76R14165 PB-F
By Lewis of Tarrant H.B. No. 3178
Substitute the following for H.B. No. 3178:
By Clark C.S.H.B. No. 3178
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to coverage for certain health benefits under the Texas
1-3 State College and University Employees Uniform Insurance Benefits
1-4 Act.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 3(a), Texas State College and University
1-7 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
1-8 Texas Insurance Code), is amended to read as follows:
1-9 (a) Unless a different meaning is plainly required by the
1-10 context, the following words and phrases as used in this Act shall
1-11 have the following meanings:
1-12 (1) "Administering carrier" shall mean any carrier or
1-13 organization, qualified to do business in Texas, designated by an
1-14 institution to administer any services, benefits, insurance
1-15 coverages, or requirements in accordance with this Act [and the
1-16 council's regulations thereunder].
1-17 (2)(A) "Retired employee" shall mean a former [an]
1-18 employee as defined in this Act who has at least three years'
1-19 service as an eligible employee with an employing institution,
1-20 whose last state employment before retirement was with that
1-21 employing institution, and who retires or has retired under a
1-22 retirement provision under the jurisdiction of:
1-23 (i) [(A)] the Teachers Retirement System
1-24 of Texas, pursuant to Subtitle C, Title 8, Government Code;
2-1 (ii) [(B)] the Optional Retirement
2-2 Program, Chapter 830, Government Code; provided, however, that the
2-3 employee has met service requirements, age requirements, and other
2-4 applicable requirements as may be promulgated by the institution
2-5 comparable to the requirements for retirement under the Teachers
2-6 Retirement System of Texas;
2-7 (iii) [(C)] the Employees Retirement
2-8 System of Texas; or
2-9 (iv) [(D)] any other federal or state
2-10 statutory retirement program to which the institution has made
2-11 employer contributions; provided, however, that the employee has
2-12 met service requirements, age requirements, and other applicable
2-13 requirements as may be promulgated by the institution comparable to
2-14 the requirements for retirement under the Teachers Retirement
2-15 System of Texas.
2-16 (B) A former employee is eligible to be
2-17 classified as a retired employee at an employing institution if the
2-18 former employee:
2-19 (i) meets the minimum requirements
2-20 established under Paragraph (A) of this subdivision to qualify as a
2-21 retired employee except that the last state employment before
2-22 retirement is not at the employing institution; and
2-23 (ii) does not meet the requirements for a
2-24 retired employee under Section 3, Texas Employees Uniform Group
2-25 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
2-26 Code).
2-27 (3) "Carrier" shall mean a qualified carrier as
3-1 defined in this Act.
3-2 (4)(A) "Employee" shall mean any person employed by a
3-3 governing board of an institution:
3-4 (i) [who retires under the provisions
3-5 cited in Subsection (a)(2) of this section;]
3-6 [(ii)] who receives his compensation for
3-7 services rendered to an institution [on a warrant or check issued
3-8 pursuant to a payroll certified by an institution or by an elected
3-9 or duly appointed officer of this state], [and who] is eligible for
3-10 participation in the Teacher Retirement System of Texas, and is
3-11 expected to work at least 20 hours per week and to continue in the
3-12 employment for a term of at least 4-1/2 months or is appointed for
3-13 at least 50 percent of a standard full-time appointment; or
3-14 (ii) [(iii)] who receives his compensation
3-15 for services rendered as provided in this subdivision but is not
3-16 permitted to be a member of the Teacher Retirement System of Texas
3-17 because he is solely employed by an institution of higher education
3-18 that as a condition of employment requires the employee to be
3-19 enrolled as a student in the institution in graduate-level courses
3-20 and who is employed at least 20 hours a week.
3-21 (B) Persons performing personal services for
3-22 such institutions as independent contractors shall never be
3-23 considered employees for purposes of this Act.
3-24 (5) "Employer" shall mean the institutions defined
3-25 [elsewhere] in Subdivision (7) [Subsection (8)] of this section.
