1-1 By: Sadler, et al. (Senate Sponsor - Bivins) H.B. No. 3343
1-2 (In the Senate - Received from the House May 1, 2001;
1-3 May 1, 2001, read first time and referred to Committee on
1-4 Education; May 3, 2001, reported adversely, with favorable
1-5 Committee Substitute by the following vote: Yeas 8, Nays 0;
1-6 May 3, 2001, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 3343 By: Bivins
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to benefits, including group benefits coverage, for
1-11 certain participants of the Teacher Retirement System of Texas and
1-12 employees of certain charter schools.
1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14 ARTICLE 1
1-15 SECTION 1.01. Subchapter E, Chapter 3, Insurance Code, is
1-16 amended by adding Article 3.50-7 to read as follows:
1-17 Art. 3.50-7. TEXAS ACTIVE SCHOOL EMPLOYEES UNIFORM GROUP
1-18 BENEFITS ACT
1-19 Sec. 1. SHORT TITLE. This article may be cited as the Texas
1-20 Active School Employees Uniform Group Benefits Act.
1-21 Sec. 2. DEFINITIONS. In this article:
1-22 (1) "Administering firm" means any firm designated by
1-23 the trustee to administer any coverages, services, benefits, or
1-24 requirements under this article and the trustee's rules adopted
1-25 under this article.
1-26 (2) "Charter school" means an open-enrollment charter
1-27 school established under Subchapter D, Chapter 12, Education Code.
1-28 (3) "Employee" means a participating member of the
1-29 Teacher Retirement System of Texas who is employed by a school
1-30 district or a regional education service center and who is not
1-31 covered by a group insurance program under the Texas Employees
1-32 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
1-33 Texas Insurance Code) or the Texas State College and University
1-34 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
1-35 Texas Insurance Code). The term does not include a person
1-36 performing personal services for a participating entity as an
1-37 independent contractor.
1-38 (4) "Health benefits plan" means any group policy or
1-39 contract, medical, dental, or hospital service agreement,
1-40 membership or subscription contract, salary continuation plan,
1-41 health maintenance organization agreement, preferred provider
1-42 arrangement, or any similar group arrangement or any combination of
1-43 those policies, plans, contracts, agreements, or arrangements
1-44 provided for the purpose of providing, paying for, or reimbursing
1-45 expenses for health care services.
1-46 (5) "Participating employee" means an employee who is
1-47 participating in the program.
1-48 (6) "Participating entity" means an entity
1-49 participating in the group benefits program established under this
1-50 article. The term includes:
1-51 (A) a school district;
1-52 (B) a regional education service center; and
1-53 (C) a charter school.
1-54 (7) "Program" means the group benefits program
1-55 established under this article.
1-56 (8) "Regional education service center" means a
1-57 regional education service center established under Chapter 8,
1-58 Education Code.
1-59 (9) "Trustee" means the Teacher Retirement System of
1-60 Texas.
1-61 (10) "School district" means a public school district
1-62 of this state.
1-63 Sec. 3. ADMINISTRATION BY TRUSTEE. The Teacher Retirement
1-64 System of Texas, as trustee, shall implement and administer the
2-1 program.
2-2 Sec. 4. POWERS AND DUTIES OF TRUSTEE. (a) The trustee may
2-3 take the actions it considers necessary to devise, administer, and
2-4 implement the program.
2-5 (b) The trustee may hire and compensate employees as
2-6 necessary to implement the program. The trustee may contract with
2-7 an independent and experienced group insurance consultant or
2-8 actuary for advice and counsel in implementing and administering
2-9 the program.
2-10 (c) The trustee may adopt rules relating to the program as
2-11 considered necessary by the trustee.
2-12 (d) In contracting for any benefits under this article,
2-13 competitive bidding shall be required under rules adopted by the
2-14 trustee. The trustee is not required to select the lowest bid but
2-15 may consider also ability to service contracts, past experiences,
2-16 financial stability, and other relevant criteria. If the trustee
2-17 awards a contract to an entity whose bid deviates from that
2-18 advertised, the deviation shall be recorded and the reasons for the
2-19 deviation shall be fully justified in the minutes of the next
2-20 meeting of the trustee.
2-21 (e) The trustee may enter into interagency contracts with
2-22 any agency of the state, including the Employees Retirement System
2-23 of Texas and the Texas Department of Insurance, for the purpose of
2-24 assistance in implementing the program.
2-25 (f) The trustee has the same powers with regard to the
2-26 program that the Employees Retirement System of Texas has in
2-27 administering the Texas Employees Uniform Group Insurance Benefits
2-28 Act (Article 3.50-2, Vernon's Texas Insurance Code), including the
2-29 power to adjudicate claims and to expel participants from the
2-30 program for cause.
2-31 Sec. 5. GROUP COVERAGE PLANS. (a) The trustee shall
2-32 establish plans of group coverages for employees of participating
2-33 entities and their dependents. The plans of group benefits must
2-34 include at least five tiers of group coverage, with benefits at
2-35 different levels in each tier, ranging from the first tier basic
2-36 coverage plan to the standard plan. Each tier must contain a
2-37 health benefits plan. The standard plan of group benefits shall be
2-38 comparable in scope and, to the greatest extent possible, in cost
2-39 to the health benefit plan coverages provided under the Texas
2-40 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
2-41 Vernon's Texas Insurance Code).
2-42 (b) In addition to health benefit plans, the coverages may
2-43 include accidental death and dismemberment coverages, coverages
2-44 against short-term or long-term loss of salary, and other coverages
2-45 considered advisable by the trustee.
2-46 Sec. 6. PARTICIPATION IN PROGRAM BY ENTITY. (a) Beginning
2-47 September 1, 2002, a school district, regional education service
2-48 center, or charter school may elect to participate in the program
2-49 provided by this article.
2-50 (b) A school district, regional education service center, or
2-51 charter school that elects to participate in the program is
2-52 required to participate for a minimum of three years. The
2-53 beginning of the entity's participation in the program must
2-54 coincide with the beginning of a school year in an odd-numbered
2-55 year.
2-56 (c) The trustee by rule shall establish a biennial deadline
2-57 for notification of the trustee of an election to begin
2-58 participation. The rule must require notification by the school
2-59 district, regional education service center, or charter school to
2-60 the trustee at least three months before the entity begins
2-61 participation.
2-62 (d) A participating entity may elect to discontinue
2-63 participation by notifying the trustee in the manner prescribed by
2-64 the trustee at least three months before the entity discontinues
2-65 participation.
2-66 (e) Only a participating entity is eligible to receive the
2-67 state contribution described under Section 9 of this article.
2-68 Sec. 7. PARTICIPATION IN PROGRAM BY EMPLOYEE. (a) In this
2-69 section, "full-time employee" and "part-time employee" have the
3-1 meanings defined by trustee rules.
3-2 (b) Each full-time employee of a participating entity is
3-3 automatically covered by the first tier basic coverage plan unless
3-4 the employee:
3-5 (1) specifically waives coverage under this article in
3-6 the manner prescribed by trustee rule;
3-7 (2) selects a higher tier coverage plan; or
3-8 (3) is expelled from the program.
3-9 (c) Each part-time employee of a participating entity is
3-10 eligible to participate in the program on application in the manner
3-11 provided by the trustee, unless the employee has been expelled from
3-12 the program. A participating entity shall notify each of its
3-13 part-time employees of the employee's eligibility to participate in
3-14 the program.
3-15 (d) A participating employee may select coverage in any
3-16 coverage plan offered by the trustee under this article. The
3-17 employee is required to participate in the selected coverage plan
3-18 for one year. An employee who selects coverage in a coverage plan
3-19 other than the first tier basic coverage plan is not required to
3-20 maintain participation in that coverage plan and, after the
3-21 expiration of the one-year term, may waive coverage or select
3-22 coverage in a lower tier coverage plan.
