By Ehrhardt H.B. No. 12
77R1529 PB-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
1-10 Texas School Employees Uniform Group Health Insurance Benefits Act.
1-11 Sec. 2. DEFINITIONS. In this article:
1-12 (1) "Administering firm" means any entity
1-13 designated by the trustee to administer any coverages, services,
1-14 benefits, or requirements under this article and the trustee's
1-15 rules adopted under this article.
1-16 (2) "Basic coverage" means the program of group
1-17 coverages determined by the trustee in which each full-time
1-18 employee and 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 (26 U.S.C.
1-22 Section 125) and its subsequent amendments.
1-23 (4) "Employee" means a participating member of the
1-24 Teacher Retirement System of Texas who is employed by a
2-1 participating school district and who is not covered by a group
2-2 insurance program under the Texas Employees Uniform Group Insurance
2-3 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) or the
2-4 Texas State College and University Employees Uniform Insurance
2-5 Benefits Act (Article 3.50-3, Vernon's Texas Insurance Code). The
2-6 term does not include an individual performing personal services
2-7 for a school district as an independent contractor.
2-8 (5) "Health benefit plan" means any group policy
2-9 or contract, medical, dental, or hospital service agreement,
2-10 membership or subscription contract, salary continuation plan,
2-11 health maintenance organization agreement, preferred provider
2-12 arrangement, or any similar group arrangement or any combination of
2-13 those policies, plans, contracts, agreements, or arrangements that
2-14 provides for, pays for, or reimburses expenses for health care
2-15 services, including comparable health care services for employees
2-16 and retirees who rely solely on spiritual means through prayer for
2-17 healing in accordance with the teaching of a recognized church or
2-18 denomination.
2-19 (6) "Retiree" means a person who:
2-20 (A) has retired under the Teacher
2-21 Retirement System of Texas with at least 10 years of credit for
2-22 service in public schools of this state or has retired under the
2-23 Teacher Retirement System of Texas for disability and is entitled
2-24 to receive an annuity from the system based on the person's
2-25 service; and
2-26 (B) is not eligible to participate in the
3-1 group insurance program provided under the Texas Employees Uniform
3-2 Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
3-3 Insurance Code) or the Texas State College and University Employees
3-4 Uniform Insurance Benefits Act (Article 3.50-3, Vernon's Texas
3-5 Insurance Code).
3-6 (7) "Trustee" means the Teacher Retirement System
3-7 of Texas.
3-8 Sec. 3. ADMINISTRATION. (a) The Teacher Retirement
3-9 System of Texas, as trustee, shall implement and administer the
3-10 statewide uniform group insurance program described by this
3-11 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
4-1 described by this article that the Employees Retirement System of
4-2 Texas has in administering the Texas Employees Uniform Group
4-3 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
4-4 Code), including the power to adjudicate claims, expel participants
4-5 from the program for cause, and adopt rules to administer this
4-6 article.
4-7 Sec. 4. PARTICIPATION IN PROGRAM. (a) Each school
4-8 district is required to participate in the program.
4-9 (b) Each full-time employee or retiree of a school
4-10 district is automatically covered by the basic coverage for
4-11 employees or retirees, as applicable, unless the employee or
4-12 retiree specifically waives coverage or unless the employee or
4-13 retiree is expelled from the program.
4-14 (c) Each part-time employee of a participating school
4-15 district is eligible to participate in the program provided by this
4-16 article on application in the manner provided by the trustee,
4-17 unless the employee has been expelled from the program. A
4-18 participating school district shall notify each of its part-time
4-19 employees of the employee's eligibility for participation in the
4-20 program.
4-21 Sec. 5. GROUP COVERAGES. (a) The trustee shall
4-22 establish plans of group coverages for employees and retirees of
4-23 school districts and their dependents. The coverages shall be
4-24 comparable in scope and, to the greatest extent possible, in cost
4-25 to the coverages provided under the Texas Employees Uniform Group
4-26 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
5-1 Code) and may include group life coverages, health benefit plans,
5-2 accidental death and dismemberment coverages, coverages against
5-3 short-term or long-term loss of salary, and other coverages
5-4 considered advisable by the trustee. Comparable plans of each type
5-5 of coverage established must be offered to employees and retirees
5-6 of all school districts.
5-7 (b) The trustee by rule may define the basic coverage in
5-8 which each full-time employee or retiree participates unless
5-9 specifically waived. Basic coverage must include a health benefit
5-10 plan. The trustee by rule may define optional coverage, which may
5-11 include coverage for dependents, and voluntary coverage.
5-12 (c) The trustee may provide a cafeteria plan for employees
5-13 of school districts.
