By Shields H.B. No. 129
74R1632(1) DLF
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to medical savings accounts.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. DEFINITIONS. In this Act:
1-5 (1) "Account" means a medical savings account
1-6 established under this Act.
1-7 (2) "Account administrator" means a person qualified
1-8 to act as an account administrator under Section 3 of this Act.
1-9 (3) "Account holder" means:
1-10 (A) an employee of an employer if the employer
1-11 contributes to a medical savings account on that employee's behalf;
1-12 or
1-13 (B) a sole proprietor who makes contributions to
1-14 a medical savings account on the sole proprietor's own behalf.
1-15 (4) "Dependent" means:
1-16 (A) the spouse of an account holder; or
1-17 (B) a child of an account holder who is:
1-18 (i) under 19 years of age;
1-19 (ii) under 23 years of age and enrolled as
1-20 a full-time student at an accredited institution of higher
1-21 education; or
1-22 (iii) medically certified as mentally or
1-23 physically disabled and who is financially dependent on the account
1-24 holder.
2-1 (5) "Person" means an individual, corporation,
2-2 government or governmental subdivision or agency, business trust,
2-3 estate, trust, partnership, association, or any other legal entity.
2-4 (6) "Program" means a medical savings account program
2-5 established by an employer under this Act.
2-6 SECTION 2. ACCOUNT AUTHORIZED. (a) An employer may
2-7 establish a medical savings account program for the benefit of the
2-8 employer's employees.
2-9 (b) A program established under this section must provide
2-10 for:
2-11 (1) the contribution into a medical savings account by
2-12 the account holder or by the employer on behalf of the account
2-13 holder; and
2-14 (2) an account administrator to manage the medical
2-15 savings account.
2-16 (c) The program may provide for a health insurance plan to
2-17 provide coverage for each account holder and the dependents of the
2-18 account holder. The employer may fund contributions to the account
2-19 through savings realized on the purchase of a health insurance plan
2-20 with a higher deductible amount than previously purchased by the
2-21 employer.
2-22 (d) An employer that offers a program shall inform each
2-23 employee in writing of the federal tax consequences of the
2-24 contributions made by the employer before making a contribution on
2-25 behalf of that employee.
2-26 SECTION 3. ACCOUNT ADMINISTRATOR. (a) The following
2-27 persons may act as an account administrator under this Act:
3-1 (1) a bank, savings and loan association, savings
3-2 bank, or credit union chartered under the laws of this state or the
3-3 United States;
3-4 (2) a trust company authorized to act as a fiduciary;
3-5 (3) an insurance company authorized to do business in
3-6 this state under Chapter 3, Insurance Code, a group hospital
3-7 service corporation authorized to do business in this state under
3-8 Chapter 20, Insurance Code, or a health maintenance organization
3-9 authorized to do business in this state under the Texas Health
3-10 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
3-11 Code);
3-12 (4) a broker-dealer, commodity issuer, investment
3-13 advisor, or agent registered under a securities law of this state
3-14 or the United States;
3-15 (5) a third-party administrator holding a certificate
3-16 of authority issued under Article 21.07-6, Insurance Code;
3-17 (6) a certified public accountant licensed by the
3-18 Texas State Board of Public Accountancy;
3-19 (7) an attorney licensed to practice in this state; or
3-20 (8) an employer that:
3-21 (A) operates a self-insured health plan
3-22 under the Employee Retirement Income Security Act of 1974 (29
3-23 U.S.C. Section 1001 et seq.); or
3-24 (B) participates in the medical savings
3-25 account program established under this Act.
3-26 (b) The account administrator shall issue to the account
3-27 holder an identification card indicating the account holder's
4-1 participation in a program.
4-2 (c) If the account administrator is not an employer under
4-3 Subsection (a)(8) of this section, the account administrator may
4-4 charge a fee. The amount of the fee shall be established by an
4-5 agreement between the account administrator and the employer.
4-6 SECTION 4. USE OF ACCOUNT. (a) The account administrator
4-7 shall use money in an account to:
4-8 (1) pay eligible medical expenses of the account
4-9 holder or the account holder's dependents or to reimburse the
4-10 account holder for these expenses; or
4-11 (2) purchase a health insurance policy, an evidence of
4-12 coverage issued by a health maintenance organization under the
4-13 Texas Health Maintenance Organization Act (Chapter 20A, Vernon's
4-14 Texas Insurance Code), or a group hospital service contract issued
4-15 by a group hospital service corporation under Chapter 20, Insurance
4-16 Code, that provides benefits for the account holder and the account
4-17 holder's dependents for health care services or for medical or
4-18 surgical expenses incurred as a result of an accident or sickness.
4-19 (b) A medical expense is eligible for payment or
4-20 reimbursement under Subsection (a) of this section if:
4-21 (1) it is a medical expense described under Section
4-22 213(d), Internal Revenue Code (26 U.S.C. Section 213(d)); and
4-23 (2) payment or reimbursement for the expense is not
4-24 otherwise provided for under any insurance policy, including a
4-25 motor vehicle or workers' compensation insurance policy, or under
4-26 an evidence of coverage issued by a health maintenance organization
4-27 under the Texas Health Maintenance Organization Act (Chapter 20A,
5-1 Vernon's Texas Insurance Code), a group hospital service contract
5-2 issued by a group hospital service corporation under Chapter 20,
5-3 Insurance Code, or any employer-funded health benefit plan,
5-4 including a self-insured health benefit plan.
5-5 SECTION 5. EMPLOYER ADVANCES. (a) If, in any month, an
5-6 account holder or a dependent of an account holder incurs a medical
5-7 expense that is eligible for payment or reimbursement under Section
5-8 4(a) of this Act and that exceeds the amount of money in the
5-9 account holder's account, the employer may advance to the employee
5-10 the amount necessary to cover the expenses.
5-11 (b) An advance under this section shall be made free of
5-12 interest.
5-13 (c) The employer who has made an advance under this section
5-14 may set off the amount of the advance against future contributions
5-15 to the account.
5-16 SECTION 6. DEATH OF ACCOUNT HOLDER. On the death of the
5-17 account holder, the account administrator shall pay to the estate
5-18 of the deceased any money in the account, including interest earned
5-19 on the account.
5-20 SECTION 7. TERMINATION OF EMPLOYMENT. (a) If the account
5-21 holder ceases to be employed by the employer who has established a
5-22 program under this Act, the administrator shall, not later than the
5-23 60th day after the account holder's last day of employment, pay any
5-24 money in the account, including interest earned on the account:
5-25 (1) to the account holder; or
5-26 (2) at the option of the account holder, to the credit
5-27 of another account established under this Act by a subsequent
6-1 employer for the benefit of that account holder, subject to the
6-2 agreement of the subsequent employer.
6-3 (b) The account administrator may retain and continue to
6-4 administer the account for the benefit of the employee if, not
6-5 later than the 30th day after the account holder's last day of
6-6 employment, the account holder requests that the account
6-7 administrator do so.
6-8 SECTION 8. EMERGENCY. The importance of this legislation
6-9 and the crowded condition of the calendars in both houses create an
6-10 emergency and an imperative public necessity that the
6-11 constitutional rule requiring bills to be read on three several
6-12 days in each house be suspended, and this rule is hereby suspended,
6-13 and that this Act take effect and be in force from and after its
6-14 passage, and it is so enacted.