By Delisi H.B. No. 1513
77R5397 PB-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the establishment of a defined contribution health care
1-3 benefits program for employees of public school districts.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 ARTICLE 1. DEFINED CONTRIBUTION PROGRAM
1-6 SECTION 1.01. Title 1, Insurance Code, is amended by adding
1-7 Chapter 3A to read as follows:
1-8 CHAPTER 3A. TEXAS PUBLIC SCHOOL EMPLOYEES
1-9 DEFINED CONTRIBUTION PROGRAM
1-10 SUBCHAPTER A. GENERAL PROVISIONS
1-11 Art. 3A.001. SHORT TITLE. This Act may be cited as the
1-12 Texas Public School Employees Defined Contribution Act.
1-13 Art. 3A.002. PURPOSE. The legislature finds that escalating
1-14 health care expenses, particularly the increasing cost of medical
1-15 treatment and health insurance for employees and their dependents,
1-16 constitute a substantial financial burden during an employee's
1-17 working career. The purpose of this Act is to establish regional
1-18 risk pools for employees of public school districts and to provide
1-19 from the state a defined contribution to assist in the payment of
1-20 premiums for health coverage obtained though participation in those
1-21 regional pools. Under the program established by this Act, state
1-22 contributions will not be considered taxable income because the
1-23 contributions directly pay the costs of premiums incurred by
1-24 employee participation in health coverage. The program is designed
2-1 to provide employees with the maximum combination of choice and
2-2 financial security.
2-3 Art. 3A.003. GENERAL DEFINITIONS. In this chapter:
2-4 (1) "Benefit options" include:
2-5 (A) long-term care coverage;
2-6 (B) long-term disability coverage;
2-7 (C) short-term disability coverage;
2-8 (D) accidental death and dismemberment coverage;
2-9 (E) group term life insurance coverage;
2-10 (F) vision care coverage;
2-11 (G) dental coverage;
2-12 (H) prescription drug coverage;
2-13 (I) prosthetic device coverage;
2-14 (J) obstetrical coverage; and
2-15 (K) any other supplemental coverage considered
2-16 appropriate by the board of trustees.
2-17 (2) "Board of trustees" means the board of trustees of
2-18 the Employees Retirement System of Texas.
2-19 (3) "Defined contribution" means the dollar amount
2-20 provided to an employee by the state to pay for the employee's
2-21 health coverage costs under this chapter.
2-22 (4) "District" means a public school district of this
2-23 state.
2-24 (5) "Employee" means an individual who is employed by
2-25 a school district and who is not covered by a group insurance
2-26 program under the Texas Employees Uniform Group Insurance Benefits
2-27 Act (Article 3.50-2, Vernon's Texas Insurance Code) or the Texas
3-1 State College and University Employees Uniform Insurance Benefits
3-2 Act (Article 3.50-3, Vernon's Texas Insurance Code). The term does
3-3 not include an individual performing personal services for a school
3-4 district as an independent contractor.
3-5 (6) "Health benefits plan" means a plan designed to
3-6 provide, pay for, or reimburse expenses for health care services.
3-7 The term includes:
3-8 (A) a group insurance policy, contract, or
3-9 certificate;
3-10 (B) a medical or hospital service agreement;
3-11 (C) a membership or subscription contract;
3-12 (D) a salary continuation plan; or
3-13 (E) a similar group arrangement, including
3-14 coverage through a health maintenance organization regulated under
3-15 the Texas Health Maintenance Organization Act (Chapter 20A,
3-16 Vernon's Texas Insurance Code).
3-17 (7) "Health benefits plan provider" means an entity
3-18 that provides health benefits plan coverage in this state. The term
3-19 includes:
3-20 (A) an insurance company authorized to do
3-21 business in this state;
3-22 (B) a group hospital service corporation
3-23 operating under Chapter 20 of this code;
3-24 (C) a health maintenance organization regulated
3-25 under the Texas Health Maintenance Organization Act (Chapter 20A,
3-26 Vernon's Texas Insurance Code);
3-27 (D) a stipulated premium insurance company
4-1 operating under Chapter 22 of this code;
4-2 (E) a multiple employer welfare arrangement
4-3 subject to Subchapter I, Chapter 3, of this code;
4-4 (F) an approved nonprofit health corporation
4-5 that holds a certificate of authority issued under Article 21.52F
4-6 of this code;
4-7 (G) an entity providing a combination of a
4-8 high-deductible health benefits coverage plan and a medical savings
4-9 account program; or
4-10 (H) any other entity providing a plan of health
4-11 insurance or health benefits coverage subject to state regulation
4-12 by the Texas Department of Insurance.
4-13 (8) "Outside-program coverage" means health benefits
4-14 coverage obtained through a source other than the program. The
4-15 term includes a direct contract between health care consumers and
4-16 health benefits plan providers.
4-17 (9) "Participant" means a person enrolled in the
4-18 program.
4-19 (10) "Primary health coverage plan" means an
4-20 open-enrollment group health coverage plan administered by the
4-21 board of trustees under this chapter through a regional risk pool.
4-22 (11) "Program" means the Texas public school employees
4-23 defined contribution program established by this Act.
4-24 (12) "Qualified health care expense" means an expense
4-25 paid by a participating employee for medical care, as defined by 26
4-26 U.S.C. Section 213(d), as amended, for the employee or the
4-27 employee's dependents as defined by 26 U.S.C. Section 152, as
5-1 amended.
5-2 (13) "Regional risk pool" means a pool of employees
5-3 drawn from a geographic area established by the trustee.
5-4 (14) "State contribution" means the defined amount
5-5 paid by the state for certain portions of health coverage premiums
5-6 incurred for employee and dependent health coverage.
