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.