3-23 (e) A participating entity is not entitled to a state
3-24 contribution under Section 9 of this article as to an employee who
3-25 waives coverage under Subsection (b)(1) of this section. After a
3-26 waiver of coverage, an employee may elect to participate in the
3-27 coverage based only on a change in status or another reason
3-28 approved by the trustee.
3-29 Sec. 8. FUND. (a) The Texas school employees uniform group
3-30 benefits trust fund is created as a trust fund with the comptroller
3-31 and shall be administered by the trustee on behalf of the
3-32 participants in the program.
3-33 (b) All contributions from employees, amounts paid by
3-34 participating entities, contributions for optional coverages,
3-35 investment income, appropriations for implementation of the
3-36 program, and other money required or authorized to be paid into the
3-37 fund shall be paid into the fund.
3-38 (c) Except as provided by Subsection (e) of this section,
3-39 the trustee may use amounts in the fund only to provide group
3-40 coverages under this article and to pay the expenses of
3-41 administering the program.
3-42 (d) The trustee may invest assets of the fund in the manner
3-43 provided by Section 67(a)(3), Article XVI, Texas Constitution.
3-44 (e) Notwithstanding any other provision of this article, the
3-45 trustee may use amounts in the fund to perform the comparability
3-46 study required under Section 22.004(e), Education Code.
3-47 Sec. 9. STATE CONTRIBUTION. (a) The state shall assist
3-48 employees of participating school districts in the purchase of
3-49 health benefits plan coverages under this article by providing the
3-50 amount specified for a covered employee in the General
3-51 Appropriations Act. The state contribution shall be distributed
3-52 through the school finance formulas under Chapters 41 and 42,
3-53 Education Code, and used by school districts as provided by
3-54 Sections 42.2514 and 42.260, Education Code.
3-55 (b) The state shall assist employees of participating
3-56 regional education service centers and charter schools in the
3-57 purchase of health benefits plan coverages under this article by
3-58 providing to the employing service center or charter school the
3-59 amount specified for a covered employee in the General
3-60 Appropriations Act.
3-61 Sec. 10. PARTICIPATING ENTITY CONTRIBUTION. (a) Except as
3-62 otherwise provided by this section, effective September 1, 2002, a
3-63 participating entity shall contribute to the fund a sum certain
3-64 multiplied by the number of persons employed by the entity. The
3-65 sum certain must be set at a level that, in combination with the
3-66 amount the participating entity receives from the state as provided
3-67 by Section 9 of this article, is adequate to provide, at a minimum,
3-68 100 percent of the cost of employee-only coverage under the first
3-69 tier basic coverage plan.
4-1 (b) Effective September 1, 2002, a participating entity
4-2 that, for the 2000-2001 school year, paid amounts to share with
4-3 employees the cost of coverage under a group health benefits plan
4-4 shall contribute, for each fiscal year, an amount computed as
4-5 provided by this subsection. The participating entity shall divide
4-6 the amount that the entity paid during the 2000-2001 school year
4-7 for the prior group health benefits plan by the total number of
4-8 employees of the participating entity during the 2000-2001 school
4-9 year and multiply the result by the number of participating
4-10 employees employed by the entity in the fiscal year for which the
4-11 computation is made. The required contribution is 80 percent of
4-12 the resulting amount.
4-13 (c) If the amount contributed by a participating entity
4-14 subject to Subsection (b) of this section, when combined with the
4-15 state contribution described by Section 9 of this article, exceeds
4-16 the amount necessary to provide 100 percent of the cost of
4-17 employee-only coverage under the standard plan, the entity may use
4-18 the excess amount only to provide employee benefits, which may
4-19 include contributions to cover the cost of dependent and optional
4-20 coverages and increased employee compensation.
4-21 Sec. 11. EMPLOYEE CONTRIBUTION. Each participating employee
4-22 shall pay 100 percent of the cost of optional coverage or dependent
4-23 coverage selected by the employee unless the participating entity
4-24 employing the employee:
4-25 (1) pays all or part of the cost of that coverage
4-26 under Section 10 of this article; or
4-27 (2) elects to pay all or part of the cost of that
4-28 coverage under Section 22.004, Education Code.
4-29 SECTION 1.02. Article 3.50-4, Insurance Code, is amended by
4-30 adding Section 5A to read as follows:
4-31 Sec. 5A. TIERS OF COVERAGE. The trustee shall offer to each
4-32 retiree participating in the program at least five tiers of group
4-33 coverage. The coverage plans offered under this section must be
4-34 comparable to the coverage plans offered by the trustee to active
4-35 employees under Section 5, Article 3.50-7, of this code.
4-36 SECTION 1.03. (a) The Teacher Retirement System of Texas
4-37 shall begin enrollment in the program provided under Article
4-38 3.50-7, Insurance Code, as added by this Act, to begin with the
4-39 2002-2003 school year.
4-40 (b) A school district, regional education service center, or
4-41 charter school that elects to participate in the program provided
4-42 under Article 3.50-7, Insurance Code, as added by this Act,
4-43 beginning with the 2002-2003 school year, shall notify the Teacher
4-44 Retirement System of Texas of the election not later than March 1,
4-45 2002. An employee of a participating school district, regional
4-46 education service center, or charter school who waives coverage
4-47 under the program shall give notice of the waiver in the manner
4-48 prescribed by Article 3.50-7, Insurance Code, as added by this Act,
4-49 or rules adopted under that article not later than September 1,
4-50 2002.
4-51 (c) The Teacher Retirement System of Texas shall adopt rules
4-52 establishing coverage plans under Article 3.50-7, Insurance Code,
4-53 as added by this Act, not later than June 1, 2002.
4-54 SECTION 1.04. The Teacher Retirement System of Texas shall
4-55 transfer to the fund established under Section 8, Article 3.50-7,
4-56 Insurance Code, as added by this Act, any outstanding balance held
4-57 by the Teacher Retirement System of Texas as of December 31, 2001,
4-58 in the school employees group insurance fund established under
4-59 Section 15, Article 3.50-4, Insurance Code, that was designated for
4-60 use in programs relating to active school district employees.
4-61 SECTION 1.05. Except as provided by Section 7.01 of this
4-62 Act, this article takes effect January 1, 2002.
4-63 ARTICLE 2. SCHOOL FINANCE
4-64 SECTION 2.01. Effective September 1, 2001, Section
4-65 21.402(a), Education Code, is amended to read as follows:
4-66 (a) Except as provided by Subsection (d), (e), or (f), a
4-67 school district must pay each classroom teacher, full-time
4-68 librarian, full-time counselor certified under Subchapter B, or
4-69 full-time school nurse not less than the minimum monthly salary,
5-1 based on the employee's level of experience, determined by the
5-2 following formula:
5-3 MS = SF X FS
5-4 where:
5-5 "MS" is the minimum monthly salary;
5-6 "SF" is the applicable salary factor specified by Subsection
5-7 (c); and
5-8 "FS" is the amount, as determined by the commissioner under
5-9 Subsection (b), of state and local funds per weighted student
5-10 available to a district eligible to receive state assistance under
5-11 Section 42.302 with an enrichment tax rate, as defined by Section
5-12 42.302, equal to the maximum rate authorized under Section 42.303,
5-13 except that the amount of state and local funds per weighted
5-14 student does not include the amount attributable to 80 percent of
5-15 the increase in the guaranteed level made by H.B. No. 3343, Acts of
5-16 the 77th Legislature, Regular Session, 2001.
5-17 SECTION 2.02. Effective September 1, 2001, Section
5-18 41.002(a), Education Code, is amended to read as follows:
5-19 (a) A school district may not have a wealth per student that
5-20 exceeds ________ or a greater amount for any year provided by
5-21 appropriation [$295,000].
5-22 SECTION 2.03. Effective September 1, 2002, Section
5-23 41.002(a), Education Code, is amended to read as follows:
5-24 (a) Subject to Section 41.0021, a [A] school district may
5-25 not have a wealth per student that exceeds ________ or a greater
5-26 amount for any year provided by appropriation [$295,000].
