By Isett H.B. No. 2878
75R5896 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the adoption of a catastrophic care and medical savings
1-3 account program for state employees and retired state employees.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter E, Chapter 3, Insurance Code, is
1-6 amended by adding Article 3.50-2A to read as follows:
1-7 Art. 3.50-2A. CATASTROPHIC CARE AND MEDICAL SAVINGS ACCOUNT
1-8 PROGRAM FOR STATE EMPLOYEES
1-9 Sec. 1. DEFINITIONS. In this article:
1-10 (1) "Account" means a medical savings account
1-11 established under this article.
1-12 (2) "Account administrator" means a person qualified
1-13 to act as an account administrator under Section 4 of this article.
1-14 (3) "Account holder" means an employee or annuitant.
1-15 (4) "Annuitant" has the meaning assigned by Section 3,
1-16 Texas Employees Uniform Group Insurance Benefits Act (Article
1-17 3.50-2, Vernon's Texas Insurance Code).
1-18 (5) "Dependent" has the meaning assigned by Section 3,
1-19 Texas Employees Uniform Group Insurance Benefits Act (Article
1-20 3.50-2, Vernon's Texas Insurance Code).
1-21 (6) "Employee" has the meaning assigned by Section 3,
1-22 Texas Employees Uniform Group Insurance Benefits Act (Article
1-23 3.50-2, Vernon's Texas Insurance Code).
1-24 (7) "Health care facility" means a hospital,
2-1 ambulatory surgical center, chemical dependency treatment facility,
2-2 minor emergency center, pharmacy, clinical laboratory, diagnostic
2-3 imaging center, renal dialysis facility, birthing center, rural
2-4 health clinic, or federally qualified health center.
2-5 (8) "Health benefits plan" has the meaning assigned by
2-6 Section 3, Texas Employees Uniform Group Insurance Benefits Act
2-7 (Article 3.50-2, Vernon's Texas Insurance Code).
2-8 (9) "Person" means an individual, corporation,
2-9 government or governmental subdivision or agency, estate, trust,
2-10 partnership, association, or any other legal entity.
2-11 (10) "Program" means the catastrophic care and medical
2-12 savings account program established under this article.
2-13 (11) "System" means the Employees Retirement System of
2-14 Texas.
2-15 Sec. 2. ACCOUNT AUTHORIZED; ELECTION. (a) An employee or
2-16 annuitant eligible for coverage under the Texas Employees Uniform
2-17 Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
2-18 Insurance Code) may elect to participate in the catastrophic care
2-19 and medical savings account program established under this article
2-20 for the benefit of that individual and the individual's dependents.
2-21 (b) An employee or annuitant who elects to participate in
2-22 the program is entitled to benefits as provided by this article but
2-23 is not entitled to receive coverage under the Texas Employees
2-24 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
2-25 Texas Insurance Code) for health care for that individual and the
2-26 individual's dependents.
2-27 (c) An employee or annuitant who elects to participate in
3-1 the program must provide written notice to the Employees Retirement
3-2 System of that election not later than August 1 preceding the state
3-3 fiscal biennium for which the person makes the election. An
3-4 election made under this section:
3-5 (1) is binding on the individual for the state fiscal
3-6 biennium beginning after the date of the election;
3-7 (2) may not be revoked during the term of that state
3-8 fiscal biennium; and
3-9 (3) must be renewed in writing as provided by rules
3-10 adopted by the system.
3-11 Sec. 3. PROGRAM REQUIREMENTS. (a) An account under this
3-12 article must be a separate interest-bearing account that is
3-13 federally insured or administered by a fidelity-bonded
3-14 administrator.
3-15 (b) The program must provide for an account administrator to
3-16 manage the account holder's medical savings account.
3-17 (c) The system shall inform each employee in writing of the
3-18 federal tax consequences of contributions made by this state under
3-19 this article before making a contribution on behalf of that
3-20 employee.
