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.