By Wohlgemuth H.B. No. 2632
77R8964 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to adoption of a medical savings account program for
1-3 active employees of school districts.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 ARTICLE 1. MEDICAL SAVINGS ACCOUNT 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 MEDICAL SAVINGS
1-9 ACCOUNT PROGRAM
1-10 SUBCHAPTER A. GENERAL PROVISIONS
1-11 Art. 3A.001. GENERAL DEFINITIONS. In this chapter:
1-12 (1) "Account" means a medical savings account
1-13 established under this chapter for a participating employee.
1-14 (2) "Account administrator" means a person qualified
1-15 to act as an account administrator under Article 3A.054 of this
1-16 code.
1-17 (3) "Benefit options" include:
1-18 (A) long-term care coverage;
1-19 (B) long-term disability coverage;
1-20 (C) short-term disability coverage;
1-21 (D) accidental death and dismemberment coverage;
1-22 (E) group term life insurance coverage;
1-23 (F) vision care coverage;
1-24 (G) dental coverage;
2-1 (H) prescription drug coverage;
2-2 (I) prosthetic device coverage;
2-3 (J) obstetrical coverage; and
2-4 (K) any other supplemental coverage considered
2-5 appropriate by the board of trustees.
2-6 (4) "Board of trustees" means the board of trustees of
2-7 the Teachers Retirement System of Texas.
2-8 (5) "Dependent" means:
2-9 (A) the spouse of a person;
2-10 (B) an unmarried child of the person if that
2-11 child is under 25 years of age, including:
2-12 (i) an adopted child;
2-13 (ii) a stepchild, foster child, or other
2-14 child who has a regular parent-child relationship with the person;
2-15 or
2-16 (iii) a recognized natural child; or
2-17 (C) the person's recognized natural child,
2-18 adopted child, foster child, stepchild, or other child who has a
2-19 regular parent-child relationship with the participating employee,
2-20 without regard to the age of the child, if the child lives with or
2-21 has care provided by the person on a regular basis and is mentally
2-22 retarded or physically incapacitated to an extent that the child is
2-23 dependent on the person for care or support, as determined by the
2-24 board of trustees.
2-25 (6) "District" means a public school district of this
2-26 state.
2-27 (7) "Employee" means an individual who is employed by
3-1 a school district and who is not covered by a group insurance
3-2 program under the Texas Employees Uniform Group Insurance Benefits
3-3 Act (Article 3.50-2, Vernon's Texas Insurance Code) or the Texas
3-4 State College and University Employees Uniform Insurance Benefits
3-5 Act (Article 3.50-3, Vernon's Texas Insurance Code). The term does
3-6 not include an individual performing personal services for a school
3-7 district as an independent contractor.
3-8 (8) "Health benefits plan" means a plan designed to
3-9 provide, pay for, or reimburse expenses for health care services.
3-10 The term includes:
3-11 (A) a group insurance policy, contract, or
3-12 certificate;
3-13 (B) a medical or hospital service agreement; or
3-14 (C) a similar group arrangement, including
3-15 coverage through a health maintenance organization regulated under
3-16 the Texas Health Maintenance Organization Act (Chapter 20A,
3-17 Vernon's Texas Insurance Code).
3-18 (9) "Health benefits plan provider" means an entity
3-19 that provides health benefits plan coverage in this state. The term
3-20 includes:
3-21 (A) an insurance company authorized to do
3-22 business in this state;
3-23 (B) a group hospital service corporation
3-24 operating under Chapter 20 of this code;
3-25 (C) a health maintenance organization regulated
3-26 under the Texas Health Maintenance Organization Act (Chapter 20A,
3-27 Vernon's Texas Insurance Code);
4-1 (D) a stipulated premium insurance company
4-2 operating under Chapter 22 of this code;
4-3 (E) a multiple employer welfare arrangement
4-4 subject to Subchapter I, Chapter 3, of this code;
4-5 (F) an approved nonprofit health corporation
4-6 that holds a certificate of authority issued under Article 21.52F
4-7 of this code; or
4-8 (G) any other entity providing a plan of health
4-9 insurance or health benefits coverage subject to state regulation
4-10 by the department.
