HBA-SEP, MPM H.B. 1189 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1189 By: Telford Teacher Health Insurance, Select 2/12/2001 Introduced BACKGROUND AND PURPOSE Because of the rising cost of health care, ensuring health insurance benefits for public school employees is an important issue for the state, school districts, and employees. House Bill 1189 creates a base statewide insurance plan for active school district employees fully funded by the state, and allows districts to choose more expensive plans by covering the difference in cost. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Active School Employees Group Benefits Board in SECTION 1.01 (Articles 3A.054, 3A.101, 3A.102, and 3A.103, Insurance Code) and SECTION 3.05 of this bill. ANALYSIS House Bill 1189, amends the Insurance and Education codes to create the Texas Active School Employees Group Health Benefits Act, and establishes the Texas Active School Employees Group Benefits Program (program) to provide group health benefits for active employees of Texas school districts. The bill amends the Insurance Code to establish the Texas Active School Employees Group Benefits Board (board), and sets forth appointment, administration, operation, and reporting procedures and requirements of the board (Arts. 3A.051-3A.055). The bill requires the board to implement and administer a program of group health benefits coverage for active employees of school districts. The board is authorized to contract with an independent administrator for the program. The board is required to adopt rules necessary to administer a program that is applicable to all school districts of this state (Art. 34.054). The bill authorizes a public school district, beginning August 1, 2002, to elect to participate in the program unless the district is participating in the group insurance program under the Texas Employees Uniform Group Insurance Benefits Act administered by Employees Retirement System (ERS). The bill prohibits a participating district from providing a competing group health benefits program for employees. The bill requires a district that elects to participate in the program to do so for a minimum of two years. The board is authorized to establish, by rule, a biennial deadline for notification of the board of a district's election to participate in the program (Art. 3A.101). H.B. 1189 amends the Insurance and Education codes to authorize a district to discontinue participation only by notifying the board and obtaining the board's determination that the district is committed to offering an alternative basic plan of group health benefits under existing provisions with no contribution from the state and at no cost to participating employees. The bill provides that the beginning and ending of a district's participation must coincide with the beginning of an odd-numbered year.(Arts. 3A.101 and 3A.106, Insurance Code; Section 22.004, Education Code and SECTION 3.02). The bill amends the Insurance Code to provide that each full-time employee, as defined by board rule, of a participating district is automatically covered by the basic plan selected by the district, unless the employee specifically waives coverage or is expelled from the program. The bill provides that part-time employees are eligible to participate in the program only as provided by board rule, and requires a participating district to notify part-time employees of their eligibility (Art. 3A.102). The bill requires the board to adopt plans of group benefits which must include one or more basic group health insurance plans for district employees and their dependents. The bill requires at least one of the basic plans to be comparable in scope, and to the extent possible, in cost to the health benefit plan coverage, provided to state employees under the Texas Employees Uniform Group Insurance Benefits Act. The bill provides that a district must select the same basic plan for all employees. The bill authorizes the plans of group benefits to include other coverages and benefits, and provides that comparable plans of each type of benefit adopted must be offered to employees of all school districts (Art. 3A.103). The bill authorizes the board, by rule, to define optional coverage which may be selected by a district employee, which must include coverage for dependents. The bill authorizes the board to determine that plans of group benefits shall be provided directly from the Texas active school employees uniform group benefits trust fund, rather than through the purchase of coverage. The bill exempts any self-funded plan of group benefits from any other provision of the Insurance Code, unless the law specifically applies to the plan or this bill (Art. 3A.103). H.B. 1189 requires the state to pay100 percent of the cost for employee-only coverage under the least expensive basic plan of group health benefits for each active employee participating in the program. The bill requires a district that selects a more expensive plan to pay the employee-only costs that exceed the amount the state pays for the least expensive plan (Article 3A.104). The bill requires a participating employee to pay all of the cost of optional coverage, including dependent coverage (Art. 3A.105). The bill provides that any contributions collected from the state, the district, and the employee, as well as any amounts appropriated by the legislature for contingency reserves or administrative expenses, shall be deposited in the Texas active school employees uniform benefits trust fund (fund), which is a trust fund with the comptroller of public accounts (Art. 3A.151). The bill authorizes the board to use amounts in the fund only to provide group benefits through the program, and to pay administrative expenses of the program. The bill authorizes the board to invest assets of the fund in the manner provided by the Texas Constitution (Art. 3A.152). The bill requires the board to develop the program to be implemented and administered during the 20012002 school year (SECTION 3.02). The bill requires the board to adopt necessary rules for the development of the program no later than December 31, 2001 (SECTION 3.05). The bill provides that coverage under the program begins with the 2002-2003 school year, but no later than September 1, 2002 (SECTION 3.02). The bill repeals provisions authorizing the participation of active employees in the Texas Public School Employees Group Insurance Program and removes references to active employees from the Texas Public School Employees Group Insurance Act, effective September 1, 2002 (SECTION 3.01 and Art. 3.50-4, Insurance Code). The bill requires TRS to transfer from the Texas Public School Employees Group Insurance Program, to the board, all assets and liabilities provided under the program for active employees, as well as records relating to employee coverage, for the program established by this bill no later than September 1, 2002. The bill also requires the comptroller of public accounts, no later than September 1, 2002, to transfer from the school employees group insurance program fund all assets and liabilities of that fund relating to coverage for active employees to the fund established in this bill (SECTION 3.03). EFFECTIVE DATE September 1, 2001. Provisions removing active employees from the provisions of the Texas Public School Employees Group Insurance Program take effect September 1, 2002.