By Telford H.B. No. 1189
77R3388 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to group benefits for active employees and retirees of
1-3 school districts.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 ARTICLE 1. MANDATORY GROUP BENEFITS PROGRAM
1-6 FOR ACTIVE SCHOOL EMPLOYEES
1-7 SECTION 1.01. Title 1, Insurance Code, is amended by adding
1-8 Chapter 3A to read as follows:
1-9 CHAPTER 3A. TEXAS ACTIVE SCHOOL EMPLOYEES GROUP BENEFITS PROGRAM
1-10 SUBCHAPTER A. GENERAL PROVISIONS
1-11 Art. 3A.001. SHORT TITLE. This chapter may be cited as the
1-12 Texas Active School Employees Group Health Benefits Act.
1-13 Art. 3A.002. DEFINITIONS. In this chapter:
1-14 (1) "Administering firm" means any firm designated by
1-15 the board to administer any coverages, services, benefits, or
1-16 requirements under this chapter and the board's rules adopted under
1-17 this chapter.
1-18 (2) "Basic plan" means the plan of group benefits
1-19 adopted by the board and selected by a school district in which
1-20 each full-time employee of the school district participates
1-21 automatically unless participation is specifically waived.
1-22 (3) "Board" means the Texas Active School Employees
1-23 Group Benefits Board.
1-24 (4) "Cafeteria plan" means a plan as defined and
2-1 authorized by Section 125, Internal Revenue Code of 1986.
2-2 (5) "Dependent" means:
2-3 (A) a spouse of an employee;
2-4 (B) an employee's or a deceased employee's
2-5 unmarried child who is younger than 25 years of age, including:
2-6 (i) an adopted child;
2-7 (ii) a foster child, stepchild, or other
2-8 child who is in a regular parent-child relationship; and
2-9 (iii) a recognized natural child; and
2-10 (C) an employee's recognized natural child,
2-11 adopted child, foster child, stepchild, or other child who is in a
2-12 regular parent-child relationship and who lives with or whose care
2-13 is provided by the employee or surviving spouse on a regular basis,
2-14 regardless of the child's age, if the child is mentally retarded or
2-15 physically incapacitated to such an extent as to be dependent on
2-16 the employee or surviving spouse for care or support, as determined
2-17 by the board, or in the case of a deceased employee, a recognized
2-18 natural child, adopted child, foster child, stepchild, or other
2-19 child who was in a regular parent-child relationship and who lived
2-20 with or whose care was provided by the deceased employee on a
2-21 regular basis, regardless of the child's age, if the child is
2-22 mentally retarded or physically incapacitated to such an extent as
2-23 to have been dependent on the deceased employee or surviving spouse
2-24 for care or support, as determined by the board.
2-25 (6) "Employee" means a participating member of the
2-26 Teacher Retirement System of Texas who is employed by a school
2-27 district and who is not covered by a group insurance program under
3-1 the Texas Employees Uniform Group Insurance Benefits Act (Article
3-2 3.50-2, Vernon's Texas Insurance Code) or the Texas State College
3-3 and University Employees Uniform Insurance Benefits Act (Article
3-4 3.50-3, Vernon's Texas Insurance Code). The term does not include
3-5 an individual performing personal services for a school district as
3-6 an independent contractor.
3-7 (7) "Fund" means the Texas active school employees
3-8 uniform group benefits trust fund.
3-9 (8) "Group program" means the Texas active school
3-10 employees group benefits program authorized by this chapter.
3-11 (9) "Health benefits plan" means any group policy or
3-12 contract, medical, dental, or hospital service agreement,
3-13 membership or subscription contract, salary continuation plan,
3-14 health maintenance organization agreement, or preferred provider
3-15 arrangement, or any similar group arrangement or any combination of
3-16 those policies, plans, contracts, agreements, or arrangements, that
3-17 provides, pays for, or reimburses expenses for health care
3-18 services.
3-19 (10) "Participating school district" means a public
3-20 school district that has elected under Article 3A.101 of this
3-21 chapter to participate in the group program and has not
3-22 discontinued participation under Article 3A.106 of this chapter.
3-23 (11) "Surviving dependent child" means the dependent
3-24 child of a deceased employee who has survived the deceased employee
3-25 and the deceased employee's spouse if the deceased employee had 10
3-26 or more years of service credit in the Teacher Retirement System of
3-27 Texas.
4-1 (12) "Surviving spouse" means the surviving spouse of
4-2 a deceased employee who had 10 or more years of service credit in
4-3 the Teacher Retirement System of Texas.
