Senate Research Center   S.B. 135
77R1529 PB-DBy: Carona
As Filed


Currently, many Texas public school employees do not have health insurance
for various reasons. Also, the health insurance program for retired public
school employees (TRS-CARE) continues to grow while facing financial
concerns.  As proposed, S.B. 135 creates a uniform group insurance plan
that pools active and retired public school employees into one health
insurance and retirement system that must be comparable to the system the
state already provides for educators in state colleges and universities, as
well as for state employees. 


Rulemaking authority is granted to the Teacher Retirement System of Texas
in SECTION 1 (Sections 2, 3 and 5, Article 3.50 - 7, Insurance Code) and
SECTION 7 of this bill. 


SECTION 1.  Amends Chapter 3E, Insurance Code, by adding Article 3.50-7, as


Sec. 1.  SHORT TITLE.  Authorizes this article to be cited as the Texas
School Employees Uniform Group Health Insurance Benefits Act. 

Sec. 2.  DEFINITIONS.  Defines "administering firm," "basic coverage,"
"cafeteria plan," "employee," "health benefit plan," "retiree,"and

Sec. 3.  ADMINISTRATION.  Requires the Teacher Retirement System of Texas
(TRS),  as trustee, to implement and administer the statewide uniform group
insurance program (program) described by this article, and authorizes the
hiring and compensating of employees.  Authorizes the trustee, on a
competitive bid basis, to contract with a qualified, experienced firm of
group insurance specialists or an administering firm acting as independent
administrators and managers of the program that will ensure proper
administration authorized under this article and are required to be paid by
the trustee.  Authorizes the trustee to contract with any state agency,
including the Employees Retirement System of Texas, for the purpose of
assistance in implementing the program.  Provides that the trustee has the
same powers the Employees Retirement System of Texas  has in administering
the Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
V.T.I.C.), including the power to adjudicate claims, expel participants
from the program for cause, and adopt rules to administer this article.   

Sec. 4.  PARTICIPATION IN PROGRAM.  Requires all school districts to
participate in the program, and provides that each full-time school
district  employee or retiree is automatically covered by basic coverage
unless the employee or retiree waives coverage or is expelled from the
program.  Provides that each part-time employee is eligible for coverage
unless the employee has been expelled from the program, and requires each
participating school district to  notify all part-time employees of the
employee's eligibility for participation in the program.   

Sec. 5.  GROUP COVERAGE.  Requires the trustee to establish plans of group
coverages for all employees and retirees of school districts and their
dependents, and requires the coverages to be comparable to the coverage
provided by the Texas Employees Uniform Group Insurance Benefits Act and
may include certain and other coverages considered advisable by the
trustee. Requires comparable coverage plans to be offered to all school
district employees and retirees. Authorizes the trustee by rule to define
the basic coverage for each full-time employee or retiree that is required
to be included in a health benefit plan, unless specifically waived, and
authorizes the trustee to, by rule, to define optional coverage, which may
include coverage for dependents and voluntary coverage.  Authorizes the
trustee to provide a cafeteria plan for school district employees.
Authorizes the trustee to determine that plans of coverages to be provided
directly from the fund described by Section 7 of this article, rather than
through the purchase of coverage, and exempts any self-funded plan of
coverages  from any other provision of this code unless the law
specifically applies to the plan or to this article. 

Sec. 6.  PAYMENT OF CONTRIBUTIONS.  Requires the state to contribute an
amount equivalent to that of the Texas Employees Uniform Group Insurance
Benefits Act for each employee and retiree, and requires each employee and
retiree to pay the portion that exceeds the amount covered by the program. 

Sec. 7.  FUND.  Requires the contributions collected under Section 6 and
any amounts appropriated by the legislature for contingency reserves or
administrative expenses to be deposited  in the Texas school employees
uniform group insurance trust fund, which is a trust fund with the
comptroller, and authorizes the trustee to use the fund only to provide
group coverages under this article and to pay the expenses of administering
the program.  Authorizes the trustee to invest assets of the fund in the
manner provided by Section 67(a)(3) (State and Local Retirement Systems),
Article XVI, Texas Constitution. 

SECTION 2.  Amends Article 3.50-4, Insurance Code, by adding Section 3A, as

trustee to transfer all coverages provided by the program established under
this article and all records relating to the program, and requires the
comptroller to transfer all assets and liabilities, to the group insurance
program established under Article 3.50-7 of this code not later than the
date on which the program is implemented.  Provides that the program
provided by this article is terminated upon the transfer of property. 

SECTION 3.  Amends Article 3.51, Insurance Code, by adding Section 3, as

Sec. 3.  Prohibits a common or independent school district or any other
agency or subdivision of the public school system of this state from
procuring or renewing insurance contracts under this article after the date
the program is implemented, notwithstanding any other provision of this

SECTION 4.  Amends Section 26.036, Insurance Code, by adding Subsection
(c), to prohibit an independent school district from participating in the
small employer market and renewing an insurance contract obtained in
accordance with this article after the date on which the program is

SECTION 5.  Amends Section 22.004, Education Code, by adding Subsection
(h), to prohibit a district from making health coverage available to its
employees under this section after the date on which the program is
implemented.  Requires a district to begin participating in the program on
a certain date. 

SECTION 6.  Requires TRS to develop the plan or plans to be implemented and
administered under  Article 3.50-7, Insurance Code, as added by this Act.
Authorizes the system to employ persons, as necessary, to implement this
subsection.  Requires the Employees Retirement System of Texas to enroll
persons in the program beginning with the first school year when the
legislature appropriates the contributions required under Section 6,
Article 3.50-7, Insurance Code, as added by this Act. 

SECTION 7. Effective date:  (a) September 1, 2001, except as provided by
Subsection(b) of this section.   
(b) Requires the Teacher Retirement System of Texas to adopt rules as
necessary to implement SECTION 6 of this Act not later that  December 31,