By Tillery                                             H.B. No. 523
         77R2981 PB-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to a statewide group insurance program for school district
 1-3     employees and retirees.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Sections 2(2) and (5), Article 3.50-4, Insurance
 1-6     Code, are amended to read as follows:
 1-7                 (2)  "Carrier" means:
 1-8                       (A)  an [any] insurance company authorized to do
 1-9     business in this state;
1-10                       (B)  a group [or] hospital service corporation
1-11     operating under Chapter 20 of this code; [authorized by the State
1-12     Board of Insurance to provide any of the insurance coverages,
1-13     benefits,] or
1-14                       (C)  a health maintenance organization regulated
1-15     under the Texas Health Maintenance Organization Act (Chapter 20A,
1-16     Vernon's Texas Insurance Code) [services provided by this article
1-17     under the insurance laws of this state].
1-18                 (5)  "Health benefit plan" or "plan" means a group
1-19     insurance policy, contract, or certificate, medical or hospital
1-20     service agreement, membership or subscription contract, salary
1-21     continuation plan, or similar group arrangement, including coverage
1-22     through a health maintenance organization regulated under the Texas
1-23     Health Maintenance Organization Act (Chapter 20A, Vernon's Texas
1-24     Insurance Code), to provide, pay for, or reimburse expenses for
 2-1     health care services.
 2-2           SECTION 2. Section 3(a), Article 3.50-4, Insurance Code, is
 2-3     amended to read as follows:
 2-4           (a)  The Texas Public School Employees Group Insurance
 2-5     Program is established to provide for a health benefit [an
 2-6     insurance] plan or plans under this article and may provide other
 2-7     insurance coverages as provided by this article.
 2-8           SECTION 3. Section 5(a), Article 3.50-4, Insurance Code, is
 2-9     amended to read as follows:
2-10           (a)  The trustee may adopt rules, plans, procedures, and
2-11     orders reasonably necessary to implement this article, including:
2-12                 (1)  establishment of minimum benefit and financing
2-13     standards for group health benefits [insurance] coverage and other
2-14     coverage to be provided to all retirees, active employees,
2-15     dependents, surviving spouses, and surviving dependent children;
2-16                 (2)  establishment of basic and optional group coverage
2-17     to be provided to retirees, active employees, dependents, surviving
2-18     spouses, and surviving dependent children;
2-19                 (3)  establishment of the procedures for contributions
2-20     and deductions;
2-21                 (4)  establishment of periods for enrollment and
2-22     selection of optional coverage and procedures for enrolling and
2-23     exercising options under the plan;
2-24                 (5)  determination of methods and procedures for claims
2-25     administration;
2-26                 (6)  study of the operation of all [insurance] coverage
2-27     provided under this article;
 3-1                 (7)  administration of the fund;
 3-2                 (8)  adoption of a timetable for the development of
 3-3     minimum benefit and financial standards for group [insurance]
 3-4     coverage, establishment of group health benefit plans and other
 3-5     insurance plans, and the taking of bids for and awarding of
 3-6     contracts for group health benefit plans and other insurance plans;
 3-7     and
 3-8                 (9)  contracting with an independent and experienced
 3-9     group insurance consultant or actuary, who does not receive
3-10     [insurance] commissions from any carrier [insurance company], for
3-11     advice and counsel in implementing and administering this program.
3-12           SECTION 4. Section 6, Article 3.50-4, Insurance Code, is
3-13     amended by amending Subsections (a), (c), and (f) and adding
3-14     Subsection (h) to read as follows:
3-15           (a)  There is created a Health Benefit [Retirees] Advisory
3-16     Committee composed of nine members appointed by the trustee.  One
3-17     member shall be an active school administrator.  One member shall
3-18     be a retired school administrator.  Two members shall be active
3-19     teachers.  Three members shall be retired teachers.  One member
3-20     shall be an active member of the auxiliary personnel of a school
3-21     district.  One member shall be a retired member of the auxiliary
3-22     personnel.
3-23           (c)  The committee shall:
3-24                 (1)  hold public hearings on group health benefits
3-25     coverage and other insurance benefits;
3-26                 (2)  recommend to the trustee minimum standards and
3-27     features of the plan or plans that it considers appropriate; and
 4-1                 (3)  recommend to the trustee desirable changes in
 4-2     rules and legislation affecting the program.
