B-127426, FEBRUARY 11, 1960, 39 COMP. GEN. 573
Highlights
CIVILIAN PERSONNEL - PAYROLL DEDUCTIONS - EMPLOYEE ORGANIZATION HEALTH PLANS INCLUDING OTHER BENEFITS SINCE ONLY THOSE DEDUCTIONS FROM THE SALARIES OF GOVERNMENT PERSONNEL WHICH ARE SPECIFICALLY AUTHORIZED BY LAW MAY BE WITHHELD THROUGH AUTOMATIC PAYROLL DEDUCTIONS. INCLUDING THOSE EMPLOYEE ORGANIZATION HEALTH PLANS WHICH ARE APPROVED BY THE CIVIL SERVICE COMMISSION UNDER SECTION 4 (A) OF THE ACT. WHICH ARE OFFERED BY VARIOUS EMPLOYEE ORGANIZATIONS IN PACKAGE PLANS TOGETHER WITH HEALTH BENEFITS. SAID ASSOCIATION IS COMPOSED EXCLUSIVELY OF EMPLOYEES OF THE FEDERAL BUREAU OF INVESTIGATION FOR THE PURPOSE OF PROVIDING A GROUP INSURANCE PROTECTION PLAN FOR SUCH EMPLOYEES. TO THE EFFECT THAT THE COLLECTION OF PREMIUMS FROM CLERICAL EMPLOYEE MEMBERS OF THE ASSOCIATION BY MEANS OF MECHANIZED PAYROLL DEDUCTIONS WAS NOT AUTHORIZED.
B-127426, FEBRUARY 11, 1960, 39 COMP. GEN. 573
CIVILIAN PERSONNEL - PAYROLL DEDUCTIONS - EMPLOYEE ORGANIZATION HEALTH PLANS INCLUDING OTHER BENEFITS SINCE ONLY THOSE DEDUCTIONS FROM THE SALARIES OF GOVERNMENT PERSONNEL WHICH ARE SPECIFICALLY AUTHORIZED BY LAW MAY BE WITHHELD THROUGH AUTOMATIC PAYROLL DEDUCTIONS, THE AUTHORITY IN SECTION 7 OF THE FEDERAL EMPLOYEES HEALTH BENEFITS ACT OF 1959, 5 U.S.C. 3006, FOR WITHHOLDING THE EMPLOYEES' SHARE OF THE COST OF HEALTH BENEFITS, INCLUDING THOSE EMPLOYEE ORGANIZATION HEALTH PLANS WHICH ARE APPROVED BY THE CIVIL SERVICE COMMISSION UNDER SECTION 4 (A) OF THE ACT, 5 U.S.C. 3003 (3), MAY NOT BE REGARDED AS AUTHORITY FOR PERMITTING PAYROLL DEDUCTIONS FOR BENEFITS OTHER THAN HEALTH, SUCH AS LIFE INSURANCE, INCOME PROTECTION, AUTOMOBILE INSURANCE, ETC., WHICH ARE OFFERED BY VARIOUS EMPLOYEE ORGANIZATIONS IN PACKAGE PLANS TOGETHER WITH HEALTH BENEFITS.
TO THE ATTORNEY GENERAL, FEBRUARY 11, 1960:
YOUR LETTER OF NOVEMBER 18, 1959, PRESENTED FOR OUR CONSIDERATION A QUESTION ARISING IN CONNECTION WITH THE SPECIAL AGENTS MUTUAL BENEFIT ASSOCIATION. SAID ASSOCIATION IS COMPOSED EXCLUSIVELY OF EMPLOYEES OF THE FEDERAL BUREAU OF INVESTIGATION FOR THE PURPOSE OF PROVIDING A GROUP INSURANCE PROTECTION PLAN FOR SUCH EMPLOYEES. IN RESPONSE TO AN INQUIRY FROM YOUR PREDECESSOR, THE HONORABLE HERBERT BROWNELL, JR., WE RENDERED OUR DECISION OF MAY 15, 1956, PUBLISHED AT 35 COMP. GEN. 641, TO THE EFFECT THAT THE COLLECTION OF PREMIUMS FROM CLERICAL EMPLOYEE MEMBERS OF THE ASSOCIATION BY MEANS OF MECHANIZED PAYROLL DEDUCTIONS WAS NOT AUTHORIZED. YOUR LETTER OF NOVEMBER 18 NOW ADVISES THAT IT APPEARS FROM DISCUSSIONS WITH OFFICIALS OF THE CIVIL SERVICE COMMISSION THAT THE ASSOCIATION'S HEALTH BENEFITS PLAN WILL QUALIFY AS AN EMPLOYEE ORGANIZATION PLAN UNDER SECTION 4 (3) OF THE FEDERAL EMPLOYEES HEALTH BENEFITS ACT OF 1959, APPROVED SEPTEMBER 28, 1959, 73 STAT. 711, 5 U.S.C. 3003 (3). IF THE PLAN QUALIFIES AND IS APPROVED BY THE CIVIL SERVICE COMMISSION, THE GOVERNMENT WILL MAKE ITS CONTRIBUTION TOWARDS THE HEALTH BENEFITS, AND THE EMPLOYEES' SHARE WILL BE WITHHELD FROM THEIR SALARY PAYMENTS, IN ACCORDANCE WITH THE PROVISIONS OF SECTION 7 OF THE ACT 73 STAT. 713, 5 U.S. 3006. HOWEVER, LIFE INSURANCE IS INCLUDED IN THE ASSOCIATION'S "PACKAGE" AND HAS BEEN SO INCLUDED SINCE THE INCEPTION OF THE ASSOCIATION IN 1948. ONE INSURANCE COMPANY UNDERWRITES THE ENTIRE ASSOCIATION "PACKAGE" AND ALL PREMIUMS ARE PAID TO THAT COMPANY. HENCE, YOU REQUEST ADVICE AS TO WHETHER WE WOULD OBJECT IF THE PAYROLL DEDUCTIONS MADE BY THE FEDERAL BUREAU OF INVESTIGATION FOR THE EMPLOYEES' PORTION OF THE COSTS INCLUDE THE COSTS OF THE LIFE INSURANCE WHICH IS AN INTEGRAL PART OF THE "PACKAGE.' YOU ALSO STATE THAT IT IS NOT ANTICIPATED THAT SUCH DEDUCTIONS, IF PERMITTED, WOULD INCREASE THE ADMINISTRATIVE COSTS UNDER THIS ACT.