5-7 Art. 3A.004. DEFINITIONS OF DEPENDENT, SURVIVING SPOUSE. In
5-8 this chapter:
5-9 (1) "Dependent" means:
5-10 (A) the spouse of a person;
5-11 (B) an unmarried child of the person if that
5-12 child is under 25 years of age, including:
5-13 (i) an adopted child;
5-14 (ii) a stepchild, foster child, or other
5-15 child who has a regular parent-child relationship with the person;
5-16 or
5-17 (iii) a recognized natural child; or
5-18 (C) the person's recognized natural child,
5-19 adopted child, foster child, stepchild, or other child who has a
5-20 regular parent-child relationship with the participating employee,
5-21 without regard to the age of the child, if the child:
5-22 (i) lives with or has care provided by the
5-23 person on a regular basis; and
5-24 (ii) is mentally retarded or physically
5-25 incapacitated to an extent that the child is dependent on the
5-26 person for care or support, as determined by the board of trustees.
5-27 (2) "Surviving spouse" means:
6-1 (A) the surviving spouse of a deceased retiree;
6-2 or
6-3 (B) the surviving spouse of a deceased employee
6-4 who had 10 or more years of actual service credit in the Teacher
6-5 Retirement System of Texas.
6-6 Art. 3A.005. DEFINITION OF RETIREE. In this chapter,
6-7 "retiree" means an individual who:
6-8 (1) retired under the Teacher Retirement System of
6-9 Texas with at least 10 years of credit for actual service for an
6-10 employing district or has retired under the Teacher Retirement
6-11 System of Texas for disability and is entitled to receive an
6-12 annuity from the Teacher Retirement System of Texas under Section
6-13 824.304(b), Government Code; and
6-14 (2) is not eligible to directly participate in the
6-15 group insurance program provided under the Texas Employees Uniform
6-16 Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
6-17 Insurance Code) or the Texas State College and University Employees
6-18 Uniform Insurance Benefits Act (Article 3.50-3, Vernon's Texas
6-19 Insurance Code).
6-20 Art. 3A.006. APPLICABILITY OF OTHER LAW. This chapter does
6-21 not prohibit a district from providing additional or supplemental
6-22 insurance coverage under Article 3.51 or 26.036 of this code or
6-23 Section 22.005, Education Code.
6-24 SUBCHAPTER B. ESTABLISHMENT OF PROGRAM;
6-25 POWERS AND DUTIES OF BOARD OF TRUSTEES
6-26 Art. 3A.051. CREATION OF PROGRAM; GENERAL AUTHORITY. The
6-27 Texas public school employees defined contribution program is
7-1 established to provide group health coverage and a menu of benefit
7-2 options to employees through the use of regional risk pools and to
7-3 establish defined district and state contributions to defray the
7-4 premium cost of that health benefits coverage.
7-5 Art. 3A.052. ADMINISTRATION. (a) The board of trustees is
7-6 the trustee for the program and shall administer the program.
7-7 (b) The board of trustees may adopt rules, plans,
7-8 procedures, and orders reasonably necessary to implement this
7-9 chapter.
7-10 (c) The board of trustees by rule shall establish:
7-11 (1) minimum benefit and financing standards for group
7-12 health benefits coverage and other benefit options to be provided
7-13 to all participants;
7-14 (2) basic and optional group coverage to be provided
7-15 to all participants; and
7-16 (3) procedures for:
7-17 (A) the selection of benefit options;
7-18 (B) enrolling in, and exercising options under,
7-19 the program; and
7-20 (C) except as otherwise provided by this
7-21 chapter, payment of contributions and deductions.
7-22 (d) The board of trustees shall determine methods and
7-23 procedures for claims administration.
7-24 (e) The board of trustees shall conduct ongoing studies of
7-25 the operation of all benefit options provided under this chapter.
7-26 (f) The board of trustees shall adopt rules relating to the
7-27 administration of the regional risk pools and their associated
8-1 trust funds.
8-2 (g) The board of trustees shall adopt a timetable for:
8-3 (1) the development of minimum benefit and financial
8-4 standards for group coverage provided under this chapter;
8-5 (2) the establishment of group health benefits plans,
8-6 other insurance plans, and other benefit options; and
8-7 (3) the taking of bids and awarding of contracts for
8-8 group health benefits plans, other insurance plans, and other
8-9 benefit options.
8-10 (h) The board of trustees shall establish plans, rules, and
8-11 procedures for the medical savings account program administered
8-12 under this chapter.
8-13 Art. 3A.053. PERSONNEL. The board of trustees may employ
8-14 persons as necessary to assist the board of trustees in
8-15 administering this chapter.
8-16 Art. 3A.054. CONTRACTS. The board of trustees may, on a
8-17 competitive bid basis, contract with:
8-18 (1) a qualified, experienced firm of group insurance
8-19 specialists;
8-20 (2) a qualified, experienced firm of specialists in
8-21 any of the benefit options authorized under this chapter; and
8-22 (3) an administering firm to act for the board of
8-23 trustees in the capacity of an independent administrator and
8-24 manager of a plan or benefit option authorized under this chapter.
8-25 Art. 3A.055. ADVISORY COMMITTEES. (a) The board of trustees
8-26 shall appoint advisory committees to advise the board of trustees
8-27 on the implementation or administration of the program. The
9-1 advisory committees shall include regional advisory committees
9-2 whose membership is drawn from each regional risk pool geographic
9-3 area. The advisory committees may include a credentialing advisory
9-4 committee and a medical care advisory committee.
9-5 (b) The advisory committees shall:
9-6 (1) hold public hearings on the program;
9-7 (2) recommend to the board of trustees minimum
9-8 standards for the program; and
9-9 (3) recommend to the board of trustees changes in
9-10 rules and legislation affecting the program.
