By Sadler, et al. H.B. No. 3343
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the operation and funding of certain group coverage
1-3 programs for certain school and educational employees and their
1-4 dependents.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 ARTICLE 1. GROUP HEALTH COVERAGE PROGRAM
1-7 SECTION 1.01. Subchapter E, Chapter 3, Insurance Code, is
1-8 amended by adding Article 3.50-7 to read as follows:
1-9 Art. 3.50-7. TEXAS SCHOOL EMPLOYEES UNIFORM GROUP HEALTH
1-10 COVERAGE ACT
1-11 Sec. 1. SHORT TITLE. This article may be cited as the Texas
1-12 School Employees Uniform Group Health Coverage Act.
1-13 Sec. 2. DEFINITIONS. In this article:
1-14 (1) "Administering firm" means any entity designated
1-15 by the trustee to administer any coverages, services, benefits, or
1-16 requirements under this article and the trustee's rules adopted
1-17 under this article.
1-18 (2) "Cafeteria plan" means a plan as defined and
1-19 authorized by Section 125, Internal Revenue Code of 1986, and its
1-20 subsequent amendments.
1-21 (3) "Charter school" means an open-enrollment charter
1-22 school established under Subchapter D, Chapter 12, Education Code.
1-23 (4) "Employee" means a participating member of the
1-24 Teacher Retirement System of Texas who is employed by a
2-1 participating entity and who is not receiving coverage from a
2-2 uniform group insurance program under the Texas Employees Uniform
2-3 Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
2-4 Insurance Code), the Texas State College and University Employees
2-5 Uniform Insurance Benefits Act (Article 3.50-3, Vernon's Texas
2-6 Insurance Code), or the Texas Public School Retired Employees Group
2-7 Insurance Program established under Article 3.50-4 of this code.
2-8 The term does not include an individual performing personal
2-9 services as an independent contractor.
2-10 (5) "Health coverage plan" means any group policy or
2-11 contract, hospital service agreement, health maintenance
2-12 organization agreement, preferred provider arrangement, or any
2-13 similar group arrangement or any combination of those policies,
2-14 contracts, agreements, or arrangements that provides for, pays for,
2-15 or reimburses expenses for health care services.
2-16 (6) "Participating entity" means an entity
2-17 participating in the uniform group coverage program established
2-18 under this article. The term includes:
2-19 (A) a school district;
2-20 (B) a regional education service center; and
2-21 (C) a charter school that meets the requirements
2-22 of Section 6 of this article.
2-23 (7) "Program" means the uniform group coverage program
2-24 established under this article.
2-25 (8) "Regional education service center" means a
2-26 regional education service center established under Chapter 8,
2-27 Education Code.
3-1 (9) "Trustee" means the Teacher Retirement System of
3-2 Texas.
3-3 Sec. 3. ADMINISTRATION. (a) The Teacher Retirement System
3-4 of Texas, as trustee, shall implement and administer the uniform
3-5 group coverage program described by this article.
3-6 (b) The trustee may hire and compensate employees.
3-7 (c) The trustee may, on a competitive bid basis, contract
3-8 with a qualified, experienced firm of group insurance plan
3-9 specialists or an administering firm who will act for the trustee
3-10 in the capacity of independent administrators and managers of the
3-11 program. The independent administrator selected by the trustee
3-12 shall assist the trustee to ensure the proper administration of
3-13 this article and the coverages, services, and benefits provided for
3-14 or authorized by this article and shall be paid by the trustee.
3-15 (d) The trustee may enter into interagency contracts with
3-16 any agency of the state, including the Employees Retirement System
3-17 of Texas, for the purpose of assistance in implementing the
3-18 program.
3-19 (e) The trustee has the powers with regard to the program
3-20 that the Employees Retirement System of Texas has in administering
3-21 the Texas Employees Uniform Group Insurance Benefits Act (Article
3-22 3.50-2, Vernon's Texas Insurance Code), including the power to
3-23 adjudicate claims, expel participants from the program for cause,
3-24 and adopt rules to administer this article.
3-25 Sec. 4. GROUP COVERAGES. (a) The trustee by rule shall
3-26 establish plans of group coverages for employees participating in
3-27 the program and their dependents. The plans must include at least
4-1 two tiers of group coverage, with coverage at different levels in
4-2 each tier, ranging from the catastrophic care coverage plan to the
4-3 primary care coverage plan. Each tier must contain a health
4-4 coverage plan.
4-5 (b) The trustee by rule shall define the requirements of
4-6 each coverage plan and tier of coverage. The coverage provided
4-7 under the catastrophic care coverage plan shall be prescribed by
4-8 the trustee by rule and must provide coverage at least as extensive
4-9 as the coverage provided under the TRS-Care 2 plan operated under
4-10 Article 3.50-4 of this code. The coverage provided under the
4-11 primary care coverage plan must be comparable in scope and, to the
4-12 greatest extent possible, in cost to the coverage provided under
4-13 the Texas Employees Uniform Group Insurance Benefits Act (Article
4-14 3.50-2, Vernon's Texas Insurance Code).
4-15 (c) Comparable coverage plans of each tier of coverage
4-16 established must be offered to employees of all participating
4-17 entities.
4-18 (d) Coverage provided under the program may not be made
4-19 subject to a preexisting condition limitation.
4-20 (e) The trustee may provide a cafeteria plan for employees
4-21 of participating entities.
4-22 Sec. 5. PARTICIPATION IN PROGRAM BY SCHOOL DISTRICTS AND
4-23 REGIONAL EDUCATION SERVICE CENTERS. (a) Effective September 1,
4-24 2002, each school district with 500 or fewer employees and each
4-25 regional education service center is required to participate in the
4-26 program.
4-27 (a-1) Effective September 1, 2002, a school district with
5-1 more than 500 employees but not more than 1,000 employees may elect
5-2 to participate in the program. A school district that elects to
5-3 participate in the program under this subsection must notify the
5-4 trustee of the election, in the manner prescribed by the trustee,
5-5 not later than September 30, 2001. This subsection expires January
5-6 1, 2002.