4-11 (10) "Participant" means a person enrolled in the
4-12 program.
4-13 (11) "Program" means the Texas public school employees
4-14 medical savings account program established by this chapter.
4-15 (12) "Qualified health care expense" means an expense
4-16 paid by a participating employee for medical care, as defined by 26
4-17 U.S.C. Section 213(d), as amended, for the employee or the
4-18 employee's dependents, as defined by 26 U.S.C. Section 152, as
4-19 amended.
4-20 Art. 3A.002. APPLICABILITY OF OTHER LAW. This chapter does
4-21 not prohibit a district from providing additional or supplemental
4-22 insurance coverage under Article 3.51 or 26.036 of this code or
4-23 Section 22.005, Education Code.
4-24 SUBCHAPTER B. ESTABLISHMENT OF MEDICAL SAVINGS ACCOUNT
4-25 PROGRAM; POWERS AND DUTIES OF BOARD OF TRUSTEES
4-26 Art. 3A.051. CREATION OF PROGRAM; ADMINISTRATION; RULES. (a)
4-27 The Texas public school employees medical savings account program
5-1 is established for the benefit of public school employees and those
5-2 employees' dependents.
5-3 (b) The board of trustees is the trustee for the program and
5-4 shall administer the program.
5-5 (c) The board of trustees shall adopt rules, plans, and
5-6 procedures as necessary for the administration of the medical
5-7 savings account program adopted under this chapter.
5-8 Art. 3A.052. CONTRACTS. On a competitive bid basis, the
5-9 board of trustees shall, as necessary to implement this article,
5-10 contract with:
5-11 (1) a qualified, experienced firm of group insurance
5-12 specialists;
5-13 (2) a qualified, experienced firm of specialists in
5-14 any of the benefit options authorized under this chapter; and
5-15 (3) an administering firm to act for the board of
5-16 trustees in the capacity of account administrator.
5-17 Art. 3A.053. REQUIREMENTS FOR MEDICAL SAVINGS ACCOUNTS.
5-18 (a) The board of trustees shall request in writing a ruling or
5-19 opinion from the Internal Revenue Service as to whether the medical
5-20 savings accounts adopted under this chapter and the state rules
5-21 governing those accounts qualify the accounts for appropriate
5-22 federal tax exemptions. Based on the response of the Internal
5-23 Revenue Service, the board of trustees shall:
5-24 (1) modify the rules, plans, and procedures adopted
5-25 under Article 3A.051 of this code as necessary to ensure the
5-26 qualification of those accounts for appropriate federal tax
5-27 exemptions; and
6-1 (2) certify the information regarding federal tax
6-2 qualifications to the comptroller.
6-3 (b) Once finalized rules, plans, and procedures are adopted
6-4 by the board of trustees and approved by the Internal Revenue
6-5 Service, the board of trustees shall:
6-6 (1) solicit bids for the development and establishment
6-7 of the medical savings account program; and
6-8 (2) provide information to participating employees
6-9 regarding the operation of the medical savings accounts adopted
6-10 under this chapter.
6-11 Art. 3A.054. ACCOUNT ADMINISTRATOR. (a) The following
6-12 persons may act as an account administrator under this chapter:
6-13 (1) a bank, savings and loan association, savings
6-14 bank, or credit union chartered under the laws of this state or the
6-15 United States;
6-16 (2) a trust company authorized to act as a fiduciary;
6-17 (3) an insurance company authorized under this chapter
6-18 to engage in business in this state, a group hospital service
6-19 corporation authorized under Chapter 20 of this code to engage in
6-20 business in this state, or a health maintenance organization
6-21 authorized under the Texas Health Maintenance Organization Act
6-22 (Chapter 20A, Vernon's Texas Insurance Code) to engage in business
6-23 in this state;
6-24 (4) a third-party administrator holding a certificate
6-25 of authority issued under Article 21.07-6 of this code; or
6-26 (5) a certified public accountant licensed by the
6-27 Texas State Board of Public Accountancy.
7-1 (b) An account administrator may charge a fee for services
7-2 performed as the administrator of an account. The amount of the
7-3 fee shall be established in the contract between the account
7-4 administrator and the board of trustees.