4-4 (Articles 3A.003-3A.050 reserved for expansion
4-5 SUBCHAPTER B. TEXAS ACTIVE SCHOOL EMPLOYEES
4-6 GROUP BENEFITS BOARD
4-7 Art. 3A.051. BOARD; MEMBERSHIP. (a) The Texas Active School
4-8 Employees Group Benefits Board is established.
4-9 (b) The board is composed of nine members appointed by the
4-10 governor with the advice and consent of the senate. Two members
4-11 shall be members of school boards. Two members shall be
4-12 superintendents of school districts. Three members shall be
4-13 teachers who are active employees of school districts. One member
4-14 shall be a member of the auxiliary personnel of a school district.
4-15 One member shall be a person who is not employed by a school
4-16 district who has demonstrated experience in the administration of
4-17 group health benefit plans.
4-18 (c) Appointments to the board shall be made without regard
4-19 to the race, color, disability, sex, religion, age, or national
4-20 origin of the appointee.
4-21 Art. 3A.052. TERMS; VACANCY. (a) Members of the board are
4-22 appointed for staggered six-year terms, with the terms of three
4-23 members expiring February 1 of each odd-numbered year.
4-24 (b) If a vacancy occurs on the board, the governor shall
4-25 appoint a replacement to fill the unexpired term.
4-26 Art. 3A.053. COMPENSATION; REIMBURSEMENT. A board member is
4-27 entitled to compensation and reimbursement of the traveling
5-1 expenses incurred by the member while conducting the business of
5-2 the board, as provided in the General Appropriations Act.
5-3 Art. 3A.054. BOARD POWERS AND DUTIES. (a) The board shall
5-4 administer and enforce this chapter. The board shall:
5-5 (1) implement and administer a program of group health
5-6 benefits coverage for active employees of school districts as
5-7 provided by this chapter;
5-8 (2) adopt, as part of the group program, rules and
5-9 guidelines for a comprehensive health benefits plan applicable to
5-10 all school districts of this state;
5-11 (3) analyze group benefits plans marketed to the board
5-12 to provide coverage for active employees of school districts;
5-13 (4) provide information to participating school
5-14 districts and their employees regarding the group program; and
5-15 (5) assist participating school districts in resolving
5-16 problems regarding implementation of the group program.
5-17 (b) The board shall adopt rules as necessary to administer
5-18 this chapter.
5-19 (c) The board may hire and compensate employees.
5-20 (d) The board may, on a competitive bid basis, contract with
5-21 a qualified, experienced firm of group insurance specialists or an
5-22 administering firm that will act for the board in the capacity of
5-23 independent administrators and managers of the group program. The
5-24 independent administrator selected by the board shall assist the
5-25 board to ensure the proper administration of this chapter and the
5-26 coverages, services, and benefits provided for or authorized by
5-27 this chapter and shall be paid by the board.
6-1 (e) The board may enter into interagency contracts and
6-2 memoranda of understanding with any agency of the state, including
6-3 the Employees Retirement System of Texas and the Teacher Retirement
6-4 System of Texas, for assistance in implementing the group program.
6-5 (f) The board has the powers with regard to the group
6-6 program that the Employees Retirement System of Texas has in
6-7 administering the Texas Employees Uniform Group Insurance Benefits
6-8 Act (Article 3.50-2, Vernon's Texas Insurance Code), including the
6-9 power to adjudicate claims and expel participants from the program
6-10 for cause.
6-11 (g) The board shall pay the administrative costs incurred in
6-12 implementing the group program and shall impose a uniform fee on
6-13 participating school districts in an amount reasonable and
6-14 necessary to pay those costs.
6-15 Art. 3A.055. ANNUAL REPORTS. (a) The board shall file
6-16 annually with the governor and the presiding officer of each house
6-17 of the legislature a complete and detailed written report
6-18 accounting for all funds received and disbursed by the board during
6-19 the preceding fiscal year. The report required under this
6-20 subsection must be in the form and reported in the time provided by
6-21 the General Appropriations Act.
6-22 (b) The board shall file annually with the governor and the
6-23 presiding officer of each house of the legislature a complete and
6-24 detailed written report regarding the activities of the board in
6-25 implementing this chapter. The board shall submit copies of the
6-26 report required under this subsection to:
6-27 (1) the commissioner;
7-1 (2) the Employees Retirement System of Texas; and
7-2 (3) the Teacher Retirement System of Texas.