5-7 (b) Effective September 1, 2005, a school district with more
5-8 than 500 employees may elect to participate in the program. A
5-9 school district that elects to participate under this subsection
5-10 shall apply for participation in the manner prescribed by the
5-11 trustee by rule.
5-12 (c) In determining the number of employees of a school
5-13 district for purposes of Subsections (a) and (b) of this section,
5-14 school districts that on August 1, 2001, are members of a risk pool
5-15 established under the authority of Chapter 172, Local Government
5-16 Code, as provided by Section 22.004, Education Code, may elect to
5-17 be treated as a single unit. A school district shall elect whether
5-18 to be considered as a member of a risk pool under this section by
5-19 notifying the trustee not later than September 1, 2001.
5-20 (d) A risk pool that provides group health coverage to 500
5-21 or fewer school district employees is subject to Subsection (a) of
5-22 this section, and effective September 1, 2002, the group health
5-23 coverage of the school districts that are members of such a risk
5-24 pool is subject to Section 4 of this article.
5-25 (d-1) A risk pool that provides group health coverage to
5-26 more than 500 school district employees but fewer than 1,000
5-27 employees that elects to participate as provided by Subsection
6-1 (a-1) of this section must notify the trustee not later than
6-2 September 30, 2001, as provided by that subsection. This
6-3 subsection expires January 1, 2002.
6-4 (e) A school district with 500 or fewer employees that is a
6-5 member of a risk pool described by Subsection (c) of this section
6-6 that provides group health coverage to more than 500 school
6-7 district employees must elect, not later than September 1, 2001,
6-8 whether to be treated as a school district with 500 or fewer
6-9 employees or as part of a unit with more than 500 employees. The
6-10 school district must notify the trustee of the election, in the
6-11 manner prescribed by the trustee, not later than September 1, 2001.
6-12 Sec. 6. PARTICIPATION BY CHARTER SCHOOLS; ELIGIBILITY. (a)
6-13 A charter school is eligible to participate in the program if the
6-14 school agrees:
6-15 (1) that all records of the school relating to
6-16 participation in the program are open to inspection by the trustee,
6-17 the administering firm, the commissioner of education, or a
6-18 designee of any of those entities; and
6-19 (2) to have its accounts relating to participation in
6-20 the program annually audited by a certified public accountant at
6-21 the school's expense.
6-22 (b) A charter school must notify the trustee of the school's
6-23 intent to participate in the program in the manner and within the
6-24 time required by trustee rule.
6-25 Sec. 7. PARTICIPATION BY EMPLOYEE. (a) In this section,
6-26 "full-time employee" and "part-time employee" have the meanings
6-27 assigned by trustee rules.
7-1 (b) Except as provided by Subsection (c) of this section,
7-2 participation in the program is limited to employees of
7-3 participating entities who are full-time employees and to part-time
7-4 employees who are participating members in the Teacher Retirement
7-5 System of Texas. Such an employee who applies for coverage during
7-6 an open enrollment period prescribed by the trustee is
7-7 automatically covered by the catastrophic care coverage plan
7-8 unless the employee:
7-9 (1) specifically waives coverage under this article;
7-10 (2) selects a higher tier coverage plan; or
7-11 (3) is expelled from the program.
7-12 (c) A part-time employee of a participating entity who is
7-13 not a participating member in the Teacher Retirement System of
7-14 Texas is eligible to participate in the program only if the
7-15 employee pays all of the premiums and other costs associated with
7-16 the health coverage plan selected by the employee.
7-17 (d) Notwithstanding Subsection (c), a school district may
7-18 pay any portion of what otherwise would be the employee share of
7-19 premiums and other costs associated with the health coverage plan
7-20 selected by the employee.
7-21 Sec. 8. FUND. (a) The Texas school employees uniform group
7-22 coverage trust fund is established as a trust fund with the
7-23 comptroller.
7-24 (b) The fund is composed of:
7-25 (1) all contributions made to the fund under this
7-26 article from employees, participating entities, and the state;
7-27 (2) contributions made by employees or participating
8-1 entities for optional coverages;
8-2 (3) investment income;
8-3 (4) any additional amounts appropriated by the
8-4 legislature for contingency reserves, administrative expenses, or
8-5 other expenses; and
8-6 (5) any other money required or authorized to be paid
8-7 into the fund.
8-8 (c) The trustee may use amounts in the fund only to provide
8-9 group coverages under this article and to pay the expenses of
8-10 administering the program.
8-11 (d) The trustee may invest assets of the fund in the manner
8-12 provided by Section 67(a)(3), Article XVI, Texas Constitution.
8-13 Sec. 9. PAYMENT OF CONTRIBUTIONS FOR PROGRAM. (a) For each
8-14 participating entity, the state shall contribute the sum certain
8-15 prescribed as a state contribution under Article 3.50-9 of this
8-16 code to the fund established under Section 8 of this article.
8-17 (b) A school district shall make contributions for the
8-18 program as provided by Article 3.50-10 of this code. A charter
8-19 school or regional education service center shall make
8-20 contributions for the program as provided by trustee rule.
8-21 (c) An employee covered by the program shall pay that
8-22 portion of the cost of coverage selected by the employee that
8-23 exceeds the amount of the state and participating entity
8-24 contributions under Subsections (a) and (b) of this section. The
8-25 employee may pay the employee's contribution under this subsection
8-26 from the amount distributed to the employee under Article 3.50-8 of
8-27 this code.
9-1 (d) Notwithstanding Subsection (c), a school district may
9-2 pay any portion of what otherwise would be the employee share of
9-3 premiums and other costs associated with the health coverage plan
9-4 selected by the employee.
9-5 SECTION 1.02. Effective September 1, 2002, Subchapter E,
9-6 Chapter 3, Insurance Code, is amended by adding Article 3.50-8 to
9-7 read as follows:
9-8 Art. 3.50-8. SCHOOL EMPLOYEE HEALTH COVERAGE OR COMPENSATION
9-9 SUPPLEMENTATION
9-10 Sec. 1. DEFINITIONS. In this article:
9-11 (1) "Eligible charter school" means an open-enrollment
9-12 charter school established under Subchapter D, Chapter 12,
9-13 Education Code, that is eligible for participation in the uniform
9-14 group coverage program established under Article 3.50-7 of this
9-15 code.