 4-3           (f)  A person is not eligible for appointment as a member of
 4-4     the advisory committee if the person is required to register [with
 4-5     the secretary of state] under Chapter 305, Government Code [422,
 4-6     Acts of the 63rd Legislature, Regular Session, 1973 (Article
 4-7     6252-9c, Vernon's Texas Civil Statutes)].
 4-8           (h)  The advisory committee is not subject to Section
 4-9     2110.008, Government Code.
4-10           SECTION 5. Section 7, Article 3.50-4, Insurance Code, is
4-11     amended to read as follows:
4-12           Sec. 7.  PARTICIPATION BY RETIREE. (a)  Each retiree must be
4-13     enrolled in a basic plan offered in the program unless:
4-14                 (1)  the retiree rejects enrollment in the program in
4-15     writing on a form provided by the trustee; or
4-16                 (2)  the retiree has been found under Section 18A of
4-17     this article to have defrauded or attempted to defraud the program.
4-18           (b)  For each retiree who participates in the program, the
4-19     state through the trustee shall contribute from money in the fund
4-20     the [total] cost for the basic plan covering the retiree as
4-21     follows:
4-22                 (1)  100 percent of the cost of the basic group health
4-23     benefits coverage for a retiree who retired with at least 30 years
4-24     of actual service credit for a school district;
4-25                 (2)  75 percent of the cost of the basic group health
4-26     benefits coverage for a retiree who retired with at least 20 but
4-27     less than 30 years of actual service credit; and
 5-1                 (3)  50 percent of the cost of the basic group health
 5-2     benefits coverage for a retiree who retired with at least 10 years
 5-3     but less than 20 years of actual service credit.
 5-4           (c)  A retiree shall pay 100 percent of the cost of optional
 5-5     coverage or dependent coverage selected by the retiree.
 5-6           SECTION 6. Section 7A, Article 3.50-4, Insurance Code, is
 5-7     amended to read as follows:
 5-8           Sec. 7A.  PARTICIPATION BY ACTIVE EMPLOYEES. (a)  Each [A]
 5-9     public school district shall [may elect to] participate in the
5-10     program provided under this article.  A district [that elects to
5-11     participate] must accept the schedule of costs adopted by the
5-12     trustee.  [A district may offer an alternative health benefit plan
5-13     to its active employees during the period of its participation in
5-14     the program if the trustee approves the plan as providing
5-15     contributions, participation, and a design that are in accordance
5-16     with sound group benefit underwriting principles.]
5-17           (b)  The trustee by rule shall establish [provide]:
5-18                 (1)  minimum benefit standards for the program
5-19     [eligibility requirements for participation by a school district,
5-20     which may include criteria based on size]; and
5-21                 (2)  other requirements for school districts as
5-22     determined by the trustee to be necessary for the operation of
5-23     [restrictions on the ability of a school district to begin or
5-24     discontinue participation, which may include a minimum period of
5-25     participation and limited periods for elections to begin or
5-26     discontinue participation;]
5-27                 [(3)  administrative fees to be paid by participating
 6-1     school districts to cover the trustee's administrative costs in
 6-2     extending the program to active employees; and]
 6-3                 [(4)  requirements to minimize the effects of adverse
 6-4     selection on] the program.
 6-5           (c)  The trustee shall provide basic group health benefits
 6-6     coverage for each active employee and may provide optional group
 6-7     coverages for active employees participating in the program.  The
 6-8     coverages must be the same type of coverages as the [may be
 6-9     combined with or similar to, but separate from,] coverages provided
6-10     to retirees.  The trustee by rule shall define the requirements of
6-11     the basic coverage [sum of premiums and administrative fees
6-12     received from participating school districts and active employees
6-13     must cover all expenses of school district employee participation
6-14     in the program].
6-15           (d)  Each [Participation by an] active employee of a
6-16     [participating] school district shall participate in the basic
6-17     coverage unless [is optional with] the employee specifically waives
6-18     participation in writing.  A school district may not offer a
6-19     financial incentive to an active employee for declining to
6-20     participate in the program.  An active employee is entitled to
6-21     obtain coverage for dependents in the same manner as a
6-22     participating retiree.
6-23           (e)  Each [participating] school district shall contribute
6-24     for each district employee covered by the program an amount equal
6-25     to 50 [not less than 75] percent of the cost for the employee only
6-26     of the plans of group coverages authorized by the trustee for
6-27     active employees.  [The district shall certify to the trustee the
 7-1     amount the district will contribute monthly toward the cost of
 7-2     coverage. The trustee shall determine if the amount is sufficient
 7-3     to underwrite the plan for the district based on sound group
 7-4     benefit underwriting principles. A determination by the trustee
 7-5     under this subsection is final.]