5-27 SECTION 2.04. Subchapter A, Chapter 41, Education Code, is
5-28 amended by adding Section 41.0021 to read as follows:
5-29 Sec. 41.0021. EQUALIZED WEALTH LEVEL FOR SCHOOL DISTRICTS
5-30 NOT PARTICIPATING IN GROUP BENEFITS PROGRAM. Notwithstanding
5-31 Section 41.002, for a school district that does not participate in
5-32 the group benefits program established under Article 3.50-7,
5-33 Insurance Code, the wealth per student to which the district is
5-34 entitled is the wealth per student to which the district was
5-35 entitled for the 2000-2001 school year or a greater amount for any
5-36 year provided by appropriation.
5-37 SECTION 2.05. Effective September 1, 2001, Subchapter E,
5-38 Chapter 42, Education Code, is amended by adding Section 42.2513 to
5-39 read as follows:
5-40 Sec. 42.2513. ADDITIONAL STATE AID FOR CERTAIN SCHOOL
5-41 DISTRICTS. (a) This section applies only to a school district
5-42 that participates in the group benefits program established under
5-43 Article 3.50-7, Insurance Code.
5-44 (a-1) Notwithstanding Subsection (a), for the 2001-2002
5-45 school year, any school district is eligible for state aid under
5-46 this section. This subsection expires September 1, 2002.
5-47 (b) A school district to which this section applies is
5-48 entitled to state aid in an amount, as determined by the
5-49 commissioner, according to the formula:
5-50 ASA = (IGL X WADA X DTR X 100) - AIFE
5-51 where:
5-52 "ASA" is the amount of additional state aid to which the
5-53 district is entitled;
5-54 "IGL" is the increase made by H.B. No. 3343, Acts of the 77th
5-55 Legislature, Regular Session, 2001, to the guaranteed level of
5-56 state and local funds per weighted student per cent of tax effort
5-57 under Section 42.302;
5-58 "WADA" is the number of students in weighted average daily
5-59 attendance, as determined under Section 42.302;
5-60 "DTR" is the district enrichment tax rate of the school
5-61 district, as determined under Section 42.302; and
5-62 "AIFE" is the amount of:
5-63 (1) additional state aid allocated to the district
5-64 because of increases in funding elements under this chapter made by
5-65 H.B. No. 3343, Acts of the 77th Legislature, Regular Session, 2001;
5-66 or
5-67 (2) reductions in payments required under Chapter 41
5-68 because of the increase made by H.B. No. 3343, Acts of the 77th
5-69 Legislature, Regular Session, 2001, to the equalized wealth level.
6-1 (c) For purposes of Subsection (b), additional state aid
6-2 allocated to a school district because of increases in funding
6-3 elements ("AIFE") does not include additional state aid allocated
6-4 to the district under Section 42.2514.
6-5 (d) A determination by the commissioner under this section
6-6 is final and may not be appealed.
6-7 (e) The commissioner may adopt rules to implement this
6-8 section.
6-9 SECTION 2.06. Subchapter E, Chapter 42, Education Code, is
6-10 amended by adding Section 42.2514 to read as follows:
6-11 Sec. 42.2514. ADDITIONAL STATE AID FOR SCHOOL EMPLOYEE
6-12 BENEFITS. (a) For each school year, a school district, including
6-13 a school district that is otherwise ineligible for state aid under
6-14 this chapter, that participates in the group benefits program
6-15 established under Article 3.50-7, Insurance Code, is entitled to
6-16 state aid in an amount, as determined by the commissioner, equal to
6-17 the difference, if any, between:
6-18 (1) the amount determined by multiplying the amount
6-19 specified in the General Appropriations Act for that year for
6-20 purposes of the state contribution under Section 9, Article 3.50-7,
6-21 Insurance Code, by the number of district employees participating
6-22 in the group benefits program under that article; and
6-23 (2) an amount equal to 80 percent of the amount of:
6-24 (A) additional funds to which the district is
6-25 entitled due to the increase made by H.B. No. 3343, Acts of the
6-26 77th Legislature, Regular Session, 2001, to:
6-27 (i) the equalized wealth level under
6-28 Section 41.002; and
6-29 (ii) the guaranteed level of state and
6-30 local funds per weighted student per cent of tax effort under
6-31 Section 42.302; or
6-32 (B) additional state aid to which the district
6-33 is entitled under Section 42.2513.
6-34 (b) A school district may use state aid received under this
6-35 section only to pay contributions as required by Article 3.50-7,
6-36 Insurance Code.
6-37 (c) A determination by the commissioner under this section
6-38 is final and may not be appealed.
6-39 (d) The commissioner may adopt rules to implement this
6-40 section.
6-41 SECTION 2.07. Section 42.253(a), Education Code, is amended
6-42 to read as follows:
6-43 (a) Subject to Section 42.2531, for [For] each school year
6-44 the commissioner shall determine:
6-45 (1) the amount of money to which a school district is
6-46 entitled under Subchapters B and C;
6-47 (2) the amount of money to which a school district is
6-48 entitled under Subchapter F;
6-49 (3) the amount of money allocated to the district from
6-50 the available school fund;
6-51 (4) the amount of each district's tier one local share
6-52 under Section 42.252; and
6-53 (5) the amount of each district's tier two local share
6-54 under Section 42.302.
6-55 SECTION 2.08. Subchapter E, Chapter 42, Education Code, is
6-56 amended by adding Section 42.2531 to read as follows:
6-57 Sec. 42.2531. FUNDING FOR SCHOOL DISTRICTS NOT PARTICIPATING
6-58 IN GROUP BENEFITS PROGRAM. Notwithstanding Section 42.253, for a
6-59 school district that does not participate in the group benefits
6-60 program established under Article 3.50-7, Insurance Code, the
6-61 amount of money to which the district is entitled under Subchapter
6-62 F is computed using the guaranteed level of state and local funds
6-63 per weighted student per cent of tax effort under Section 42.302
6-64 for the 2000-2001 school year or a greater amount for any year
6-65 provided by appropriation.
6-66 SECTION 2.09. Effective September 1, 2001, Subchapter E,
6-67 Chapter 42, Education Code, is amended by adding Section 42.2591 to
6-68 read as follows:
6-69 Sec. 42.2591. USE OF CERTAIN FUNDS. (a) For the 2001-2002
7-1 school year, the commissioner shall certify to each school district
7-2 the amount of:
7-3 (1) additional funds to which the district is entitled
7-4 due to the increase made by H.B. No. 3343, Acts of the 77th
7-5 Legislature, Regular Session, 2001, to:
7-6 (A) the equalized wealth level under Section
7-7 41.002; or
7-8 (B) the guaranteed level of state and local
7-9 funds per weighted student per cent of tax effort under Section
7-10 42.302; or
7-11 (2) additional state aid to which the district is
7-12 entitled under Section 42.2513.
7-13 (b) Notwithstanding any other provision of this code, a
7-14 school district may use an amount of funds equal to 80 percent of
7-15 the amount certified for the district under Subsection (a) only to
7-16 pay:
7-17 (1) a nonrecurring expense, including a capital
7-18 outlay; or
7-19 (2) debt service.
7-20 (c) A determination by the commissioner under this section
7-21 is final and may not be appealed.
7-22 (d) The commissioner may adopt rules to implement this
7-23 section.
7-24 (e) This section expires September 1, 2002.
7-25 SECTION 2.10. Subchapter E, Chapter 42, Education Code, is
7-26 amended by adding Section 42.260 to read as follows:
7-27 Sec. 42.260. USE OF CERTAIN FUNDS. (a) For each year, the
7-28 commissioner shall certify to each school district that
7-29 participates in the group benefits program established under
7-30 Article 3.50-7, Insurance Code, the amount of:
7-31 (1) additional funds to which the district is entitled
7-32 due to the increase made by H.B. No. 3343, Acts of the 77th
7-33 Legislature, Regular Session, 2001, to:
7-34 (A) the equalized wealth level under Section
7-35 41.002; or
7-36 (B) the guaranteed level of state and local
7-37 funds per weighted student per cent of tax effort under Section
7-38 42.302; or
7-39 (2) additional state aid to which the district is
7-40 entitled under Section 42.2513.