9-16 (2) "Employee" means a participating member of the
9-17 Teacher Retirement System of Texas who:
9-18 (A) is employed by a school district, eligible
9-19 charter school, or regional education service center; and
9-20 (B) is not a retiree covered under the Texas
9-21 Public School Retired Employees Group Insurance Program established
9-22 under Article 3.50-4 of this code.
9-23 (3) "Regional education service center" means a
9-24 regional education service center established under Chapter 8,
9-25 Education Code.
9-26 (4) "Trustee" means the Teacher Retirement System of
9-27 Texas.
10-1 Sec. 2. SCHOOL EMPLOYEE HEALTH COVERAGE OR COMPENSATION
10-2 SUPPLEMENTATION. (a) Each year, the trustee shall deliver to each
10-3 school district, including a school district that is ineligible for
10-4 state aid under Chapter 42, Education Code, each eligible charter
10-5 school, and each regional education service center state funds in
10-6 an amount, as determined by the trustee, equal to the product of
10-7 the specific amount provided by appropriation for purposes of this
10-8 article multiplied by the number of employees employed by the
10-9 district, school, or service center.
10-10 (b) All funds received by a school district, eligible
10-11 charter school, or regional education service center under this
10-12 article are held in trust for the benefit of the employee on whose
10-13 behalf the district, school, or service center received the funds.
10-14 (c) The trustee shall distribute funds under this article in
10-15 equal monthly installments. The trustee is entitled to recover
10-16 from a school district, eligible charter school, or regional
10-17 education service center any amount distributed under this article
10-18 to which the district, school, or service center was not entitled.
10-19 (d) A determination by the trustee under this section is
10-20 final and may not be appealed.
10-21 Sec. 3. EMPLOYEE ELECTION. (a) Each employee shall elect
10-22 whether state funds distributed under this article to the school
10-23 district, eligible charter school, or regional education service
10-24 center employing the employee are to be:
10-25 (1) placed into a health care reimbursement account;
10-26 (2) used by the district, school, or service center to
10-27 pay for optional health care coverage for the employee or the
11-1 employee's dependents;
11-2 (3) paid to the employee as supplemental compensation;
11-3 (4) placed into a medical savings account that meets
11-4 the requirements of Section 5 of this article; or
11-5 (5) divided among two or more of the options permitted
11-6 by Subdivisions (1)-(4) of this subsection.
11-7 (b) For each state fiscal year, an election under this
11-8 section must be made before the later of:
11-9 (1) August 1 of the preceding state fiscal year; or
11-10 (2) the 31st day after the date the employee is hired.
11-11 (c) The trustee shall prescribe and distribute to each
11-12 school district, eligible charter school, and regional education
11-13 service center:
11-14 (1) a model explanation written in English and Spanish
11-15 of the options employees may elect under this section and the
11-16 effect of electing each option; and
11-17 (2) an election form to be completed by employees.
11-18 (d) Each state fiscal year, a school district, eligible
11-19 charter school, or regional education service center shall prepare
11-20 and distribute to each employee a written explanation in English
11-21 and Spanish, as appropriate, of the options the employee may elect
11-22 under this section. The explanation must be based on the model
11-23 explanation prepared by the trustee under Subsection (c) of this
11-24 section and must reflect all available health coverage options
11-25 available to the employee. The explanation must be distributed to
11-26 an employee before the later of:
11-27 (1) July 1 of the preceding state fiscal year; or
12-1 (2) the fifth day after the date the employee is
12-2 hired.
12-3 (e) The written explanation under Subsection (d) of this
12-4 section must be accompanied by a copy of the election form
12-5 prescribed under Subsection (c)(2) of this section.
12-6 (f) Any unencumbered funds that are returned to the district
12-7 from accounts established under Subsection (a)(1) of this section
12-8 may be used only to provide employee compensation, benefits, or
12-9 both.
12-10 Sec. 4. RULES. The trustee may adopt rules to implement
12-11 this article.
12-12 Sec. 5. MEDICAL SAVINGS ACCOUNT. (a) In this section,
12-13 "qualified health care expense" means an expense paid by an
12-14 employee for medical care, as defined by 26 U.S.C. Section 213(d),
12-15 as amended, for the employee or the employee's dependents, as
12-16 defined by 26 U.S.C. Section 152, as amended.
12-17 (b) The trustee, by rule, shall specify the requirements for
12-18 the medical savings account established under this article.
12-19 (c) The trustee shall request in writing a ruling or opinion
12-20 from the Internal Revenue Service as to whether the medical savings
12-21 accounts adopted under this article and the state rules governing
12-22 those accounts qualify the accounts for appropriate federal tax
12-23 exemptions. Based on the response of the Internal Revenue Service,
12-24 the trustee shall:
12-25 (1) modify the rules, plans, and procedures adopted
12-26 under this section as necessary to ensure the qualification of
12-27 those accounts for appropriate federal tax exemptions; and
13-1 (2) certify the information regarding federal tax
13-2 qualifications to the comptroller.
13-3 (d) An employee who elects under Section 3(a) of this
13-4 article to have state funds distributed under this article placed
13-5 in a medical savings account may use the money in that account only
13-6 for a qualified health care expense.
13-7 SECTION 1.03. Effective September 1, 2002, Subchapter E,
13-8 Chapter 3, Insurance Code, is amended by adding Article 3.50-9 to
13-9 read as follows:
13-10 Art. 3.50-9. STATE CONTRIBUTION FOR COVERAGE PLANS FOR
13-11 EDUCATIONAL EMPLOYEES
13-12 Sec. 1. DEFINITIONS. In this article:
13-13 (1) "Covered entity" means:
13-14 (A) a public school district of this state;
13-15 (B) a regional education service center
13-16 established under Chapter 8, Education Code; and
13-17 (C) a charter school that meets the requirements
13-18 of Section 6, Article 3.50-7, of this code.
