Court Opinion

ID: 4132521
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:27:32.993606+00
Date Added: 2024-06-11T14:34:16.532772
License: Public Domain

The Honorable Everett L. Anschutz   Opinion NO. H-859
    Executive Secretary
    Employees Retirement System         Re: Validity of rule
       of Texas                         that state contribution
-   P. 0. Box 12337, Capitol Station    to employees' insurance
    Austin, Texas 78711                 must be applied to the
                                        state basic insurance
                                        plan.

    Dear Mr. Anschutz:

         You have requested our opinion regarding the authority
    of the Board of Trustees of the Employees Retirement System
    to promulgate a rule requiring that state contributions
    under article 3.50-2 of the Texas Insurance Code be applied
    only to an approved "basic plan." This question has arisen
    because some state employees, principally those with private
    hospitalization or life insurance plans wish to forego parti-
    cipating in a basic plan of coverage and elect to participate
    only in optional features of the program.

         The Board of Trustees of the Employees Retirement
    System is charged with the administration of the Texas
    Employees Uniform Group Insurance Benefits Act, article
    3.50-2, Texas Insurance Code. Sections 3(a) (ll), 4. Pur-
    suant to that authority, the Board has promulgated Rule
    335.80.00.108, which provides:

              For each person covered either as an
              employee or as a retiree, an agency
              shall pay toward the cost of the employee's
              or retiree's group insurance coverage an
              amount equal to that authorized by the
              legislature in the general appropriations
              act. That amount shall be applied only to
              the active em lo ee basicplans  or the -
              sim$ehasis               am.-       -

                             p.3623
The Honorable Everett L. Anschutz - page 2(H-859)

By another rule, the Board has defined "basic plans" as
"medical care coverages which provide one or more levels of
benefits, including uniform life and accidental death and
dismemberment coverages." Rule 335.80.00.109(c).   "Retiree
plan" refers only to "medical care benefits provided to
retired employees." Rule 335.80.00.109(e).   Under the
Board's rules, a person would not be permitted to waive
medical coverage while simultaneously receiving a state
contribution for life insurance coverage.

     Article 3.50-2 of the Texas Insurance Code provides,
in section 4:

          The administration and implementation of
          this Act are vested solely in the trustee.
          . . . The trustee shall have full power
          and authority to promulgate all rules,
          regulations, plans, procedures, and orders
          reasonably necessary to implement and carry out
          the purposes and provisions of this Act in
          all its particulars, including but not
          limited to the following:

              (a) preparation of specifications -
                                                for
          all insurance provizd by authority of
          this Act;
          --
              (b) prescribing the time at which and
          the conditions under which an em lo ee is
          agible     for allerages
                     --               Eo&k?t%d,
          this
          --    Act;

             (h) adoption of all rules and regula-
          tions consistent with the provisions of
          this Act and its purpose as it deems
          necessary to carry out its statutory duties
          and responsibilities;

             (i) development of basic plans of group
          insurance coverages and benefits applicable
          to all state employees . . . .

             .    ”   I   .

                 (Emphasis added).

                              p. 3624
The Honbrable Everett L. Anschutz - page 3 (H-859)

The trustee is required to "establish a plan or plans for
active employees and retired employees," which "in the
trustees' discretion may include but are not necessarily
limited to," inter alia medical benefits, life insurance,
and accidentaldeath  and dismemberment coverage. Section
5(a). Furthermore, the trustee is directed to establish
a group life insurance program

          subject to the conditions and limitations
          contained in [the] Act and the trustee's
         'rules and regulations promulgated pursuant
          thereto. Section 11.

     In our opinion, article 3.50-2 provides ample
authority for the Board of Trustees to limit state contribu-
tions for group life insurance to persons who also participate
in the basic plan of medical insurance. Such a requirement may be
deemed a "preparation of specifications" as permitted under
section 4(a), and a prescription of "the conditions under
which an employee is eligible for all coverages."  Section
4(b). In addition, under section S(a), the trustee is given
discretion to require the inclusion of a variety of coverages
in any plan which the trustee chooses to establish. Finally,
life insurance coverage is available, under section 11,
"subject to . . . the trustee's rules and regulations . . . ."
We believe that the Board of Trustees may direct thereunder
that any life insurance program be tied to medical coverage.

     When an administrative agency is granted broad rule-
making authority, the "determining factor" is whether

          the rule's provisions [are] in harmony
          with the general objectives of the Act
          involved. Gerst v. Oak Cliff Savings
          & Loan Ass'n, 432 S.W.2d 702, 706 (Tex.
          --
          sup. 1968).
Article 3.50-2, in listing seven purposes of the Texas Employees
Uniform Group Insurance Benefits Act, declares that the first
is

          to provide uniformity in life, accident,
          and health insurance and benefits coverages
          on all employees of the State of Texas.
          Section 2(a).

                       p. 3625
   The Honorable Everett L. Anschutz - page 4 (H-858)

   We believe that Rule 335.80.00.108 comports with the purpose
   of providing uniformity in group insurance coverage. Accordingly,
   it is our opinion that such rule is valid, and thus, the Board
   of Trustees of the Employees Retirement System may require
   that state contributions under article 3.50-2 of the Texas
   Insurance Code be applied only to an approved "basic plan"
   or "retirees plan."

                           SUMMARY

                The Board of Trustees of the Employees
                Retirement System, as trustee under the
                Texas Employees Uniform Group Insurance
                Benefits Act, article 3.50-2, Texas Insur-
                ance Code, may promulgate a rule requiring
                that state contributions thereunder be applied
                only to an approved "basic plan" or "retirees
                plan."

                                         Very truly yours,

                                          OHN L. HILL
                                          ttorney General of Texas

    APPROVED:
<----.,.

   Opinion   Committee

    jwb

                               p. 3626