9-11 (c) A person is not eligible for appointment as a member of
9-12 an advisory committee under this section if the person is required
9-13 to register under Chapter 305, Government Code.
9-14 (d) An advisory committee appointed under this section is
9-15 not subject to Section 2110.008, Government Code.
9-16 Art. 3A.056. ANNUAL REPORT OF PROGRAM ACTIVITIES. (a) Not
9-17 later than June 1 of each year, the board of trustees shall submit
9-18 a report to the governor, the lieutenant governor, the speaker of
9-19 the house of representatives, and the commissioner.
9-20 (b) The report must summarize the activities of the program
9-21 in the calendar year preceding the year in which the report is
9-22 submitted.
9-23 SUBCHAPTER C. PROGRAM PARTICIPATION AND COVERAGE
9-24 Art. 3A.101. REQUIRED PARTICIPATION BY DISTRICTS;
9-25 PARTICIPATION OBLIGATIONS. (a) Each district shall participate in
9-26 its respective regional risk pool as provided by this subchapter.
9-27 (b) Participation in a regional risk pool under the program
10-1 includes:
10-2 (1) paying the required district contribution to the
10-3 regional risk pool trust fund as provided by Article 3A.251 of this
10-4 chapter; and
10-5 (2) providing a notice to each employee as prescribed
10-6 by the board of trustees relating to the existence of the program
10-7 that contains the address from which an employee may obtain
10-8 information about:
10-9 (A) the coverage offered by the employee's
10-10 respective regional risk pool;
10-11 (B) eligibility requirements for and cost of
10-12 that coverage;
10-13 (C) the defined contribution that the employee
10-14 is eligible to receive; and
10-15 (D) other information considered useful by the
10-16 board of trustees.
10-17 Art. 3A.102. PROVISION OF COVERAGE. The program shall
10-18 provide, through the regional risk pools, group health benefits
10-19 plan coverage to an employee who is eligible for that coverage
10-20 under this chapter and, as provided by this chapter, to that
10-21 employee's dependents.
10-22 Art. 3A.103. PRIMARY HEALTH COVERAGE; COVERAGE PLANS. (a)
10-23 The board of trustees shall administer open-enrollment primary
10-24 health coverage plans through the regional risk pools for
10-25 participating employees and their dependents.
10-26 (b) The board of trustees shall, through each regional risk
10-27 pool, administer health benefits plans with different levels of
11-1 benefits, as described by Subsections (c)-(e) of this article.
11-2 (c) The board of trustees shall administer a primary health
11-3 coverage plan with coverage that is comparable in scope and, to the
11-4 greatest extent possible, in cost to the basic coverage for health
11-5 care provided to state employees under the Texas Employees Uniform
11-6 Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
11-7 Insurance Code). The primary health coverage plan described by
11-8 this subsection is designated the Texas Red I plan.
11-9 (d) The board of trustees shall administer a primary health
11-10 coverage plan with coverage that exceeds in scope the level of
11-11 benefits provided under the Texas Red I plan. The primary health
11-12 coverage plan described by this subsection is designated the Texas
11-13 White plan.
11-14 (e) The board of trustees shall administer a primary health
11-15 coverage plan with coverage that is not comparable in scope to the
11-16 level of benefits provided under the Texas Red I plan and is of
11-17 lesser cost than the Texas Red I plan or the Texas White plan. The
11-18 primary health coverage plan described by this subsection is
11-19 designated the Texas Blue plan.
11-20 (f) In addition to the plans described by Subsections
11-21 (c)-(e) of this article, the board of trustees shall administer:
11-22 (1) a medical savings account program, designated the
11-23 Texas Red II plan, operated under rules, plans, and procedures
11-24 adopted by the board of trustees, that includes basic coverage
11-25 comparable in scope to at least the coverage provided under the
11-26 Texas Red I plan, with a deductible set by the board of trustees
11-27 between $2,000 and $4,000; and
12-1 (2) any additional primary health coverage plans as
12-2 determined to be appropriate by the board of trustees that are at
12-3 least comparable to the plan designated as the Texas Blue plan.
12-4 Art. 3A.104. BENEFIT OPTIONS. The board of trustees shall
12-5 administer, through each regional risk pool, a menu of benefit
12-6 options for participants.
12-7 Art. 3A.105. REQUIREMENTS FOR MEDICAL SAVINGS ACCOUNTS. (a)
12-8 The board of trustees shall adopt rules, plans, and procedures as
12-9 provided by this article for the administration of the medical
12-10 savings account program adopted under this chapter.
12-11 (b) The board of trustees shall request in writing a ruling
12-12 or opinion from the Internal Revenue Service as to whether the
12-13 medical savings accounts adopted under this chapter and the state
12-14 rules governing those accounts qualify the accounts for appropriate
12-15 federal tax exemptions. Based on the response of the Internal
12-16 Revenue Service, the board of trustees shall:
12-17 (1) modify the rules, plans, and procedures adopted
12-18 under Subsection (a) of this article as necessary to ensure the
12-19 qualification of those accounts for appropriate federal tax
12-20 exemptions; and
12-21 (2) certify the information regarding federal tax
12-22 qualifications to the comptroller.
12-23 (c) Once finalized rules, plans, and procedures are adopted
12-24 by the board of trustees and approved by the Internal Revenue
12-25 Service, the board of trustees shall:
12-26 (1) solicit bids for the development and establishment
12-27 of the medical savings account program; and
13-1 (2) provide information to participating employees
13-2 regarding the operation of the medical savings accounts adopted
13-3 under this chapter.
