By Ehrhardt H.B. No. 1294
76R4916 GCH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to a statewide group insurance program for employees and
1-3 retirees of school districts.
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 3.50-7 to read as follows:
1-7 Art. 3.50-7. TEXAS SCHOOL EMPLOYEES UNIFORM GROUP HEALTH
1-8 INSURANCE BENEFITS ACT
1-9 Sec. 1. SHORT TITLE. This article may be cited as the Texas
1-10 School Employees Uniform Group Health Insurance Benefits Act.
1-11 Sec. 2. DEFINITIONS. In this article:
1-12 (1) "Administering firm" means any firm designated by
1-13 the trustee to administer any coverages, services, benefits, or
1-14 requirements under this article and the trustee's rules adopted
1-15 under this article.
1-16 (2) "Basic coverage" means the program of group
1-17 coverages determined by the trustee in which every full-time
1-18 employee and every retiree participates automatically unless
1-19 participation is specifically waived.
1-20 (3) "Cafeteria plan" means a plan as defined and
1-21 authorized by Section 125, Internal Revenue Code of 1986.
1-22 (4) "Employee" means a participating member of the
1-23 Teacher Retirement System of Texas who is employed by a
1-24 participating school district and who is not covered by a group
2-1 insurance program under the Texas Employees Uniform Group Insurance
2-2 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) or the
2-3 Texas State College and University Employees Uniform Insurance
2-4 Benefits Act (Article 3.50-3, Vernon's Texas Insurance Code). The
2-5 term does not include a person performing personal services for a
2-6 school district as an independent contractor.
2-7 (5) "Health benefits plan" means any group policy or
2-8 contract, medical, dental, or hospital service agreement,
2-9 membership or subscription contract, salary continuation plan,
2-10 health maintenance organization agreement, preferred provider
2-11 arrangement, or any similar group arrangement or any combination of
2-12 those policies, plans, contracts, agreements, or arrangements
2-13 provided for the purpose of providing, paying for, or reimbursing
2-14 expenses for health care services, including comparable health care
2-15 services for employees and retirees who rely solely on spiritual
2-16 means through prayer for healing in accordance with the teaching of
2-17 a recognized church or denomination.
2-18 (6) "Participating school district" means a public
2-19 school district that is not exempt under Section 4 of this article
2-20 from participation in the program provided under this article.
2-21 (7) "Retiree" means a person who:
2-22 (A) has retired under the Teacher Retirement
2-23 System of Texas with at least 10 years of credit for service in
2-24 public schools of this state or has retired under the Teacher
2-25 Retirement System of Texas for disability and is entitled to
2-26 receive an annuity from the system based on the person's service;
2-27 and
3-1 (B) is not eligible to participate in the group
3-2 insurance program provided under the Texas Employees Uniform Group
3-3 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
3-4 Code) or the Texas State College and University Employees Uniform
3-5 Insurance Benefits Act (Article 3.50-3, Vernon's Texas Insurance
3-6 Code).
3-7 (8) "Trustee" means the Employees Retirement System of
3-8 Texas.
3-9 Sec. 3. ADMINISTRATION. (a) The Employees Retirement
3-10 System of Texas, as trustee, shall implement and administer the
3-11 statewide uniform group insurance program described by this
3-12 article.
3-13 (b) The trustee may hire and compensate employees.
3-14 (c) The trustee may, on a competitive bid basis, contract
3-15 with a qualified, experienced firm of group insurance specialists
3-16 or an administering firm who will act for the trustee in the
3-17 capacity of independent administrators and managers of the programs
3-18 authorized under this article. The independent administrator
3-19 selected by the trustee shall assist the trustee to ensure the
3-20 proper administration of this article and the coverages, services,
3-21 and benefits provided for or authorized by this article and shall
3-22 be paid by the trustee.
3-23 (d) The trustee may enter into interagency contracts with
3-24 any agency of the state, including the Teacher Retirement System of
3-25 Texas, for the purpose of assistance in implementing the program
3-26 provided by this article.
3-27 (e) The trustee has the powers with regard to the program
4-1 described by this article that the trustee has in administering the
4-2 Texas Employees Uniform Group Insurance Benefits Act (Article
4-3 3.50-2, Vernon's Texas Insurance Code), including the power to
4-4 adjudicate claims, expel participants from the program for cause,
4-5 and adopt rules to administer this article.
4-6 Sec. 4. PARTICIPATION IN PROGRAM. (a) A public school
4-7 district is required to participate in the program provided by this
4-8 article unless the executive director of the trustee determines
4-9 under Section 22.004(h), Education Code, that the district's
4-10 coverage is comparable to the coverage provided under this article.
4-11 (b) Each full-time employee or retiree of a participating
4-12 school district is automatically covered by the basic plan for
4-13 employees or retirees, as applicable, unless the employee or
4-14 retiree specifically waives coverage or unless the employee or
4-15 retiree is expelled from the program.
4-16 (c) Each part-time employee of a participating school
4-17 district is eligible to participate in the program provided by this
4-18 article on application in the manner provided by the trustee,
4-19 unless the employee has been expelled from the program. A
4-20 participating school district shall notify each of its part-time
4-21 employees of their eligibility for participation in the program.