7-41 (b) Notwithstanding any other provision of this code, a
7-42 school district may use an amount of funds equal to 80 percent of
7-43 the amount certified for the district under Subsection (a) only to
7-44 provide coverages authorized under Article 3.50-7, Insurance Code.
7-45 (c) A determination by the commissioner under this section
7-46 is final and may not be appealed.
7-47 (d) The commissioner may adopt rules to implement this
7-48 section.
7-49 SECTION 2.11. Effective September 1, 2001, Section
7-50 42.302(a), Education Code, is amended to read as follows:
7-51 (a) Each school district is guaranteed a specified amount
7-52 per weighted student in state and local funds for each cent of tax
7-53 effort over that required for the district's local fund assignment
7-54 up to the maximum level specified in this subchapter. The amount
7-55 of state support, subject only to the maximum amount under Section
7-56 42.303, is determined by the formula:
7-57 GYA = (GL X WADA X DTR X 100) - LR
7-58 where:
7-59 "GYA" is the guaranteed yield amount of state funds to be
7-60 allocated to the district;
7-61 "GL" is the dollar amount guaranteed level of state and local
7-62 funds per weighted student per cent of tax effort, which is ______
7-63 [$24.99] or a greater amount for any year provided by
7-64 appropriation;
7-65 "WADA" is the number of students in weighted average daily
7-66 attendance, which is calculated by dividing the sum of the school
7-67 district's allotments under Subchapters B and C, less any allotment
7-68 to the district for transportation, any allotment under Section
7-69 42.158, and 50 percent of the adjustment under Section 42.102, by
8-1 the basic allotment for the applicable year;
8-2 "DTR" is the district enrichment tax rate of the school
8-3 district, which is determined by subtracting the amounts specified
8-4 by Subsection (b) from the total amount of maintenance and
8-5 operations taxes collected by the school district for the
8-6 applicable school year and dividing the difference by the quotient
8-7 of the district's taxable value of property as determined under
8-8 Subchapter M, Chapter 403, Government Code, or, if applicable,
8-9 under Section 42.2521, divided by 100; and
8-10 "LR" is the local revenue, which is determined by multiplying
8-11 "DTR" by the quotient of the district's taxable value of property
8-12 as determined under Subchapter M, Chapter 403, Government Code, or,
8-13 if applicable, under Section 42.2521, divided by 100.
8-14 SECTION 2.12. Effective September 1, 2002, Section
8-15 42.302(a), Education Code, is amended to read as follows:
8-16 (a) Each school district is guaranteed a specified amount
8-17 per weighted student in state and local funds for each cent of tax
8-18 effort over that required for the district's local fund assignment
8-19 up to the maximum level specified in this subchapter. The amount
8-20 of state support, subject only to the maximum amount under Section
8-21 42.303, is determined by the formula:
8-22 GYA = (GL X WADA X DTR X 100) - LR
8-23 where:
8-24 "GYA" is the guaranteed yield amount of state funds to be
8-25 allocated to the district;
8-26 "GL" is the dollar amount guaranteed level of state and local
8-27 funds per weighted student per cent of tax effort, which is ______
8-28 [$24.99] or a greater amount for any year provided by
8-29 appropriation;
8-30 "WADA" is the number of students in weighted average daily
8-31 attendance, which is calculated by dividing the sum of the school
8-32 district's allotments under Subchapters B and C, less any allotment
8-33 to the district for transportation, any allotment under Section
8-34 42.158, and 50 percent of the adjustment under Section 42.102, by
8-35 the basic allotment for the applicable year;
8-36 "DTR" is the district enrichment tax rate of the school
8-37 district, which is determined by subtracting the amounts specified
8-38 by Subsection (b) from the total amount of maintenance and
8-39 operations taxes collected by the school district for the
8-40 applicable school year and dividing the difference by the quotient
8-41 of the district's taxable value of property as determined under
8-42 Subchapter M, Chapter 403, Government Code, or, if applicable,
8-43 under Section 42.2521, divided by 100; and
8-44 "LR" is the local revenue, which is determined by multiplying
8-45 "DTR" by the quotient of the district's taxable value of property
8-46 as determined under Subchapter M, Chapter 403, Government Code, or,
8-47 if applicable, under Section 42.2521, divided by 100.
8-48 SECTION 2.13. Except as otherwise provided by this article
8-49 or as provided by Section 7.01 of this Act, this article takes
8-50 effect September 1, 2002.
8-51 ARTICLE 3. COVERAGE FOR DEPENDENT CHILDREN
8-52 OF CERTAIN SCHOOL DISTRICT EMPLOYEES
8-53 SECTION 3.01. Subchapter E, Chapter 3, Insurance Code, is
8-54 amended by adding Article 3.50-8 to read as follows:
8-55 Art. 3.50-8. HEALTH BENEFIT PLAN COVERAGE FOR DEPENDENT
8-56 CHILDREN OF CERTAIN SCHOOL DISTRICT EMPLOYEES
8-57 Sec. 1. DEFINITIONS. In this article:
8-58 (1) "Charter school" means an open-enrollment charter
8-59 school established under Subchapter D, Chapter 12, Education Code.
8-60 (2) "Employee" means a participating member of the
8-61 Teacher Retirement System of Texas who is employed by a school
8-62 district or a regional education service center, or a person
8-63 employed by a charter school. The term does not include an
8-64 individual performing personal services for a school district,
8-65 regional education service center, or charter school as an
8-66 independent contractor.
8-67 (3) "Health coverage plan" means any group policy or
8-68 contract, medical, dental, or hospital service agreement,
8-69 membership or subscription contract, salary continuation plan,
9-1 health maintenance organization agreement, preferred provider
9-2 arrangement, or any similar group arrangement or any combination of
9-3 those policies, plans, contracts, agreements, or arrangements that
9-4 provides for, pays for, or reimburses expenses for health care
9-5 services.
9-6 (4) "Regional education service center" means a
9-7 regional education service center established under Chapter 8,
9-8 Education Code.
9-9 (5) "Trustee" means the Teacher Retirement System of
9-10 Texas.
9-11 Sec. 2. CONTRIBUTIONS FOR COVERAGE. (a) Subject to any
9-12 applicable limit in the General Appropriations Act, the trustee
9-13 shall use money appropriated for employer contributions to fund 80
9-14 percent of the cost of health coverage under this article for a
9-15 child who:
9-16 (1) is a dependent of an employee;
9-17 (2) would be eligible, if the child were not the
9-18 dependent of the employee, for benefits under the program
9-19 established by this state to implement Title XXI of the Social
9-20 Security Act (42 U.S.C. Section 1397aa et seq.), as amended; and
9-21 (3) is not eligible for the state Medicaid program.
9-22 (b) The coverage provided under this article must provide
9-23 benefits equivalent to the benefits provided under the state child
9-24 health plan operated under Chapter 62, Health and Safety Code.
9-25 (c) Notwithstanding Subsection (a) of this section, the
9-26 trustee may pay a higher percentage of the cost of coverage for a
9-27 child described by Subsection (a) of this section if money becomes
9-28 available for that purpose.
9-29 Sec. 3. NOTIFICATION TO EMPLOYEES. The trustee shall
9-30 notify employees that:
9-31 (1) the employee may be eligible for dependent child
9-32 coverage under Section 2 of this article; and
9-33 (2) the employee may apply for the coverage as
9-34 provided by Section 4 of this article.
9-35 Sec. 4. APPLICATION FOR COVERAGE. (a) An employee who
9-36 desires dependent child coverage under this article shall apply to
9-37 the Texas Department of Human Services or other agency designated
9-38 by the Health and Human Services Commission to perform eligibility
9-39 screening under this article.
