STATE‑FUNDED INSURANCE COVERAGE FOR FERRY SYSTEM EMPLOYEES

FERRIES ‑- INSURANCE ‑- EMPLOYEES ‑- STATE‑FUNDED INSURANCE COVERAGE FOR FERRY SYSTEM EMPLOYEES

(1) Employees of the Washington State Ferry System are subject to the jurisdiction of the State Employees Insurance Board under chapter 41.05 RCW with respect to the design of such employer-funded insurance coverage as they receive from the state.

(2) The employer's contribution of the Washington Department of Transportation under RCW 41.05.050(2) is not, in the case of ferry system employees, limited to that which the State Employees Insurance Board sets as the employer's contribution for state agencies generally.

                                                                   - - - - - - - - - - - - -

                                                                 January 14, 1980

Honorable Leonard Nord
Director
Department of Personnel
600 S. Franklin
P.O. Box 1789
Olympia, Washington 98504                                                                                                                 Cite as:  AGLO 1980 No. 3

Dear Sir:

            By letter previously acknowledged you requested our opinion on certain questions relative to insurance coverage for employees of the Washington State Ferry System under chapter 41.05 RCW.  We paraphrase your questions as follows:

            (1) Are ferry system employees subject to the jurisdiction of the State Employees Insurance Board under chapter 41.05 RCW with respect to the design of such employer-funded insurance coverage as they receive from the state?

             [[Orig. Op. Page 2]]

            (2) If question (1) is answered in the affirmative, is the employer's contribution of the Washington Department of Transportation under RCW 41.05.050(2) limited to that which the State Employees Insurance Board sets as the employer's contribution for state agencies, generally?

            We answer question (1) in the affirmative and question (2) in the negative for the reasons set forth in our analysis.

                                                                     ANALYSIS

            The State Employees Insurance Board (SEIB) was created by chapter 39, Laws of 1970, 1st Ex. Sess.  Section 2 of that act read, in pertinent part, as follows:

            ". . .

            "(2) The board shall study all matters connected with the providing of adequate health care coverage for state employees on the best basis possible with relation both to the welfare of the employees and to the state.  The board shall design benefits, devise specifications, analyze carrier responses to advertisements for bids, determine the terms and conditions of employee participation and coverage, and decide on the award of contracts which shall be signed by the trustee on behalf of the board . . .

            "(3) The board shall develop and provide three employee health care benefit plans; . . . PROVIDED, That employees may choose participation in only one of the three plans sponsored by the board."

            This section was subsequently amended by § 1, chapter 147, Laws of 1973, 1st Ex. Sess., to add life, liability, accidental death and dismemberment insurance and disability insurance to the types of insurance which the SEIB may provide for state employees.  See, RCW 41.05.020(1).  Then, in 1977, it was repealed by § 7, chapter 137, Laws of 1977, 1st Ex. Sess., but, at the same time, was replaced by the almost identical provisions of § 2 of the same act, now RCW 41.05.025, which reads, in material part, as follows:

             [[Orig. Op. Page 3]]

            ". . .

            "(2) The board shall study all matters connected with the providing of adequate health care coverage, life insurance, liability insurance, accidental death and dismemberment insurance, and disability income insurance or any one of, or a combination of, the enumerated types of insurance and health care plans for employees and their dependents on the best basis possible with relation both the welfare of the employees and to the state:  PROVIDED, That liability insurance shall not be made available to dependents.  The board shall design benefits, devise specifications, analyze carrier responses to advertisements for bids, determine the terms and conditions of employee participation and coverage, and decide on the award of contracts which shall be signed by the trustee on behalf of the board: . . ."

            Your questions stem from the language of RCW 41.05.050(2), a further part of the law which relates to employers' contributions to the state employees insurance fund as established by RCW 41.05.040.  RCW 41.05.050(2) reads, in material part, as follows:

            ". . .

            "(2) The contributions of any department, division, or separate agency of the state government, and such county, municipal, or other political subdivisions as are covered by this chapter, shall be set by the state employees insurance board, subject to the approval of the governor for availability of funds as specifically appropriated by the legislature for that purpose:  PROVIDED, That nothing herein shall be a limitation on employees employed under chapter 47.64 RCW . . ."

