B-24641, JUNE 5, 1952, 31 COMP. GEN. 647

B-24641: Jun 5, 1952

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IS IN CONTRAVENTION OF EXISTING LAWS AND VIOLATES THE GENERAL PUBLIC POLICY AGAINST MAKING THE GOVERNMENT A COLLECTION AGENCY FOR PRIVATE ORGANIZATIONS. 1952: REFERENCE IS MADE TO LETTER DATED MAY 1. THE PREMIUM ON WHICH IS TO BE PAID BY THE EMPLOYEES AND INSURING ONLY EMPLOYEES. FOR AMOUNTS OF INSURANCE BASED UPON SOME PLAN WHICH WILL PRECLUDE INDIVIDUAL SELECTION. THAT WHEN THE BENEFITS OF THE POLICY ARE OFFERED TO ALL ELIGIBLE EMPLOYEES. SINCE THE GROUP INSURANCE PLAN INVOLVED IS AUTHORIZED BY THE ACT OF 1950. THERE NOT ONLY IS IMPLIED AUTHORITY FOR ADMINISTRATION THEREOF UNDER ESTABLISHED FEDERAL PROCEDURES BUT ALSO. THAT IT IS THE PLAIN DUTY OF THE NATIONAL ADVISORY COMMITTEE FOR AERONAUTICS TO PROVIDE AN ECONOMICAL AND PRACTICAL METHOD OF COLLECTING PREMIUMS AND PAYING CLAIMS.

B-24641, JUNE 5, 1952, 31 COMP. GEN. 647

COMPENSATION - WITHHOLDING - INSURANCE PREMIUMS THE PROPOSED PLAN TO MAKE VOLUNTARY PAY ROLL DEDUCTIONS FROM THE SALARIES OF EMPLOYEES OF THE NATIONAL ADVISORY COMMITTEE FOR AERONAUTICS FOR PREMIUMS DUE UNDER A GROUP LIFE INSURANCE POLICY ISSUED FOR SUCH EMPLOYEES PURSUANT TO SECTION 10 OF THE LIFE INSURANCE ACT OF THE DISTRICT OF COLUMBIA, AS AMENDED, IS IN CONTRAVENTION OF EXISTING LAWS AND VIOLATES THE GENERAL PUBLIC POLICY AGAINST MAKING THE GOVERNMENT A COLLECTION AGENCY FOR PRIVATE ORGANIZATIONS.

COMPTROLLER GENERAL WARREN TO THE CHAIRMAN, NATIONAL ADVISORY COMMITTEE FOR AERONAUTICS, JUNE 5, 1952:

REFERENCE IS MADE TO LETTER DATED MAY 1, 1952, FROM THE EXECUTIVE SECRETARY, NATIONAL ADVISORY COMMITTEE FOR AERONAUTICS, REQUESTING DECISION ON A PROPOSAL TO MAKE PAYROLL DEDUCTIONS FROM SALARIES OR OTHER COMPENSATION OF CERTAIN EMPLOYEES OF THE COMMITTEE FOR PREMIUMS DUE UNDER A GROUP LIFE INSURANCE POLICY ISSUED FOR SUCH EMPLOYEES PURSUANT TO SECTION 10 OF THE LIFE INSURANCE ACT OF THE DISTRICT OF COLUMBIA, AS AMENDED BY THE ACT OF JULY 12, 1950, PUBLIC LAW 607, 64 STAT. 330-335.

SAID SECTION 10 OF THE ACT OF JULY 12, 1950, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

NO POLICY OF GROUP LIFE INSURANCE SHALL BE DELIVERED IN THE DISTRICT UNLESS IT CONFORMS TO ONE OF THE FOLLOWING DESCRIPTIONS:

A POLICY ISSUED TO THE PRESIDENT OF THE BOARD OF COMMISSIONERS, OR TO THE HEAD OF ANY FEDERAL DEPARTMENT OR INDEPENDENT FEDERAL BUREAU, BOARD, COMMISSION, OR OTHER FEDERAL INDEPENDENT ESTABLISHMENT, OR TO AN ASSOCIATION OF FEDERAL EMPLOYEES, AS THE CASE MAY BE, COVERING NOT LESS THAN FIFTY EMPLOYEES OF THE GOVERNMENT OF THE DISTRICT OR OF THE FEDERAL GOVERNMENT, WITH OR WITHOUT MEDICAL EXAMINATION, THE PREMIUM ON WHICH IS TO BE PAID BY THE EMPLOYEES AND INSURING ONLY EMPLOYEES, OR ANY CLASS OR CLASSES THEREOF DETERMINED BY CONDITIONS PERTAINING TO THE EMPLOYMENT, FOR AMOUNTS OF INSURANCE BASED UPON SOME PLAN WHICH WILL PRECLUDE INDIVIDUAL SELECTION, FOR THE BENEFIT OF PERSONS OTHER THAN THE EMPLOYER: PROVIDED, THAT WHEN THE BENEFITS OF THE POLICY ARE OFFERED TO ALL ELIGIBLE EMPLOYEES, NOT LESS THAN 75 PERCENTUM OF SUCH EMPLOYEES MAY BE SO INSURED.