9-40 (b) The eligibility screening shall be coordinated with
9-41 eligibility screening for the state Medicaid program. The agency
9-42 that performs the eligibility screening shall certify to the
9-43 trustee in writing whether a child is eligible for dependent child
9-44 coverage under Section 2 of this article.
9-45 (c) If an employee does not obtain dependent child coverage
9-46 under this article at the time the employee is initially employed,
9-47 the employee may apply for the coverage during any open enrollment
9-48 period applicable to the employee's coverage under Article 3.50-4
9-49 or 3.50-7 of this code or any other applicable state law. The
9-50 trustee may:
9-51 (1) continue the coverage until the next open
9-52 enrollment period applicable to the employee's coverage, without
9-53 regard to any change in status of the child; or
9-54 (2) adopt rules requiring an employee, during the
9-55 period the coverage is in effect, to report a change in status that
9-56 would make the dependent child ineligible for coverage and may
9-57 terminate the coverage on receipt of the report of a change in
9-58 status.
9-59 (d) The trustee may require an employee to reapply for
9-60 dependent child coverage under this article during each annual open
9-61 enrollment period applicable to the employee's coverage. The
9-62 trustee and the Texas Department of Human Services or other agency
9-63 designated by the Health and Human Services Commission to perform
9-64 eligibility screening under this article shall cooperate to develop
9-65 a cost-effective method for annual reevaluation of eligibility
9-66 determinations for dependent child coverage under this article.
9-67 Sec. 5. TERMINATION OF PROGRAM. If the program established
9-68 under Chapter 62, Health and Safety Code, that uses federal funding
9-69 under Title XXI of the Social Security Act (42 U.S.C. Section
10-1 1397aa et seq.), as amended, is terminated, state contributions for
10-2 benefits for those eligible under Section 2 of this article end on
10-3 the date of that termination.
10-4 SECTION 3.02. (a) Except as provided by Section 7.01 of
10-5 this Act, this article takes effect September 1, 2001.
10-6 (b) Article 3.50-8, Insurance Code, as added by this
10-7 article, does not apply to the purchase of health benefit plan
10-8 coverage for a dependent child by the Teacher Retirement System of
10-9 Texas before fiscal year 2003.
10-10 ARTICLE 4. RETIREMENT BENEFITS AND CONTRIBUTIONS
10-11 SECTION 4.01. Section 824.001, Government Code, is amended
10-12 to read as follows:
10-13 Sec. 824.001. TYPES OF BENEFITS. The types of benefits
10-14 payable by the retirement system are:
10-15 (1) service retirement benefits;
10-16 (2) disability retirement benefits; [and]
10-17 (3) death benefits; and
10-18 (4) retiree health care benefits permitted under
10-19 Section 401(h), Internal Revenue Code of 1986, and its subsequent
10-20 amendments.
10-21 SECTION 4.02. Sections 824.203(a) and (e), Government Code,
10-22 are amended to read as follows:
10-23 (a) Except as provided by Subsections (c), (d), and (e), the
10-24 standard service retirement annuity is an amount computed on the
10-25 basis of the member's average annual compensation for the three
10-26 years of service, whether or not consecutive, in which the member
10-27 received the highest annual compensation, times 2.25 [2.2] percent
10-28 for each year of service credit in the retirement system.
10-29 (e) The annual standard service retirement annuity for a
10-30 person who immediately before retirement holds a position as a
10-31 classroom teacher or full-time librarian, or the annual death
10-32 benefit annuity based on the service of a member who at the time of
10-33 death held a position as a classroom teacher or full-time
10-34 librarian, may not be less than an amount computed on the basis of
10-35 the minimum annual salary provided by the Education Code for a
10-36 classroom teacher or full-time librarian, multiplied by 2.25 [2.2]
10-37 percent for each year of service credit in the retirement system.
10-38 SECTION 4.03. Chapter 824, Government Code, is amended by
10-39 adding Subchapter J to read as follows:
10-40 SUBCHAPTER J. RETIREE HEALTH CARE BENEFITS
10-41 Sec. 824.851. DEFINITIONS. In this subchapter:
10-42 (1) "401(h) account" means the 401(h) account
10-43 established under this subchapter.
10-44 (2) "Active employee" means an employee who is a
10-45 member of the Teacher Retirement System of Texas and who is not
10-46 entitled to coverage under a health benefit plan provided under the
10-47 Texas Employees Uniform Group Insurance Benefits Act (Article
10-48 3.50-2, Vernon's Texas Insurance Code) or under the Texas State
10-49 College and University Employees Uniform Insurance Benefits Act
10-50 (Article 3.50-3, Vernon's Texas Insurance Code).
10-51 (3) "Carrier" means any insurance company or hospital
10-52 service corporation authorized by the Texas Department of Insurance
10-53 to provide any of the insurance coverages, benefits, or services
10-54 provided by this subchapter under the insurance laws of this state.
10-55 (4) "Dependent" means:
10-56 (A) a spouse of a retiree; or
10-57 (B) a retiree's unmarried child who is younger
10-58 than 25 years of age, including an adopted child, a foster child, a
10-59 stepchild, or other child who is in a regular parent-child
10-60 relationship, and a recognized natural child; and a retiree's
10-61 recognized natural child, adopted child, foster child, stepchild,
10-62 or other child who is in a regular parent-child relationship and
10-63 who lives with or whose care is provided by the retiree or
10-64 surviving spouse on a regular basis, regardless of the child's age,
10-65 if the child is mentally retarded or physically incapacitated to
10-66 such an extent as to be dependent on the retiree or surviving
10-67 spouse for care or support, as determined by the trustee.
10-68 (5) "Health benefit plan" means a group insurance
10-69 policy, contract, or certificate, medical or hospital service
11-1 agreement, membership or subscription contract, salary continuation
11-2 plan, or similar group arrangement to provide, or pay for or
11-3 reimburse expenses for, health care services.
11-4 (6) "Medicare" means the health insurance program for
11-5 the aged and disabled that is provided by the United States
11-6 government.
11-7 (7) "Minimum premium contract" means a contract
11-8 entered into with the carrier by the board of trustees that
11-9 provides that an appropriate amount will be paid to the carrier to
11-10 cover its cost of direct claims administration, cost of other
11-11 administration, risk charges with stop-loss provisions, and profit
11-12 and the remainder of the funds will be used to reimburse the
11-13 carrier to cover claims as they are paid, to pay the administrative
11-14 expenses, and to provide the assets to cover all reserves necessary
11-15 for the trustee to operate on a financially sound basis.
11-16 (8) "Policy year" means the period beginning on
11-17 September 1 of one year and ending on August 31 of the following
11-18 year.
11-19 (9) "Qualified retiree" means a person who is:
11-20 (A) a retiree with at least 10 years of service
11-21 credit in the retirement system for actual service in a public
11-22 school in this state and who is not eligible to be covered by a
11-23 health benefit plan provided under the Texas Employees Uniform
11-24 Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
11-25 Insurance Code) or under the Texas State College and University
11-26 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
11-27 Texas Insurance Code); or
11-28 (B) a disability retiree entitled to receive
11-29 monthly benefits from the retirement system.
11-30 (10) "Surviving dependent child" means the dependent
11-31 child of a deceased retiree who has survived the deceased retiree
11-32 and the deceased retiree's spouse.
11-33 (11) "Surviving spouse" means the surviving spouse of
11-34 a deceased retiree.
11-35 Sec. 824.852. APPLICABILITY OF OTHER LAWS. Article 3.51,
11-36 Insurance Code, does not apply to insurance purchased under this
11-37 subchapter.
11-38 Sec. 824.853. ACCOUNT. (a) The 401(h) account is
11-39 established to provide for medical benefits under this subchapter.
11-40 (b) The board of trustees shall take the actions it
11-41 considers necessary to devise, administer, and implement the 401(h)
11-42 account.