7-3 (Articles 3A.056-3A.100 reserved for expansion
7-4 SUBCHAPTER C. GROUP PROGRAM
7-5 Art. 3A.101. PARTICIPATION IN PROGRAM. (a) Beginning August
7-6 1, 2002, a public school district may elect to participate in the
7-7 group program unless the district is participating in the group
7-8 insurance program under the Texas Employees Uniform Group Insurance
7-9 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code).
7-10 (b) A school district that elects to participate in the
7-11 group program may not provide a competing group health benefits
7-12 program for employees, including a program under Section 22.004,
7-13 Education Code.
7-14 (c) A school district that elects to participate in the
7-15 group program is required to participate for a minimum of two
7-16 years. The beginning of a district's participation in the program
7-17 must coincide with the beginning of a school year in an
7-18 odd-numbered year.
7-19 (d) The board by rule may establish a biennial deadline for
7-20 notification of the board of an election to begin participation.
7-21 (e) A participating school district may discontinue
7-22 participation only as provided by Article 3A.106 of this chapter.
7-23 Art. 3A.102. PARTICIPATION BY EMPLOYEES. (a) Each full-time
7-24 employee of a participating school district is automatically
7-25 covered by the basic plan for employees selected by the school
7-26 district, unless the employee specifically waives coverage or
7-27 unless the employee is expelled from the group program. For
8-1 purposes of this subsection, "full-time employee" has the meaning
8-2 defined by board rule.
8-3 (b) A part-time employee of a participating school district
8-4 is eligible to participate in the group program only as provided by
8-5 board rule. A participating school district shall notify its
8-6 part-time employees of their eligibility to participate in the
8-7 program.
8-8 Art. 3A.103. GROUP BENEFITS. (a) The board shall adopt
8-9 plans of group benefits for employees of school districts and their
8-10 dependents. The plans of group benefits must include one or more
8-11 basic plans of group health benefits that may be selected by a
8-12 school district for all district employees. At least one of the
8-13 basic plans of group health benefits shall be comparable in scope
8-14 and, to the greatest extent possible, in cost to the health benefit
8-15 plan coverages provided under the Texas Employees Uniform Group
8-16 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
8-17 Code). A district must select the same basic plan of group health
8-18 benefits for all district employees.
8-19 (b) The plans of group benefits may also include group life
8-20 coverages, accidental death and dismemberment coverages, coverages
8-21 against short-term or long-term loss of salary, and other benefits
8-22 considered advisable by the board. Comparable plans of each type
8-23 of benefit adopted must be offered to employees of all school
8-24 districts.
8-25 (c) The board by rule may define optional coverage that may
8-26 be selected by individual school district employees, which must
8-27 include coverage for dependents.
9-1 (d) The board may provide a cafeteria plan for employees of
9-2 school districts.
9-3 (e) The board may determine that plans of group benefits
9-4 shall be provided directly from the Texas active school employees
9-5 uniform group benefits trust fund rather than through the purchase
9-6 of coverage. Any self-funded plan of group benefits is exempt from
9-7 any other provision of this code unless the law specifically
9-8 applies to the plan or this chapter.
9-9 Art. 3A.104. PAYMENT OF CONTRIBUTIONS. (a) The state
9-10 shall pay 100 percent of the cost of employee-only coverage under
9-11 the least expensive basic plan of group health benefits adopted
9-12 under Article 3A.103(a) of this chapter for each active employee
9-13 participating in the group program.
9-14 (b) A participating school district that selects a basic
9-15 plan that is more expensive than the plan described by Subsection
9-16 (a) of this article shall pay on behalf of its employees the full
9-17 cost of employee-only coverage in that plan that exceeds the amount
9-18 of the state contribution under Subsection (a) of this article.
9-19 Art. 3A.105. PAYMENT OF CONTRIBUTIONS FOR OPTIONAL COVERAGE.
9-20 A participating employee shall pay all of the cost of optional
9-21 coverage selected by the employee, including dependent coverage.
9-22 Art. 3A.106. DISCONTINUANCE OF PARTICIPATION. (a) A school
9-23 district participating in the group program may elect to
9-24 discontinue participation by notifying the board in the manner
9-25 prescribed by the board and obtaining the board's determination
9-26 that the district is committed to offering an alternate basic plan
9-27 of group health benefits that meets the requirements of Section
10-1 22.004, Education Code, at no cost to its participating employees.
10-2 (b) Participation in the group program ends immediately
10-3 before the beginning of the first school year that begins in an
10-4 odd-numbered year after the date the board makes the determination
10-5 required by Subsection (a) of this article.