THE LETTER OF MAY 1 URGES THAT, SINCE THE GROUP INSURANCE PLAN INVOLVED IS AUTHORIZED BY THE ACT OF 1950, SUPRA, THERE NOT ONLY IS IMPLIED AUTHORITY FOR ADMINISTRATION THEREOF UNDER ESTABLISHED FEDERAL PROCEDURES BUT ALSO, THAT IT IS THE PLAIN DUTY OF THE NATIONAL ADVISORY COMMITTEE FOR AERONAUTICS TO PROVIDE AN ECONOMICAL AND PRACTICAL METHOD OF COLLECTING PREMIUMS AND PAYING CLAIMS. IT IS STATED THAT A STUDY OF THE MATTER SHOWS THE BEST METHOD OF COLLECTING PREMIUMS WOULD BE THROUGH VOLUNTARY PAYROLL DEDUCTIONS IN THE MANNER PRESCRIBED BY GENERAL REGULATIONS NO. 102 OF THIS OFFICE, AND THAT ANY OTHER METHOD WOULD BE MORE COSTLY AND TIME CONSUMING.

THE ACT OF 1950, SUPRA, IS AN AMENDMENT TO THE LAWS OF THE DISTRICT OF COLUMBIA REGULATING THE BUSINESS OF COMMERCIAL LIFE INSURANCE THEREIN. THE SECTION HERE INVOLVED CONTINUED TO FEDERAL EMPLOYEES THE PRIVILEGE--- CONTAINED IN THE ACT OF JUNE 19, 1934, 48 STAT. 1165--- OF PARTICIPATING IN COMMERCIAL GROUP LIFE INSURANCE THROUGH POLICIES ISSUED TO THE HEAD OF A FEDERAL DEPARTMENT OR AGENCY OR TO AN ASSOCIATION OF FEDERAL EMPLOYEES AND REQUIRES THE PAYMENT OF PREMIUMS BY THEM. THE INSTANT PROVISION IS NOT NEW AND IS COMPARABLE WITH A SIMILAR PROVISION IN THE EARLIER LAW. SEE PAGE 2 OF SENATE REPORT 1284, 81ST CONGRESS, ON THE BILL WHICH BECAME THE ACT OF JULY 12, 1950. IT GOES NO FURTHER THAN TO DESIGNATE THE HEAD OF A FEDERAL AGENCY OR AN ASSOCIATION OF FEDERAL EMPLOYEES AS AMONG THOSE ELIGIBLE TO SPONSOR GROUP INSURANCE UNDER THE LAW OF THE MUNICIPALITY. FURTHERMORE, THE ACT DOES NOT PURPORT TO REGULATE ANY FUNCTIONS OF THE FEDERAL GOVERNMENT NOR TO IMPOSE ANY OBLIGATIONS UPON FEDERAL FUNDS. PROVISIONS OF FEDERAL LAW IMPOSING ANY SUCH OBLIGATIONS HAVE BEEN CALLED TO ATTENTION HERE AND NONE HAVE BEEN FOUND EITHER IN THE APPROPRIATIONS TO THE NATIONAL ADVISORY COMMITTEE FOR AERONAUTICS OR OTHERWISE.

UNDER EXISTING LAW THE APPLICATION OF THE PAYROLL DEDUCTION PROCEDURES PRESCRIBED BY GENERAL REGULATIONS NO. 102, 30 COMP. GEN. 563, TO THE COLLECTION AND PAYMENT TO PRIVATE INSURANCE COMPANIES OF PREMIUMS UNDER COMMERCIAL GROUP LIFE INSURANCE POLICIES, WOULD CONTRAVENE THE PROVISIONS OF SECTION 3477 AND 3620 OF THE REVISED STATUTES, WHICH RESPECTIVELY (1) PROHIBIT THE ASSIGNMENT OF CLAIMS AGAINST THE UNITED STATES AND (2) REQUIRE THE PUBLIC MONEYS TO BE DRAWN ONLY IN FAVOR OF THE PERSONS TO WHOM PAYMENT IS TO BE MADE. THE PURPOSE AND INTENT OF THE LATTER PROVISIONS ARE THAT THE GOVERNMENT MUST DEAL ONLY WITH ITS OWN CREDITORS AND THAT IT MAY NOT BE HELD ACCOUNTABLE TO STRANGERS TO ITS TRANSACTIONS. ALSO, THE PROPOSED PROCEDURE WOULD CONTRAVENE SECTION 3678 OF THE REVISED STATUTES, WHICH PROVIDES IN PLAIN AND UNEQUIVOCAL TERMS THAT APPROPRIATIONS SHALL BE USED SOLELY TO ACCOMPLISH THE OBJECTS FOR WHICH THEY ARE MADE AND FOR NO OTHER PURPOSES. MANIFESTLY, THE ADOPTION OF THE PROPOSED PROCEDURE WOULD VIOLATE THE GENERAL PUBLIC POLICY AGAINST MAKING THE GOVERNMENT A COLLECTION AGENCY FOR PRIVATE ORGANIZATIONS, RESULTING IN THE DIVERSION OF THE SERVICES OF OFFICERS AND EMPLOYEES OF THE GOVERNMENT FROM THEIR OFFICIAL FUNCTIONS AND DUTIES FOR WHICH APPROPRIATIONS ARE MADE, WITHOUT COMPENSATING BENEFITS TO THE UNITED STATES.

ACCORDINGLY, IT MUST BE HELD THAT THE PROPOSED PAYROLL DEDUCTION PLAN IS NOT AUTHORIZED UNDER EXISTING LAW AND, THEREFORE, MAY NOT BE APPROVED BY THIS OFFICE.