13-19 (2) "Employee" has the meaning assigned by Article
13-20 3.50-7 of this code.
13-21 (3) "Health coverage plan" has the meaning assigned by
13-22 Article 3.50-7 of this code.
13-23 Sec. 2. STATE CONTRIBUTION. (a) The state shall contribute
13-24 monthly for each employee of a covered entity who participates in a
13-25 group health coverage plan provided by or through the covered
13-26 entity a sum certain as determined by appropriation to be used by
13-27 the covered entity only for the purchase of health care coverage
14-1 plans for employees of the covered entity as authorized by:
14-2 (1) Article 3.50-7 of this code;
14-3 (2) Section 22.004, Education Code; or
14-4 (3) another applicable law of this state.
14-5 (b) A state contribution made under this section shall be
14-6 deposited, as applicable, in:
14-7 (1) the Texas school employees uniform group coverage
14-8 trust fund established under Section 8, Article 3.50-7, of this
14-9 code; or
14-10 (2) another fund established for the payment of school
14-11 employee health coverages that meets requirements for those funds
14-12 prescribed by the comptroller or another appropriate officer of
14-13 this state.
14-14 (c) State funds received by a school district under this
14-15 article may not be considered for any purpose under Chapter 41 or
14-16 42, Education Code.
14-17 SECTION 1.04. Subchapter E, Chapter 3, Insurance Code, is
14-18 amended by adding Article 3.50-10 to read as follows:
14-19 Art. 3.50-10. SCHOOL DISTRICT EXPENDITURES FOR EMPLOYEE
14-20 HEALTH COVERAGE PLANS
14-21 Sec. 1. DEFINITION. In this article, "participating
14-22 employee" means an employee of a school district who participates
14-23 in a group health coverage plan provided by or through the
14-24 district.
14-25 Sec. 2. MAINTENANCE OF EFFORT FOR 2000-2001 SCHOOL YEAR.
14-26 Subject to Section 3 of this article, and except as provided by
14-27 Section 5 of this article, a school district that, for the
15-1 2000-2001 school year, paid amounts to share with employees the
15-2 cost of coverage under a group benefits plan shall, for each fiscal
15-3 year, use to provide health coverage an amount for each
15-4 participating employee at least equal to the amount computed as
15-5 provided by this subsection. The school district shall divide the
15-6 amount that the district paid during the 2000-2001 school year for
15-7 the prior group benefits plan by the total number of full-time
15-8 employees of the district in the 2000-2001 school year and multiply
15-9 the result by the number of full-time employees of the district in
15-10 the fiscal year for which the computation is made. Amounts used as
15-11 required by this section shall be deposited in a fund described by
15-12 Section 2(b), Article 3.50-9, of this code.
15-13 Sec. 3. MINIMUM EFFORT. (a) A school district shall, for
15-14 each fiscal year, use to provide health coverage an amount equal to
15-15 the number of participating employees of the district multiplied by
15-16 $1,800. Amounts used as required by this section shall be
15-17 deposited in a fund described by Section 2(b), Article 3.50-9, of
15-18 this code.
15-19 (b) Amounts received by or transferred on behalf of a school
15-20 district under Article 3.50-9 of this code are not used in
15-21 computing whether the district complies with Subsection (a) of this
15-22 section.
15-23 (c) To comply with this section, a school district may use
15-24 state funds received under Chapter 42, Education Code, other than
15-25 funds that may be used under that chapter only for a specific
15-26 purpose.
15-27 Sec. 4. STATE ASSISTANCE FOR MEETING MINIMUM EFFORT. (a)
16-1 For any state fiscal year, a school district that imposes
16-2 maintenance and operations taxes at the maximum rate permitted
16-3 under Section 45.003(d), Education Code, is entitled to state funds
16-4 in an amount equal to the difference, if any, between:
16-5 (1) an amount equal to the number of participating
16-6 employees of the district multiplied by $1,800; and
16-7 (2) the amount the district is required to use to
16-8 provide health coverage under Section 2 of this article for that
16-9 fiscal year, if that amount is less than the amount specified by
16-10 Subdivision (1) of this subsection.
16-11 (a-1) For the state fiscal year beginning September 1, 2002,
16-12 a school district is entitled to state funds in an amount equal to
16-13 the difference, if any, between:
16-14 (1) an amount equal to the number of participating
16-15 employees of the district multiplied by $1,800; and
16-16 (2) the amount the district is required to use to
16-17 provide health coverage under Section 2 of this article for that
16-18 fiscal year, if that amount is less than the amount specified by
16-19 Subdivision (1) of this subsection.
16-20 (a-2) For the state fiscal year beginning September 1, 2003,
16-21 a school district is entitled to state funds in an amount equal to
16-22 the difference, if any, between:
16-23 (1) an amount equal to the number of participating
16-24 employees of the district multiplied by $1,500; and
16-25 (2) the amount the district is required to use to
16-26 provide health coverage under Section 2 of this article for that
16-27 fiscal year, if that amount is less than the amount specified by
17-1 Subdivision (1) of this subsection.
17-2 (a-3) For the state fiscal year beginning September 1, 2004,
17-3 a school district is entitled to state funds in an amount equal to
17-4 the difference, if any, between:
17-5 (1) an amount equal to the number of participating
17-6 employees of the district multiplied by $1,200; and
17-7 (2) the amount the district is required to use to
17-8 provide health coverage under Section 2 of this article for that
17-9 fiscal year, if that amount is less than the amount specified by
17-10 Subdivision (1) of this subsection.
17-11 (a-4) For the state fiscal year beginning September 1, 2005,
17-12 a school district is entitled to state funds in an amount equal to
17-13 the difference, if any, between:
17-14 (1) an amount equal to the number of participating
17-15 employees of the district multiplied by $900; and
17-16 (2) the amount the district is required to use to
17-17 provide health coverage under Section 2 of this article for that
17-18 fiscal year, if that amount is less than the amount specified by
17-19 Subdivision (1) of this subsection.