5-14 (d) The trustee may determine that plans of coverages be
5-15 provided directly from the fund described by Section 7 of this
5-16 article rather than through the purchase of coverage. Any
5-17 self-funded plan of coverages is exempt from any other provision of
5-18 this code unless the law specifically applies to the plan or to
5-19 this article.
5-20 Sec. 6. PAYMENT OF CONTRIBUTIONS. (a) The state shall
5-21 contribute for each employee and retiree covered by the program an
5-22 amount equal to the amount the state contributes for participants
5-23 in the program provided under the Texas Employees Uniform Group
5-24 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
5-25 Code).
5-26 (b) Each employee and retiree covered by the program shall
6-1 pay that portion of the cost of coverage selected by the employee
6-2 or retiree that exceeds the amount of state contributions.
6-3 Sec. 7. FUND. (a) Contributions collected under Section
6-4 6 of this article and any amounts appropriated by the legislature
6-5 for contingency reserves or administrative expenses shall be
6-6 deposited in the Texas school employees uniform group insurance
6-7 trust fund. The fund is a trust fund with the comptroller. The
6-8 trustee may use amounts in the fund only to provide group coverages
6-9 under this article and to pay the expenses of administering the
6-10 program.
6-11 (b) The trustee may invest assets of the fund in the
6-12 manner provided by Section 67(a)(3), Article XVI, Texas
6-13 Constitution.
6-14 SECTION 2. Article 3.50-4, Insurance Code, is amended by
6-15 adding Section 3A to read as follows:
6-16 Sec. 3A. TERMINATION OF PROGRAM AND TRANSFER OF PROPERTY.
6-17 (a) The trustee shall transfer from the program established under
6-18 this article all coverages provided under the program and all
6-19 records relating to the program to the group insurance program
6-20 established under Article 3.50-7 of this code not later than the
6-21 date on which the program of coverages provided under Article
6-22 3.50-7 of this code is implemented.
6-23 (b) The comptroller shall transfer from the program
6-24 established under this article all assets and liabilities of that
6-25 program to the group insurance program established under Article
6-26 3.50-7 of this code not later than the date on which the program of
7-1 coverages provided under Article 3.50-7 of this code is
7-2 implemented.
7-3 (c) On the transfer of property described by this section,
7-4 the program provided by this article is terminated.
7-5 SECTION 3. Article 3.51, Insurance Code, is amended by
7-6 adding Section 3 to read as follows:
7-7 Sec. 3. Notwithstanding any other provision of this
7-8 article, a common or independent school district or any other
7-9 agency or subdivision of the public school system of this state may
7-10 not procure insurance contracts under this article and may not
7-11 renew an insurance contract procured under this article after the
7-12 date on which the program of coverages provided under Article
7-13 3.50-7 of this code is implemented.
7-14 SECTION 4. Section 26.036, Insurance Code, is amended by
7-15 adding Subsection (c) to read as follows:
7-16 (c) An independent school district may not participate in
7-17 the small employer market under this article and may not renew an
7-18 insurance contract obtained in accordance with this article after
7-19 the date on which the program of coverages provided under Article
7-20 3.50-7 of this code is implemented.
7-21 SECTION 5. Section 22.004, Education Code, is amended by
7-22 adding Subsection (h) to read as follows:
7-23 (h) Notwithstanding any other provision of this section, a
7-24 district may not make group health coverage available to its
7-25 employees under this section after the date on which the program of
7-26 coverages provided under Article 3.50-7, Insurance Code, is
8-1 implemented. A district is required to begin participating in the
8-2 program provided under Article 3.50-7, Insurance Code, on the later
8-3 of:
8-4 (1) the first day of the first school year
8-5 beginning after the date of implementation of Article 3.50-7,
8-6 Insurance Code; or
8-7 (2) the date on which the district's contract for
8-8 group health insurance coverage expires.
8-9 SECTION 6. (a) During the 2001-2002 school year, the
8-10 Teacher Retirement System of Texas shall develop the plan or plans
8-11 to be implemented and administered under Article 3.50-7, Insurance
8-12 Code, as added by this Act. The system may employ persons as
8-13 necessary to implement this subsection.
8-14 (b) The Employees Retirement System of Texas shall enroll
8-15 persons in the program provided under Article 3.50-7, Insurance
8-16 Code, as added by this Act, beginning with the first school year
8-17 for which the legislature makes an appropriation of contributions
8-18 required by Section 6(a) of that article.
8-19 SECTION 7. (a) Except as provided by Subsection (b) of
8-20 this section, this Act takes effect September 1, 2001.
8-21 (b) The Teacher Retirement System of Texas shall adopt
8-22 rules as necessary to implement Section 6 of this Act not later
8-23 than December 31, 2001.