             [[Orig. Op. Page 4]]

            The employees thus referred to in the proviso are personnel,

            ". . . employed aboard ferries, wharves, or terminals acquired or constructed under the authority of the Washington toll bridge authority."1/

             The first issue to be determined is whether such ferry system employees are included within the definition of "employee" in RCW 41.05.010(2); i.e.,

            "(2) 'Employee' shall include all full time and career seasonal employees of the state, . . . whether or not covered by civil service; . . ."  (Emphasis supplied)

            The answer, here, appears clear.  The Washington Department of Transportation is a state agency and, as such, its employees are employees of the state.  Therefore, all full-time or career seasonal ferry system employees fall within the scope of chapter 41.05 RCW unless they are otherwise exempted.

            The second issue to be considered, in turn, is whether the proviso contained in RCW 41.05.050(2),supra, nevertheless constitutes an exemption of ferry system employees from all of chapter 41.05 RCW.  In our opinion, it does not.  Instead, as we view it, the sole function of the proviso is to exempt ferry system employees from the previously stated requirements of RCW 41.05.050(2) itself‑-regarding employers' contributions to the state employees insurance fund.

            Generally speaking, what the opening portion of RCW 41.05.050(2) means is that the employers' contribution level is set by the SEIB, subject to the approval of the governor from the standpoint of availability of funds as specifically appropriated by the legislature for that purpose.  In recognition of the special status of ferry system employees under chapter 47.64 RCW, however, the legislature has declared this particular aspect of chapter 41.05 RCW to be inapplicable to those employees.  See, in particular, so much of RCW 47.64.030 as provides that:

             [[Orig. Op. Page 5]]

            "The authority [Washington Toll Bridge Authority] is empowered to negotiate and to enter into labor agreements with its employees or their representatives, including provisions for health and welfare benefits for its employees to be financed either wholly or in part by contributions from the operating fund. . . ."

            When the language of this statute is laid against that of RCW 41.05.050(2),supra, a conflict initially appears.  The latter statute provides that agency contributions for employees' insurance are (a) set by the State Employees Insurance Board and (b) subject to approval by the governor for the availability of funds as specifically appropriated by the legislature.  RCW 47.64.030, on the other hand, provides that such contributions (a) may be the subject of negotiations between the employer and employees or their representatives and (b) are to be financed either wholly or in part ". . . by contributions from the operating fund."  Moreover, there is no requirement in RCW 47.64.030 that the contributions be specifically appropriated by the legislature or that the governor approve of the contribution level.

            Given the foregoing, the rule of statutory construction which is applicable to this situation will be found in State ex rel. Morrison v. Seattle, 6 Wn.App. 181, 492 P.2d 1078 (1971) at p. 187:

            "A proviso in a specific clause in a statute is generally held to apply only to the clause in question, unless a clear legislative intent to the contrary is demonstrated.  See Bayha v. PUD 1, 2 Wn.2d 85, 97 P.2d 614 (1939)."

            Here we are dealing with a specific clause in a statute.  That clause deals with the dollar amount of contributions which state agencies are to pay into the state employees insurance fund.  In recognition of RCW 47.64.030,supra, however, the legislature has excepted ferry system employees from this provision of the statute.  In essence, the effect of the proviso in RCW 41.05.050(2), supra, is thus to remove the conflict between the two statutes insofar as employers' contributions are concerned.

                         [[Orig. Op. Page 6]]

            It could also be argued that there is a conflict between the portion of RCW 47.64.030 which authorizes the employer ". . . to negotiate and to enter into labor agreements with its employees or their representatives, including provisions for health and welfare benefits for its employees, . . ." and so much of RCW 41.05.025 as authorizes the SEIB to design and contract for insurance and welfare benefits for state employees.  A literal reading of the two statutes, however, produces no such conflict.  There is nothing in RCW 47.64.030 which specifically gives the function of design of the insurance programs or the contracting function to the employer.  All that statute provides is that the employer can include health and welfare benefits in its contract with its employees.  There is still room for negotiation in this area since not all of the insurance programs offered by the SEIB are fully funded by the state.  Thus, the parties can still negotiate whether the supplemental plans made available by the SEIB will be paid for by the employer‑-but the design of the insurance plans and the types offered would be determined by the SEIB.

            Based upon the foregoing, as above indicated, we answer your first question in the affirmative and your second question in the negative.  Ferry system employeesare subject to the jurisdiction of the State Employees Insurance Board with respect to the design of such employer-funded insurance coverage as they receive from the state.  However, their employer, now the Washington Department of Transportation, is not limited to the contribution level set by the SEIB2/ as the employers' contribution for state agencies.