3-26 (6) "Group life, accident, or health insurance plan"
3-27 shall mean any group insurance policy or contract, life, accident,
4-1 medical, dental, or hospital service agreement, membership or
4-2 subscription contract, or similar group arrangement provided by an
4-3 administering carrier.
4-4 (7) "Institution" shall mean The University of Texas
4-5 System or[,] The Texas A&M University System[, Texas Tech
4-6 University, and the University of Houston System, except that an
4-7 institution that elects to participate in the Employees Uniform
4-8 Group Insurance Program under Section 3A of the Texas Employees
4-9 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
4-10 Texas Insurance Code) on or before April 1, 1992, may not
4-11 participate in the Texas State College and University Employees
4-12 Uniform Insurance Benefits Program after coverage has begun under
4-13 the Employees Uniform Group Insurance Program].
4-14 (8) "Dependent" shall mean the spouse, as defined in
4-15 the Texas Family Code, of an employee or retired employee, and an
4-16 unmarried child under 25 years of age including: (A) an adopted
4-17 child, (B) a stepchild, foster child, or other child who is in a
4-18 regular parent-child relationship, (C) any such child, regardless
4-19 of age, who lives with or whose care is provided by an employee or
4-20 retired employee on a regular basis, if such child is mentally
4-21 retarded or physically incapacitated to such an extent as to be
4-22 dependent upon the employee or retired employee for care or
4-23 support, as the institution shall determine.
4-24 (9) "President" shall mean the duly authorized chief
4-25 official of any institution covered under the provisions of this
4-26 Act or such other official as may be designated by a governing
4-27 board to carry out the provisions of this Act.
5-1 (10) "Qualified carrier" shall mean:
5-2 (A) any insurance company authorized to do
5-3 business in this state by the Texas Department [State Board] of
5-4 Insurance to provide any of the types of insurance coverages,
5-5 benefits, or services provided for in this Act under any of the
5-6 insurance laws of the State of Texas, which has an adequate
5-7 surplus, a successful operating history, and which has had
5-8 successful experience in providing and servicing any of the types
5-9 of group coverage provided for in this Act as determined by the
5-10 Texas Department [State Board] of Insurance;
5-11 (B) any corporation operating under Chapter 20
5-12 of the Texas Insurance Code which provides any of the types of
5-13 coverage, benefits, or services provided for in this Act, which has
5-14 a successful operating history, and which has had successful
5-15 experience in providing and servicing any of the types of group
5-16 coverage provided for in this Act as determined by the Texas
5-17 Department [State Board] of Insurance; or
5-18 (C) any combination of carriers as herein
5-19 defined, upon such terms and conditions as may be prescribed by the
5-20 institution; provided, however, that for purposes of this Act
5-21 carriers combining for the purpose of bidding and/or underwriting
5-22 this program shall not be considered in violation of [Sections
5-23 15.01 through 15.34,] Chapter 15, [Title 2, Competition and Trade
5-24 Practices, Texas] Business & Commerce Code.
5-25 (11) "Service" shall mean any personal services of any
5-26 employee creditable in accordance with rules and regulations
5-27 promulgated by the institution.
6-1 (12) "Active employee plan" shall mean a plan or
6-2 program of group life, accident, or health insurance for active
6-3 employees as determined by the institution as provided in this Act.
6-4 (13) "Retired employee plan" shall mean a plan or
6-5 program of group insurance as determined by the institution as
6-6 defined in this Act for all retired employees as defined in this
6-7 Act.
6-8 (14) "Cafeteria plan" means a plan as defined and
6-9 authorized by Section 125, Internal Revenue Code of 1986 (26 U.S.C.
6-10 Sec. 125).
6-11 (15) "The University of Texas System" means the
6-12 entities listed or described in Section 65.02, Education Code.