10-6 (Articles 3A.107-3A.150 reserved for expansion
10-7 SUBCHAPTER D. FUND
10-8 Art. 3A.151. FUND. Contributions collected under Articles
10-9 3A.104 and 3A.105 of this chapter and any amounts appropriated by
10-10 the legislature for contingency reserves or administrative expenses
10-11 shall be deposited in the Texas active school employees uniform
10-12 group benefits trust fund. The fund is a trust fund with the
10-13 comptroller.
10-14 Art. 3A.152. USE OF FUND. (a) The board may use amounts in
10-15 the fund only to provide group benefits under this chapter and to
10-16 pay the expenses of administering the group program.
10-17 (b) The board may invest assets of the fund in the manner
10-18 provided by Section 67(a)(3), Article XVI, Texas Constitution.
10-19 ARTICLE 2. CONFORMING AMENDMENTS
10-20 SECTION 2.01. Section 1, Article 3.50-4, Insurance Code, is
10-21 amended to read as follows:
10-22 Sec. 1. SHORT TITLE. This article may be cited as the Texas
10-23 Public School Retired Employees Group Insurance Act.
10-24 SECTION 2.02. Sections 2(3), (4), (11), and (13), Article
10-25 3.50-4, Insurance Code, are amended to read as follows:
10-26 (3) "Dependent" means:
10-27 (A) a spouse of a retiree [or active member];
11-1 (B) a retiree's[, an active member's,] or a
11-2 deceased active member's unmarried child who is younger than 25
11-3 years of age including:
11-4 (i) an adopted child;
11-5 (ii) a foster child, a stepchild, or other
11-6 child who is in a regular parent-child relationship; and
11-7 (iii) a recognized natural child; and
11-8 (C) a retiree's [or active member's] recognized
11-9 natural child, adopted child, foster child, stepchild, or other
11-10 child who is in a regular parent-child relationship and who lives
11-11 with or whose care is provided by the retiree[, active member,] or
11-12 surviving spouse on a regular basis, regardless of the child's age,
11-13 if the child is mentally retarded or physically incapacitated to
11-14 such an extent as to be dependent on the retiree[, active member,]
11-15 or surviving spouse for care or support, as determined by the
11-16 trustee, or in the case of a deceased active member, a recognized
11-17 natural child, adopted child, foster child, stepchild, or other
11-18 child who was in a regular parent-child relationship and who lived
11-19 with or whose care was provided by the deceased active member on a
11-20 regular basis, regardless of the child's age, if the child is
11-21 mentally retarded or physically incapacitated to such an extent as
11-22 to have been dependent on the deceased active member or surviving
11-23 spouse for care or support, as determined by the trustee.
11-24 (4) "Fund" means the Texas public school retired
11-25 employees group insurance fund.
11-26 (11) "Surviving spouse" means[:]
11-27 [(A)] the surviving spouse of a deceased
12-1 retiree[;]
12-2 [(B) the surviving spouse of a deceased active
12-3 member of the Teacher Retirement System of Texas:]
12-4 [(i) for whom contributions have been made
12-5 to the Texas Public School Retired Employees Group Insurance
12-6 Program at the last place of employment of the deceased active
12-7 member in public education in this state;]
12-8 [(ii) who had 10 or more years of service
12-9 credit in the Teacher Retirement System of Texas; and]
12-10 [(iii) who died on or after September 1,
12-11 1986].
12-12 (13) "Surviving dependent child" means[:]
12-13 [(A)] the dependent child of a deceased retiree
12-14 who has survived the deceased retiree and the deceased retiree's
12-15 spouse[; or]
12-16 [(B) the dependent child of a deceased active
12-17 member of the Teacher Retirement System of Texas who has survived
12-18 the deceased active member and the deceased member's spouse if the
12-19 deceased active member:]
12-20 [(i) had contributions to the Texas Public
12-21 School Retired Employees Group Insurance Program at his last place
12-22 of employment within public education;]
12-23 [(ii) had 10 or more years of service
12-24 credit in the Teacher Retirement System of Texas; and]
12-25 [(iii) died on or after September 1,
12-26 1986].
12-27 SECTION 2.03. Section 3(a), Article 3.50-4, Insurance Code,
13-1 is amended to read as follows:
13-2 (a) The Texas Public School Retired Employees Group
13-3 Insurance Program is established to provide for an insurance plan
13-4 or plans under this article.
