the person to whom the statute is directed and in whom the discretion is given to authorize the payroll de- 

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. . 

Dr, John Kinross-Wright, page 5 M-394 

duction. The deduction is not made mandatory by statutory language 

calculated to effect that intent. 

SUMMARY 

Whether to allow or disallow the payroll 

deductions of state employees’ contributions for 

group insurance premiums is a matter within the 

discretion of the state department head. 

Prepared by Ray McGregor 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Kerns Taylor, Chairman 

George Kelton, Vice-Chairman 

Alfred Walker 

Charles Parrett 

Rick Fisher 

Robert Owen 

W. V. Geppert 

Staff Legal Assistant 

Hawthorne Phillips 

Executive Assistant 

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