By Armbrister S.B. No. 1120
76R3979 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 Teacher Retirement System of
3-8 Texas.
3-9 Sec. 3. ADMINISTRATION. (a) The Teacher Retirement System
3-10 of Texas, as trustee, shall implement and administer the statewide
3-11 uniform group insurance program described by this article.
3-12 (b) The trustee may hire and compensate employees.
3-13 (c) The trustee may, on a competitive bid basis, contract
3-14 with a qualified, experienced firm of group insurance specialists
3-15 or an administering firm who will act for the trustee in the
3-16 capacity of independent administrators and managers of the program
3-17 authorized under this article. The independent administrator
3-18 selected by the trustee shall assist the trustee to ensure the
3-19 proper administration of this article and the coverages, services,
3-20 and benefits provided for or authorized by this article and shall
3-21 be paid by the trustee.
3-22 (d) The trustee may enter into interagency contracts with
3-23 any agency of the state, including the Employees Retirement System
3-24 of Texas, for the purpose of assistance in implementing the program
3-25 provided by this article.
3-26 (e) The trustee has the powers with regard to the program
3-27 described by this article that the Employees Retirement System of
4-1 Texas has in administering the Texas Employees Uniform Group
4-2 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
4-3 Code), including the power to adjudicate claims, expel participants
4-4 from the program for cause, and adopt rules to administer this
4-5 article.
4-6 Sec. 4. PARTICIPATION IN PROGRAM. (a) Each public school
4-7 district is required to participate in the program provided by this
4-8 article unless the district is participating in the group insurance
4-9 program under the Texas Employees Uniform Group Insurance Benefits
4-10 Act (Article 3.50-2, Vernon's Texas Insurance Code).
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. The trustee shall
5-5 divide the state into four regions for the purpose of offering and
5-6 administering plans of coverages. Comparable plans of each type of
5-7 coverage established must be offered to employees and retirees of
5-8 all participating school districts.
5-9 (b) The trustee by rule may define the basic coverage in
5-10 which each full-time employee or retiree participates unless
5-11 specifically waived. Basic coverage must include a health benefits
5-12 plan. The trustee also by rule may define optional or voluntary
5-13 coverage.
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 covered by the program an amount
5-23 provided by the General Appropriations Act. The state shall pay
5-24 100 percent of the cost of basic coverage for retirees who are
5-25 covered by the program and who retired with at least 20 years of
5-26 service credit in the Teacher Retirement System of Texas and
5-27 one-half of the cost of basic coverage for other retirees
6-1 participating in the program.
6-2 (b) That portion of the cost of basic coverage selected by
6-3 the employee that exceeds the amount of state contributions shall
6-4 be paid by the participant and the school district by which the
6-5 participant is employed, with the participant paying 20 percent and
6-6 the school district paying 80 percent. An employee or retiree
6-7 participating in the program is responsible for paying the full
6-8 cost of optional or voluntary coverage selected.
6-9 Sec. 7. TEXAS SCHOOL EMPLOYEES UNIFORM GROUP INSURANCE TRUST
6-10 FUND. (a) The Texas school employees uniform group insurance
6-11 trust fund is created as a trust fund outside the state treasury to
6-12 be held by the Texas Treasury Safekeeping Trust Company and
6-13 administered by the trustee on behalf of the participants in the
6-14 plans of insurance coverage provided under this article.
6-15 (b) Premiums paid by enrollees, amounts recovered under
6-16 contracts for the implementation of the program provided by this
6-17 article, and investment and depository income of the fund shall be
6-18 credited to the fund.
6-19 (c) Money in the fund may be used only for the purpose of
6-20 providing the program of insurance coverage provided under this
6-21 article, including the expenses of administering the program.
6-22 (d) The trustee may invest assets of the fund in the manner
6-23 provided by Section 67(a)(3), Article XVI, Texas Constitution.
