HBA-RDP, MPM H.B. 326 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 326 By: Gallego Teacher Health Insurance, Select 2/5/2001 Introduced BACKGROUND AND PURPOSE Currently, Texas school districts and their employees, and specifically rural districts and their employees, are facing increased difficulties in obtaining health insurance due to rising premium costs. Efforts to improve teacher benefits through pay raises have been hindered by increasing premium costs. House Bill 326 gives school districts the option of joining the Texas Public Employees Group Insurance Program, administered by the Teacher Retirement System of Texas (TRS), to offer health benefit coverage to active employees, paid for jointly by the state, the district, and the employee. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Teacher Retirement System of Texas in SECTION 6 (Section 7A, Article 3.50-4, Insurance Code) of this bill. ANALYSIS House Bill 326 amends the Insurance and Education codes to extend the Texas Public Employees Group Insurance Program (program) for retired public school employees to active public school employees. The bill requires the Teacher Retirement System of Texas (TRS) to provide basic group health benefits coverage equivalent to the coverages provided to state employees by the Employee Retirement System of Texas (ERS) for each active employee through the program. The bill authorizes TRS to provide optional group coverages in addition to the basic plan (Sec. 7A, Art. 3.50-4 and Sec. 8, Art. 3.50-4, Insurance Code). The bill requires the state to contribute an amount equal to 35 percent of the cost for employee-only coverage for active employees. The bill requires each participating district to contribute an amount not to exceed 65 percent, rather than no less than 75 percent, of the cost for each district employee covered by the program. The district is authorized to contribute additional amounts for optional and dependent coverage selected by the employee. The bill requires the district to certify to TRS no later than September 1 of each year the amount the district will contribute monthly toward the cost of coverage. The bill prohibits a district from offering an alternative health benefit plan to its active employees during the period of its participation in the program. The bill requires the remainder of the costs not paid by the state or district to be deducted from the employee's compensation and requires each active employee in a participating district to participate in the basic coverage unless the employee specifically waives participation in writing (Sec. 7A, Art. 3.50-4, Insurance Code). The bill continues existing requirements for district health benefit plans in place for those districts that elect not to participate in the state program and requires the cost of such coverage to be shared by the employee and the district without contribution from the state. The executive director of TRS is required to certify whether a non-participating district's coverage is comparable to the coverage provided by ERS, and if it is not comparable, report that information to the district and the Legislative Budget Board (Sec. 7A, Art. 3.50-4, Insurance Code and Sec. 22.004, Education Code). The bill transfers the requirement to assist TRS in carrying out the provisions regarding the providing of group insurance coverages and health benefit plans from the State Board of Insurance to the commissioner of insurance and also requires TRS to make a written report to the commissioner rather than the board (Secs. 10 and 19, Art. 3.50-4, Insurance Code). The bill changes the name of the Retirees Advisory Committee currently in existence to the Health Benefit Advisory Committee (committee). The bill specifies that the committee is exempt from provisions in the Government Code that limit the existence of an advisory committee (Sec. 6, Art. 3.50-4, Insurance Code). The bill requires TRS to pay the administrative costs in extending the program to active employees, and authorizes TRS to use for that purpose any unexpended balance from the fees collected to study potential coverage under and participation in a statewide program from full-time employees of a district. The bill requires TRS, by rule, to define the requirements of the basic coverage and to establish minimum benefit standards for the program and other participation requirements for districts as determined by TRS to be necessary for the operation of the program (Sec. 7A, Art. 3.50-4, Insurance Code). EFFECTIVE DATE September 1, 2001. Provisions requiring TRS to begin enrollment in the program for active employees apply beginning with the 2002-2003 school year.