    4




                                  The Attorney         General      of Texas
                                      .          Hay 18, 1982
    MARK WHITE
    Attorney
           General

                                XonorablcHenry Wade                   opinionlo. NW-473
    supr.me burl sulidlng       CriminalDistrictAttorney
    P. 0. Box m42
                                Third Floor, ServicesBuilding         Re: Authority of the com-
    Ausm. TX 73711-2545
    51w75zso1                   Dallas,Texas 75202                    missioners court to initiate
    Tdsx Olw57C1357                                                   a plan to pay group health
    1olempw    5w475-0255                                             claims vithout purchasing a
                                                                      group insurancepolicy
    1601 M*ln St..sultr1400
    osll**lx. 75al4702          Dear l4r.Wade:
    2141?42#44
                                     You ask several questionsconcerningthe authorityof the Dallas
                                County CommissionersCourt to establish a group insuranceprogram for
    4524*IbertaAm,5ulte1w
                                county employees and their dependents without purchasing a group
    El Pmo. TX. 792052792
    01-                         insurancepolicy from an insurancecompany.

                                       h co=iasioners court may uercise only such povera as the
    127.0mlal Am. SlAts2P2      constitutionor etatutes have epecificallyconferredupon them, or
    N6uston.Tx. 77w2a55
    71-
                                which may reasonably be implied frum express powers. Canales V.
                                Laughlin,214 S.W.Zd451 ‘(Tex.1948); Rcnfro v. Shropshire,566 S.W.2d
                                688 (Tcx. Civ. App. - Eastland 1978. writ ref’d n.r.e.1. There is
    SO5 Broadw~y.Sult.312       statutory    authorityfor a comissioners court to adopt an insurance
_   LubOock.Tx. 79401.3472      plan to provide hospitalizationinsurance for county officials and
    wM47.5235
                                employees. V.T.C.S.art. 2372h-2. Further authorityis also found in
                                the Texas InsuranceCode in articles 3.51 and 3.51-2. Hovever. these
    4302 N. Tenlh.SulloB        statutes    do not authorize the implementationof a plan to provide
    McAllm. TX. 76501.105       self-insurance    or  to provide  group insurance that would be in
    512a52a47                   contraventionof the Texas InsuranceCode.

    200 MaIn Plaza.sui1e400          You are specificallyconcerned with whether there is authority
    San Anlonlo.TX. 7-2797      for such a plan to be self-fundedby the county, rather than through
    512/225-4101                the purchase of insurancefrom an insurancecompany. We have found
                                only oae etatutoryprovisionthst would empower a commissionerscourt
    An Equal Opportunilyl
                                to do this. A cosanissioners  court of a county having a populationof
    AfllmmllveAcllon Employer   SOO.000 or more is authorized to adopt rules and regulations to
                                establisha hospitaland insurancefund for county employeesas a part
                                of their employment contract.   V.T.C.S.art. 2372h. 12. Claims are to
                                be paid from a fund consistingof contributionsby employeesand the
                                county. Benefits receivedunder the plan are consideredpart of the
                                employee’s compensation. However. you indicate that you intend to
                                have dependentscovered under the same proposal,and we find nothing
                                in article 2372h that would permit such dependentsto come within the




                                                         p. 1658
HonorableHenry Wade -     Paga   2   (m-473)




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 authorizedby article 2372h and vould contravenethe
Texas InsuranceCode.

     The Texas Insurance Code requires authorizationby the State
Board of Insurance before a person or entity can engage in the
business of insurence. Ins. Code art.   1.14. 91. The business of
insuranceis defined as the commissionof one or more acts set forth
in article 1.14-1. section 2(a). subsection4 of the InsuranceCode
which include:

           The receiving or collection of any premium,
           c&ssion,   membershipfees, assessments.dues or
           other considerationfor any insuranceor any part
           thereof.

    The receiving or collection of employee contributions for
dependents to participate in the proposed plan would constitute
collectionof a premium.

     Althougha cosssiseioneracourt may adopt rules and regulationsto
implement a self-insurancefund as authorized under section 2 of
article 2372h. such fund must comply vith the restraintsset forth in
thst statute. We have found no other authoritywhich would permit a
county to implementa self-fundedprogram to pay health claims of its
employees. Bowever. a county may not collect premiums from employees
to pay for the participationof dependents in the self-insurance
program, since such would constitute the unauthorizedbusiness of
insurancein violationof article 1.14-1of the Texas InsuranceCode.

                                 SUMMARY

             A  eossnissioners court may establish a
          self-insurancefund under article 2372h. saktioa
          2, V.T.C.S., for the benefit of county officials
          and employees. but the county may not collect
          premiums from employees for the inclusion of
          dependentsin the self-insurancefund.




                                           MARK        WHITE
                                           Attorney   Generalof Texas
JOHN W. FAINTER,JR.
First AssistantAttorney    General




                                     p. 1659
HonorableHenry Wade - Page 3    (MW-473)




RICHARDE. GRAY III
RxecutiveAssistantAttorneyGeneral

Preparedby Thomas tl.Pollan
AssistantAttorney General

APPROVED:
OPINION COMMITTEE

Susan L. Garrison,Chairman
Jon Bible
Rick Gilpin
PatriciaIiinojosa
Jim Moellinger
Thomas H. Pollan




                               p. 1660
