By Harris                                               S.B. No. 14

         75R10452 GCH-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to long-term care for public employees.

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

 1-4           SECTION 1.  Subchapter E, Chapter 3, Insurance Code, is

 1-5     amended by adding Article 3.50-2A to read as follows:

 1-6           Art. 3.50-2A.  LONG-TERM CARE FOR PUBLIC EMPLOYEES

 1-7           Sec. 1.  LONG-TERM CARE BOARD.  (a)  The Public Employees

 1-8     Long-Term Care Board is established.  The board consists of:

 1-9                 (1)  the executive directors of the Teacher Retirement

1-10     System of Texas, the Employees Retirement System of Texas, the

1-11     Texas County and District Retirement System, and the Texas

1-12     Municipal Retirement System; and

1-13                 (2)  seven public members:

1-14                       (A)  two of whom are appointed by the governor;

1-15                       (B)  two of whom are appointed by the lieutenant

1-16     governor;

1-17                       (C)  two of whom are appointed by the speaker of

1-18     the house of representatives; and

1-19                       (D)  one of whom is appointed by the chief

1-20     justice of the Texas Supreme Court.

1-21           (b)  The executive directors serve as members of the board by

1-22     virtue of their position as executive directors, and the public

1-23     members serve two-year terms expiring February 1 of each

1-24     odd-numbered year.

 2-1           (c)  Members of the board annually shall select their

 2-2     presiding officers.  The board shall meet at the call of the

 2-3     presiding officer or as otherwise determined by board policy.

 2-4           (d)  A member of the board is not entitled to compensation

 2-5     for service on the board but is entitled to reimbursement of travel

 2-6     expenses incurred in performing the business of the board, as

 2-7     provided in the General Appropriations Act.

 2-8           Sec. 2.  EMPLOYEES AND CONSULTANTS.  The board may employ and

 2-9     contract with persons to assist it in performing its powers and

2-10     duties under this article and may determine their duties and

2-11     compensation.

2-12           Sec. 3.  LONG-TERM CARE COVERAGE.  (a)  The board shall

2-13     contract with carriers offering long-term care insurance plans and

2-14     enter into health care service plan contracts covering long-term

2-15     care.

2-16           (b)  The board shall award contracts to carriers who are

2-17     qualified to provide long-term care benefits and may develop and

2-18     administer self-funded long-term care insurance plans.  The board

2-19     may offer one or more long-term care insurance plans or health care

2-20     service plan contracts covering long-term care and may offer

2-21     service or indemnity plans.

2-22           (c)  The long-term care insurance plans and health care

2-23     service plan contracts covering long-term care shall include home,

2-24     community, and institutional care.

2-25           (d)  A contract entered into under this section is not

2-26     subject to competitive bidding.

2-27           (e)  The long-term care insurance plans and health care

 3-1     service plan contracts covering long-term care shall be made

 3-2     available periodically during open enrollment periods determined by

 3-3     the board.

 3-4           Sec. 4.  ENROLLMENT.  (a)  The board shall establish

 3-5     eligibility criteria for enrollment, establish appropriate

 3-6     underwriting criteria for potential enrollees, define the scope of

 3-7     covered benefits, define criteria to receive benefits, and set any

 3-8     other standards the board determines are needed.

 3-9           (b)  The classes of persons who are eligible to enroll in the

3-10     long-term care program provided by this article are:

3-11                 (1)  members and annuitants of the Employees Retirement

3-12     System of Texas, their spouses, children, and parents, and their

3-13     spouses' parents;

3-14                 (2)  members and annuitants of the Teacher Retirement

3-15     System of Texas, their spouses, children, and parents, and their

3-16     spouses' parents;

3-17                 (3)  members and annuitants of the optional retirement

3-18     program established under Chapter 830, Government Code, their

3-19     spouses, children, and parents, and their spouses' parents;