6-13 (16) "Serious [For purposes of this section, "serious]
6-14 mental illness" means the following psychiatric illnesses as
6-15 defined by the American Psychiatric Association in the Diagnostic
6-16 and Statistical Manual (DSM) III-R:
6-17 (A) schizophrenia;
6-18 (B) paranoid and other psychotic disorders;
6-19 (C) bipolar disorders (mixed, manic, and
6-20 depressive);
6-21 (D) major depressive disorders (single episode
6-22 or recurrent); and
6-23 (E) schizo-affective disorders (bipolar or
6-24 depressive).
6-25 (17) [(16)] "The Texas A&M University System" means
6-26 the entities governed under Chapters 85 through 88, Education Code,
6-27 and includes the Texas Veterinary Diagnostic Laboratory.
7-1 [(17) "Texas Tech University" means Texas Tech
7-2 University, the Texas Tech University Museum, and the Texas Tech
7-3 University Health Sciences Center.]
7-4 (18) "Basic coverage" means health insurance coverage
7-5 and other coverages that meet the basic coverage standards
7-6 established under Section 4(b)(1) of this Act ["University of
7-7 Houston System" means the entities governed under Section 111.20,
7-8 Education Code].
7-9 (19) "Optional coverage" means group coverages other
7-10 than basic coverage.
7-11 SECTION 2. Sections 4(a), (b), (d), (e), and (f), Texas
7-12 State College and University Employees Uniform Insurance Benefits
7-13 Act (Article 3.50-3, Vernon's Texas Insurance Code), are amended to
7-14 read as follows:
7-15 (a) A Texas State College and University Employees Uniform
7-16 Insurance Benefits Program is hereby created. Each institution
7-17 shall implement the program for the benefit of its employees and
7-18 retired employees.
7-19 (b) Each institution shall:
7-20 (1) determine basic coverage standards which shall be
7-21 comparable to those commonly provided in private industry and those
7-22 provided employees of other agencies and institutions of higher
7-23 education of the State of Texas under the Texas Employees Uniform
7-24 Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
7-25 Insurance Code). The institution may design a plan around existing
7-26 local conditions.
7-27 (2) include in its respective bid documents for the
8-1 various coverages a provision calling for each bidder to identify
8-2 its administrative cost as a distinguishable figure and to
8-3 enumerate what services the bidder will render in exchange for the
8-4 administrative costs so identified.
8-5 (3) determine basic procedural and administrative
8-6 practices for insurance coverages to be provided [employees
8-7 covered] under the provisions of this Act.
8-8 (4) submit its program, including any agreement under
8-9 which a firm is engaged to administer a self-insured program, to
8-10 competitive bidding at least once every six years. It is further
8-11 provided that:
8-12 (A) The Texas Department [State Board] of
8-13 Insurance shall provide, by request of the institution, a list of
8-14 all carriers authorized to do business in the State of Texas and
8-15 who will be eligible to bid on the insurance coverage or coverages
8-16 provided in this Act.
8-17 (B) The Texas Department [State Board] of
8-18 Insurance shall, upon request by the institution, examine and
8-19 evaluate the bidding contracts and certify their actuarial
8-20 soundness to the institution within 15 days from the date of
8-21 request.
8-22 (C) The institution is not required to select
8-23 the lowest bid, but shall take into consideration other factors
8-24 such as ability to service contracts, past experience, financial
8-25 stability, and other relevant criteria. Should the institution
8-26 select a carrier whose bid differs from that advertised, the
8-27 reasons for such deviation shall be fully justified and recorded in
9-1 the minutes of the next meeting of the governing board of the
9-2 institution.