11-43 (c) The 401(h) account is created in the retirement system
11-44 and is part of the trust assets of the retirement system.
11-45 (d) The comptroller is the custodian of the 401(h) account,
11-46 and the board of trustees shall administer the 401(h) account.
11-47 (e) Money required to be paid into the 401(h) account,
11-48 including contributions from active employees, and the state and
11-49 investment income, shall be paid into the 401(h) account.
11-50 (f) From the 401(h) account, the board of trustees may pay,
11-51 without state fiscal year limitation, appropriate premiums to the
11-52 carrier or carriers providing group coverage under this subchapter,
11-53 claims for benefits under the group coverage, and the amounts
11-54 expended by the board of trustees for administration.
11-55 (g) The appropriate portion of the contributions to the
11-56 401(h) account to provide for incurred but unreported claim
11-57 reserves and contingency reserves, as determined by the board of
11-58 trustees, shall be retained in the 401(h) account.
11-59 (h) Expenses for the development and administration of the
11-60 401(h) account shall be spent as provided by a budget adopted by
11-61 the board of trustees.
11-62 (i) The board of trustees may invest and reinvest the money
11-63 in the 401(h) account as provided by Subchapter D, Chapter 825, for
11-64 assets of the retirement system.
11-65 Sec. 824.854. BOARD POWERS AND DUTIES. (a) The board of
11-66 trustees may adopt rules, plans, and procedures that are reasonably
11-67 necessary to implement this subchapter, including:
11-68 (1) establishing minimum benefit and financing
11-69 standards for group insurance coverage to be provided to all
12-1 qualified retirees, dependents, surviving spouses, and surviving
12-2 dependent children;
12-3 (2) establishing procedures for contributions and
12-4 deductions;
12-5 (3) determining methods and procedures for claims
12-6 administration;
12-7 (4) administering the 401(h) account;
12-8 (5) adopting a timetable for the development of
12-9 minimum benefit and financial standards for group insurance
12-10 coverage;
12-11 (6) establishing group insurance plans;
12-12 (7) taking bids for and awarding contracts for
12-13 insurance;
12-14 (8) contracting with an independent and experienced
12-15 group insurance consultant or actuary for advice and counsel in
12-16 implementing and administering the 401(h) account;
12-17 (9) establishing the 401(h) account;
12-18 (10) creating and adopting appropriate health benefit
12-19 plan documents; and
12-20 (11) establishing appropriate accounts and reserves
12-21 within the 401(h) account.
12-22 (b) The board of trustees may adopt other rules relating to
12-23 the 401(h) account as are considered necessary by the board of
12-24 trustees.
12-25 Sec. 824.855. EMPLOYEES. (a) The board of trustees may
12-26 employ persons to assist the board in carrying out this subchapter.
12-27 (b) The board of trustees shall determine the duties and
12-28 compensation of the employees.
12-29 Sec. 824.856. PARTICIPATION. Each qualified retiree must be
12-30 enrolled in the group insurance program authorized by Article
12-31 3.50-4, Insurance Code, to be eligible for benefits under this
12-32 subchapter.
12-33 Sec. 824.857. BENEFITS. (a) The board of trustees shall be
12-34 designated as the group policyholder for any insurance purchased
12-35 under this subchapter.
12-36 (b) The board of trustees may establish one or more health
12-37 benefit plans that are self-insured.
12-38 (c) The coverages provided under the 401(h) account may
12-39 include hospital care and benefits, surgical care and treatment,
12-40 medical care and treatment, dental care, eye care, obstetrical
12-41 benefits, eligible long-term care as defined in Sections 213 and
12-42 7702B of the Internal Revenue Code of 1986, and its subsequent
12-43 amendments, prescribed drugs, medicines, and prosthetic devices,
12-44 and other supplemental benefits, supplies, and services as provided
12-45 by this subchapter.
12-46 (d) Coverages under Subsection (c) are limited to benefits
12-47 permissible under Section 213 of the Internal Revenue Code of 1986,
12-48 and its subsequent amendments.
12-49 (e) Benefits, if any, shall be paid only to the extent there
12-50 are assets available in the 401(h) account, taking into
12-51 consideration reserves established by the board of trustees.
12-52 (f) A health care claim shall be processed under the 401(h)
12-53 account first, and, to the extent the claim is not covered under
12-54 this subchapter or funds are not available, the claim shall be sent
12-55 to the board of trustees for processing under the group insurance
12-56 program authorized under Article 3.50-4, Insurance Code.
12-57 (g) The board of trustees may provide different benefits for
12-58 retirees and surviving spouses covered by Medicare than the
12-59 benefits provided for retirees and surviving spouses who are not
12-60 covered by Medicare.
12-61 (h) New contracts for coverages under this subchapter shall
12-62 be submitted for competitive bidding at least every six years.
12-63 (i) Any contract shall be based on the terms and conditions
12-64 agreed on between the board of trustees and the entity selected to
12-65 provide the coverage and benefits.
12-66 (j) Any contract for group benefits awarded by the board of
12-67 trustees must meet the minimum benefit and financial standards
12-68 adopted by the board of trustees.
12-69 (k) The coverage provided by this subchapter shall follow
13-1 the coordination of benefit rules under Article 3.50-4, Insurance
13-2 Code.
13-3 (l) In contracting for any benefits under this subchapter,
13-4 competitive bidding shall be required under rules adopted by the
13-5 board of trustees. The board of trustees is not required to select
13-6 the lowest bid but may consider also ability to service contracts,
13-7 past experiences, financial stability, and other relevant criteria.
13-8 If the board of trustees awards a contract to an entity whose bid
13-9 deviates from that advertised, the deviation shall be recorded and
13-10 the reasons for the deviation shall be fully justified in the
13-11 minutes of the next meeting of the board of trustees.
13-12 (m) Notwithstanding any other provision of this subchapter,
13-13 the board of trustees may:
13-14 (1) self-insure any benefits available under this
13-15 subchapter; and
13-16 (2) engage private entities to collect contributions
13-17 from or to settle claims in connection with benefits established by
13-18 the board of trustees under this subchapter.
13-19 (n) The board of trustees may contract directly with health
13-20 care providers, including health maintenance organizations,
13-21 preferred provider organizations, carriers, administrators, and
13-22 other qualified vendors, to provide benefits to participants.
13-23 Sec. 824.858. BENEFIT CERTIFICATES. The board of trustees
13-24 may require each insurance carrier to issue to each retiree,
13-25 surviving spouse, or surviving dependent child insured under this
13-26 subchapter a certificate of insurance that:
13-27 (1) states the benefits to which the person is
13-28 entitled;
13-29 (2) states to whom the benefits are payable;
13-30 (3) states to whom the claims must be submitted; and
13-31 (4) summarizes the provisions of the policy
13-32 principally affecting the person.
13-33 Sec. 824.859. ANNUAL REPORT AND ACCOUNTING. (a) Not later
13-34 than the 180th day after the end of each state fiscal year, the
13-35 board of trustees shall make a written report to the Texas
13-36 Department of Insurance concerning the coverages provided and the
13-37 benefits and services being received by persons under this
13-38 subchapter.
13-39 (b) Insurance coverage purchased under this subchapter shall
13-40 provide for an accounting to the board of trustees by each carrier
13-41 providing coverage not later than the 90th day after the end of
13-42 each policy year.
13-43 (c) The accounting shall be on a form approved by the board
13-44 of trustees.
13-45 (d) Other reports shall be prepared by each carrier if
13-46 considered necessary by the board of trustees.
13-47 (e) An extra charge may not be assessed by the carrier for
13-48 the accounting reports.
13-49 (f) All reports required by this subchapter shall be made
13-50 available for public inspection in a form that protects the
13-51 identity of the individual claimants.
13-52 Sec. 824.860. EXEMPTION FROM EXECUTION AND TAXATION.
