S.B. No. 404
AN ACT
1-1 relating to the right of certain municipal and county employees to
1-2 purchase a continuation of health benefits coverage at retirement.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subtitle C, Title 5, Local Government Code, is
1-5 amended by adding Chapter 174 to read as follows:
1-6 CHAPTER 174. RIGHT OF CERTAIN MUNICIPAL AND COUNTY
1-7 EMPLOYEES TO PURCHASE CONTINUED HEALTH COVERAGE AT RETIREMENT
1-8 Sec. 174.001. APPLICABILITY. This chapter applies to a
1-9 person who:
1-10 (1) retires from county employment in a county with a
1-11 population of 75,000 or more or municipal employment in a
1-12 municipality with a population of 25,000 or more; and
1-13 (2) is entitled to receive retirement benefits from a
1-14 county or municipal retirement plan.
1-15 Sec. 174.002. RIGHT TO PURCHASE CONTINUED COVERAGE. (a) A
1-16 person to whom this chapter applies is entitled to purchase
1-17 continued health benefits coverage for the person and the person's
1-18 dependents as provided by this chapter unless the person is
1-19 eligible for group health benefits coverage through another
1-20 employer. The coverage shall be provided under the group health
1-21 insurance plan or group health coverage plan provided by or through
1-22 the employing county or municipality to its employees.
1-23 (b) To receive continued coverage under this chapter, the
2-1 person must inform the employing county or municipality, not later
2-2 than the day on which the person retires from the county or
2-3 municipality, that the person elects to continue coverage.
2-4 (c) If the person elects to continue coverage for the person
2-5 and on any subsequent date elects to discontinue such coverage, the
2-6 person is no longer eligible for coverage under this chapter.
2-7 (d) If the person elects to continue coverage for any
2-8 dependent and on any subsequent date elects to discontinue such
2-9 coverage, the dependent is no longer eligible for coverage under
2-10 this chapter.
2-11 Sec. 174.003. LEVEL OF COVERAGE. (a) The person may elect
2-12 to cover the same persons who were covered under the county's or
2-13 municipality's group health insurance plan or group health coverage
2-14 plan through the person at the time the person left county or
2-15 municipal employment, or the person may elect to discontinue
2-16 coverage for one or more persons. A person who was not covered
2-17 under the plan at the time the person to whom this chapter applies
2-18 left county or municipal employment is not eligible for coverage
2-19 under this chapter.
2-20 (b) Except as provided by Subsections (c) and (d), the level
2-21 of coverage provided under this chapter at any given time is the
2-22 same level of coverage provided to current employees of the county
2-23 or municipality at that time.
2-24 (c) A county or municipality may substitute Medicare
2-25 supplement health benefits coverage as the coverage provided for a
3-1 person who receives health benefits coverage under this chapter,
3-2 including a dependent, after the date that the person becomes
3-3 eligible for federal Medicare benefits.
3-4 (d) The person may elect to continue coverage at a reduced
3-5 level, if offered by the county or municipality.
3-6 Sec. 174.004. PAYMENT FOR COVERAGE. A person who is
3-7 entitled to continued coverage under this chapter is entitled to
3-8 make payments for the coverage at the same time and to the same
3-9 entity that payments for the coverage are made by current employees
3-10 of the county or municipality.
3-11 Sec. 174.005. DUTY TO INFORM RETIREE OF RIGHTS. A county
3-12 and a municipality shall provide written notice to a person to whom
3-13 this chapter may apply of the person's rights under this chapter
3-14 not later than the date the person retires from the county or
3-15 municipality. A county or municipality may fulfill its
3-16 requirements under this section by placing the written notice
3-17 required by this section in a personnel manual or employee handbook
3-18 that is available to all employees.
3-19 Sec. 174.006. CERTAIN MATTERS NOT AFFECTED. This chapter
3-20 does not:
3-21 (1) prohibit a county or municipality from uniformly
3-22 changing the group health insurance plan or group health coverage
3-23 plan provided for its employees and retirees;
3-24 (2) affect the definition of a dependent or the
3-25 eligibility requirements for a dependent under a plan;
4-1 (3) prohibit a county or municipality from agreeing
4-2 with a person to deduct the cost of coverage provided under this
4-3 chapter from a pension check;
4-4 (4) prohibit a county or municipality from agreeing
4-5 with a person to pay for the coverage provided under this chapter
4-6 provided the person reimburses the county or municipality for the
4-7 actual cost of the coverage;
4-8 (5) prohibit a county, municipality, or a pool
4-9 established under Chapter 172 from increasing the cost of group
4-10 health coverage to its employees and to persons covered under this
4-11 chapter to reflect the increased cost, if any, attributable to
4-12 compliance with this chapter;
4-13 (6) affect the right of a county or municipality to
4-14 provide coverage under Chapter 172; or
4-15 (7) affect the right of a county, municipality, or a
4-16 pool established under Chapter 172 to offer the coverage at the
4-17 same rate that is available to active employees or to offer the
4-18 coverage at a reasonable or actual rate established for retirees
4-19 that may be greater than the rate offered to active employees.
4-20 Sec. 174.007. EXEMPTIONS. (a) A county or municipality
4-21 that does not provide health benefits coverage through a
4-22 self-insured plan or a plan authorized under Chapter 172 is not
4-23 required to provide coverage under this chapter if the county or
4-24 municipality makes a good faith effort to purchase insurance
4-25 coverage that includes coverage required by this chapter from an
5-1 insurance company authorized to do business in this state and from
5-2 pools established under Chapter 172 but is unable to find a
5-3 provider for the coverage.
5-4 (b) A county or municipality that is providing coverage
5-5 substantially similar to or better than the coverage required by
5-6 this chapter is exempt from this chapter.
5-7 SECTION 2. (a) Chapter 174, Local Government Code, as added
5-8 by this Act, applies according to its terms to all eligible persons
5-9 who leave county or municipal employment on or after January 1,
5-10 1994.
5-11 (b) A county or municipality that is required by Chapter
5-12 174, Local Government Code, as added by this Act, to provide
5-13 continued health benefits coverage but that is not allowed to
5-14 provide the coverage under the terms of the county's or
5-15 municipality's existing group health plan shall ensure that the
5-16 required continued health benefits coverage is provided for in any
5-17 new plan that is adopted by the county or municipality on or after
5-18 January 1, 1994, unless the county or municipality is exempted
5-19 under Section 174.007, Local Government Code, as added by this Act.
5-20 SECTION 3. The Texas Municipal Retirement System established
5-21 by Subtitle G, Government Code, the Texas Municipal League, and
5-22 municipal employee associations may conduct a study of the
5-23 feasibility of creating a statewide municipal retiree health
5-24 benefits risk pool and submit their findings to the Legislature not
5-25 later than September 30, 1994.
6-1 SECTION 4. This Act takes effect September 1, 1993.
6-2 SECTION 5. The importance of this legislation and the
6-3 crowded condition of the calendars in both houses create an
6-4 emergency and an imperative public necessity that the
6-5 constitutional rule requiring bills to be read on three several
6-6 days in each house be suspended, and this rule is hereby suspended.