13-4 (d) The board of trustees shall establish an annual
13-5 deductible for catastrophic care health coverage provided in
13-6 conjunction with the medical savings account program. The
13-7 deductible must be set at not less than $2,000 but not more than
13-8 $4,000.
13-9 Art. 3A.106. PARTICIPATION BY EMPLOYEES. (a) Each employee
13-10 is eligible to participate in the program established under this
13-11 chapter. An employee who elects to participate shall be enrolled
13-12 in a primary health coverage plan at least comparable to the Texas
13-13 Blue plan unless the employee:
13-14 (1) elects in writing to participate only in the
13-15 medical savings account program to receive coverage only for
13-16 catastrophic care; or
13-17 (2) provides proof of outside-program coverage to the
13-18 board of trustees in the manner prescribed by the board of
13-19 trustees.
13-20 (b) A participating employee may select the primary health
13-21 coverage plan in which the employee participates.
13-22 (c) Participation in the program qualifies an employee to
13-23 receive a defined contribution as authorized under Article
13-24 3A.252(a) of this chapter.
13-25 (d) An employee who elects not to participate in the program
13-26 but who submits to the board of trustees evidence satisfactory to
13-27 the board of trustees of outside-program coverage is qualified to
14-1 receive a defined contribution as authorized under Article
14-2 3A.252(d) of this chapter.
14-3 (e) An employee who elects not to participate in the program
14-4 and who does not submit to the board of trustees evidence
14-5 satisfactory to the board of trustees of outside-program coverage
14-6 is ineligible to receive a defined contribution as authorized under
14-7 Article 3A.252 of this chapter.
14-8 SUBCHAPTER D. ELIGIBILITY FOR COVERAGE
14-9 OF CERTAIN PERSONS WHO ARE NOT EMPLOYEES
14-10 Art. 3A.151. COVERAGE FOR DEPENDENTS. (a) A participating
14-11 employee who is covered by a primary health coverage plan is
14-12 entitled to obtain for a dependent of the participating employee
14-13 coverage in that plan in the manner determined by the board of
14-14 trustees.
14-15 (b) The participating employee shall make any required
14-16 additional contribution payments to the appropriate regional risk
14-17 pool trust fund for the dependent coverage in the manner prescribed
14-18 by the board of trustees.
14-19 (c) A district is not prohibited by this chapter from
14-20 contributing to the cost of dependent coverage.
14-21 Art. 3A.152. COVERAGE FOR SURVIVING SPOUSE OR DEPENDENTS OF
14-22 SURVIVING SPOUSE. (a) A surviving spouse may elect to retain or
14-23 obtain primary health coverage for the surviving spouse or a
14-24 dependent of the surviving spouse under a primary health coverage
14-25 plan at the applicable rate for that plan, as determined by the
14-26 board of trustees and set by the applicable health benefits plan
14-27 provider.
15-1 (b) A surviving spouse must provide payment of applicable
15-2 contributions for the coverage to the appropriate regional risk
15-3 pool trust fund in the manner prescribed by the board of trustees.
15-4 (c) The state may provide a defined contribution for the
15-5 benefit of the surviving spouse to the regional risk pool trust
15-6 fund in the manner established by Article 3A.252 of this chapter.
15-7 Art. 3A.153. COVERAGE FOR RETIREES. (a) In lieu of coverage
15-8 provided under Article 3.50-4, Insurance Code, a retiree may elect
15-9 to retain or obtain primary health coverage under a primary health
15-10 coverage plan at the applicable rate for that plan, as determined
15-11 by the board of trustees and set by the applicable health benefits
15-12 plan provider.
15-13 (b) A retiree must provide payment of applicable
15-14 contributions for the coverage to the appropriate regional risk
15-15 pool trust fund in the manner prescribed by the board of trustees.
15-16 (c) The state may provide a defined contribution for the
15-17 benefit of the retiree in a manner established by Article 3A.252 of
15-18 this chapter.
15-19 SUBCHAPTER E. REGIONAL RISK POOLS; TRUST FUNDS
15-20 Art. 3A.201. ESTABLISHMENT OF REGIONAL RISK POOLS. On the
15-21 creation of the program, the board of trustees shall establish at
15-22 least 10 regional risk pools that combine potential participating
15-23 employees in contiguous geographic areas. Each regional risk pool
15-24 must be roughly comparable in population. The number of
15-25 participating employees in any one regional risk pool may not
15-26 exceed 10 percent of the total statewide eligible public school
15-27 employee population.
16-1 Art. 3A.202. REGIONAL RISK POOL TRUST FUNDS. (a) Regional
16-2 risk pool funds shall be established as trust funds, with the
16-3 comptroller as custodian of the funds. The board of trustees shall
16-4 administer the funds.
16-5 (b) The following shall be paid into each regional risk pool
16-6 trust fund:
16-7 (1) the contributions made by the districts included
16-8 in that risk pool;
16-9 (2) the contributions made by employees of districts
16-10 included in that risk pool;
16-11 (3) the applicable state contribution;
16-12 (4) the investment and depository income of the
16-13 respective regional risk pool trust fund;
16-14 (5) premiums or other contributions paid for coverage
16-15 of retirees, dependents, surviving spouses, and surviving children;
16-16 (6) money recovered under contracts for the
16-17 implementation or administration of the program; and
16-18 (7) any other money required or authorized to be paid
16-19 into the regional risk pool trust fund.
16-20 (c) Money in a regional risk pool trust fund may be used
16-21 only for:
16-22 (1) providing benefits authorized under the program by
16-23 this chapter to members of that regional risk pool; and
16-24 (2) administration expenses.