13-53 (a) All insurance benefit payments, active employee and state
13-54 contributions, qualified retiree, surviving spouse, and surviving
13-55 dependent child contributions, and optional benefits payments and
13-56 any rights, benefits, or payments accruing to any person under this
13-57 subchapter, as well as all money in the 401(h) account created by
13-58 this subchapter, are exempt from execution, attachment,
13-59 garnishment, or any other process and may not be assigned except
13-60 for direct payment to benefit providers as authorized by the board
13-61 of trustees by contract, rule, or otherwise.
13-62 (b) A premium or contribution on a policy, insurance
13-63 contract, or agreement authorized as provided by this subchapter is
13-64 not subject to any state tax, regulatory fee, or surcharge,
13-65 including premium or maintenance taxes or fees.
13-66 Sec. 824.861. CONTRIBUTIONS. (a) For each state fiscal
13-67 year, each active employee, as a condition of employment, shall
13-68 contribute to the 401(h) account an amount equal to 0.25 percent of
13-69 the employee's salary.
14-1 (b) Each month the employer of an active employee shall
14-2 deduct the contributions from the employee's salary and shall remit
14-3 the contributions to the board of trustees as provided by any
14-4 procedures that the board of trustees may require.
14-5 (c) Instead of deducting the contributions from salaries, an
14-6 employer may assume and pay the total contributions due from its
14-7 active employees for any month.
14-8 (d) Whether the employer deducts the contributions from
14-9 salaries or assumes and pays the total contributions, contributions
14-10 under this subsection shall be picked up under Section 414(h) of
14-11 the Internal Revenue Code of 1986, and its subsequent amendments,
14-12 by the employer and paid to the 401(h) account, subject to approval
14-13 of the board of trustees and the board's receipt of a favorable
14-14 private letter ruling from the Internal Revenue Service.
14-15 (e) The board of trustees shall establish any procedures and
14-16 forms necessary or appropriate to accomplish this pickup.
14-17 (f) From September 1, 2002, to August 31, 2010, the state
14-18 shall contribute to the 401(h) account an amount equal to two
14-19 percent of the aggregate annual compensation of each active
14-20 employee. This amount is included within the total amount that the
14-21 state actually appropriates to the retirement system for state
14-22 contributions described by Section 825.404.
14-23 (g) Contributions from active employees become the property
14-24 of the 401(h) account on receipt by the board of trustees and may
14-25 not be refunded to the active employee under any circumstances,
14-26 including termination of employment.
14-27 (h) Contributions to the 401(h) account deducted from the
14-28 salary of an active employee are included in annual compensation of
14-29 the employee for purposes of the retirement system.
14-30 (i) Before the first day of November preceding each regular
14-31 session of the legislature, the board of trustees shall certify to
14-32 the Legislative Budget Board and the budget division of the
14-33 governor's office the amounts necessary to pay the state
14-34 contributions to the 401(h) account under this subchapter for
14-35 information and review.
14-36 (j) Not later than August 31 of each year, the board of
14-37 trustees shall certify to the comptroller the estimated amount of
14-38 state contributions to be received by the 401(h) account for the
14-39 next fiscal year under the appropriations authorized by this
14-40 subchapter.
14-41 (k) Contributions allocated under this section and
14-42 appropriated shall be paid from the general revenue fund in equal
14-43 monthly installments, based on the annual estimate certified by the
14-44 board of trustees to the comptroller for that year and subject to
14-45 any express limitations specified in the Act making the
14-46 appropriation. Variations between the certified amount and the
14-47 actual amount due for the year shall be reconciled at the close of
14-48 the fiscal year and proper adjustments in the annual contributions
14-49 to the 401(h) account shall be made.
14-50 (l) An employing district that fails to remit, in the period
14-51 prescribed by Section 825.408, all deposits required by this
14-52 subchapter shall pay to the 401(h) account, in addition to the
14-53 deposits, interest on the unpaid amounts at the annual rate of six
14-54 percent compounded annually.
14-55 (m) An employing district and its board of trustees hold
14-56 amounts due to the 401(h) account under this subchapter in trust
14-57 for its participants and may not divert the amounts for any other
14-58 purpose.
14-59 Sec. 824.862. COLLECTION OF CONTRIBUTIONS FROM FEDERAL OR
14-60 PRIVATE SOURCES. If an employer applies for money provided by the
14-61 United States, an agency of the United States, or a privately
14-62 sponsored source and if any of the money will pay part or all of an
14-63 active employee's salary, the employer shall apply for any legally
14-64 available money to pay state contributions required by this
14-65 subchapter to be paid to the 401(h) account, using the same
14-66 procedures provided by Section 825.406.
14-67 Sec. 824.863. STUDIES, REPORTS, AND AUDITS. (a) The board
14-68 of trustees shall study the operation and administration of this
14-69 subchapter.
15-1 (b) The board of trustees shall make a report to the
15-2 legislature at each regular legislative session relating to the
15-3 operation and administration of this subchapter.
15-4 (c) Each contract entered into under this subchapter shall
15-5 include provisions requiring carriers to:
15-6 (1) furnish to the board of trustees on a timely basis
15-7 reasonable reports that the board of trustees determines are
15-8 necessary to carry out its functions under this subchapter; and
15-9 (2) permit the board of trustees and state auditor to
15-10 examine records of the carriers as may be necessary to carry out
15-11 this subchapter.
15-12 Sec. 824.864. COVERAGE FOR DEPENDENTS, SURVIVING SPOUSES,
15-13 AND SURVIVING DEPENDENT CHILDREN. (a) Any qualified retiree
15-14 participating in the program is entitled to secure for the
15-15 retiree's dependents group insurance coverages provided for the
15-16 board of trustees.
15-17 (b) The additional contribution payments for the coverages
15-18 for dependents shall be deducted from the annuities of the
15-19 qualified retiree in the manner and form determined by the board of
15-20 trustees.
15-21 (c) A surviving spouse who is entitled to insurance benefits
15-22 under this subchapter may elect to retain or obtain the insurance
15-23 coverage for the spouse or the qualified retiree's dependents, at
15-24 the applicable rates for retirees, provided the surviving spouse
15-25 provides payment of applicable contributions in the manner
15-26 established by the board of trustees.
15-27 (d) A surviving dependent child, the guardian of the child's
15-28 estate, or the person having custody of the child may elect to
15-29 retain or obtain insurance coverage for the surviving dependent
15-30 child at rates applicable for dependents if applicable
15-31 contributions are made in the manner established by the board of
15-32 trustees.
15-33 Sec. 824.865. EXPULSION FROM PROGRAM FOR FRAUD. (a) After
15-34 notice and a hearing as provided by this section, the board of
15-35 trustees may expel from participation in the 401(h) account any
15-36 qualified retiree, surviving spouse, dependent, or surviving
15-37 dependent child who submits a fraudulent claim under, or has
15-38 defrauded or attempted to defraud, any health benefit plan offered
15-39 under this subchapter.
15-40 (b) On its own motion or on the receipt of a complaint, the
15-41 board of trustees may call and hold a hearing to determine whether
15-42 a person has submitted a fraudulent claim under or has defrauded or
15-43 attempted to defraud under this subchapter.
15-44 (c) A proceeding under this section is a contested case
15-45 under Chapter 2001.
15-46 (d) If the board of trustees, at the conclusion of the
15-47 hearing, issues a decision that finds that the accused submitted a
15-48 fraudulent claim or has defrauded or attempted to defraud under
15-49 this subchapter, the board of trustees shall expel the person from
15-50 participation in the program.
15-51 (e) The substantial evidence rule shall be used on any
15-52 appeal of a decision of the board of trustees under this section.
15-53 (f) A person expelled from coverage may not be insured by
15-54 any benefits for a period, to be determined by the board of
15-55 trustees, of up to five years from the date the expulsion takes
15-56 effect.