9-3 (D) The institution shall select and contract
9-4 for services performed by health maintenance organizations that are
9-5 approved by [the federal government, if available, or by] the State
9-6 of Texas[, if available,] to offer health-care services to eligible
9-7 employees and retired employees [persons] in a specific area of the
9-8 state. [Eligible employees and retired persons may participate in
9-9 a selected health maintenance organization in lieu of participation
9-10 in the health insurance benefits under this Act, and the employer
9-11 contributions provided by Section 13 of this Act for health-care
9-12 coverage shall be paid to the selected health maintenance
9-13 organizations on behalf of the participants. A health maintenance
9-14 organization that has been approved to provide health-care services
9-15 to employees and retired persons of the state under the Texas
9-16 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
9-17 Vernon's Texas Insurance Code) is qualified upon proper application
9-18 to the institution to provide similar services to eligible
9-19 employees and retired persons of any institution or agency under
9-20 this Act located in the same area of the state. More stringent
9-21 requirements may not be imposed on health maintenance organizations
9-22 under this Act than are imposed by the state or by the federal
9-23 government.]
9-24 (5) adopt rules and regulations consistent with the
9-25 provisions of this Act and its purpose as it deems necessary to
9-26 carry out the statutory responsibilities.
9-27 (6) establish procedures to allow each covered
10-1 employee and retired employee to obtain prompt action regarding
10-2 claims pertaining to insurance provided under this Act.
10-3 (d) Notwithstanding any other provisions of this Act, the
10-4 governing boards providing programs of benefits under this Act are
10-5 authorized to self-insure the programs and may, at their
10-6 discretion, engage a firm to administer the program. Any plan of
10-7 coverages for which an institution does not purchase insurance but
10-8 provides coverage on a self-insured basis is exempt from any other
10-9 insurance law of this state unless the law expressly applies to
10-10 that plan or this Act.
10-11 (e) The governing board of each institution providing
10-12 benefits under this Act may [study the feasibility of establishing
10-13 a cafeteria plan and may] design, develop, adopt, implement, and
10-14 administer a cafeteria plan [if the governing board determines that
10-15 the establishment of a cafeteria plan is feasible, would be
10-16 beneficial to the institution and to employees who would be
10-17 eligible to participate in the cafeteria plan, and would not
10-18 adversely affect the insurance program established under this Act].
10-19 The governing board may include in a cafeteria plan any benefit
10-20 that may be included in a cafeteria plan under federal law. In
10-21 addition to other authority granted to a governing board by this
10-22 Act, the governing board may cooperate and work with and may enter
10-23 into necessary contracts and agreements with one or more
10-24 independent and qualified agencies, persons, or entities to design,
10-25 develop, adopt, implement, or administer or to assist in the
10-26 design, development, adoption, implementation, or administration of
10-27 a cafeteria plan under this Act. A cafeteria plan may be designed,
11-1 developed, adopted, implemented, and administered by or on behalf
11-2 of an institution. If the governing board determines that a
11-3 cafeteria plan adopted under this subsection is no longer
11-4 advantageous to the institution and its employees, the governing
11-5 board may adopt an order terminating the cafeteria plan and
11-6 providing a procedure for the orderly withdrawal of the institution
11-7 and its employees from that plan.
11-8 (f) An institution may join with another institution to
11-9 procure one or more group contracts with any insurance company
11-10 authorized to do business in this state, insuring the employees and
11-11 retired employees of each participating institution. The purpose
11-12 of this authorization is to provide institutions of higher
11-13 education with the ability to obtain the benefits of economy and
11-14 improved coverages for their employees and retired employees which
11-15 may occur through increased purchasing economies for larger groups
11-16 of employees.
11-17 SECTION 3. Section 5, Texas State College and University
11-18 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
11-19 Texas Insurance Code), is amended to read as follows:
11-20 Sec. 5. BENEFIT CERTIFICATES. Each institution shall assure
11-21 that each employee and retired employee insured under this Act is
11-22 issued a certificate of insurance or plan description setting forth
11-23 the benefits to which the employee or retired employee is entitled,
11-24 to whom the benefits are payable, to whom the claims shall be
11-25 submitted, and summarizing the provisions of the policy or contract
11-26 principally affecting the employee or retired employee.