 7-6           (f)  Except as provided by Section 22.004(b), Education Code,
 7-7     each active [Each] employee covered by the program shall pay,
 7-8     through a deduction from the employee's compensation, 100 percent
 7-9     [that portion] of the cost of optional coverage or dependent
7-10     coverage selected by the employee [that exceeds the amount of
7-11     employer contributions].
7-12           (g)  The trustee shall pay, from [deposit in] the fund, the
7-13     administrative costs incurred in extending the program to active
7-14     employees and may use for that purpose any unexpended balance of
7-15     the [all] fees collected under Section 44(d), Chapter 812, Acts of
7-16     the 73rd Legislature, 1993[, except that portion used to conduct
7-17     the survey required by Section 44.  The trustee shall continue to
7-18     collect the fee through the 1996-1997 school year, after which time
7-19     the fee expires].
7-20           (h)  The state shall, for each active employee covered by the
7-21     program, contribute in the manner provided by Section 16 of this
7-22     article an amount equal to 50 percent of the cost for employee-only
7-23     coverage under the plan of basic coverage authorized by the trustee
7-24     for active employees.  The state may also make contributions to the
7-25     fund in addition to those required by Section 16(b) of this article
7-26     for the purpose of assisting in the expansion of the program to
7-27     active employees.
 8-1           [(i)  The trustee shall begin enrollment in the program for
 8-2     active employees to be effective beginning with the 1996-1997
 8-3     school year.]
 8-4           SECTION 7. Section 8(b), Article 3.50-4, Insurance Code, is
 8-5     amended to read as follows:
 8-6           (b)  The basic group health benefits coverage [coverages]
 8-7     provided under the plan or plans must be comparable to the coverage
 8-8     provided under the Texas Employees Uniform Group Insurance Benefits
 8-9     Act (Article 3.50-2, Vernon's Texas Insurance Code) and must
8-10     include coverage for prescribed drugs, medicines, and prosthetic
8-11     devices.  In addition to the basic group health benefits coverage
8-12     required under this subsection, the coverages provided under the
8-13     plan or plans may include [but are not limited to] life insurance,
8-14     accidental death and dismemberment, [hospital care and benefits,
8-15     surgical care and treatment, medical care and treatment, dental
8-16     care, eye care, obstetrical benefits,] long-term care, [prescribed
8-17     drugs, medicines, and prosthetic devices, and] other supplemental
8-18     benefits, supplies, and services [as provided by this article],
8-19     protection against loss of salary, and other coverages considered
8-20     advisable by the trustee.  In making coverage determinations under
8-21     this section, the trustee shall consult with the Employees
8-22     Retirement System of Texas.
8-23           SECTION 8. Section 9, Article 3.50-4, Insurance Code, is
8-24     amended to read as follows:
8-25           Sec. 9.  BENEFIT CERTIFICATES.  At such times, or upon such
8-26     events, as designated by the trustee, each insurance carrier shall
8-27     issue to each retiree, active employee, surviving spouse, or
 9-1     surviving dependent child entitled to coverage [insured] under this
 9-2     article a certificate of benefits [insurance] that:
 9-3                 (1)  states the benefits to which the person is
 9-4     entitled;
 9-5                 (2)  states to whom the benefits are payable;
 9-6                 (3)  states to whom the claims must be submitted; and
 9-7                 (4)  summarizes the provisions of the health benefit
 9-8     plan or other plan [policy] principally affecting the person.
 9-9           SECTION 9. Sections 10(a) and (b), Article 3.50-4, Insurance
9-10     Code, are amended to read as follows:
9-11           (a)  Not later than the 180th day after the end of each state
9-12     fiscal year, the trustee shall make a written report to the
9-13     commissioner [State Board of Insurance] concerning the [insurance]
9-14     coverages provided and the benefits and services being received by
9-15     persons covered [insured] under this article.
9-16           (b)  Coverage [Insurance coverage] purchased under this
9-17     article shall provide for an accounting to the trustee by each
9-18     carrier providing coverage not later than the 90th day after the
9-19     end of each plan [policy] year.  The accounting shall be on a form
9-20     approved by the trustee.  Other reports shall be prepared by each
9-21     carrier if considered necessary by the trustee.  An extra charge
9-22     may not be assessed by the carrier for the accounting reports.