13-5 SECTION 2.04. Section 5(a), Article 3.50-4, Insurance Code,
13-6 is amended to read as follows:
13-7 (a) The trustee may adopt rules, plans, procedures, and
13-8 orders reasonably necessary to implement this article, including:
13-9 (1) establishment of minimum benefit and financing
13-10 standards for group insurance coverage to be provided to all
13-11 retirees, [active employees,] dependents, surviving spouses, and
13-12 surviving dependent children;
13-13 (2) establishment of basic and optional group coverage
13-14 to be provided to retirees, [active employees,] dependents,
13-15 surviving spouses, and surviving dependent children;
13-16 (3) establishment of the procedures for contributions
13-17 and deductions;
13-18 (4) establishment of periods for enrollment and
13-19 selection of optional coverage and procedures for enrolling and
13-20 exercising options under the plan;
13-21 (5) determination of methods and procedures for claims
13-22 administration;
13-23 (6) study of the operation of all insurance coverage
13-24 provided under this article;
13-25 (7) administration of the fund;
13-26 (8) adoption of a timetable for the development of
13-27 minimum benefit and financial standards for group insurance
14-1 coverage, establishment of group insurance plans, and the taking of
14-2 bids for and awarding of contracts for insurance plans; and
14-3 (9) contracting with an independent and experienced
14-4 group insurance consultant or actuary, who does not receive
14-5 insurance commissions from any insurance company, for advice and
14-6 counsel in implementing and administering this program.
14-7 SECTION 2.05. Section 8(e), Article 3.50-4, Insurance Code,
14-8 is amended to read as follows:
14-9 (e) The trustee may contract for and make available to all
14-10 retirees, dependents, surviving spouses, and surviving dependent
14-11 children optional group health benefit plans in addition to the
14-12 basic plans. The optional coverage may include a smaller
14-13 deductible, lower coinsurance, or additional categories of benefits
14-14 permitted under Subsection (b) of this section to provide
14-15 additional levels of coverages and benefits. The trustee may
14-16 utilize a portion of the funds received for the Texas Public School
14-17 Retired Employees Group Insurance Program to offset some portion of
14-18 costs paid by the retiree for optional coverage if such utilization
14-19 does not reduce the period the program is projected to remain
14-20 financially solvent by more than one year in a biennium. Any
14-21 additional contributions for these optional plans shall be paid for
14-22 by the retiree, surviving spouse, or surviving dependent children.
14-23 SECTION 2.06. Section 9, Article 3.50-4, Insurance Code, is
14-24 amended to read as follows:
14-25 Sec. 9. BENEFIT CERTIFICATES. At such times, or upon such
14-26 events, as designated by the trustee, each insurance carrier shall
14-27 issue to each retiree, [active employee,] surviving spouse, or
15-1 surviving dependent child insured under this article a certificate
15-2 of insurance that:
15-3 (1) states the benefits to which the person is
15-4 entitled;
15-5 (2) states to whom the benefits are payable;
15-6 (3) states to whom the claims must be submitted; and
15-7 (4) summarizes the provisions of the policy
15-8 principally affecting the person.
15-9 SECTION 2.07. Section 12, Article 3.50-4, Insurance Code, is
15-10 amended to read as follows:
15-11 Sec. 12. DEATH CLAIMS: BENEFICIARIES. The amount of group
15-12 life insurance and group accidental death and dismemberment
15-13 insurance covering a retiree, [active employee,] surviving spouse,
15-14 dependent, or surviving dependent child at the date of death shall
15-15 be paid, on the establishment of a valid claim, only:
15-16 (1) to the beneficiary or beneficiaries designated by
15-17 the person in a signed and witnessed written document received
15-18 before death in the trustee's office; or
15-19 (2) if no beneficiary is properly designated or in
15-20 existence, to persons in accordance with the trustee's death
15-21 benefit provisions in Subsection (b), Section 824.103, Government
15-22 Code.
15-23 SECTION 2.08. Section 13, Article 3.50-4, Insurance Code, is
15-24 amended to read as follows:
15-25 Sec. 13. AUTOMATIC COVERAGE. A retiree [or active employee]
15-26 who applies during an enrollment period may not be denied any of
15-27 the group insurance basic coverage provided under this article
16-1 unless the person has been found under Section 18A of this article
16-2 to have defrauded or attempted to defraud the Texas Public School
16-3 Retired Employees Group Insurance Program.
16-4 SECTION 2.09. Section 15, Article 3.50-4, Insurance Code, is
16-5 amended to read as follows:
16-6 Sec. 15. TEXAS PUBLIC SCHOOL RETIRED EMPLOYEES GROUP
16-7 INSURANCE FUND. (a) The Texas public school retired employees
16-8 group insurance fund is created. The comptroller is the custodian
16-9 of the fund, and the trustee shall administer the fund. All
16-10 contributions from active employees, retirees, and the state,
16-11 contributions for optional coverages, investment income,
16-12 appropriations for implementation of this program, and other money
16-13 required or authorized to be paid into the fund shall be paid into
16-14 the fund. From the fund shall be paid, without state fiscal year
16-15 limitation, the appropriate premiums to the carrier or carriers
16-16 providing group coverage under the plan or plans under this
16-17 article, claims for benefits under the group coverage, and the
16-18 amounts expended by the trustee for administration of the program.