11-27 SECTION 4. Section 8(b), Texas State College and University
12-1 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
12-2 Texas Insurance Code), is amended to read as follows:
12-3 (b) Any excess of the total of Subsection (a)(1) of this
12-4 section over the corresponding sum of Subsections (a)(2) and (a)(3)
12-5 of this section may be held by the carrier issuing the policy as a
12-6 special reserve. Such reserve may be used at the discretion of the
12-7 institution for, but not limited to, providing additional coverage
12-8 for participating employees or retired employees, offsetting
12-9 necessary [employee] premium rate increases, or to reduce
12-10 participating employee or retired employee premium contributions to
12-11 the coverage. Any reserve held by the carrier would bear interest
12-12 at a rate determined each policy year by the carrier and approved
12-13 by the institution as being consistent with the rate generally used
12-14 by the carrier for similar funds held under other group insurance
12-15 policies.
12-16 SECTION 5. Section 9(a), Texas State College and University
12-17 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
12-18 Texas Insurance Code), is amended to read as follows:
12-19 (a) All insurance benefits and other payments and
12-20 transactions made pursuant to the provisions of this Act to any
12-21 employee or retired employee covered under the provisions of this
12-22 Act shall be exempt from execution, attachment, garnishment, or any
12-23 other process whatsoever.
12-24 SECTION 6. Section 10, Texas State College and University
12-25 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
12-26 Texas Insurance Code), is amended to read as follows:
12-27 Sec. 10. DEATH CLAIMS. The amount of group life insurance
13-1 and group accidental death and dismemberment insurance in force on
13-2 an employee or retired employee at the date of his death shall be
13-3 paid, on the establishment of a valid claim, to the person or
13-4 persons surviving at the date of his death, in the following order:
13-5 (a) to the beneficiary or beneficiaries designated by the
13-6 employee or retired employee in a signed and witnessed writing
13-7 received before death in the appropriate [employing] office of the
13-8 institution. For this purpose, a designation, change, or
13-9 cancellation of beneficiary in a will or other document not so
13-10 executed and filed has no force or effect.
13-11 (b) if no beneficiary is designated in accordance with
13-12 Subsection (a) of this section, payment shall be made in accordance
13-13 with the death benefit provisions of Subtitle C [the Teacher
13-14 Retirement System of Texas, Chapter 3], Title 8[1], Government
13-15 [Texas Education] Code[, as amended].
13-16 SECTION 7. Section 11, Texas State College and University
13-17 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
13-18 Texas Insurance Code), is amended to read as follows:
13-19 Sec. 11. AUTOMATIC COVERAGE. (a) No eligible employee or
13-20 eligible retired employee shall be denied enrollment in any of the
13-21 coverages provided by this Act; provided, however, that the
13-22 employee or retired employee may waive in writing any or all such
13-23 coverages. [Each policy of insurance shall provide for automatic
13-24 coverage on the date the employee becomes eligible for insurance.]
13-25 (b) From the first day of employment, the institution shall
13-26 automatically provide basic coverage for each active full-time
13-27 employee who has not waived basic coverage or selected optional
14-1 coverages [shall be protected by a basic plan of insurance coverage
14-2 automatically]. If the cost of an active employee's or retired
14-3 employee's basic coverage exceeds the amount appropriated by the
14-4 legislature for an employee or retired employee, the institution
14-5 must provide optional coverage at no cost to the employee or
14-6 retired employee. If the employee or retired employee chooses the
14-7 basic coverage rather than optional coverage, the institution may
14-8 deduct from or reduce the monthly compensation of the employee, or,
14-9 for a retired employee, require appropriate payment, up to one-half
14-10 of the amount that exceeds the state's contribution for an
14-11 employee, and the institution shall pay the difference.
14-12 (c) Each employee or retired employee who is automatically
14-13 covered under this section may subsequently retain or waive the
14-14 basic coverage plan and may make application for any other
14-15 coverages provided under this Act within applicable [institutional
14-16 and administrative council] standards.