9-23           SECTION 10. Section 13, Article 3.50-4, Insurance Code, is
9-24     amended to read as follows:
9-25           Sec. 13.  AUTOMATIC COVERAGE.  A retiree or active employee
9-26     who applies during an enrollment period may not be denied any of
9-27     the [group insurance] basic coverage provided under this article
 10-1    unless the person has been found under Section 18A of this article
 10-2    to have defrauded or attempted to defraud the Texas Public School
 10-3    Employees Group Insurance Program.
 10-4          SECTION 11. Section 15(a), Article 3.50-4, Insurance Code, is
 10-5    amended to read as follows:
 10-6          (a)  The school employees group insurance fund is created.
 10-7    The comptroller is the custodian of the fund, and the trustee shall
 10-8    administer the fund.  All contributions from active employees,
 10-9    retirees, school districts, and the state, contributions for
10-10    optional coverages, investment income, appropriations for
10-11    implementation of this program, and other money required or
10-12    authorized to be paid into the fund shall be paid into the fund.
10-13    From the fund shall be paid, without state fiscal year limitation,
10-14    the appropriate premiums to the carrier or carriers providing group
10-15    coverage under the plan or plans under this article, claims for
10-16    benefits under the group coverage, and the amounts expended by the
10-17    trustee for administration of the program.  The appropriate portion
10-18    of the contributions to the fund to provide for incurred but
10-19    unreported claim reserves and contingency reserves, as determined
10-20    by the trustee, shall be retained in the fund.
10-21          SECTION 12. Sections 16(a), (b), (c), (f), (g), (h), and (i),
10-22    Article 3.50-4, Insurance Code, are amended to read as follows:
10-23          (a)  For [the state fiscal year beginning September 1, 1985,
10-24    and for] each [subsequent] state fiscal year, each active employee,
10-25    as a condition of employment, shall contribute to the fund an
10-26    amount equal to .25 percent of the employee's salary.  Each month
10-27    the employer of an active employee shall deduct the contributions
 11-1    from the employee's salary and shall remit the contributions to the
 11-2    trustee as provided by any procedures that the trustee may require.
 11-3    In lieu of deducting the contributions from salaries, an employer
 11-4    may assume and pay the total contributions due from its active
 11-5    employees for any month.
 11-6          (b)  The state shall contribute as the state's contribution
 11-7    for coverage for retirees to the fund each fiscal year an amount
 11-8    equal to .50 percent of the salary of each active employee.  The
 11-9    state may contribute amounts in addition to the contribution
11-10    required by this subsection.
11-11          (c)  If [after the state fiscal year beginning September 1,
11-12    1990,] the amount of state and active employee contributions to the
11-13    fund is raised by the legislature above the percentages provided by
11-14    Subsections (a)  and (b) of this section to provide adequate
11-15    funding for the program, the ratio between the state's contribution
11-16    and the active employees' contributions must be maintained at two
11-17    to one.
11-18          (f)  Before the first day of November preceding each regular
11-19    session of the legislature, the trustee shall certify, for
11-20    information and review, to the Legislative Budget Board and the
11-21    budget division of the governor's office the amounts necessary to
11-22    pay the contributions of the state to the fund for the basic group
11-23    health benefit plans for active employees and retirees under this
11-24    article [for information and review].  Not later than August 31 of
11-25    each year, the trustee shall certify to the comptroller of public
11-26    accounts the estimated amount of state contributions to be received
11-27    by the fund for the next fiscal year under the appropriations
 12-1    authorized by this article.
 12-2          (g)  Contributions allocated and appropriated under this
 12-3    article [section] shall be paid from the General Revenue Fund in
 12-4    equal monthly installments, based on the annual estimate certified
 12-5    by the trustee to the comptroller of public accounts for that year,
 12-6    and subject to any express limitations specified in the Act making
 12-7    the appropriation.  Variations between the certified amount and the
 12-8    actual amount due for the year shall be reconciled at the close of
 12-9    the fiscal year and proper adjustments in the annual contributions
12-10    to the fund shall be made.
12-11          (h)  An employing district that fails to remit, before the
12-12    11th day after the last day of the month, all [member] deposits
12-13    required by this article [section] to be remitted by the district
12-14    for the month shall pay to the [Texas public school retired
12-15    employees group insurance] fund, in addition to the deposits,
12-16    interest on the unpaid amounts at the annual rate of six percent
12-17    compounded monthly.