6-24 SECTION 2. Article 3.51, Insurance Code, is amended to read
6-25 as follows:
6-26 Art. 3.51. GROUP INSURANCE FOR EMPLOYEES OF STATE AND ITS
6-27 SUBDIVISIONS AND COLLEGES [COLLEGE AND SCHOOL EMPLOYEES]
7-1 Sec. 1. (a) The State of Texas and each of its political,
7-2 governmental and administrative subdivisions, departments,
7-3 agencies, associations of public employees, and the governing
7-4 boards and authorities of each state university or college[,
7-5 colleges, common and independent school districts or of any other
7-6 agency or subdivision of the public school system of the State of
7-7 Texas] are authorized to procure contracts with any insurance
7-8 company authorized to do business in this state insuring their
7-9 respective employees, or if an association of public employees is
7-10 the policyholder, insuring its respective members, or any class or
7-11 classes thereof under a policy or policies of group health,
7-12 accident, accidental death and dismemberment, disability income
7-13 replacement and hospital, surgical and/or medical expense insurance
7-14 or a group contract providing for annuities. The dependents of any
7-15 such employees or association members, as the case may be, may be
7-16 insured under group policies which provide hospital, surgical
7-17 and/or medical expense insurance. The insureds' contributions to
7-18 the premiums for such insurance or annuities issued to the employer
7-19 or to an association of public employees as the policyholder may be
7-20 deducted by the employer from the insureds' salaries when
7-21 authorized in writing by the respective employees so to do. The
7-22 premium for the policy or contract may be paid in whole or in part
7-23 from funds contributed by the employer or in whole or in part from
7-24 funds contributed by the insured employees. When an association of
7-25 public employees is the holder of such a policy of insurance or
7-26 contract, the premium for employees that are members of such
7-27 association may be paid in whole or in part by the State of Texas
8-1 or other agency authorized to procure contracts or policies of
8-2 insurance under this section, or in whole or in part from funds
8-3 contributed by the insured employees that are members of such
8-4 association; provided, however, that any monies or credits
8-5 received by or allowed to the policyholder or contract holder
8-6 pursuant to any participation agreement contained in or issued in
8-7 connection with the policy or contract shall be applied to the
8-8 payment of future premiums and to the pro rata abatement of the
8-9 insured employee's contribution therefor.
8-10 (b) The term employees as used herein in addition to its
8-11 usual meaning shall include elective and appointive officials of
8-12 the state.
8-13 [(b) Independent School Districts procuring policies
8-14 insuring their employees under this Section may pay all or any
8-15 portion of the premiums on such policies from the local funds of
8-16 such Independent School District, but in no event shall any part of
8-17 such premiums be paid from funds paid such districts by the State
8-18 of Texas.]
8-19 Sec. 2. All group insurance contracts effected pursuant
8-20 hereto shall conform and be subject to all the provisions of any
8-21 existing or future laws concerning group insurance.
8-22 SECTION 3. Article 3.50-4, Insurance Code, and Section
8-23 22.004, Education Code, are repealed.
8-24 SECTION 4. (a) The Teacher Retirement System of Texas shall
8-25 begin enrollment in the program provided under Article 3.50-7,
8-26 Insurance Code, as added by this Act, to be effective beginning
8-27 with the 2001-2002 school year.
9-1 (b) The Teacher Retirement System of Texas shall transfer
9-2 all assets and liabilities of the program provided under Article
9-3 3.50-4, Insurance Code, all coverages provided under that program,
9-4 and all records pertaining to that program to the program provided
9-5 under Article 3.50-7, Insurance Code, as added by this Act, not
9-6 later than the date the program of coverages provided under Article
9-7 3.50-7 is implemented.
9-8 SECTION 5. This Act takes effect September 1, 1999, except
9-9 Sections 2 and 3, which take effect September 1, 2001.
9-10 SECTION 6. The importance of this legislation and the
9-11 crowded condition of the calendars in both houses create an
9-12 emergency and an imperative public necessity that the
9-13 constitutional rule requiring bills to be read on three several
9-14 days in each house be suspended, and this rule is hereby suspended.