14-17 SECTION 8. Section 12, Texas State College and University
14-18 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
14-19 Texas Insurance Code), is amended to read as follows:
14-20 Sec. 12. PAYMENT OF PREMIUMS. (a) Each institution and
14-21 agency covered under the provisions of this Act shall contribute
14-22 monthly to the cost of each insured employee's and retired
14-23 employee's coverage no less than the amount appropriated therefor
14-24 by the legislature in the General Appropriations Act. An amount
14-25 equal to the amount appropriated for an employee and retired
14-26 employee under the General Appropriations Act shall be appropriated
14-27 for each employee and retired employee by the governing board of
15-1 the institution in its respective official operating budget, if the
15-2 institution's employees are compensated from funds appropriated by
15-3 such budgets rather than by the General Appropriations Act.
15-4 (b) Except for a participant in a cafeteria plan, each [the]
15-5 employee shall authorize, in writing or electronically, and in a
15-6 form satisfactory to the institution, a deduction from his monthly
15-7 compensation of the difference between the total cost of premiums
15-8 and the amount contributed therefor by the institution or agency.
15-9 An employee who is participating in a cafeteria plan shall execute
15-10 a salary reduction agreement under which his monthly compensation
15-11 will be reduced in an amount that is equal to the difference
15-12 between the amount appropriated by the General Appropriations Act
15-13 or the institution's budget and the cost of the employee's selected
15-14 coverages for which he is eligible to pay under the cafeteria plan.
15-15 Also, the electing employee shall execute a salary deduction
15-16 agreement for any portion of the cost that is not covered by state
15-17 or institutional appropriations and cafeteria plan contributions.
15-18 (c) A retired employee shall execute agreements and make
15-19 appropriate contributions in a manner analogous to the requirements
15-20 adopted under Subsection (b) of this section for an active
15-21 employee.
15-22 SECTION 9. Section 17, Texas State College and University
15-23 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
15-24 Texas Insurance Code), is amended to read as follows:
15-25 Sec. 17. COVERAGE FOR DEPENDENTS. (a) Any employee or
15-26 retired employee shall be entitled to secure for his dependents any
15-27 uniform group insurance coverages provided for such dependents
16-1 under the rules and regulations to be promulgated by each
16-2 institution. Premium payments required of the employee or retired
16-3 employee in excess of employer contributions shall be deducted from
16-4 the monthly pay of the employee, or the employee's monthly pay
16-5 shall be reduced in the appropriate amount, or paid in such manner
16-6 and form as the institution shall determine.
16-7 (b) This subsection applies to the surviving spouse of an
16-8 employee who had at least five years of service on the date of the
16-9 employee's death, including at least three years of service as an
16-10 eligible employee with the employing institution, or the surviving
16-11 spouse of a retired employee. A surviving spouse subject to this
16-12 subsection may elect to retain the decedent's authorized coverages
16-13 and may also retain authorized coverages for any eligible
16-14 dependent, at the group rate for employees, if, on the date of the
16-15 death, those coverages were in effect for the spouse or dependent.
16-16 SECTION 10. This Act takes effect September 1, 1999, and
16-17 applies only to a group coverage that is delivered, issued for
16-18 delivery, or renewed under the Texas State College and University
16-19 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
16-20 Texas Insurance Code), on or after January 1, 2000. Coverage
16-21 delivered, issued for delivery, or renewed before January 1, 2000,
16-22 is governed by the law as it existed immediately before the
16-23 effective date of this Act, and that law is continued in effect for
16-24 that purpose.
16-25 SECTION 11. This Act takes effect September 1, 1999.
16-26 SECTION 12. The importance of this legislation and the
16-27 crowded condition of the calendars in both houses create an
17-1 emergency and an imperative public necessity that the
17-2 constitutional rule requiring bills to be read on three several
17-3 days in each house be suspended, and this rule is hereby suspended.