Further authority is also 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 self-insurance or to provide group insurance that would be in contravention of the Texas Insurance Code. You are specifically concerned with whether there is authority for such a plan to be self-funded by the county, rather than through the purchase of insurance from an insurance company. We have found only one statutory provision that would empower a commissioners court to do this. A commissioners court of a county having a population of 500,000 or more is authorized to adopt rules and regulations to establish a hospital and insurance fund for county employees as a part of their employment contract.
Claims are to 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 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 would 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 insurance. The receiving or collection of any premium, commission, membership fees, assessments, dues or other consideration for any insurance or any part thereof.