By Rangel, et al.                                     H.B. No. 1700

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to group health coverage for school district employees.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Section 22.004, Education Code, is amended to

 1-5     read as follows:

 1-6           Sec. 22.004.  GROUP HEALTH BENEFITS FOR SCHOOL EMPLOYEES.

 1-7     (a)  Each district shall make available to its employees group

 1-8     health coverage provided by a risk pool established by one or more

 1-9     school districts under Chapter 172, Local Government Code, or under

1-10     a policy of insurance or group contract issued by an insurer, a

1-11     company subject to Chapter 20, Insurance Code, or a health

1-12     maintenance organization under the Texas Health Maintenance

1-13     Organization Act (Chapter 20A, Vernon's Texas Insurance Code). The

1-14     coverage must meet the substantive coverage requirements of Article

1-15     3.51-6, Insurance Code, and any other law applicable to group

1-16     health insurance policies or contracts issued in this state.  The

1-17     coverage must include major medical treatment but may exclude

1-18     experimental procedures.  In this subsection, "major medical

1-19     treatment" means a medical, surgical, or diagnostic procedure for

1-20     illness or injury  [or intervention that has a significant recovery

1-21     period, presents a significant risk, employs a general anesthetic,

1-22     or, in the opinion of the primary physician, involves a significant

1-23     invasion of bodily integrity that requires the extraction of bodily

1-24     fluids or an incision or that produces substantial pain,

 2-1     discomfort, or debilitation].    The coverage may include managed

 2-2     care or preventive care and must be comparable to the basic health

 2-3     coverage provided under the Texas Employees Uniform Group Insurance

 2-4     Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code).  The

 2-5     board of trustees of the Teacher Retirement System of Texas shall

 2-6     adopt rules to determine whether a school district's group health

 2-7     coverage is comparable to the basic health coverage specified by

 2-8     this subsection.  The rules must provide for consideration of the

 2-9     following factors concerning the district's coverage in determining

2-10     whether the district's coverage is comparable to the basic health

2-11     coverage specified by this subsection:

2-12                 (1)  the deductible amount for service provided inside

2-13     and outside of the network;

2-14                 (2)  the coinsurance percentages for service provided

2-15     inside and outside of the network;

2-16                 (3)  the maximum amount of coinsurance payments a

2-17     covered person is required to pay;

2-18                 (4)  the amount of the copayment for an office visit;

2-19                 (5)  the schedule of benefits and the scope of

2-20     coverage;

2-21                 (6)  the lifetime maximum benefit amount; and

2-22                 (7)  verification that the coverage is issued by a

2-23     provider licensed to do business in this state by the Texas

2-24     Department of Insurance, is provided by a risk pool authorized

2-25     under Chapter 172, Local Government Code, or that a district is

2-26     capable of covering the assumed liabilities in the case of coverage

2-27     provided through district self-insurance.

 3-1           (b)  The cost of the coverage may be shared by the employees

 3-2     and the district.

 3-3           (c)  Each district shall report [certify] the district's

 3-4     compliance with this subsection to the executive director of the

 3-5     Teacher Retirement System of Texas not later than November 1 of

 3-6     each year in the manner required by the board of trustees of the

 3-7     Teacher Retirement System of Texas.  The report [certification]

 3-8     must be based on the district group health coverage plan in effect

 3-9     on November 1 and must include:

3-10                 (1)  appropriate documentation of:

3-11                       (A)  [a copy of] the district's [current]

3-12     contract for group health coverage with a provider licensed to do

3-13     business in this state by the Texas Department of Insurance; or

3-14                       (B)  a resolution of the board of trustees of the

3-15     district authorizing a self-insurance plan for district employees

3-16     and of the district's review of district ability to cover the

3-17     liability assumed;

3-18                 (2)  the schedule of benefits;

3-19                 (3)  the premium rate sheet, including the amount paid

3-20     by the district and employees;

3-21                 (4)  the number of employees covered by each health

3-22     coverage plan offered by the district; and

3-23                 (5)  any other information considered appropriate by

3-24     the executive director of the Teacher Retirement System of Texas.

3-25           (d)  Based on the criteria prescribed by Subsection (a), the

3-26     executive director of the Teacher Retirement System of Texas shall

3-27     certify whether a district's coverage is comparable to the basic

 4-1     health coverage provided under the Texas Employees Uniform Group

 4-2     Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance

 4-3     Code).  If the executive director of the Teacher Retirement System

 4-4     of Texas determines that the group health coverage offered by a

 4-5     district is not comparable, the executive director shall report

 4-6     that information to the district and to the Legislative Budget

 4-7     Board.  The executive director shall submit a report to the

 4-8     legislature not later than January 1 of each odd-numbered year

 4-9     describing the status of each district's group health coverage

4-10     program based on the report submitted by the school district and

4-11     the certification required by this section.

4-12           (e) [(b)]  A school district may not contract with an

4-13     insurer, a company subject to Chapter 20, Insurance Code, or a

4-14     health maintenance organization to issue a policy or contract under

4-15     this section, or with any person to assist the school district in

4-16     obtaining or managing the policy or contract unless, before the

4-17     contract is entered into, the insurer, company, organization, or

4-18     person provides the district with an audited financial statement

4-19     showing the financial condition of the insurer, company,

4-20     organization, or person.

4-21           (f) [(c)]  An insurer, a company subject to Chapter 20,

4-22     Insurance Code, or a health maintenance organization that issues a

4-23     policy or contract under this section and any person that assists

4-24     the school district in obtaining or managing the policy or contract

4-25     for compensation shall provide an annual audited financial

4-26     statement to the school district showing the financial condition of

4-27     the insurer, company, organization, or person.

 5-1           (g) [(d)]  An audited financial statement provided under this

 5-2     section must be made in accordance with rules adopted by the

 5-3     commissioner of insurance or state auditor, as applicable.

 5-4           SECTION 2.  This Act applies beginning with the 1998-1999

 5-5     school year.

 5-6           SECTION 3.  The importance of this legislation and the

 5-7     crowded condition of the calendars in both houses create an

 5-8     emergency and an imperative public necessity that the

 5-9     constitutional rule requiring bills to be read on three several

5-10     days in each house be suspended, and this rule is hereby suspended,

5-11     and that this Act take effect and be in force from and after its

5-12     passage, and it is so enacted.