16-19 The appropriate portion of the contributions to the fund to provide
16-20 for incurred but unreported claim reserves and contingency
16-21 reserves, as determined by the trustee, shall be retained in the
16-22 fund.
16-23 (b) The trustee shall transfer the amounts deducted from
16-24 annuities for contributions into the fund.
16-25 (c) Expenses for the development and administration of the
16-26 program shall be spent as provided by a budget adopted by the
16-27 trustee.
17-1 (d) The trustee may invest and reinvest the money in the
17-2 fund as provided by Subchapter D, Chapter 825, Government Code, for
17-3 assets of the Teacher Retirement System of Texas.
17-4 SECTION 2.10. Section 18A, Article 3.50-4, Insurance Code, is
17-5 amended to read as follows:
17-6 Sec. 18A. EXPULSION FROM PROGRAM FOR FRAUD. (a) After
17-7 notice and hearing as provided by this section, the trustee may
17-8 expel from participation in the Texas Public School Retired
17-9 Employees Group Insurance Program any retiree, [active employee,]
17-10 surviving spouse, dependent, or surviving dependent child who
17-11 submits a fraudulent claim under, or has defrauded or attempted to
17-12 defraud, any health benefits plan offered under the program.
17-13 (b) On its motion or on the receipt of a complaint, the
17-14 trustee may call and hold a hearing to determine whether a person
17-15 has submitted a fraudulent claim under, or has defrauded or
17-16 attempted to defraud, any health benefits plan offered under the
17-17 Texas Public School Retired Employees Group Insurance Program.
17-18 (c) A proceeding under this section is a contested case
17-19 under Chapter 2001, Government Code [the Administrative Procedure
17-20 and Texas Register Act (Article 6252-13a, Vernon's Texas Civil
17-21 Statutes)].
17-22 (d) If the trustee, at the conclusion of the hearing, issues
17-23 a decision that finds that the accused submitted a fraudulent claim
17-24 or has defrauded or attempted to defraud any health benefits plan
17-25 offered under the Texas Public School Retired Employees Group
17-26 Insurance Program, the trustee shall expel the person from
17-27 participation in the program.
18-1 (e) The substantial evidence rule shall be used on any
18-2 appeal of a decision of the trustee under this section.
18-3 (f) A person expelled from the Texas Public School Retired
18-4 Employees Group Insurance Program may not be insured by any health
18-5 insurance plan offered by the program for a period, to be
18-6 determined by the trustee, of up to five years from the date the
18-7 expulsion takes effect.
18-8 SECTION 2.11. Section 18B(a), Article 3.50-4, Insurance Code,
18-9 is amended to read as follows:
18-10 (a) Section 825.507, Government Code, concerning the
18-11 confidentiality of information in records that are in the custody
18-12 of the Teacher Retirement System of Texas, applies to information
18-13 in records that are in the custody of the retirement system
18-14 regarding retirees, active employees, annuitants, or beneficiaries
18-15 under the Texas Public School Retired Employees Group Insurance
18-16 Program.
18-17 SECTION 2.12. Sections 18C(c), (d), and (i), Article 3.50-4,
18-18 Insurance Code, are amended to read as follows:
18-19 (c) The trustee, the Texas public school retired employees
18-20 group insurance program, the Texas public school retired employees
18-21 group insurance fund, and the board of trustees, officers, advisory
18-22 committee members, and employees of the trustee are not liable for
18-23 damages arising from the acts or omissions of health care providers
18-24 who are participating health care providers in the coordinated care
18-25 network established by the trustee. Those health care providers
18-26 are independent contractors and are responsible for their own acts
18-27 and omissions.
19-1 (d) The trustee, the Texas public school retired employees
19-2 group insurance program, the Texas public school retired employees
19-3 group insurance fund, or a member of a credentialing committee, or
19-4 the board of trustees, officers, advisory committee members, or
19-5 employees of the trustee are not liable for damages arising from
19-6 any act, statement, determination, recommendation made, or act
19-7 reported, without malice, in the course of the evaluation of the
19-8 qualifications of health care providers or of the patient care
19-9 rendered by those providers.
