                                                                          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-




                                                                    - 1953-
                                                                                                                                                     . .     .




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-




                                                                    -       1954 -
.         .




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.



                                                          - 1955-
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-




                                                        -1956-
 .         .




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




                                                   - 1957-