3-21 Sec. 4. ACCOUNT ADMINISTRATOR. (a) The following persons
3-22 may act as an account administrator under this article:
3-23 (1) a bank, savings and loan association, savings
3-24 bank, or credit union organized under the laws of this state or the
3-25 United States;
3-26 (2) a trust company authorized to act as a fiduciary;
3-27 (3) an insurance company authorized to do business in
4-1 this state under Chapter 3, Insurance Code, a group hospital
4-2 service corporation authorized to do business in this state under
4-3 Chapter 20, Insurance Code, or a health maintenance organization
4-4 authorized to do business in this state under the Texas Health
4-5 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
4-6 Code);
4-7 (4) a third-party administrator holding a certificate
4-8 of authority issued under Article 21.07-6, Insurance Code; or
4-9 (5) a certified public accountant licensed by the
4-10 Texas State Board of Public Accountancy.
4-11 (b) The account administrator may charge an administrative
4-12 fee to cover expenses incurred by the administrator in making
4-13 investments for the account and in claims processing. The amount
4-14 of the fee may not exceed 10 percent of the amount deposited to the
4-15 account in a year and shall be established by an agreement between
4-16 the account administrator and the account holder.
4-17 (c) The account administrator is the fiduciary of the
4-18 account holder.
4-19 Sec. 5. CATASTROPHIC HEALTH INSURANCE PLAN. (a) The system
4-20 shall establish a catastrophic care plan that provides catastrophic
4-21 health care benefits for account holders and dependents.
4-22 (b) The catastrophic care plan shall allow the account
4-23 holder to select from four levels of deductibles, with deductibles
4-24 under the levels set at $500, $1,000, $1,500, and $2,000.
4-25 (c) The system, by rule, shall determine which diseases,
4-26 injuries, or other health conditions require catastrophic health
4-27 care benefits under this section.
5-1 Sec. 6. FUNDING; STATE CONTRIBUTIONS. (a) For each account
5-2 holder, the state shall pay through the system the annual premium
5-3 required for the catastrophic care plan established under Section 5
5-4 of this article.
5-5 (b) In addition to the state contribution under Subsection
5-6 (a) of this section, the state shall pay annually an amount equal
5-7 to 25 percent less than the average premium imposed under all other
5-8 health benefits plans in which a state employee is eligible to
5-9 participate under the Texas Employees Uniform Group Insurance
5-10 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) into a
5-11 medical savings account established under this article. The
5-12 account holder may make contributions to the account in addition to
5-13 the contribution made by the state.
5-14 (c) The system shall make the contribution required under
5-15 Subsection (b) of this section until the balance in the account is
5-16 at least $15,000. When the balance in the account reaches $15,000,
5-17 the state contribution ceases until the balance is below $15,000.
5-18 (d) On retirement of the employee or termination of the
5-19 employee's state employment, the system shall disburse the
5-20 outstanding balance in the account to the account holder.
5-21 (e) The total state contribution made each year under
5-22 Subsections (a) and (b) of this section may not exceed the premium
5-23 paid by the state for employee-only coverage under the Texas
5-24 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
5-25 Vernon's Texas Insurance Code).
5-26 (f) For purposes of Chapter 61, Labor Code, the term
5-27 "wages," as defined by Section 61.001, Labor Code, includes a
6-1 contribution required to be made by this state to a medical savings
6-2 account under this article.
6-3 Sec. 7. USE OF ACCOUNT. (a) Money in an account may be
6-4 spent only for medical purposes. The system may adopt rules
6-5 relating to the determination of whether a specific use constitutes
6-6 a medical purpose for purposes of this article. In making those
6-7 determinations, the system shall construe the term "medical
6-8 purpose" broadly.
6-9 (b) The account administrator shall use money in an account
6-10 for either or both of the following purposes:
6-11 (1) to pay eligible medical expenses of the account
6-12 holder or the account holder's dependents or to reimburse the
6-13 account holder for those expenses; or
6-14 (2) to purchase a health benefits plan that provides
6-15 benefits for the account holder and the account holder's
6-16 dependents.