7-5 (c) The account administrator is the fiduciary of the
7-6 participating employee who has an account under this chapter.
7-7 Art. 3A.055. PERSONNEL. The board of trustees may employ
7-8 persons as necessary to assist the board of trustees in
7-9 administering this chapter.
7-10 Art. 3A.056. ANNUAL REPORT OF PROGRAM ACTIVITIES. (a) Not
7-11 later than June 1 of each year, the board of trustees shall submit
7-12 a report to the governor, the lieutenant governor, the speaker of
7-13 the house of representatives, and the commissioner.
7-14 (b) The report must summarize the activities of the program
7-15 in the calendar year preceding the year in which the report is
7-16 submitted.
7-17 SUBCHAPTER C. PROGRAM PARTICIPATION AND COVERAGE
7-18 Art. 3A.101. REQUIRED PARTICIPATION BY DISTRICTS;
7-19 PARTICIPATION OBLIGATIONS. (a) Each district shall participate in
7-20 the program as provided by this subchapter.
7-21 (b) Participation in the program includes:
7-22 (1) paying the required district contributions to the
7-23 accounts as provided by Article 3A.202 of this code; and
7-24 (2) providing a notice to each employee as prescribed
7-25 by the board of trustees relating to the existence of the program
7-26 that contains the address from which an employee may obtain
7-27 information about:
8-1 (A) the coverage offered by the program;
8-2 (B) eligibility requirements for and costs of
8-3 that coverage;
8-4 (C) the contribution that the employee is
8-5 eligible to receive from the state and the employing school
8-6 district for the costs of the coverage; and
8-7 (D) other information considered useful by the
8-8 board of trustees.
8-9 Art. 3A.102. PROVISION OF COVERAGE. The program shall
8-10 provide, through the medical savings accounts, group health
8-11 benefits plan coverage as provided by this chapter to an employee
8-12 who is eligible for that coverage under this chapter and, as
8-13 provided by this chapter, to that employee's dependents.
8-14 Art. 3A.103. COVERAGE PLANS. (a) The program must include:
8-15 (1) a primary care coverage plan comparable in scope
8-16 and, to the greatest extent possible, in cost to the basic coverage
8-17 for health care provided to state employees under the Texas
8-18 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
8-19 Vernon's Texas Insurance Code); and
8-20 (2) a catastrophic care coverage plan.
8-21 (b) The catastrophic care coverage plan must be less
8-22 expensive for employee-only and employee and dependents coverage
8-23 than the primary care coverage plan.
8-24 Art. 3A.104. PARTICIPATION BY EMPLOYEES. (a) Each employee
8-25 is eligible to participate in the program established under this
8-26 chapter. An employee who elects to participate shall be enrolled
8-27 in the primary care coverage plan unless the employee elects in
9-1 writing to participate only in the catastrophic care coverage plan.
9-2 (b) Participation in the program qualifies an employee to
9-3 receive a contribution to the employee's account as authorized
9-4 under Subchapter D of this chapter. An employee who elects not to
9-5 participate in the program is ineligible to receive a contribution.
9-6 Art. 3A.105. COVERAGE FOR DEPENDENTS. (a) A participating
9-7 employee is entitled to obtain for a dependent of the participating
9-8 employee coverage in the plan selected by the employee in the
9-9 manner determined by the board of trustees.
9-10 (b) The participating employee shall make any required
9-11 additional contribution payments for the dependent coverage in the
9-12 manner prescribed by the board of trustees.
9-13 (c) A district is not prohibited by this chapter from
9-14 contributing to the cost of dependent coverage.
9-15 Art. 3A.106. IDENTIFICATION CARDS. (a) The account
9-16 administrator shall issue to each participating employee an
9-17 identification card indicating:
9-18 (1) the name of the employee and any dependent of the
9-19 employee for whom eligible expenses may be paid under the program;
9-20 (2) the name, address, and phone number of the account
9-21 administrator; and
9-22 (3) a description of the coverage plan in which the
9-23 employee is participating.
9-24 (b) The account administrator shall issue a duplicate
9-25 identification card to each of the employee's dependents for whom
9-26 eligible expenses may be paid under the program.