16-25 SUBCHAPTER F. CONTRIBUTIONS
16-26 Art. 3A.251. DISTRICT CONTRIBUTIONS. (a) Each school
16-27 district shall contribute for each district employee covered
17-1 through the district's respective regional risk pool an amount not
17-2 less than the greater of:
17-3 (1) 70 percent of the cost of employee-only coverage
17-4 under the Texas Red I plan; or
17-5 (2) 100 percent of the cost of employee-only coverage
17-6 under the Texas Blue plan.
17-7 (b) The district shall remit its contribution to the
17-8 appropriate regional risk pool trust fund according to procedures
17-9 adopted by the board of trustees.
17-10 Art. 3A.252. STATE CONTRIBUTION. (a) For each participating
17-11 employee, the state shall contribute the amounts specified by
17-12 Subchapter G of this chapter to the employee's respective regional
17-13 risk pool trust fund.
17-14 (b) Except as provided by Subsection (d) of this article,
17-15 the state contribution shall be used first to defray the cost of
17-16 the primary health coverage plan chosen by the participating
17-17 employee if the employee is participating in such a plan.
17-18 (c) After the primary health coverage plan costs have been
17-19 paid, the employee may designate that any part of the state
17-20 contribution remaining be used to cover the costs of premiums for:
17-21 (1) supplemental coverage; or
17-22 (2) other benefit options available to the employee as
17-23 determined by the board of trustees.
17-24 (d) If the employee is not participating in a primary health
17-25 coverage plan under this chapter, the employee may designate that
17-26 the state contribution be:
17-27 (1) used to cover the costs of premiums for
18-1 outside-program or supplemental coverage;
18-2 (2) used to cover the costs of premiums for other
18-3 benefit options available to the employee as determined by the
18-4 board of trustees; or
18-5 (3) deposited into a medical savings account
18-6 established for the employee for the payment of qualified health
18-7 care expenses if the trustee has determined that those accounts
18-8 meet the requirements described by Article 3A.105 of this chapter.
18-9 (e) On covering the cost of all obligated defined
18-10 contributions, the state may distribute any remaining amounts in
18-11 the state defined contribution trust fund to the appropriate
18-12 regional risk pool trust funds on a pro-rata basis, to be used on
18-13 behalf of retirees and surviving spouses of employees.
18-14 (f) A state contribution to which an employee is entitled
18-15 under Subsection (d) of this article shall be paid:
18-16 (1) directly to the health coverage provider for
18-17 outside-program premiums incurred by the employee; or
18-18 (2) if the employee has paid the premiums, to the
18-19 employee as reimbursement for the employee-paid premiums for
18-20 outside the program coverage.
18-21 Art. 3A.253. PARTICIPANT CONTRIBUTIONS. (a) Each
18-22 participant shall pay that portion of the cost of the primary
18-23 health coverage plan selected that exceeds the amount of the state
18-24 and district contributions made under this chapter.
18-25 (b) The participant shall remit the participant's
18-26 contribution to the appropriate regional risk pool trust fund in a
18-27 manner prescribed by the board of trustees.
19-1 SUBCHAPTER G. STATE CONTRIBUTIONS AND FUNDING
19-2 Art. 3A.301. STATE CONTRIBUTIONS. (a) The state shall
19-3 contribute $325 annually on behalf of each participating employee
19-4 to that employee's respective regional risk pool trust fund, to be
19-5 used as authorized by Subchapter F of this chapter.
19-6 (b) The state shall contribute $1,300 annually per eligible
19-7 dependent on behalf of each participating employee into that
19-8 employee's respective regional risk pool trust fund to be used as
19-9 authorized by Subchapter F of this chapter.
19-10 Art. 3A.302. STATE CONTRIBUTION FUND. (a) The state
19-11 contribution fund is established on creation of the program. The
19-12 state contribution fund is a trust fund with the comptroller.
19-13 (b) The comptroller shall serve as custodian of the state
19-14 contribution trust fund.
19-15 (c) The following shall be paid into the state contribution
19-16 fund:
19-17 (1) state appropriations from general revenue; and
19-18 (2) other money required or authorized to be paid into
19-19 this fund.
19-20 (d) Money in the state contribution fund may only be used to
19-21 pay for state defined contributions as specified by this chapter.
19-22 SUBCHAPTER H. RECORDS, PROCEEDINGS, AND ACCOUNTING;
19-23 INVESTMENT AUTHORITY
19-24 Art. 3A.351. CONFIDENTIALITY OF RECORDS. (a) Section
19-25 825.507, Government Code, applies to information in records
19-26 relating to an employee, retiree, or other participant under the
19-27 program.
20-1 (b) The program may disclose to a health benefits plan
20-2 provider information in the records of an individual that the board
20-3 of trustees determines is necessary to administer the program.
20-4 Art. 3A.352. CLAIM DENIAL; EXPULSION FROM PROGRAM. (a) A
20-5 participant may appeal a claim denial or expulsion from the program
20-6 to the board of trustees.
20-7 (b) Adjudication of claim disputes and expulsion from the
20-8 program are subject to the contested case provisions of Chapter
20-9 2001, Government Code.
20-10 Art. 3A.353. HEARING EXAMINER. The board of trustees may
20-11 delegate its authority to adjudicate claim disputes and expulsions
20-12 to a qualified hearing examiner.
20-13 Art. 3A.354. APPEAL. (a) A decision of the board of
20-14 trustees or hearing examiner is subject to review by a district
20-15 court in the county in which the claimant resides.
20-16 (b) An appeal of a determination under this section is under
20-17 the substantial evidence rule.
20-18 Art. 3A.355. ANNUAL ACCOUNTING. (a) In this article, "plan
20-19 year" means the period beginning on September 1 and ending the
20-20 following August 31.