17-20 (a-5) For the state fiscal year beginning September 1, 2006,
17-21 a school district is entitled to state funds in an amount equal to
17-22 the difference, if any, between:
17-23 (1) an amount equal to the number of participating
17-24 employees of the district multiplied by $600; and
17-25 (2) the amount the district is required to use to
17-26 provide health coverage under Section 2 of this article for that
17-27 fiscal year, if that amount is less than the amount specified by
18-1 Subdivision (1) of this subsection.
18-2 (a-6) For the state fiscal year beginning September 1, 2007,
18-3 a school district is entitled to state funds in an amount equal to
18-4 the difference, if any, between:
18-5 (1) an amount equal to the number of participating
18-6 employees of the district multiplied by $300; and
18-7 (2) the amount the district is required to use to
18-8 provide health coverage under Section 2 of this article for that
18-9 fiscal year, if that amount is less than the amount specified by
18-10 Subdivision (1) of this subsection.
18-11 (a-7) State funds to which a school district is entitled
18-12 under Subsections (a-1)-(a-6) of this section shall be deposited in
18-13 a fund described by Section 2(b), Article 3.50-9, of this code.
18-14 (a-8) A school district that receives state funds under
18-15 Subsection (a) of this section for a state fiscal year is not
18-16 entitled to state funds under Subsection (a-1), (a-2), (a-3),
18-17 (a-4), (a-5), or (a-6) of this section.
18-18 (a-9) Subsections (a-1)-(a-8) of this section and this
18-19 subsection expire September 1, 2008.
18-20 (b) The Teacher Retirement System of Texas shall distribute
18-21 state funds to school districts under this section in equal monthly
18-22 installments. State funds received under this section shall be
18-23 deposited in a fund described by Section 2(b), Article 3.50-9, of
18-24 this code. The Texas Education Agency shall provide to the
18-25 retirement system information necessary for the retirement system
18-26 to determine a school district's eligibility for state funds under
18-27 this section.
19-1 (c) The Teacher Retirement System of Texas is entitled to
19-2 recover from a school district any amount distributed under this
19-3 section to which the district was not entitled. A determination by
19-4 the retirement system under this section is final and may not be
19-5 appealed.
19-6 Sec. 5. USE OF EXCESS MAINTENANCE OF EFFORT. If the amount a
19-7 school district is required to use to provide health coverage under
19-8 Section 2 of this article for a fiscal year exceeds the amount
19-9 necessary for the district to comply with Section 3 of this article
19-10 for that year, the district may use the difference only to provide
19-11 employee compensation, benefits, or both.
19-12 Sec. 6. EFFECT OF RECEIPT OF STATE FUNDS. State funds
19-13 received by a school district under this article may not be
19-14 considered for any purpose under Chapter 41 or 42, Education Code.
19-15 Except as provided by Section 2 or 5 of this article, this article
19-16 does not permit the Teacher Retirement System of Texas, the Texas
19-17 Education Agency, or the commissioner of education to require a
19-18 school district to spend local funds for any specific purpose.
19-19 Sec. 7. ADDITIONAL SUPPORT FOR CERTAIN SCHOOL DISTRICTS. (a)
19-20 This section applies only to a school district that:
19-21 (1) pays taxes under 26 U.S.C. Section 3111(a), and
19-22 its subsequent amendments, for employees covered by the Social
19-23 Security retirement program; and
19-24 (2) covered all employees under that program before
19-25 January 1, 2001.
19-26 (b) The state shall provide additional support for a school
19-27 district to which this section applies in an amount computed by
20-1 multiplying the total amount received by the district and taken as
20-2 supplemental compensation by district employees under Section 2,
20-3 Article 3.50-8 of this code, by .062.
20-4 (c) The trustee may adopt rules as necessary to implement
20-5 this section.
20-6 (d) This section expires September 1, 2008.
20-7 SECTION 1.05. Section 42.253, Education Code, is amended by
20-8 adding Subsection (e-1) to read as follows:
20-9 (e-1) For the 2003-2004, 2004-2005, 2005-2006, 2006-2007,
20-10 2007-2008, or 2008-2009 school year, for a school district that is
20-11 required to increase its maintenance and operations tax rate to
20-12 permit the district to comply with Section 3(a), Article 3.50-10,
20-13 Insurance Code, the limit authorized under Subsection (e) is
20-14 increased by an amount equal to the portion of the district's
20-15 maintenance and operations tax for that year necessary for the
20-16 district, when added to state funds received under this chapter for
20-17 that portion of the tax, to comply with Section 3(a), Article
20-18 3.50-10, Insurance Code. For the 2005-2006 and 2007-2008 school
20-19 years, the limit authorized under Subsection (e) does not include
20-20 any portion of a school district's maintenance and operations tax
20-21 rate for which the limit under Subsection (e) applicable to the
20-22 district was increased under this subsection. The commissioner may
20-23 adopt rules necessary to administer this subsection. A
20-24 determination of the commissioner under this subsection is final
20-25 and may not be appealed. This subsection expires September 1,
20-26 2009.
20-27 SECTION 1.06. Section 26.08, Tax Code, is amended by adding
21-1 Subsections (k) and (l) to read as follows:
21-2 (k) For purposes of this section, for the 2003, 2004, 2005,
21-3 2006, 2007, or 2008 tax year, for a school district that is
21-4 required to increase its maintenance and operations tax rate to
21-5 permit the district to comply with Section 3(a), Article 3.50-10,
21-6 Insurance Code, the rollback tax rate of a school district is the
21-7 sum of:
21-8 (1) the tax rate that, applied to the current total
21-9 value for the district, would impose taxes in an amount that, when
21-10 added to state funds that would be distributed to the district
21-11 under Chapter 42, Education Code, for the school year beginning in
21-12 the current tax year using that tax rate, would provide the same
21-13 amount of state funds distributed under Chapter 42 and maintenance
21-14 and operations taxes of the district per student in weighted
21-15 average daily attendance for that school year that would have been
21-16 available to the district in the preceding year if the funding
21-17 elements for Chapters 41 and 42, Education Code, for the current
21-18 year had been in effect for the preceding year;
21-19 (2) the tax rate that, applied to the current total
21-20 value for the district, would impose taxes in the amount that, when
21-21 added to state funds that would be distributed to the district
21-22 under Chapter 42, Education Code, for the school year beginning in
21-23 the current tax year using that tax rate, permits the district to
21-24 comply with Section 3(a), Article 3.50-10, Insurance Code;
21-25 (3) the rate of $0.06 per $100 of taxable value; and
21-26 (4) the district's current debt rate.