19-10 (i) A credentialing committee, a person participating in a
19-11 credentialing review, a health care provider, the trustee, the
19-12 Texas public school retired employees group insurance program, or
19-13 the board of trustees, officers, advisory committee members, or
19-14 employees of the trustee that are named as defendants in any civil
19-15 action filed as a result of participation in the credentialing
19-16 process may use otherwise confidential information obtained for
19-17 legitimate internal business and professional purposes, including
19-18 use in their own defense. Use of information under this subsection
19-19 does not constitute a waiver of the confidential and privileged
19-20 nature of the information.
19-21 SECTION 2.13. Section 22.004, Education Code, is amended to
19-22 read as follows:
19-23 Sec. 22.004. GROUP HEALTH BENEFITS FOR SCHOOL EMPLOYEES. (a)
19-24 Each district may participate in the group benefits program
19-25 provided under Chapter 3A, Insurance Code.
19-26 (b) A district that does not elect to participate in the
19-27 program described by Subsection (a) shall make available to its
20-1 employees group health coverage provided by a risk pool established
20-2 by one or more school districts under Chapter 172, Local Government
20-3 Code, or under a policy of insurance or group contract issued by an
20-4 insurer, a company subject to Chapter 20, Insurance Code, or a
20-5 health maintenance organization under the Texas Health Maintenance
20-6 Organization Act (Chapter 20A, Vernon's Texas Insurance Code). The
20-7 coverage must meet the substantive coverage requirements of Article
20-8 3.51-6, Insurance Code, and any other law applicable to group
20-9 health insurance policies or contracts issued in this state. The
20-10 coverage must include major medical treatment but may exclude
20-11 experimental procedures. In this subsection, "major medical
20-12 treatment" means a medical, surgical, or diagnostic procedure for
20-13 illness or injury. The coverage may include managed care or
20-14 preventive care and must be comparable to the basic health coverage
20-15 provided under the Texas Employees Uniform Group Insurance Benefits
20-16 Act (Article 3.50-2, Vernon's Texas Insurance Code). The board of
20-17 trustees of the Teacher Retirement System of Texas shall adopt
20-18 rules to determine whether a school district's group health
20-19 coverage is comparable to the basic health coverage specified by
20-20 this subsection. The rules must provide for consideration of the
20-21 following factors concerning the district's coverage in determining
20-22 whether the district's coverage is comparable to the basic health
20-23 coverage specified by this subsection:
20-24 (1) the deductible amount for service provided inside
20-25 and outside of the network;
20-26 (2) the coinsurance percentages for service provided
20-27 inside and outside of the network;
21-1 (3) the maximum amount of coinsurance payments a
21-2 covered person is required to pay;
21-3 (4) the amount of the copayment for an office visit;
21-4 (5) the schedule of benefits and the scope of
21-5 coverage;
21-6 (6) the lifetime maximum benefit amount; and
21-7 (7) verification that the coverage is issued by a
21-8 provider licensed to do business in this state by the Texas
21-9 Department of Insurance or is provided by a risk pool authorized
21-10 under Chapter 172, Local Government Code, or that a district is
21-11 capable of covering the assumed liabilities in the case of coverage
21-12 provided through district self-insurance.
21-13 (c) [(b)] The cost of the coverage provided under the
21-14 program described by Subsection (a) shall be paid by the state, the
21-15 district, and the employees in the manner provided by Chapter 3A,
21-16 Insurance Code. The cost of coverage provided under a plan adopted
21-17 under Subsection (b) shall [may] be shared by the employees and the
21-18 district without contribution by the state.
21-19 (d) [(c)] Each district shall report the district's
21-20 compliance with this section [subsection] to the executive director
21-21 of the Teacher Retirement System of Texas not later than March 1 of
21-22 each even-numbered year in the manner required by the board of
21-23 trustees of the Teacher Retirement System of Texas. For a district
21-24 that does not elect to participate in the program described by
21-25 Subsection (a), the [The] report must be based on the district
21-26 group health coverage plan in effect during the current plan year
21-27 and must include:
22-1 (1) appropriate documentation of:
22-2 (A) the district's contract for group health
22-3 coverage with a provider licensed to do business in this state by
22-4 the Texas Department of Insurance or a risk pool authorized under
22-5 Chapter 172, Local Government Code; or
22-6 (B) a resolution of the board of trustees of the
22-7 district authorizing a self-insurance plan for district employees
22-8 and of the district's review of district ability to cover the
22-9 liability assumed;
22-10 (2) the schedule of benefits;
22-11 (3) the premium rate sheet, including the amount paid
22-12 by the district and employee;
22-13 (4) the number of employees covered by the [each]
22-14 health coverage plan offered by the district; and
22-15 (5) any other information considered appropriate by
22-16 the executive director of the Teacher Retirement System of Texas.