9-27 Art. 3A.107. USE OF ACCOUNT. (a) The account administrator
10-1 shall use money in an employee's account to pay:
10-2 (1) the costs of the health benefit plan coverage
10-3 selected by the employee for the employee and the employee's
10-4 dependents; and
10-5 (2) any additional eligible medical expenses of the
10-6 participating employee or the employee's dependents or to reimburse
10-7 the employee for those expenses.
10-8 (b) A medical expense is eligible for payment or
10-9 reimbursement under Subsection (a)(2) of this article if:
10-10 (1) it is a medical expense described under Section
10-11 213(d), Internal Revenue Code of 1986 (26 U.S.C. Section 213(d)),
10-12 as amended; and
10-13 (2) payment or reimbursement for the expense is not
10-14 otherwise provided for under the coverage plan selected by the
10-15 employee or under another insurance policy, including a motor
10-16 vehicle or workers' compensation insurance policy.
10-17 Art. 3A.108. PROMPT PAYMENT OF CLAIMS. (a) Except as
10-18 provided by Subsection (b) of this article, the account
10-19 administrator shall pay a claim for an expense that is eligible for
10-20 payment or reimbursement from the account not later than the 30th
10-21 day after the date the claim is submitted to the account
10-22 administrator.
10-23 (b) The account administrator may request documents
10-24 necessary to verify whether an expense is eligible for payment or
10-25 reimbursement from the account. If the account administrator makes
10-26 a request under this subsection, the account administrator shall
10-27 pay a claim for an expense that is eligible for payment or
11-1 reimbursement from the account not later than the 30th day after
11-2 the date the documents are received by the account administrator.
11-3 SUBCHAPTER D. CONTRIBUTIONS
11-4 Art. 3A.201. STATE CONTRIBUTION. For each participating
11-5 employee, the state shall annually contribute $1,500 to the medical
11-6 savings account established for that employee for the payment of
11-7 qualified health care expenses if the board of trustees has
11-8 determined that those accounts meet the requirements described by
11-9 Article 3A.053 of this chapter.
11-10 Art. 3A.202. DISTRICT AND EMPLOYEE CONTRIBUTIONS. (a) For
11-11 each participating district employee, the employing school district
11-12 and the employee shall annually contribute to the medical savings
11-13 account established for that employee:
11-14 (1) $2,000 for employee-only coverage; or
11-15 (2) if the participating employee is also covering
11-16 dependents, $3,000.
11-17 (b) The district shall pay two-thirds of the contribution
11-18 required under Subsection (a) of this article.
11-19 (c) The participating employee shall pay:
11-20 (1) the balance of the contribution required under
11-21 Subsection (a) of this article; and
11-22 (2) any additional amounts required to cover benefit
11-23 options selected by the employee.
11-24 (d) The participating employee shall remit the employee's
11-25 contribution in monthly installments to the district in the manner
11-26 prescribed by the district. The district shall remit its
11-27 contribution and the contributions made by its employees to the
12-1 board of trustees in the manner prescribed by the board of trustees
12-2 for transmittal to the account administrator.
12-3 SUBCHAPTER E. RECORDS, PROCEEDINGS, AND ACCOUNTING;
12-4 INVESTMENT AUTHORITY
12-5 Art. 3A.251. CONFIDENTIALITY OF RECORDS. (a) Section
12-6 825.507, Government Code, applies to information in records
12-7 relating to an employee or other participant under the program.
12-8 (b) The program may disclose to a health benefits plan
12-9 provider information in the records of an individual that the board
12-10 of trustees determines is necessary to administer the program.
12-11 Art. 3A.252. CLAIM DENIAL; EXPULSION FROM PROGRAM. (a) A
12-12 participant may appeal a claim denial or expulsion from the program
12-13 to the board of trustees.
12-14 (b) Adjudication of claim disputes and expulsions from the
12-15 program are subject to the contested case provisions of Chapter
12-16 2001, Government Code.
12-17 Art. 3A.253. HEARING EXAMINER. The board of trustees may
12-18 delegate its authority to adjudicate claim disputes and expulsions
12-19 to a qualified hearing examiner.