12-18          (i)  An employing district and its trustees hold amounts due
12-19    to the [Texas public school retired employees group insurance] fund
12-20    under this article in trust for the fund and its participants and
12-21    may not divert the amounts for any other purpose.
12-22          SECTION 13.  Section 17(a), Article 3.50-4, Insurance Code,
12-23    is amended to read as follows:
12-24          (a)  The trustee shall study the operation and administration
12-25    of this article, including surveys and reports on financing group
12-26    insurance coverages and health benefit [benefits] plans available
12-27    to active employees and retirees, and the experience and projected
 13-1    cost of coverage and  benefits.  The trustee shall make a report to
 13-2    the legislature at each regular legislative session relating to the
 13-3    operation and administration of this article.
 13-4          SECTION 14.  Section 19, Article 3.50-4, Insurance Code, is
 13-5    amended to read as follows:
 13-6          Sec. 19.  ASSISTANCE. In implementing and administering this
 13-7    article, the commissioner [State Board of Insurance], as requested
 13-8    by the trustee, shall assist the trustee in carrying out this
 13-9    article.
13-10          SECTION 15.  Section 22.004, Education Code, is amended to
13-11    read as follows:
13-12          Sec. 22.004.  GROUP HEALTH BENEFITS FOR SCHOOL EMPLOYEES. (a)
13-13    Each district shall participate in the group health benefits
13-14    program provided under Article 3.50-4, Insurance Code.
13-15          (b)  In addition to coverage provided under the program
13-16    described by Subsection (a), a district may [shall] make available
13-17    to its employees additional benefits to provide dependent or
13-18    optional [group health] coverage, in whole or in part, through
13-19    [provided by] a risk pool established by one or more school
13-20    districts under Chapter 172, Local Government Code, or under a
13-21    policy of insurance or group contract issued by an insurer, a
13-22    company subject to Chapter 20, Insurance Code, or a health
13-23    maintenance organization under the Texas Health Maintenance
13-24    Organization Act (Chapter 20A, Vernon's Texas Insurance Code).
13-25    [The coverage must meet the substantive coverage requirements of
13-26    Article 3.51-6, Insurance Code, and any other law applicable to
13-27    group health insurance policies or contracts issued in this state.
 14-1    The coverage must include major medical treatment but may exclude
 14-2    experimental procedures.  In this subsection, "major medical
 14-3    treatment" means a medical, surgical, or diagnostic procedure for
 14-4    illness or injury. The coverage may include managed care or
 14-5    preventive care and must be comparable to the basic health coverage
 14-6    provided under the Texas Employees Uniform Group Insurance Benefits
 14-7    Act (Article 3.50-2, Vernon's Texas Insurance Code).  The board of
 14-8    trustees of the Teacher Retirement System of Texas shall adopt
 14-9    rules to determine whether a school district's group health
14-10    coverage is comparable to the basic health coverage specified by
14-11    this subsection.  The rules must provide for consideration of the
14-12    following factors concerning the district's coverage in determining
14-13    whether the district's coverage is comparable to the basic health
14-14    coverage specified by this subsection:]
14-15                [(1)  the deductible amount for service provided inside
14-16    and outside of the network;]
14-17                [(2)  the coinsurance percentages for service provided
14-18    inside and outside of the network;]
14-19                [(3)  the maximum amount of coinsurance payments a
14-20    covered person is required to pay;]
14-21                [(4)  the amount of the copayment for an office visit;]
14-22                [(5)  the schedule of benefits and the scope of
14-23    coverage;]
14-24                [(6)  the lifetime maximum benefit amount; and]
14-25                [(7)  verification that the coverage is issued by a
14-26    provider licensed to do business in this state by the Texas
14-27    Department of Insurance or is provided by a risk pool authorized
 15-1    under Chapter 172, Local Government Code, or that a district is
 15-2    capable of covering the assumed liabilities in the case of coverage
 15-3    provided through district self-insurance.]
 15-4          (c) [(b)]  The cost of the coverage provided under the
 15-5    program described by Subsection (a) shall be paid by the state, the
 15-6    district, and the employees in the manner provided by Section 7A,
 15-7    Article 3.50-4, Insurance Code.  The cost of coverage provided
 15-8    under a plan adopted under Subsection (b) shall [may] be shared by
 15-9    the employees and the district without contribution by the state.