22-17 (e) For each district that does not elect to participate in
22-18 the program described by Subsection (a), and based [(d) Based] on
22-19 the criteria prescribed by Subsection (b) [(a)], the executive
22-20 director of the Teacher Retirement System of Texas shall certify
22-21 whether a district's coverage is comparable to the basic health
22-22 coverage provided under the Texas Employees Uniform Group Insurance
22-23 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code). If
22-24 the executive director of the Teacher Retirement System of Texas
22-25 determines that the group health coverage offered by a district is
22-26 not comparable, the executive director shall report that
22-27 information to the district and to the Legislative Budget Board.
23-1 The executive director shall submit a report to the legislature not
23-2 later than September 1 of each even-numbered year describing the
23-3 status of each district's group health coverage program based on
23-4 the information contained in the report required by Subsection (d)
23-5 [(c)] and the certification required by this subsection.
23-6 (f) [(e)] A school district that does not elect to
23-7 participate in the program described by Subsection (a) may not
23-8 contract with an insurer, a company subject to Chapter 20,
23-9 Insurance Code, or a health maintenance organization to issue a
23-10 policy or contract under this section, or with any person to assist
23-11 the school district in obtaining or managing the policy or contract
23-12 unless, before the contract is entered into, the insurer, company,
23-13 organization, or person provides the district with an audited
23-14 financial statement showing the financial condition of the insurer,
23-15 company, organization, or person.
23-16 (g) [(f)] An insurer, a company subject to Chapter 20,
23-17 Insurance Code, or a health maintenance organization that issues a
23-18 policy or contract under this section and any person that assists
23-19 the school district in obtaining or managing the policy or contract
23-20 for compensation shall provide an annual audited financial
23-21 statement to the school district showing the financial condition of
23-22 the insurer, company, organization, or person.
23-23 (h) [(g)] An audited financial statement provided under this
23-24 section must be made in accordance with rules adopted by the
23-25 commissioner of insurance or state auditor, as applicable.
23-26 ARTICLE 3. REPEALER; TRANSITION
23-27 SECTION 3.01. Effective September 1, 2002, Section 7A,
24-1 Article 3.50-4, Insurance Code, is repealed.
24-2 SECTION 3.02. (a) During the 2001-2002 school year, the
24-3 Texas Active School Employees Group Benefits Board shall develop
24-4 the group program to be implemented and administered under Chapter
24-5 3A, Insurance Code, as added by this Act. The board may employ
24-6 persons as necessary to implement this subsection.
24-7 (b) Coverage under the group program authorized by Chapter
24-8 3A, Insurance Code, as added by this Act, shall begin with the
24-9 2002-2003 school year, but not later than September 1, 2002.
24-10 (c) A school district that elects to participate in the
24-11 group program for the 2002-2003 school year may elect to
24-12 discontinue participation only in accordance with Article 3A.106,
24-13 Insurance Code, as added by this Act.
24-14 SECTION 3.03. (a) The Teacher Retirement System of Texas
24-15 shall, not later than September 1, 2002, transfer from the program
24-16 established under Article 3.50-4, Insurance Code, all assets and
24-17 liabilities provided under that program regarding active employees,
24-18 and all records relating to coverage of active employees under the
24-19 program, to the Texas Active School Employees Group Benefits Board
24-20 for the statewide group program established under Chapter 3A,
24-21 Insurance Code, as added by this Act.
24-22 (b) The comptroller shall, not later than September 1, 2002,
24-23 transfer from the fund established under Section 15, Article
24-24 3.50-4, Insurance Code, all assets and liabilities of that fund
24-25 relating to coverage for active employees to the fund established
24-26 under Subchapter D, Chapter 3A, Insurance Code, as added by this
24-27 Act.
25-1 SECTION 3.04. In making initial appointments to the Texas
25-2 Active School Employees Group Benefits Board, the governor shall
25-3 appoint three members for terms expiring February 1, 2003, three
25-4 members for terms expiring February 1, 2005, and three members for
25-5 terms expiring February 1, 2007.
25-6 SECTION 3.05. (a) This Act takes effect September 1, 2001,
25-7 except that Article 2 of this Act takes effect September 1, 2002.
25-8 (b) The Texas Active School Employees Group Benefits Board
25-9 shall adopt rules as necessary to implement Section 3.02 of this
25-10 Act not later than December 31, 2001.