12-20 Art. 3A.254. APPEAL. (a) A decision of the board of
12-21 trustees or hearing examiner is subject to review by a district
12-22 court in the county in which the claimant resides.
12-23 (b) An appeal of a determination under this section is under
12-24 the substantial evidence rule.
12-25 Art. 3A.255. ANNUAL ACCOUNTING. (a) In this article, "plan
12-26 year" means the period beginning on September 1 and ending the
12-27 following August 31.
13-1 (b) Coverage purchased under this chapter must provide for
13-2 an accounting to the board of trustees by each health benefits plan
13-3 provider.
13-4 (c) The accounting must be submitted:
13-5 (1) not later than the 90th day after the last day of
13-6 each plan year; and
13-7 (2) on a form approved by the board of trustees.
13-8 (d) Each health benefits plan provider shall prepare any
13-9 other report required by rule by the board of trustees.
13-10 (e) A health benefits plan provider may not assess an
13-11 additional charge for preparation of an accounting report.
13-12 Art. 3A.256. ASSISTANCE. In implementing and administering
13-13 this chapter, the board of trustees may obtain the assistance of
13-14 any state agency the board considers appropriate.
13-15 ARTICLE 2. CONFORMING AMENDMENTS; REPEALER
13-16 SECTION 2.01. Section 1, Article 3.50-4, Insurance Code, is
13-17 amended to read as follows:
13-18 Sec. 1. SHORT TITLE. This article may be cited as the Texas
13-19 Public School Retired Employees Group Insurance Act.
13-20 SECTION 2.02. Sections 2(3), (4), (11), and (13), Article
13-21 3.50-4, Insurance Code, are amended to read as follows:
13-22 (3) "Dependent" means:
13-23 (A) a spouse of a retiree [or active member];
13-24 (B) a retiree's[, an active member's,] or a
13-25 deceased active member's unmarried child who is younger than 25
13-26 years of age including:
13-27 (i) an adopted child;
14-1 (ii) a foster child, a stepchild, or other
14-2 child who is in a regular parent-child relationship; and
14-3 (iii) a recognized natural child; and
14-4 (C) a retiree's [or active member's] recognized
14-5 natural child, adopted child, foster child, stepchild, or other
14-6 child who is in a regular parent-child relationship and who lives
14-7 with or whose care is provided by the retiree[, active member,] or
14-8 surviving spouse on a regular basis, regardless of the child's age,
14-9 if the child is mentally retarded or physically incapacitated to
14-10 such an extent as to be dependent on the retiree[, active member,]
14-11 or surviving spouse for care or support, as determined by the
14-12 trustee, or in the case of a deceased active member, a recognized
14-13 natural child, adopted child, foster child, stepchild, or other
14-14 child who was in a regular parent-child relationship and who lived
14-15 with or whose care was provided by the deceased active member on a
14-16 regular basis, regardless of the child's age, if the child is
14-17 mentally retarded or physically incapacitated to such an extent as
14-18 to have been dependent on the deceased active member or surviving
14-19 spouse for care or support, as determined by the trustee.
14-20 (4) "Fund" means the Texas public school retired
14-21 employees group insurance fund.
14-22 (11) "Surviving spouse" means[:]
14-23 [(A)] the surviving spouse of a deceased
14-24 retiree[;]
14-25 [(B) the surviving spouse of a deceased active
14-26 member of the Teacher Retirement System of Texas:]
14-27 [(i) for whom contributions have been made
15-1 to the Texas Public School Retired Employees Group Insurance
15-2 Program at the last place of employment of the deceased active
15-3 member in public education in this state;]
15-4 [(ii) who had 10 or more years of service
15-5 credit in the Teacher Retirement System of Texas; and]
15-6 [(iii) who died on or after September 1,
15-7 1986].