21-27 (l) Subsection (k) and this subsection expire January 1,
22-1 2009.
22-2 SECTION 1.07. Subchapter C, Chapter 62, Health and Safety
22-3 Code, is amended by adding Section 62.1015 to read as follows:
22-4 Sec. 62.1015. ELIGIBILITY OF CERTAIN CHILDREN; DISALLOWANCE
22-5 OF MATCHING FUNDS. (a) In this section, "charter school,"
22-6 "employee," and "regional education service center" have the
22-7 meanings assigned by Section 2, Article 3.50-7, Insurance Code.
22-8 (b) A child of an employee of a charter school, school
22-9 district, or regional education service center may be enrolled in
22-10 health benefits coverage under the child health plan. A child
22-11 enrolled in the child health plan under this section participates
22-12 in the same manner as any other child enrolled in the child health
22-13 plan.
22-14 (c) The cost of health benefits coverage for children
22-15 enrolled in the child health benefit plan under this section shall
22-16 be paid as provided in the General Appropriations Act. Expenditures
22-17 made to provide health benefits coverage under this section may not
22-18 be included for the purpose of determining the state children's
22-19 health insurance expenditures, as that term is defined by 42 U.S.C.
22-20 Section 1397ee(d)(2)(B), as amended.
22-21 ARTICLE 2. CONFORMING AMENDMENTS
22-22 SECTION 2.01. Article 3.50-4, Insurance Code, is amended by
22-23 adding Section 3A to read as follows:
22-24 Sec. 3A. TRANSFER OF RECORDS. The trustee shall transfer
22-25 from the program established under this article all records
22-26 relating to active employees participating in the uniform group
22-27 coverage program established under Article 3.50-7 of this code not
23-1 later than the date on which the program of coverages provided
23-2 under Article 3.50-7 of this code is implemented.
23-3 SECTION 2.02. Section 1, Article 3.50-4, Insurance Code, is
23-4 amended to read as follows:
23-5 Sec. 1. SHORT TITLE. This article may be cited as the Texas
23-6 Public School Retired Employees Group Insurance Act.
23-7 SECTION 2.03. Sections 2(3) and (4), Article 3.50-4,
23-8 Insurance Code, are amended to read as follows:
23-9 (3) "Dependent" means:
23-10 (A) a spouse of a retiree [or active member];
23-11 (B) a retiree's[, an active member's,] or a
23-12 deceased active member's unmarried child who is younger than 25
23-13 years of age including:
23-14 (i) an adopted child;
23-15 (ii) a foster child, a stepchild, or other
23-16 child who is in a regular parent-child relationship; and
23-17 (iii) a recognized natural child; and
23-18 (C) a retiree's [or active member's] recognized
23-19 natural child, adopted child, foster child, stepchild, or other
23-20 child who is in a regular parent-child relationship and who lives
23-21 with or whose care is provided by the retiree[, active member,] or
23-22 surviving spouse on a regular basis, regardless of the child's age,
23-23 if the child is mentally retarded or physically incapacitated to
23-24 such an extent as to be dependent on the retiree[, active member,]
23-25 or surviving spouse for care or support, as determined by the
23-26 trustee, or in the case of a deceased active member, a recognized
23-27 natural child, adopted child, foster child, stepchild, or other
24-1 child who was in a regular parent-child relationship and who lived
24-2 with or whose care was provided by the deceased active member on a
24-3 regular basis, regardless of the child's age, if the child is
24-4 mentally retarded or physically incapacitated to such an extent as
24-5 to have been dependent on the deceased active member or surviving
24-6 spouse for care or support, as determined by the trustee.
24-7 (4) "Fund" means the retired [Texas public] school
24-8 employees group insurance fund.
24-9 SECTION 2.04. Section 3(a), Article 3.50-4, Insurance Code,
24-10 is amended to read as follows:
24-11 (a) The Texas Public School Retired Employees Group
24-12 Insurance Program is established to provide for an insurance plan
24-13 or plans under this article.
24-14 SECTION 2.05. Section 5(a), Article 3.50-4, Insurance Code,
24-15 is amended to read as follows:
24-16 (a) The trustee may adopt rules, plans, procedures, and
24-17 orders reasonably necessary to implement this article, including:
24-18 (1) establishment of minimum benefit and financing
24-19 standards for group insurance coverage to be provided to all
24-20 retirees, [active employees,] dependents, surviving spouses, and
24-21 surviving dependent children;
24-22 (2) establishment of basic and optional group coverage
24-23 to be provided to retirees, [active employees,] dependents,
24-24 surviving spouses, and surviving dependent children;
24-25 (3) establishment of the procedures for contributions
24-26 and deductions;
24-27 (4) establishment of periods for enrollment and
25-1 selection of optional coverage and procedures for enrolling and
25-2 exercising options under the plan;
25-3 (5) determination of methods and procedures for claims
25-4 administration;
25-5 (6) study of the operation of all insurance coverage
25-6 provided under this article;
25-7 (7) administration of the fund;
25-8 (8) adoption of a timetable for the development of
25-9 minimum benefit and financial standards for group insurance
25-10 coverage, establishment of group insurance plans, and the taking of
25-11 bids for and awarding of contracts for insurance plans; and
25-12 (9) contracting with an independent and experienced
25-13 group insurance consultant or actuary, who does not receive
25-14 insurance commissions from any insurance company, for advice and
25-15 counsel in implementing and administering this program.