AS YOU WERE ADVISED BY OUR LETTER OF JANUARY 8, 1960, B-127426, WE REQUESTED CERTAIN INFORMATION FROM THE CIVIL SERVICE COMMISSION IN CONNECTION WITH THE MATTER. THE CIVIL SERVICE COMMISSION HAS ADVISED US THAT THEIR APPROVAL OF THE SAMBA PLAN OR ANY OTHER EMPLOYEE ORGANIZATION PLAN UNDER THE ACT WILL EXTEND ONLY TO THE HEALTH BENEFIT PORTION THEREOF AND WILL NOT BE RELATED IN ANY WAY WHATSOEVER TO LIFE INSURANCE OR ANY OTHER TYPE OF INSURANCE THAT MAY BE INCLUDED THEREIN. THE COMMISSION HAS STATED FURTHER THAT THE REGULATIONS TO BE ISSUED UNDER THE ACT WILL REQUIRE THAT THERE BE A COMPLETE SEPARATION OF THE PLANS FROM AN ACCOUNTING, AUDITING, AND RECORD-KEEPING STANDPOINT. SINCE THE ACT AUTHORIZES WITHHOLDING FROM EMPLOYEES' SALARIES ONLY IN CONNECTION WITH SUCH EMPLOYEE ORGANIZATION PLANS AS MAY BE APPROVED BY THE CIVIL SERVICE COMMISSION, IT IS APPARENT THAT THE FEDERAL EMPLOYEES' HEALTH BENEFITS ACT OF 1959, DOES NOT AUTHORIZE SUCH WITHHOLDING FOR THE LIFE INSURANCE PORTION OF THE SAMBA PLAN.
IN ADDITION, THERE ARE A NUMBER OF EMPLOYEE ORGANIZATIONS OTHER THAN SAMBA WHICH OFFER VARIOUS TYPES OF INSURANCE TO THEIR MEMBERS. PERMITTING PAYROLL DEDUCTIONS FOR THE LIFE INSURANCE PORTION OF THE SAMBA PLAN WOULD NECESSITATE SIMILAR ACTION WITH RESPECT TO OTHER EMPLOYEE ORGANIZATIONS WHOSE PLANS INCLUDE FEATURES OTHER THAN HEALTH BENEFITS. THIS MIGHT INCLUDE DEDUCTIONS FOR LIFE INSURANCE, INCOME PROTECTION INSURANCE, AND EVEN AUTOMOBILE INSURANCE, WHICH IS NOW OFFERED BY AT LEAST ONE EMPLOYEE ORGANIZATION. MOREOVER, IF DEDUCTIONS FOR OTHER THAN HEALTH BENEFITS WERE PERMITTED, THE ATTENDANT PROBLEMS COULD NOT BE CONFINED TO ANY ONE OR TO JUST A FEW AGENCIES. MOST EMPLOYEE ORGANIZATIONS PERMIT A PERSON TO RETAIN HIS MEMBERSHIP AND HIS RIGHT TO PARTICIPATE IN THE ORGANIZATION'S BENEFIT PLAN EVEN AFTER A TRANSFER FROM THE PARENT AGENCY. CONSIDERING ALL THE VARIOUS KINDS OF EMPLOYEE ORGANIZATION BENEFITS FOR WHICH DEDUCTIONS COULD BE MADE AND THE LARGE NUMBER OF EMPLOYEE ORGANIZATIONS THAT MIGHT BE INVOLVED, THE EFFECT ON THE PAYROLL, ACCOUNTING, AND AUDITING WORK OF FEDERAL AGENCIES COULD BE SUBSTANTIAL.
IN VIEW OF THE ABOVE, AND SINCE PAYROLL DEDUCTIONS MAY BE MADE ONLY PURSUANT TO SPECIFIC STATUTORY AUTHORITY, IT MUST BE HELD THAT PAYROLL DEDUCTIONS FOR THE LIFE INSURANCE PORTION OF THE SAMBA PLAN MAY NOT BE MADE UNDER EXISTING LAW.