15-8 (13) "Surviving dependent child" means[:]
15-9 [(A)] the dependent child of a deceased retiree
15-10 who has survived the deceased retiree and the deceased retiree's
15-11 spouse[; or]
15-12 [(B) the dependent child of a deceased active
15-13 member of the Teacher Retirement System of Texas who has survived
15-14 the deceased active member and the deceased member's spouse if the
15-15 deceased active member:]
15-16 [(i) had contributions to the Texas Public
15-17 School Retired Employees Group Insurance Program at his last place
15-18 of employment within public education;]
15-19 [(ii) had 10 or more years of service
15-20 credit in the Teacher Retirement System of Texas; and]
15-21 [(iii) died on or after September 1,
15-22 1986].
15-23 SECTION 2.03. Section 3(a), Article 3.50-4, Insurance Code,
15-24 is amended to read as follows:
15-25 (a) The Texas Public School Retired Employees Group
15-26 Insurance Program is established to provide for an insurance plan
15-27 or plans under this article.
16-1 SECTION 2.04. Section 5(a), Article 3.50-4, Insurance Code,
16-2 is amended to read as follows:
16-3 (a) The trustee may adopt rules, plans, procedures, and
16-4 orders reasonably necessary to implement this article, including:
16-5 (1) establishment of minimum benefit and financing
16-6 standards for group insurance coverage to be provided to all
16-7 retirees, [active employees,] dependents, surviving spouses, and
16-8 surviving dependent children;
16-9 (2) establishment of basic and optional group coverage
16-10 to be provided to retirees, [active employees,] dependents,
16-11 surviving spouses, and surviving dependent children;
16-12 (3) establishment of the procedures for contributions
16-13 and deductions;
16-14 (4) establishment of periods for enrollment and
16-15 selection of optional coverage and procedures for enrolling and
16-16 exercising options under the plan;
16-17 (5) determination of methods and procedures for claims
16-18 administration;
16-19 (6) study of the operation of all insurance coverage
16-20 provided under this article;
16-21 (7) administration of the fund;
16-22 (8) adoption of a timetable for the development of
16-23 minimum benefit and financial standards for group insurance
16-24 coverage, establishment of group insurance plans, and the taking of
16-25 bids for and awarding of contracts for insurance plans; and
16-26 (9) contracting with an independent and experienced
16-27 group insurance consultant or actuary, who does not receive
17-1 insurance commissions from any insurance company, for advice and
17-2 counsel in implementing and administering this program.
17-3 SECTION 2.05. Section 7(a), Article 3.50-4, Insurance Code,
17-4 is amended to read as follows:
17-5 (a) Each retiree must be enrolled in a basic plan offered in
17-6 the program unless:
17-7 (1) the retiree rejects enrollment in the program in
17-8 writing on a form provided by the trustee; [or]
17-9 (2) the retiree is participating in the Texas public
17-10 school employees medical savings account program as provided by
17-11 Chapter 3A of this code; or
17-12 (3) the retiree has been found under Section 18A of
17-13 this article to have defrauded or attempted to defraud the program.
17-14 SECTION 2.06. Section 8(e), Article 3.50-4, Insurance Code,
17-15 is amended to read as follows:
17-16 (e) The trustee may contract for and make available to all
17-17 retirees, dependents, surviving spouses, and surviving dependent
17-18 children optional group health benefit plans in addition to the
17-19 basic plans. The optional coverage may include a smaller
17-20 deductible, lower coinsurance, or additional categories of benefits
17-21 permitted under Subsection (b) of this section to provide
17-22 additional levels of coverages and benefits. The trustee may
17-23 utilize a portion of the funds received for the Texas Public School
17-24 Retired Employees Group Insurance Program to offset some portion of
17-25 costs paid by the retiree for optional coverage if such utilization
17-26 does not reduce the period the program is projected to remain
17-27 financially solvent by more than one year in a biennium. Any
18-1 additional contributions for these optional plans shall be paid for
18-2 by the retiree, surviving spouse, or surviving dependent children.
18-3 SECTION 2.07. Section 9, Article 3.50-4, Insurance Code, is
18-4 amended to read as follows:
18-5 Sec. 9. BENEFIT CERTIFICATES. At such times, or upon such
18-6 events, as designated by the trustee, each insurance carrier shall
18-7 issue to each retiree, [active employee,] surviving spouse, or
18-8 surviving dependent child insured under this article a certificate
18-9 of insurance that:
18-10 (1) states the benefits to which the person is
18-11 entitled;
18-12 (2) states to whom the benefits are payable;
18-13 (3) states to whom the claims must be submitted; and
18-14 (4) summarizes the provisions of the policy
18-15 principally affecting the person.