20-21 (b) Coverage purchased under this chapter must provide for
20-22 an accounting to the board of trustees by each health benefits plan
20-23 provider.
20-24 (c) The accounting must be submitted:
20-25 (1) not later than the 90th day after the last day of
20-26 each plan year; and
20-27 (2) on a form approved by the board of trustees.
21-1 (d) Each health benefits plan provider shall prepare any
21-2 other report required by rule by the board of trustees.
21-3 (e) A health benefits plan provider may not assess an
21-4 additional charge for preparation of an accounting report.
21-5 Art. 3A.356. ASSISTANCE. In implementing and administering
21-6 this chapter, the board of trustees may obtain the assistance of
21-7 any state agency the board considers appropriate.
21-8 Art. 3A.357. INVESTMENT AUTHORITY. The board of trustees
21-9 may invest assets of any fund administered under this chapter in
21-10 the manner provided by Subchapter D, Chapter 825, Government Code,
21-11 for assets of the program.
21-12 ARTICLE 2. CONFORMING AMENDMENTS; REPEALER
21-13 SECTION 2.01. Section 1, Article 3.50-4, Insurance Code, is
21-14 amended to read as follows:
21-15 Sec. 1. SHORT TITLE. This article may be cited as the Texas
21-16 Public School Retired Employees Group Insurance Act.
21-17 SECTION 2.02. Sections 2(3), (4), (11), and (13), Article
21-18 3.50-4, Insurance Code, are amended to read as follows:
21-19 (3) "Dependent" means:
21-20 (A) a spouse of a retiree [or active member];
21-21 (B) a retiree's[, an active member's,] or a
21-22 deceased active member's unmarried child who is younger than 25
21-23 years of age including:
21-24 (i) an adopted child;
21-25 (ii) a foster child, a stepchild, or other
21-26 child who is in a regular parent-child relationship; and
21-27 (iii) a recognized natural child; and
22-1 (C) a retiree's [or active member's] recognized
22-2 natural child, adopted child, foster child, stepchild, or other
22-3 child who is in a regular parent-child relationship and who lives
22-4 with or whose care is provided by the retiree[, active member,] or
22-5 surviving spouse on a regular basis, regardless of the child's age,
22-6 if the child is mentally retarded or physically incapacitated to
22-7 such an extent as to be dependent on the retiree[, active member,]
22-8 or surviving spouse for care or support, as determined by the
22-9 trustee, or in the case of a deceased active member, a recognized
22-10 natural child, adopted child, foster child, stepchild, or other
22-11 child who was in a regular parent-child relationship and who lived
22-12 with or whose care was provided by the deceased active member on a
22-13 regular basis, regardless of the child's age, if the child is
22-14 mentally retarded or physically incapacitated to such an extent as
22-15 to have been dependent on the deceased active member or surviving
22-16 spouse for care or support, as determined by the trustee.
22-17 (4) "Fund" means the Texas public school retired
22-18 employees group insurance fund.
22-19 (11) "Surviving spouse" means[:]
22-20 [(A)] the surviving spouse of a deceased
22-21 retiree[;]
22-22 [(B) the surviving spouse of a deceased active
22-23 member of the Teacher Retirement System of Texas:]
22-24 [(i) for whom contributions have been made
22-25 to the Texas Public School Retired Employees Group Insurance
22-26 Program at the last place of employment of the deceased active
22-27 member in public education in this state;]
23-1 [(ii) who had 10 or more years of service
23-2 credit in the Teacher Retirement System of Texas; and]
23-3 [(iii) who died on or after September 1,
23-4 1986].
23-5 (13) "Surviving dependent child" means[:]
23-6 [(A)] the dependent child of a deceased retiree
23-7 who has survived the deceased retiree and the deceased retiree's
23-8 spouse[; or]
23-9 [(B) the dependent child of a deceased active
23-10 member of the Teacher Retirement System of Texas who has survived
23-11 the deceased active member and the deceased member's spouse if the
23-12 deceased active member:]
23-13 [(i) had contributions to the Texas Public
23-14 School Retired Employees Group Insurance Program at his last place
23-15 of employment within public education;]
23-16 [(ii) had 10 or more years of service
23-17 credit in the Teacher Retirement System of Texas; and]
23-18 [(iii) died on or after September 1,
23-19 1986].
23-20 SECTION 2.03. Section 3(a), Article 3.50-4, Insurance Code,
23-21 is amended to read as follows:
23-22 (a) The Texas Public School Retired Employees Group
23-23 Insurance Program is established to provide for an insurance plan
23-24 or plans under this article.
23-25 SECTION 2.04. Section 5(a), Article 3.50-4, Insurance Code,
23-26 is amended to read as follows:
23-27 (a) The trustee may adopt rules, plans, procedures, and
24-1 orders reasonably necessary to implement this article, including:
24-2 (1) establishment of minimum benefit and financing
24-3 standards for group insurance coverage to be provided to all
24-4 retirees, [active employees,] dependents, surviving spouses, and
24-5 surviving dependent children;
24-6 (2) establishment of basic and optional group coverage
24-7 to be provided to retirees, [active employees,] dependents,
24-8 surviving spouses, and surviving dependent children;
24-9 (3) establishment of the procedures for contributions
24-10 and deductions;
24-11 (4) establishment of periods for enrollment and
24-12 selection of optional coverage and procedures for enrolling and
24-13 exercising options under the plan;
24-14 (5) determination of methods and procedures for claims
24-15 administration;
24-16 (6) study of the operation of all insurance coverage
24-17 provided under this article;
24-18 (7) administration of the fund;
24-19 (8) adoption of a timetable for the development of
24-20 minimum benefit and financial standards for group insurance
24-21 coverage, establishment of group insurance plans, and the taking of
24-22 bids for and awarding of contracts for insurance plans; and
24-23 (9) contracting with an independent and experienced
24-24 group insurance consultant or actuary, who does not receive
24-25 insurance commissions from any insurance company, for advice and
24-26 counsel in implementing and administering this program.
