Untitled Texas Attorney General Opinion ( 1976 )

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