4-22 Sec. 5. GROUP COVERAGES. (a) The trustee shall establish
4-23 plans of group coverages for employees and retirees of
4-24 participating school districts and their dependents. The coverages
4-25 shall be comparable in scope and, to the greatest extent possible,
4-26 in cost to the coverages provided under the Texas Employees Uniform
4-27 Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
5-1 Insurance Code) and may include group life coverages, health
5-2 benefit plans, accidental death and dismemberment coverages,
5-3 coverages against short-term or long-term loss of salary, and other
5-4 coverages considered advisable by the trustee. Comparable plans of
5-5 each type of coverage established must be offered to employees and
5-6 retirees of all participating school districts.
5-7 (b) The trustee by rule may define the basic coverage in
5-8 which each full-time employee or retiree participates unless
5-9 specifically waived. Basic coverage must include a health benefits
5-10 plan. The trustee also by rule may define optional coverage for
5-11 which the trustee may make available state contributions and
5-12 voluntary coverage for which the employee or retiree is responsible
5-13 for all contributions.
5-14 (c) The trustee may provide a cafeteria plan for employees
5-15 of participating school districts.
5-16 (d) The trustee may determine that plans of coverages be
5-17 provided directly from the fund rather than through the purchase of
5-18 insurance. Any self-funded plan of coverages is exempt from any
5-19 other insurance law unless the law specifically applies to the plan
5-20 or this article.
5-21 Sec. 6. PAYMENT OF CONTRIBUTIONS. (a) The state shall
5-22 contribute for each employee and retiree covered by the program an
5-23 amount equal to the amount the state contributes for participants
5-24 in the program provided under the Texas Employees Uniform Group
5-25 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
5-26 Code).
5-27 (b) Each employee and retiree covered by the program shall
6-1 pay that portion of the cost of coverage selected by the employee
6-2 or retiree that exceeds the amount of state contributions.
6-3 Sec. 7. FUND. (a) Contributions collected under Section 6
6-4 of this article and any amounts appropriated by the legislature for
6-5 contingency reserves or administrative expenses shall be deposited
6-6 in the Texas school employees uniform group insurance trust fund.
6-7 The fund is created with the comptroller. The trustee may use
6-8 amounts in the fund only to provide group coverages under this
6-9 article and to pay the expenses of administering the program.
6-10 (b) The trustee may invest assets of the fund in the manner
6-11 provided by Section 67(a)(3), Article XVI, Texas Constitution.
6-12 SECTION 2. Article 3.50-4, Insurance Code, is amended by
6-13 adding Section 3A to read as follows:
6-14 Sec. 3A. TERMINATION OF PROGRAM AND TRANSFER OF PROPERTY.
6-15 The trustee shall transfer to the Employees Retirement System of
6-16 Texas all assets and liabilities of the program, all coverages
6-17 provided under the program, and all records pertaining to the
6-18 program not later than the date the program of coverages provided
6-19 under Article 3.50-7 of this code is implemented. On the transfer
6-20 of property described by this section, the program provided by this
6-21 article is terminated.
6-22 SECTION 3. Section 22.004, Education Code, is amended by
6-23 adding Subsection (h) to read as follows:
6-24 (h) Notwithstanding Subsections (a), (b), and (d), group
6-25 health coverage provided by a district must be comparable to the
6-26 basic coverage provided under Article 3.50-7, Insurance Code, if
6-27 that program of coverages has been implemented, rather than to the
7-1 basic coverage provided under the Texas Employees Uniform Group
7-2 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
7-3 Code). If the program of coverages has been implemented under
7-4 Article 3.50-7, Insurance Code, the board of trustees and the
7-5 executive director of the Employees Retirement System of Texas have
7-6 the powers and duties granted by this section to the board of
7-7 trustees and the executive director, as applicable, of the Teacher
7-8 Retirement System of Texas, except that the executive director may
7-9 not certify a district's coverage as comparable unless the
7-10 executive director determines that the district's coverage results
7-11 in a lower average cost to participants than the basic coverage
7-12 provided under Article 3.50-7, Insurance Code. If the executive
7-13 director determines that a district's coverage is not comparable,
7-14 the district is required to begin participating in the program
7-15 provided under Article 3.50-7, Insurance Code, on the later of the
7-16 beginning of the next school year or on the expiration of the
7-17 district's contract for group health insurance coverage.
7-18 SECTION 4. The Employees Retirement System of Texas shall
7-19 begin enrollment in the program provided under Article 3.50-7,
7-20 Insurance Code, as added by this Act, to be effective beginning
7-21 with the first school year for which the legislature makes
7-22 appropriations of contributions required by Section 6(a) of that
7-23 article.
7-24 SECTION 5. The importance of this legislation and the
7-25 crowded condition of the calendars in both houses create an
7-26 emergency and an imperative public necessity that the
7-27 constitutional rule requiring bills to be read on three several
8-1 days in each house be suspended, and this rule is hereby suspended.