24-27 SECTION 2.05. Section 7(a), Article 3.50-4, Insurance Code,
25-1 is amended to read as follows:
25-2 (a) Each retiree must be enrolled in a basic plan offered in
25-3 the program unless:
25-4 (1) the retiree rejects enrollment in the program in
25-5 writing on a form provided by the trustee; [or]
25-6 (2) the retiree is participating in the Texas public
25-7 school employees defined contribution program as provided by
25-8 Chapter 3A of this code; or
25-9 (3) the retiree has been found under Section 18A of
25-10 this article to have defrauded or attempted to defraud the program.
25-11 SECTION 2.06. Section 8(e), Article 3.50-4, Insurance Code,
25-12 is amended to read as follows:
25-13 (e) The trustee may contract for and make available to all
25-14 retirees, dependents, surviving spouses, and surviving dependent
25-15 children optional group health benefit plans in addition to the
25-16 basic plans. The optional coverage may include a smaller
25-17 deductible, lower coinsurance, or additional categories of benefits
25-18 permitted under Subsection (b) of this section to provide
25-19 additional levels of coverages and benefits. The trustee may
25-20 utilize a portion of the funds received for the Texas Public School
25-21 Retired Employees Group Insurance Program to offset some portion of
25-22 costs paid by the retiree for optional coverage if such utilization
25-23 does not reduce the period the program is projected to remain
25-24 financially solvent by more than one year in a biennium. Any
25-25 additional contributions for these optional plans shall be paid for
25-26 by the retiree, surviving spouse, or surviving dependent children.
25-27 SECTION 2.07. Section 9, Article 3.50-4, Insurance Code, is
26-1 amended to read as follows:
26-2 Sec. 9. BENEFIT CERTIFICATES. At such times, or upon such
26-3 events, as designated by the trustee, each insurance carrier shall
26-4 issue to each retiree, [active employee,] surviving spouse, or
26-5 surviving dependent child insured under this article a certificate
26-6 of insurance that:
26-7 (1) states the benefits to which the person is
26-8 entitled;
26-9 (2) states to whom the benefits are payable;
26-10 (3) states to whom the claims must be submitted; and
26-11 (4) summarizes the provisions of the policy
26-12 principally affecting the person.
26-13 SECTION 2.08. Section 12, Article 3.50-4, Insurance Code, is
26-14 amended to read as follows:
26-15 Sec. 12. DEATH CLAIMS: BENEFICIARIES. The amount of group
26-16 life insurance and group accidental death and dismemberment
26-17 insurance covering a retiree, [active employee,] surviving spouse,
26-18 dependent, or surviving dependent child at the date of death shall
26-19 be paid, on the establishment of a valid claim, only:
26-20 (1) to the beneficiary or beneficiaries designated by
26-21 the person in a signed and witnessed written document received
26-22 before death in the trustee's office; or
26-23 (2) if no beneficiary is properly designated or in
26-24 existence, to persons in accordance with the trustee's death
26-25 benefit provisions in Subsection (b), Section 824.103, Government
26-26 Code.
26-27 SECTION 2.09. Section 13, Article 3.50-4, Insurance Code, is
27-1 amended to read as follows:
27-2 Sec. 13. AUTOMATIC COVERAGE. A retiree [or active employee]
27-3 who applies during an enrollment period may not be denied any of
27-4 the group insurance basic coverage provided under this article
27-5 unless the person has been found under Section 18A of this article
27-6 to have defrauded or attempted to defraud the Texas Public School
27-7 Retired Employees Group Insurance Program.
27-8 SECTION 2.10. Section 15, Article 3.50-4, Insurance Code, is
27-9 amended to read as follows:
27-10 Sec. 15. TEXAS PUBLIC SCHOOL RETIRED EMPLOYEES GROUP
27-11 INSURANCE FUND. (a) The Texas public school retired employees
27-12 group insurance fund is created. The comptroller is the custodian
27-13 of the fund, and the trustee shall administer the fund. All
27-14 contributions from active employees, retirees, and the state,
27-15 contributions for optional coverages, investment income,
27-16 appropriations for implementation of this program, and other money
27-17 required or authorized to be paid into the fund shall be paid into
27-18 the fund. From the fund shall be paid, without state fiscal year
27-19 limitation, the appropriate premiums to the carrier or carriers
27-20 providing group coverage under the plan or plans under this
27-21 article, claims for benefits under the group coverage, and the
27-22 amounts expended by the trustee for administration of the program.
27-23 The appropriate portion of the contributions to the fund to provide
27-24 for incurred but unreported claim reserves and contingency
27-25 reserves, as determined by the trustee, shall be retained in the
27-26 fund.
27-27 (b) The trustee shall transfer the amounts deducted from
28-1 annuities for contributions into the fund.
28-2 (c) Expenses for the development and administration of the
28-3 program shall be spent as provided by a budget adopted by the
28-4 trustee.
28-5 (d) The trustee may invest and reinvest the money in the
28-6 fund as provided by Subchapter D, Chapter 825, Government Code, for
28-7 assets of the Teacher Retirement System of Texas.
28-8 SECTION 2.11. Section 18A, Article 3.50-4, Insurance Code,
28-9 is amended to read as follows:
28-10 Sec. 18A. EXPULSION FROM PROGRAM FOR FRAUD. (a) After
28-11 notice and hearing as provided by this section, the trustee may
28-12 expel from participation in the Texas Public School Retired
28-13 Employees Group Insurance Program any retiree, [active employee,]
28-14 surviving spouse, dependent, or surviving dependent child who
28-15 submits a fraudulent claim under, or has defrauded or attempted to
28-16 defraud, any health benefits plan offered under the program.