25-16 SECTION 2.06. Section 8(e), Article 3.50-4, Insurance Code,
25-17 is amended to read as follows:
25-18 (e) The trustee may contract for and make available to all
25-19 retirees, dependents, surviving spouses, and surviving dependent
25-20 children optional group health benefit plans in addition to the
25-21 basic plans. The optional coverage may include a smaller
25-22 deductible, lower coinsurance, or additional categories of benefits
25-23 permitted under Subsection (b) of this section to provide
25-24 additional levels of coverages and benefits. The trustee may
25-25 utilize a portion of the funds received for the Texas Public School
25-26 Retired Employees Group Insurance Program to offset some portion of
25-27 costs paid by the retiree for optional coverage if such utilization
26-1 does not reduce the period the program is projected to remain
26-2 financially solvent by more than one year in a biennium. Any
26-3 additional contributions for these optional plans shall be paid for
26-4 by the retiree, surviving spouse, or surviving dependent children.
26-5 SECTION 2.07. Section 9, Article 3.50-4, Insurance Code, is
26-6 amended to read as follows:
26-7 Sec. 9. BENEFIT CERTIFICATES. At such times, or upon such
26-8 events, as designated by the trustee, each insurance carrier shall
26-9 issue to each retiree, [active employee,] surviving spouse, or
26-10 surviving dependent child insured under this article a certificate
26-11 of insurance that:
26-12 (1) states the benefits to which the person is
26-13 entitled;
26-14 (2) states to whom the benefits are payable;
26-15 (3) states to whom the claims must be submitted; and
26-16 (4) summarizes the provisions of the policy
26-17 principally affecting the person.
26-18 SECTION 2.08. Section 12, Article 3.50-4, Insurance Code, is
26-19 amended to read as follows:
26-20 Sec. 12. DEATH CLAIMS: BENEFICIARIES. The amount of group
26-21 life insurance and group accidental death and dismemberment
26-22 insurance covering a retiree, [active employee,] surviving spouse,
26-23 dependent, or surviving dependent child at the date of death shall
26-24 be paid, on the establishment of a valid claim, only:
26-25 (1) to the beneficiary or beneficiaries designated by
26-26 the person in a signed and witnessed written document received
26-27 before death in the trustee's office; or
27-1 (2) if no beneficiary is properly designated or in
27-2 existence, to persons in accordance with the trustee's death
27-3 benefit provisions in Subsection (b), Section 824.103, Government
27-4 Code.
27-5 SECTION 2.09. Section 13, Article 3.50-4, Insurance Code, is
27-6 amended to read as follows:
27-7 Sec. 13. AUTOMATIC COVERAGE. A retiree [or active employee]
27-8 who applies during an enrollment period may not be denied any of
27-9 the group insurance basic coverage provided under this article
27-10 unless the person has been found under Section 18A of this article
27-11 to have defrauded or attempted to defraud the Texas Public School
27-12 Retired Employees Group Insurance Program.
27-13 SECTION 2.10. Section 15, Article 3.50-4, Insurance Code, is
27-14 amended to read as follows:
27-15 Sec. 15. RETIRED SCHOOL EMPLOYEES GROUP INSURANCE FUND.
27-16 (a) The retired school employees group insurance fund is created.
27-17 The comptroller is the custodian of the fund, and the trustee shall
27-18 administer the fund. All contributions from active employees,
27-19 retirees, and the state, contributions for optional coverages,
27-20 investment income, appropriations for implementation of this
27-21 program, and other money required or authorized to be paid into the
27-22 fund shall be paid into the fund. From the fund shall be paid,
27-23 without state fiscal year limitation, the appropriate premiums to
27-24 the carrier or carriers providing group coverage under the plan or
27-25 plans under this article, claims for benefits under the group
27-26 coverage, and the amounts expended by the trustee for
27-27 administration of the program. The appropriate portion of the
28-1 contributions to the fund to provide for incurred but unreported
28-2 claim reserves and contingency reserves, as determined by the
28-3 trustee, shall be retained in the fund.
28-4 (b) The trustee shall transfer the amounts deducted from
28-5 annuities for contributions into the fund.
28-6 (c) Expenses for the development and administration of the
28-7 program shall be spent as provided by a budget adopted by the
28-8 trustee.
28-9 (d) The trustee may invest and reinvest the money in the
28-10 fund as provided by Subchapter D, Chapter 825, Government Code, for
28-11 assets of the Teacher Retirement System of Texas.
28-12 SECTION 2.11. Section 18A, Article 3.50-4, Insurance Code,
28-13 is amended to read as follows:
28-14 Sec. 18A. EXPULSION FROM PROGRAM FOR FRAUD. (a) After
28-15 notice and hearing as provided by this section, the trustee may
28-16 expel from participation in the Texas Public School Retired
28-17 Employees Group Insurance Program any retiree, [active employee,]
28-18 surviving spouse, dependent, or surviving dependent child who
28-19 submits a fraudulent claim under, or has defrauded or attempted to
28-20 defraud, any health benefits plan offered under the program.
28-21 (b) On its motion or on the receipt of a complaint, the
28-22 trustee may call and hold a hearing to determine whether a person
28-23 has submitted a fraudulent claim under, or has defrauded or
28-24 attempted to defraud, any health benefits plan offered under the
28-25 Texas Public School Retired Employees Group Insurance Program.
28-26 (c) A proceeding under this section is a contested case
28-27 under Chapter 2001, Government Code [the Administrative Procedure
29-1 and Texas Register Act (Article 6252-13a, Vernon's Texas Civil
29-2 Statutes)].
29-3 (d) If the trustee, at the conclusion of the hearing, issues
29-4 a decision that finds that the accused submitted a fraudulent claim
29-5 or has defrauded or attempted to defraud any health benefits plan
29-6 offered under the Texas Public School Retired Employees Group
29-7 Insurance Program, the trustee shall expel the person from
29-8 participation in the program.
29-9 (e) The substantial evidence rule shall be used on any
29-10 appeal of a decision of the trustee under this section.
29-11 (f) A person expelled from the Texas Public School Retired
29-12 Employees Group Insurance Program may not be insured by any health
29-13 insurance plan offered by the program for a period, to be
29-14 determined by the trustee, of up to five years from the date the
29-15 expulsion takes effect.