18-16 SECTION 2.08. Section 12, Article 3.50-4, Insurance Code, is
18-17 amended to read as follows:
18-18 Sec. 12. DEATH CLAIMS: BENEFICIARIES. The amount of group
18-19 life insurance and group accidental death and dismemberment
18-20 insurance covering a retiree, [active employee,] surviving spouse,
18-21 dependent, or surviving dependent child at the date of death shall
18-22 be paid, on the establishment of a valid claim, only:
18-23 (1) to the beneficiary or beneficiaries designated by
18-24 the person in a signed and witnessed written document received
18-25 before death in the trustee's office; or
18-26 (2) if no beneficiary is properly designated or in
18-27 existence, to persons in accordance with the trustee's death
19-1 benefit provisions in Subsection (b), Section 824.103, Government
19-2 Code.
19-3 SECTION 2.09. Section 13, Article 3.50-4, Insurance Code, is
19-4 amended to read as follows:
19-5 Sec. 13. AUTOMATIC COVERAGE. A retiree [or active employee]
19-6 who applies during an enrollment period may not be denied any of
19-7 the group insurance basic coverage provided under this article
19-8 unless the person has been found under Section 18A of this article
19-9 to have defrauded or attempted to defraud the Texas Public School
19-10 Retired Employees Group Insurance Program.
19-11 SECTION 2.10. Section 15, Article 3.50-4, Insurance Code, is
19-12 amended to read as follows:
19-13 Sec. 15. TEXAS PUBLIC SCHOOL RETIRED EMPLOYEES GROUP
19-14 INSURANCE FUND. (a) The Texas public school retired employees
19-15 group insurance fund is created. The comptroller is the custodian
19-16 of the fund, and the trustee shall administer the fund. All
19-17 contributions from active employees, retirees, and the state,
19-18 contributions for optional coverages, investment income,
19-19 appropriations for implementation of this program, and other money
19-20 required or authorized to be paid into the fund shall be paid into
19-21 the fund. From the fund shall be paid, without state fiscal year
19-22 limitation, the appropriate premiums to the carrier or carriers
19-23 providing group coverage under the plan or plans under this
19-24 article, claims for benefits under the group coverage, and the
19-25 amounts expended by the trustee for administration of the program.
19-26 The appropriate portion of the contributions to the fund to provide
19-27 for incurred but unreported claim reserves and contingency
20-1 reserves, as determined by the trustee, shall be retained in the
20-2 fund.
20-3 (b) The trustee shall transfer the amounts deducted from
20-4 annuities for contributions into the fund.
20-5 (c) Expenses for the development and administration of the
20-6 program shall be spent as provided by a budget adopted by the
20-7 trustee.
20-8 (d) The trustee may invest and reinvest the money in the
20-9 fund as provided by Subchapter D, Chapter 825, Government Code, for
20-10 assets of the Teacher Retirement System of Texas.
20-11 SECTION 2.11. Section 18A, Article 3.50-4, Insurance Code,
20-12 is amended to read as follows:
20-13 Sec. 18A. EXPULSION FROM PROGRAM FOR FRAUD. (a) After
20-14 notice and hearing as provided by this section, the trustee may
20-15 expel from participation in the Texas Public School Retired
20-16 Employees Group Insurance Program any retiree, [active employee,]
20-17 surviving spouse, dependent, or surviving dependent child who
20-18 submits a fraudulent claim under, or has defrauded or attempted to
20-19 defraud, any health benefits plan offered under the program.
20-20 (b) On its motion or on the receipt of a complaint, the
20-21 trustee may call and hold a hearing to determine whether a person
20-22 has submitted a fraudulent claim under, or has defrauded or
20-23 attempted to defraud, any health benefits plan offered under the
20-24 Texas Public School Retired Employees Group Insurance Program.
