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.