29-16 SECTION 2.12. Section 18B(a), Article 3.50-4, Insurance
29-17 Code, is amended to read as follows:
29-18 (a) Section 825.507, Government Code, concerning the
29-19 confidentiality of information in records that are in the custody
29-20 of the Teacher Retirement System of Texas, applies to information
29-21 in records that are in the custody of the retirement system
29-22 regarding retirees, active employees, annuitants, or beneficiaries
29-23 under the Texas Public School Retired Employees Group Insurance
29-24 Program.
29-25 SECTION 2.13. Sections 18C(c), (d), and (i), Article 3.50-4,
29-26 Insurance Code, are amended to read as follows:
29-27 (c) The trustee, the Texas public school retired employees
30-1 group insurance program, the retired school employees group
30-2 insurance fund, and the board of trustees, officers, advisory
30-3 committee members, and employees of the trustee are not liable for
30-4 damages arising from the acts or omissions of health care providers
30-5 who are participating health care providers in the coordinated care
30-6 network established by the trustee. Those health care providers
30-7 are independent contractors and are responsible for their own acts
30-8 and omissions.
30-9 (d) The trustee, the Texas public school retired employees
30-10 group insurance program, the retired school employees group
30-11 insurance fund, or a member of a credentialing committee, or the
30-12 board of trustees, officers, advisory committee members, or
30-13 employees of the trustee are not liable for damages arising from
30-14 any act, statement, determination, recommendation made, or act
30-15 reported, without malice, in the course of the evaluation of the
30-16 qualifications of health care providers or of the patient care
30-17 rendered by those providers.
30-18 (i) A credentialing committee, a person participating in a
30-19 credentialing review, a health care provider, the trustee, the
30-20 Texas public school retired employees group insurance program, or
30-21 the board of trustees, officers, advisory committee members, or
30-22 employees of the trustee that are named as defendants in any civil
30-23 action filed as a result of participation in the credentialing
30-24 process may use otherwise confidential information obtained for
30-25 legitimate internal business and professional purposes, including
30-26 use in their own defense. Use of information under this subsection
30-27 does not constitute a waiver of the confidential and privileged
31-1 nature of the information.
31-2 SECTION 2.14. Article 3.51, Insurance Code, is amended by
31-3 adding Section 3 to read as follows:
31-4 Sec. 3. Notwithstanding any other provision of this article,
31-5 a common or independent school district or any other agency or
31-6 subdivision of the public school system of this state that is
31-7 participating in the uniform group coverage program established
31-8 under Article 3.50-7 of this code may not procure contracts under
31-9 this article for health insurance coverage and may not renew a
31-10 health insurance contract procured under this article after the
31-11 date on which the program of coverages provided under Article
31-12 3.50-7 of this code is implemented.
31-13 SECTION 2.15. Article 26.036, Insurance Code, is amended by
31-14 adding Subsection (c) to read as follows:
31-15 (c) An independent school district that is participating in
31-16 the uniform group coverage program established under Article 3.50-7
31-17 of this code may not participate in the small employer market under
31-18 this article for health insurance coverage and may not renew a
31-19 health insurance contract obtained in accordance with this article
31-20 after the date on which the program of coverages provided under
31-21 Article 3.50-7 of this code is implemented.
31-22 SECTION 2.16. Section 22.004, Education Code, is amended by
31-23 adding Subsection (h) to read as follows:
31-24 (h) Notwithstanding any other provision of this section, a
31-25 district participating in the uniform group coverage program
31-26 established under Article 3.50-7, Insurance Code, may not make
31-27 group health coverage available to its employees under this
32-1 section after the date on which the program of coverages provided
32-2 under Article 3.50-7, Insurance Code, is implemented.
32-3 SECTION 2.17. Section 822.201(c), Government Code, is amended
32-4 to read as follows:
32-5 (c) Excluded from salary and wages are:
32-6 (1) expense payments;
32-7 (2) [,] allowances;
32-8 (3) [,] payments for unused vacation or sick leave;
32-9 (4) [,] maintenance or other nonmonetary compensation;
32-10 (5) [,] fringe benefits;
32-11 (6) [,] deferred compensation other than as provided
32-12 by Subsection (b)(3);
32-13 (7) [,] compensation that is not made pursuant to a
32-14 valid employment agreement;
32-15 (8) [,] payments received by an employee in a school
32-16 year that exceed $5,000 for teaching a driver education and traffic
32-17 safety course that is conducted outside regular classroom hours;
32-18 (9) [,] the benefit replacement pay a person earns as
32-19 a result of a payment made under Subchapter B or C, Chapter 661;
32-20 (10) supplemental compensation an employee elects to
32-21 receive under Article 3.50-8, Insurance Code;[,] and
32-22 (11) any compensation not described in Subsection (b).
32-23 SECTION 2.18. Sections 7A, 20, and 21, Article 3.50-4,
32-24 Insurance Code, are repealed.
32-25 SECTION 2.19. Sections 2.02-2.13, 2.17, and 2.18 of this Act
32-26 take effect September 1, 2002.
32-27 ARTICLE 3. TRANSITION; EFFECTIVE DATE
33-1 SECTION 3.01. The Teacher Retirement System of Texas shall
33-2 develop the coverage plans to be implemented in the uniform group
33-3 coverage program established under Article 3.50-7, Insurance Code,
33-4 as added by this Act, beginning September 1, 2001, and shall
33-5 develop the enrollment requirements for the program during the
33-6 2001-2002 school year, with coverage beginning September 1, 2002.
33-7 SECTION 3.02. A school district that becomes eligible to
33-8 participate in the uniform group coverage program established under
33-9 Article 3.50-7, Insurance Code, as added by this Act, as provided
33-10 by Section 5(b) of that article and that elects to participate in
33-11 the program beginning September 1, 2005, must notify the Teacher
33-12 Retirement System of Texas of the election not later than January
33-13 1, 2005.
33-14 SECTION 3.03. Except as otherwise provided by this Act, this
33-15 Act takes effect September 1, 2001.