6-17 (c) A medical expense is eligible for payment or
6-18 reimbursement under Subsection (b) of this section if:
6-19 (1) it is an expense:
6-20 (A) described under Section 213(d), Internal
6-21 Revenue Code of 1986 (26 U.S.C. Section 213(d)); or
6-22 (B) determined by the system to be an expense
6-23 legitimately related to a medical purpose under the rules adopted
6-24 under Subsection (a) of this section; and
6-25 (2) payment or reimbursement for the expense is not
6-26 otherwise provided for under any health plan or other insurance
6-27 policy, including a motor vehicle or workers' compensation
7-1 insurance policy.
7-2 Sec. 8. IDENTIFICATION CARDS. (a) The account
7-3 administrator shall issue to the account holder an identification
7-4 card indicating:
7-5 (1) the name of the account holder and any dependent
7-6 of the account holder for whom eligible expenses may be paid under
7-7 the program;
7-8 (2) the name, address, and phone number of the account
7-9 administrator; and
7-10 (3) whether the account holder is covered by a health
7-11 benefits plan.
7-12 (b) The account administrator shall issue a duplicate
7-13 identification card to each dependent of an account holder for whom
7-14 eligible expenses may be paid under the program.
7-15 Sec. 9. PROMPT PAYMENT OF CLAIMS. (a) Except as provided by
7-16 Subsection (b) of this section, the account administrator shall pay
7-17 a claim that is eligible for payment from the account not later
7-18 than the 30th day after the date the claim is submitted to the
7-19 account administrator.
7-20 (b) The account administrator may request documents
7-21 necessary to verify whether a claim is eligible for payment from
7-22 the account. If the account administrator makes a request under
7-23 this subsection, the account administrator shall pay a claim that
7-24 is eligible for payment from the account not later than the 30th
7-25 day after the date the documents are received by the account
7-26 administrator.
7-27 Sec. 10. ACCESS TO HEALTH CARE SERVICES. (a) A health care
8-1 facility may not refuse to provide medical services to an
8-2 individual on the basis of that individual's inability to pay for
8-3 the services if the individual presents an identification card
8-4 issued under this article and the health benefits plan or medical
8-5 savings account provides full coverage and reimbursement for the
8-6 services requested, excepting any copayment or deductible amounts
8-7 applicable under the plan.
8-8 (b) A health care facility may delay providing services,
8-9 other than emergency services, to an individual in order to contact
8-10 the account administrator to confirm the individual's participation
8-11 in the program.
8-12 Sec. 11. DEATH OF ACCOUNT HOLDER. (a) On the death of the
8-13 account holder, the account administrator shall transfer the
8-14 account to a dependent of the account holder named as a successor
8-15 account holder by the account holder in the agreement establishing
8-16 the account. If the agreement does not designate a successor
8-17 account holder, the account administrator shall pay to the estate
8-18 of the deceased account holder any money in the account, including
8-19 any interest on the account.
8-20 (b) If an account is transferred to a successor account
8-21 holder under this section, the account administrator shall continue
8-22 to administer the account for the benefit of the dependents of the
8-23 original account holder.
8-24 (c) An account administrator shall make the transfer or
8-25 payment required by Subsection (a) of this section not later than
8-26 the 30th day after the date on which the account administrator
8-27 receives proof of the death of the account holder.
9-1 SECTION 2. (a) Except as provided by Subsection (b) of this
9-2 section, Article 3.50-2A, Insurance Code, as added by this Act,
9-3 takes effect September 1, 1997.
9-4 (b) The Employees Retirement System of Texas shall adopt
9-5 rules as necessary to implement Article 3.50-2A, Insurance Code, as
9-6 added by this Act, not later than January 1, 1998. An employee or
9-7 annuitant may begin participation in the program established under
9-8 that article beginning with the state fiscal year starting
9-9 September 1, 1998.
9-10 SECTION 3. The importance of this legislation and the
9-11 crowded condition of the calendars in both houses create an
9-12 emergency and an imperative public necessity that the
9-13 constitutional rule requiring bills to be read on three several
9-14 days in each house be suspended, and this rule is hereby suspended.