Office of House Bill AnalysisH.B. 326
By: Gallego
Teacher Health Insurance, Select


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


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. 


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

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). 


September 1, 2001. Provisions requiring TRS to begin enrollment in the
program for active employees apply beginning with the 2002-2003 school