Untitled Texas Attorney General Opinion ( 1969 )

RNEY GENERAL
OF TEXAS
AUSTIN, Texan 787ll
CR*wP”RD c. MAHTIN
AT-rORNEY GENER*L
May 15, 1969
Dr. John Kinross-Wright Opinion No. M-394
Commissioner of Texas
Department of Mental
Health and Retardation
Box S, Capitol Station
Austin, Texas 78711 Re: The legality of a state depart-
ment head’s decision to with-
hold insurance premium pay-
ments from the salaries of
employees for only one insurance
Dear Dr. Kinross-Wright: 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 man-
agement of this Department were notified of my deci-
sion adopting the Northeastern Life Insurance Company
of New York as the official insurance carrier of this De-
partment and that this carrier would be the only insur-
ante company to whom premium payments would be
made on a payroll deduction basis. The payroll of all
institutions of this Department are prepared and pro-
cessed 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 pay-
ments 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 policy-
holder 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 em-
ployees . . are authorized to procure co~ntracts insur-
ing their respective employees . ~ under a policy or
policies of group, health, accident, accidental death and
dismemberment, disability income replacement and hos-
pital, 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 in-
sured 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 depart-
ment head has the authority to make the payroll deductions for the pay-
ment 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 pay-
roll deductions for group insurance premium payments to only those em-
ployees 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”.
I
the Court in Kleck v. Zoning Board Civ. of Adjustment of the City of San
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 mere-
ly permissive, and not as mandatory, ex-
cept for the purpose of sustaining or enforc-
ing a right -- either public or private --
but is never construed as mandatory for the
purpose of creating a right ’ ” (Em-
phasis 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 mat-
ter within the discretion of the department head and does not create a
contractual right or obligation. Statutes directed to public officers con-
cerning modes of procedure methods, and systems are construed as dis-
cretionary 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 pay-
roll deductions for employee’s contributions for a group insurance pro-
gram, 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 pro-
visions of the Insurance Code. It is within the discretion of the depart-
ment head to make such a decision. The right of a stat.e employee to con-
tract with any group insurance carrier and pay the necessary premiums
thereto is not affected by whether the statutory payroll deduction author-
ization is permitted by a department head. However, once the depart,-
ment head has exercised his discretion and provided for the payroll de-
duction, 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 di-
rected 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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