28-17 (b) On its motion or on the receipt of a complaint, the
28-18 trustee may call and hold a hearing to determine whether a person
28-19 has submitted a fraudulent claim under, or has defrauded or
28-20 attempted to defraud, any health benefits plan offered under the
28-21 Texas Public School Retired Employees Group Insurance Program.
28-22 (c) A proceeding under this section is a contested case
28-23 under Chapter 2001, Government Code [the Administrative Procedure
28-24 and Texas Register Act (Article 6252-13a, Vernon's Texas Civil
28-25 Statutes)].
28-26 (d) If the trustee, at the conclusion of the hearing, issues
28-27 a decision that finds that the accused submitted a fraudulent claim
29-1 or has defrauded or attempted to defraud any health benefits plan
29-2 offered under the Texas Public School Retired Employees Group
29-3 Insurance Program, the trustee shall expel the person from
29-4 participation in the program.
29-5 (e) The substantial evidence rule shall be used on any
29-6 appeal of a decision of the trustee under this section.
29-7 (f) A person expelled from the Texas Public School Retired
29-8 Employees Group Insurance Program may not be insured by any health
29-9 insurance plan offered by the program for a period, to be
29-10 determined by the trustee, of up to five years from the date the
29-11 expulsion takes effect.
29-12 SECTION 2.12. Section 18B(a), Article 3.50-4, Insurance
29-13 Code, is amended to read as follows:
29-14 (a) Section 825.507, Government Code, concerning the
29-15 confidentiality of information in records that are in the custody
29-16 of the Teacher Retirement System of Texas, applies to information
29-17 in records that are in the custody of the retirement system
29-18 regarding retirees, active employees, annuitants, or beneficiaries
29-19 under the Texas Public School Retired Employees Group Insurance
29-20 Program.
29-21 SECTION 2.13. Sections 18C(c), (d), and (i), Article 3.50-4,
29-22 Insurance Code, are amended to read as follows:
29-23 (c) The trustee, the Texas public school retired employees
29-24 group insurance program, the Texas public school retired employees
29-25 group insurance fund, and the board of trustees, officers, advisory
29-26 committee members, and employees of the trustee are not liable for
29-27 damages arising from the acts or omissions of health care providers
30-1 who are participating health care providers in the coordinated care
30-2 network established by the trustee. Those health care providers
30-3 are independent contractors and are responsible for their own acts
30-4 and omissions.
30-5 (d) The trustee, the Texas public school retired employees
30-6 group insurance program, the Texas public school retired employees
30-7 group insurance fund, or a member of a credentialing committee, or
30-8 the board of trustees, officers, advisory committee members, or
30-9 employees of the trustee are not liable for damages arising from
30-10 any act, statement, determination, recommendation made, or act
30-11 reported, without malice, in the course of the evaluation of the
30-12 qualifications of health care providers or of the patient care
30-13 rendered by those providers.
30-14 (i) A credentialing committee, a person participating in a
30-15 credentialing review, a health care provider, the trustee, the
30-16 Texas public school retired employees group insurance program, or
30-17 the board of trustees, officers, advisory committee members, or
30-18 employees of the trustee that are named as defendants in any civil
30-19 action filed as a result of participation in the credentialing
30-20 process may use otherwise confidential information obtained for
30-21 legitimate internal business and professional purposes, including
30-22 use in their own defense. Use of information under this subsection
30-23 does not constitute a waiver of the confidential and privileged
30-24 nature of the information.
30-25 SECTION 2.14. The following laws are repealed:
30-26 (1) Section 22.004, Education Code; and
30-27 (2) Section 7A, Article 3.50-4, Insurance Code.
31-1 SECTION 2.15. This article takes effect September 1, 2002.
31-2 ARTICLE 3. TRANSITION; GENERAL EFFECTIVE DATE
31-3 SECTION 3.01. (a) During the 2001-2002 school year, the
31-4 Employees Retirement System of Texas shall develop the plan or
31-5 plans to be implemented and administered under Chapter 3A,
31-6 Insurance Code, as added by this Act.
31-7 (b) Coverage under the plan or plans authorized by Chapter
31-8 3A, Insurance Code, as added by this Act, shall begin with the
31-9 2002-2003 school year, but not later than September 1, 2002.
31-10 SECTION 3.02. (a) The Teacher Retirement System of Texas
31-11 shall, not later than September 1, 2002, transfer from the program
31-12 established under Article 3.50-4, Insurance Code, all coverages
31-13 provided under the program for active employees, and all records
31-14 relating to coverage of active employees under the program, to the
31-15 Employees Retirement System of Texas for use in the program
31-16 established under Chapter 3A, Insurance Code, as added by this Act.
31-17 (b) The comptroller shall, not later than September 1, 2002,
31-18 transfer from the fund established under Section 15, Article
31-19 3.50-4, Insurance Code, all assets and liabilities of that fund
31-20 relating to coverage for active employees to the state contribution
31-21 fund established under Article 3A.302, Insurance Code, as added by
31-22 this Act.
31-23 (c) On the transfer of property described by this section,
31-24 the program provided by Section 7A, Article 3.50-4, Insurance Code,
31-25 is terminated.
31-26 SECTION 3.03. The Employees Retirement System of Texas shall
31-27 adopt rules as necessary to implement Section 3.01 of this Act not
32-1 later than March 1, 2002.
32-2 SECTION 3.04. Except as otherwise provided by this Act, this
32-3 Act takes effect September 1, 2001.