20-25 (c) A proceeding under this section is a contested case
20-26 under Chapter 2001, Government Code [the Administrative Procedure
20-27 and Texas Register Act (Article 6252-13a, Vernon's Texas Civil
21-1 Statutes)].
21-2 (d) If the trustee, at the conclusion of the hearing, issues
21-3 a decision that finds that the accused submitted a fraudulent claim
21-4 or has defrauded or attempted to defraud any health benefits plan
21-5 offered under the Texas Public School Retired Employees Group
21-6 Insurance Program, the trustee shall expel the person from
21-7 participation in the program.
21-8 (e) The substantial evidence rule shall be used on any
21-9 appeal of a decision of the trustee under this section.
21-10 (f) A person expelled from the Texas Public School Retired
21-11 Employees Group Insurance Program may not be insured by any health
21-12 insurance plan offered by the program for a period, to be
21-13 determined by the trustee, of up to five years from the date the
21-14 expulsion takes effect.
21-15 SECTION 2.12. Section 18B(a), Article 3.50-4, Insurance
21-16 Code, is amended to read as follows:
21-17 (a) Section 825.507, Government Code, concerning the
21-18 confidentiality of information in records that are in the custody
21-19 of the Teacher Retirement System of Texas, applies to information
21-20 in records that are in the custody of the retirement system
21-21 regarding retirees, active employees, annuitants, or beneficiaries
21-22 under the Texas Public School Retired Employees Group Insurance
21-23 Program.
21-24 SECTION 2.13. Sections 18C(c), (d), and (i), Article 3.50-4,
21-25 Insurance Code, are amended to read as follows:
21-26 (c) The trustee, the Texas public school retired employees
21-27 group insurance program, the Texas public school retired employees
22-1 group insurance fund, and the board of trustees, officers, advisory
22-2 committee members, and employees of the trustee are not liable for
22-3 damages arising from the acts or omissions of health care providers
22-4 who are participating health care providers in the coordinated care
22-5 network established by the trustee. Those health care providers
22-6 are independent contractors and are responsible for their own acts
22-7 and omissions.
22-8 (d) The trustee, the Texas public school retired employees
22-9 group insurance program, the Texas public school retired employees
22-10 group insurance fund, or a member of a credentialing committee, or
22-11 the board of trustees, officers, advisory committee members, or
22-12 employees of the trustee are not liable for damages arising from
22-13 any act, statement, determination, recommendation made, or act
22-14 reported, without malice, in the course of the evaluation of the
22-15 qualifications of health care providers or of the patient care
22-16 rendered by those providers.
22-17 (i) A credentialing committee, a person participating in a
22-18 credentialing review, a health care provider, the trustee, the
22-19 Texas public school retired employees group insurance program, or
22-20 the board of trustees, officers, advisory committee members, or
22-21 employees of the trustee that are named as defendants in any civil
22-22 action filed as a result of participation in the credentialing
22-23 process may use otherwise confidential information obtained for
22-24 legitimate internal business and professional purposes, including
22-25 use in their own defense. Use of information under this subsection
22-26 does not constitute a waiver of the confidential and privileged
22-27 nature of the information.
23-1 SECTION 2.14. The following laws are repealed:
23-2 (1) Section 22.004, Education Code; and
23-3 (2) Section 7A, Article 3.50-4, Insurance Code.
23-4 SECTION 2.15. This article takes effect September 1, 2002.
23-5 ARTICLE 3. TRANSITION; GENERAL EFFECTIVE DATE
23-6 SECTION 3.01. (a) During the 2001-2002 school year, the
23-7 Teachers Retirement System of Texas shall develop the program to be
23-8 implemented and administered under Chapter 3A, Insurance Code, as
23-9 added by this Act.
23-10 (b) Participation in the program authorized by Chapter 3A,
23-11 Insurance Code, as added by this Act, shall begin with the
23-12 2002-2003 school year, but not later than September 1, 2002.
23-13 SECTION 3.02. The Employees Retirement System of Texas shall
23-14 adopt rules as necessary to implement Section 3.01 of this Act not
23-15 later than March 1, 2002.
23-16 SECTION 3.03. Except as otherwise provided by this Act, this
23-17 Act takes effect September 1, 2001.