3-20                 (4)  members and annuitants of the Judicial Retirement

3-21     System of Texas Plan One, their spouses, children, and parents, and

3-22     their spouses' parents;

3-23                 (5)  members and annuitants of the Judicial Retirement

3-24     System of Texas Plan Two, their spouses, children, and parents, and

3-25     their spouses' parents;

3-26                 (6)  members and annuitants of the Texas County and

3-27     District Retirement System, their spouses, children, and parents,

 4-1     and their spouses' parents;

 4-2                 (7)  members and annuitants of the Texas Municipal

 4-3     Retirement System, their spouses, children, and parents, and their

 4-4     spouses' parents; and

 4-5                 (8)  members and annuitants, and the spouses, children,

 4-6     parents, and spouses' parents of members and annuitants, of any

 4-7     other retirement system administered by the state or a political

 4-8     subdivision of the state, the governing body of which has

 4-9     contracted with the board to provide coverage under this article.

4-10           (c)  A potential enrollee  must meet the eligibility and

4-11     underwriting criteria established by the board.

4-12           (d)  The full cost of enrollment in a long-term care

4-13     insurance plan or in a health service plan contract covering

4-14     long-term care shall be paid by the enrollees.

4-15           Sec. 5.  PUBLIC EMPLOYEES LONG-TERM CARE FUND.  (a)  The

4-16     public employees long-term care fund is established as a trust fund

4-17     outside the state treasury.

4-18           (b)  The comptroller is custodian of the fund and shall draw

4-19     warrants on the fund at the direction of the board or the board's

4-20     designee.

4-21           (c)  The board may set the premiums for any self-funded

4-22     long-term care plan and assess charges against carriers and the

4-23     premiums of enrollees to recover the administrative costs of the

4-24     public employees long-term care program.

4-25           (d)  Premiums paid by enrollees, amounts recovered under

4-26     contracts for the implementation of the public employees long-term

4-27     care program established under this article, and investment and

 5-1     depository income of the fund shall be credited to the fund.  The

 5-2     legislature may make appropriations to the fund.

 5-3           (e)  Money in the fund may be used only for the purpose of

 5-4     administering any self-funded long-term care plan developed by the

 5-5     board and for paying the administrative expenses of the long-term

 5-6     care program.  The fund is not subject to legislative

 5-7     appropriation, except that the legislature in the General

 5-8     Appropriations Act may limit the amount in the fund that may be

 5-9     used to pay administrative expenses.

5-10           Sec. 6.  INVESTMENT OF FUND.  (a)  As trustees  and

5-11     fiduciaries of the public employees long-term care fund, the board

5-12     may invest assets of the fund in any investment in which an asset

5-13     of a retirement system of which the executive director is a member

5-14     of the board  may be invested.  The board is subject to the

5-15     investment standard provided by Section 67(a)(3), Article XVI,

5-16     Texas Constitution.

5-17           (b)  The board may employ investment staff or contract with

5-18     independent investment managers to manage the investments of the

5-19     public employees long-term care fund.

5-20           Sec. 7.  IMPLEMENTATION.  The board shall implement the

5-21     long-term care program developed under this article when the board

5-22     determines that it is feasible to do so.

5-23           SECTION 2.  If the Public Employees Long-Term Care Board does

5-24     not implement the long-term care program under Article 3.50-2A,

5-25     Insurance Code, as added by this Act, before January 1, 1999, the

5-26     board shall prepare and file a report with the governor, the

5-27     lieutenant governor, and the speaker of the house of

 6-1     representatives before that date making its recommendations for the

 6-2     resources necessary to implement the program.

 6-3           SECTION 3.  This Act takes effect September 1, 1997.

 6-4           SECTION 4.  The importance of this legislation and the

 6-5     crowded condition of the calendars in both houses create an

 6-6     emergency and an imperative public necessity that the

 6-7     constitutional rule requiring bills to be read on three several

 6-8     days in each house be suspended, and this rule is hereby suspended.