15-10          (d) [(c)]  Each district shall report the district's
15-11    compliance with this section [subsection] to the executive director
15-12    of the Teacher Retirement System of Texas not later than March 1 of
15-13    each even-numbered year in the manner required by the board of
15-14    trustees of the Teacher Retirement System of Texas.  For a district
15-15    that elects to provide additional coverage described by Subsection
15-16    (b), the [The] report [must be based on the district group health
15-17    coverage plan in effect during the current plan year and] must
15-18    include:
15-19                (1)  appropriate documentation of:
15-20                      (A)  the district's contract [for group health
15-21    coverage] with a coverage provider licensed to do business in this
15-22    state by the Texas Department of Insurance or a risk pool
15-23    authorized under Chapter 172, Local Government Code; or
15-24                      (B)  a resolution of the board of trustees of the
15-25    district authorizing a self-insurance plan for district employees
15-26    and of the district's review of district ability to cover the
15-27    liability assumed;
 16-1                (2)  the schedule of benefits;
 16-2                (3)  the premium rate sheet, including the amount paid
 16-3    by the district and employee;
 16-4                (4)  the number of employees covered by the [each
 16-5    health] coverage plan offered by the district; and
 16-6                (5)  any other information considered appropriate by
 16-7    the executive director of the Teacher Retirement System of Texas.
 16-8          [(d)  Based on the criteria prescribed by Subsection (a), the
 16-9    executive director of the Teacher Retirement System of Texas shall
16-10    certify whether a district's coverage is comparable to the basic
16-11    health coverage provided under the Texas Employees Uniform Group
16-12    Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
16-13    Code).  If the executive director of the Teacher Retirement System
16-14    of Texas determines that the group health coverage offered by a
16-15    district is not comparable, the executive director shall report
16-16    that information to the district and to the Legislative Budget
16-17    Board. The executive director shall submit a report to the
16-18    legislature not later than September 1 of each even-numbered year
16-19    describing the status of each district's group health coverage
16-20    program based on the information contained in the report required
16-21    by Subsection (c) and the certification required by this
16-22    subsection.]
16-23          (e)  A school district that elects to provide additional
16-24    coverage described by Subsection (b) may not contract with an
16-25    insurer, a company subject to Chapter 20, Insurance Code, or a
16-26    health maintenance organization to issue a policy or contract under
16-27    this section, or with any person to assist the school district in
 17-1    obtaining or managing the policy or contract unless, before the
 17-2    contract is entered into, the insurer, company, organization, or
 17-3    person provides the district with an audited financial statement
 17-4    showing the financial condition of the insurer, company,
 17-5    organization, or person.
 17-6          (f)  An insurer, a company subject to Chapter 20, Insurance
 17-7    Code, or a health maintenance organization that issues a policy or
 17-8    contract under this section and any person that assists the school
 17-9    district in obtaining or managing the policy or contract for
17-10    compensation shall provide an annual audited financial statement to
17-11    the school district showing the financial condition of the insurer,
17-12    company, organization, or person.
17-13          (g)  An audited financial statement provided under this
17-14    section must be made in accordance with rules adopted by the
17-15    commissioner of insurance or state auditor, as applicable.
17-16          SECTION 16.  Section 20, Article 3.50-4, Insurance Code, is
17-17    repealed.
17-18          SECTION 17.  Effective September 1, 2002, the following laws
17-19    are repealed:
17-20                (1)  Section 22.005, Education Code; and
17-21                (2)  Article 26.036, Insurance Code.
17-22          SECTION 18.  The Teacher Retirement System of Texas shall
17-23    begin enrollment in the group health benefits program for active
17-24    employees and retirees as provided under Article 3.50-4, Insurance
17-25    Code, as amended by this Act, to be effective beginning with the
17-26    2002-2003 school year.
17-27          SECTION 19.  A school district that, before September 1,
 18-1    2001, established a health care fund under Section 22.005,
 18-2    Education Code, shall abolish the fund not later than September 1,
 18-3    2002.  Any unexpended balance in the fund attributable to
 18-4    deductions made from the salary of district employees shall be
 18-5    distributed to those employees in shares proportionate to the
 18-6    amount contributed by each employee not later than December 1,
 18-7    2002.
 18-8          SECTION 20.  This Act takes effect September 1, 2001.