INSURANCE ‑- STATE EMPLOYEES ‑- AUTHORITY OF STATE EMPLOYEES' INSURANCE BOARD WITH RESPECT TO PANEL MEDICINE PLAN

INSURANCE ‑- STATE EMPLOYEES ‑- AUTHORITY OF STATE EMPLOYEES' INSURANCE BOARD WITH RESPECT TO PANEL MEDICINE PLAN
 
(1) RCW 41.05.020 (3) does not require the state employees' insurance board to approve a panel medicine plan for the coverage of state employees residing within the service area covered by such a plan whenever one or more such plans are there available.
 
(2) After the state employees' insurance board has, in fact, granted approval to such a panel medicine plan it may thereafter withdraw approval from this plan.
 
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                                                                    June 1, 1973
 
Honorable Leonard Nord
Chairman, Washington
State Employees' Insurance Board
P.O. Box 1789
Olympia, Washington 98504
                                                                                                               Cite as:  AGLO 1973 No. 61
 
 
Dear Sir:
 
            This is written in response to your recent letter requesting our opinion on a question which we divide and paraphrase as follows:
 
            (1) Does RCW 41.05.020 (3) require the state employees' insurance board to approve a panel medicine plan for the coverage of state employees residing within the service area covered by such a plan whenever one or more such plans are there available?
 
            (2) Assuming that the state employees' insurance board has, in fact, granted approval of such a panel medicine plan, may it thereafter withdraw approval from this plan?
 
            We answer question (1) in the negative and question (2) in the affirmative.
 
                                                                     ANALYSIS
 
            By its enactment of chapter 39, Laws of 1970, Ex. Sess., now codified as chapter 41.05 RCW, the legislature created a state employees' insurance board and charged that board with certain responsibilities with respect to the provision of medical insurance coverage for state employees.  Thereafter, during its recently concluded 1973 first extraordinary session the legislature amended various portions of the act to broaden its scope so as to include certain other types of insurance.  See chapter 147, Laws of 1973, Ex. Sess.  In addition, this amendatory act altered several aspects of the earlier law as it pertained to medical (or health care) coverage.
 
            Although this 1973 act will not become effective until July 16, 1973,1/ we shall base our answers to your  [[Orig. Op. Page 2]] questions upon its provisions ‑ inasmuch as you have indicated in your letter that the board has already extended the contract of the particular panel medicine plan giving rise to this request for another year; i.e., until August 1, 1974.  In so doing, however, we do not mean to infer that your specific questions would have been answered any differently under the original, 1970, act ‑ for as will be readily seen below, the 1973 amendment to that portion of the earlier act which is pertinent to your questions has not substantially altered the requirements of that act insofar as the inclusion of a panel medicine plan option is concerned.
 
            As amended by § 1, chapter 147, supra, RCW 41.05.020 (3) reads in material part as follows:
 
            "(3) The board shall develop and provide ((three)) employee health care benefit plans; at least one plan will provide major medical benefits as its primary feature, ((another)) at least one plan will provide basic first-dollar benefits as its primary feature plus major medical, either or ((both)) all of which may be provided through a contract or contracts with regularly constituted insurance carriers of health care service contractors as defined in chapter 48.44 RCW, and another plan to be provided by a panel medicine plan in its service area only when approved by the board.  Except for panel medicine plans, no more than one insurance carrier or health care service contractor shall be contracted with to provide the same plan of benefits:  . . ."
 
            Although (as will be observed from the bill form we have used in the above quotation) this subsection originally required the board to ". . . develop and provide three employee health care benefit plans; . . ." (emphasis supplied), it seems to us from a reading of the entire statute that the third of these plans ‑ a panel medicine plan ‑ was even then only required to be provided ". . . when approved by the board.  . . ."  And most certainly this is true under the 1973 amended version of the statute.  Thus, our answer to the first part of your question is that RCW 41.05.020 (3) does not require the state employees' insurance board to approve a  [[Orig. Op. Page 3]] panel medicine plan.  Instead, it merely provides that where such a plan is in operation in a particular area the plan will be made available to any state employees residing within that area if ‑ but only if ‑ it is approved by the board.
 
            Moreover, we further read this statutory provision as meaning that the board's approval of a panel medicine plan is just as much a requisite to its periodic renewal upon expiration of the term covered by a contract for such a plan as it is to the original of the plan in the first instance.  Unless the plan still meets with the board's approval at that time its inclusion within the over-all package of options for eligible employees not only may, but must, be terminated; for only when such a panel medicine plan is approved by the board may it be provided as one of the "employee health care benefit plans" authorized by the subject statute.
 
            Based upon the foregoing analysis of that statute, we therefore answer the first portion of your question, as above paraphrased, in the negative and the second in the affirmative.  In so advising you we should, however, counsel you briefly on the related question of the grounds which may be relied upon by the board in disapproving a particular panel medicine plan.  We do not mean by thus answering your specific questions to suggest that the board may arbitrarily disapprove such a plan for reasons unrelated to the basic objective of the subject legislation.  Instead, any such disapproval must be based upon a determination that the inclusion of the plan in question is not in accordance with the objective of providing (in the express words of RCW 41.05.020 (2)) ". . . adequate health care coverage for state employees on the best possible basis with relation both to the welfare of the employees and to the state . . ."
 
            We trust the foregoing will be of assistance to you.
 
Very truly yours,
 
SLADE GORTON
Attorney General
 
 
KENNETH W. ELFBRANDT
Assistant Attorney General
 
 
                                                         ***   FOOTNOTES   ***
 
1/See, Wash. Const., Article II, § 1 (Amendment 7).