15-57 Sec. 824.866. CONFIDENTIALITY OF RECORDS. (a) Section
15-58 825.507, concerning the confidentiality and disclosure of records,
15-59 applies to records that are in the custody of the retirement
15-60 system, or in the custody of an administrator, carrier, agent,
15-61 attorney, consultant, or governmental body acting in cooperation
15-62 with or on behalf of the retirement system, regarding retirees,
15-63 annuitants, or beneficiaries under the 401(h) account.
15-64 (b) The retirement system may disclose to health and benefit
15-65 providers information in the records of an individual that the
15-66 retirement system determines to be necessary to administer this
15-67 subchapter.
15-68 Sec. 824.867. COORDINATED CARE NETWORK. The board of
15-69 trustees may take action as it determines necessary to implement
16-1 and administer a coordinated care network for the 401(h) account,
16-2 under Section 18C, Article 3.50-4, Insurance Code.
16-3 Sec. 824.868. ASSISTANCE. The Texas Department of
16-4 Insurance, as requested by the board of trustees, shall assist the
16-5 board of trustees in implementing and administering this
16-6 subchapter.
16-7 Sec. 824.869. EFFECTIVE DATE OF COVERAGE. Coverage under
16-8 the 401(h) account authorized by this subchapter shall begin on the
16-9 later of September 1, 2002, or the date the board of trustees has
16-10 appropriate approval from the Internal Revenue Service.
16-11 SECTION 4.04. Section 825.402, Government Code, is amended
16-12 to read as follows:
16-13 Sec. 825.402. RATE OF MEMBER CONTRIBUTIONS. The rate of
16-14 contributions for each member of the retirement system is:
16-15 (1) five percent of the member's annual compensation
16-16 or $180, whichever is less, for service rendered after August 31,
16-17 1937, and before September 1, 1957;
16-18 (2) six percent of the first $8,400 of the member's
16-19 annual compensation for service rendered after August 31, 1957, and
16-20 before September 1, 1969;
16-21 (3) six percent of the member's annual compensation
16-22 for service rendered after August 31, 1969, and before the first
16-23 day of the 1977-78 school year;
16-24 (4) 6.65 percent of the member's annual compensation
16-25 for service rendered after the last day of the period described by
16-26 Subdivision (3) and before September 1, 1985; and
16-27 (5) 6.4 percent of the member's annual compensation
16-28 for service rendered after August 31, 1985, plus the percentage
16-29 required under Section 824.861(a).
16-30 SECTION 4.05. Section 825.306, Government Code, is amended
16-31 to read as follows:
16-32 Sec. 825.306. CREDITING SYSTEM ASSETS. The assets of the
16-33 retirement system shall be credited, according to the purpose for
16-34 which they are held, to one of the following accounts:
16-35 (1) member savings account;
16-36 (2) state contribution account;
16-37 (3) retired reserve account;
16-38 (4) interest account;
16-39 (5) expense account; [or]
16-40 (6) deferred retirement option account; or
16-41 (7) the 401(h) account under Subchapter J, Chapter
16-42 824.
16-43 SECTION 4.06. Sections 825.307(a) and (b), Government Code,
16-44 are amended to read as follows:
16-45 (a) Except as provided by Subchapter J, Chapter 824, the
16-46 [The] retirement system shall deposit in a member's individual
16-47 account in the member savings account:
16-48 (1) the amount of contributions to the retirement
16-49 system that is deducted from the member's compensation;
16-50 (2) the portion of a deposit made on or after
16-51 resumption of membership that represents the amount of retirement
16-52 benefits received;
16-53 (3) the portion of a deposit to reinstate service
16-54 credit previously canceled that represents the amount withdrawn or
16-55 refunded;
16-56 (4) the portion of a deposit to establish membership
16-57 service credit previously waived that is required by Section
16-58 823.202(b)(1);
16-59 (5) the portion of a deposit to establish membership
16-60 service credit for service performed after retirement that is
16-61 required by Section 823.502(c)(3);
16-62 (6) the portion of a deposit to establish military
16-63 service credit required by Section 823.302(c);
16-64 (7) the portion of a deposit to establish equivalent
16-65 membership service credit required by Section 823.401(d),
16-66 823.402(e)(1) or (e)(2), 823.404(c), or 823.3021(f)(1); and
16-67 (8) interest earned on money in the account as
16-68 provided by Subsections (b) and (c) and Section 825.313(c).
16-69 (b) Interest on a member's contribution other than interest
17-1 on the portion of the member's contribution deposited in the 401(h)
17-2 account under Subchapter J, Chapter 824, is earned monthly and
17-3 computed at the rate of five percent a year. Except as provided by
17-4 Subsection (c), interest is computed based on the mean balance in
17-5 the member's account during that fiscal year and shall be credited
17-6 on August 31 of each year.
17-7 SECTION 4.07. Section 825.308, Government Code, is amended
17-8 to read as follows:
17-9 Sec. 825.308. STATE CONTRIBUTION ACCOUNT. The retirement
17-10 system shall deposit in the state contribution account:
17-11 (1) [all] state contributions to the retirement system
17-12 required by Section 825.404 other than contributions deposited in
17-13 the 401(h) account under Subchapter J, Chapter 824;
17-14 (2) amounts from the interest account as provided by
17-15 Section 825.313(b)(2) [825.313(b)(5)];
17-16 (3) retirement annuities waived or forfeited in
17-17 accordance with Section 824.601 or 824.004;
17-18 (4) fees collected under Section 825.403(h);
17-19 (5) fees and interest for reinstatement of service
17-20 credit or establishment of membership service credit as provided by
17-21 Section 823.202, 823.501, or 823.502;
17-22 (6) the portion of a deposit required by Section
17-23 823.302 to establish military service credit that represents a fee;
17-24 and
17-25 (7) the portion of a deposit required by Section
17-26 823.401(e) to establish out-of-state service credit that represents
17-27 a fee.
17-28 SECTION 4.08. Section 825.312(a), Government Code, is
17-29 amended to read as follows:
17-30 (a) The retirement system shall deposit in the expense
17-31 account:
17-32 (1) money transferred from the interest account under
17-33 Section 825.313(d); and
17-34 (2) money received from the Texas Public School
17-35 Employees Group Insurance Program or another health insurance
17-36 program for school employees or retirees for service performed for
17-37 the program by the retirement system.
17-38 SECTION 4.09. Section 825.404(e), Government Code, is
17-39 amended to read as follows:
17-40 (e) Except for money appropriated by the state to the 401(h)
17-41 account under Subchapter J, Chapter 824, all [All] money
17-42 appropriated by the state to the retirement system under this
17-43 subtitle shall be paid to the state contribution account in equal
17-44 monthly installments as provided by Section 403.093(c), [Government
17-45 Code,] except money appropriated under Subsection (d), which
17-46 remains in the general revenue fund until expenses are approved
17-47 under Chapter 2103.
17-48 SECTION 4.10. Section 16, Article 3.50-4, Insurance Code, is
17-49 amended to read as follows:
17-50 Sec. 16. CONTRIBUTIONS. (a) For each [the] state fiscal
17-51 year in which active employee contributions are not required to be
17-52 deposited in the 401(h) account under Subchapter J, Chapter 824,
17-53 Government Code [beginning September 1, 1985, and for each
17-54 subsequent state fiscal year], each active employee, as a condition
17-55 of employment, shall contribute to the fund an amount equal to .25
17-56 percent of the employee's salary. Each month the employer of an
17-57 active employee shall deduct the contributions from the employee's
17-58 salary and shall remit the contributions to the trustee as provided
17-59 by any procedures that the trustee may require. In lieu of
17-60 deducting the contributions from salaries, an employer may assume
17-61 and pay the total contributions due from its active employees for
17-62 any month.
17-63 (b) The state shall contribute as the state's contribution
17-64 to the fund each fiscal year an amount equal to one [.50] percent
17-65 of the salary of each active employee. The state may contribute
17-66 amounts in addition to the contribution required by this
17-67 subsection.
17-68 (c) [If after the state fiscal year beginning September 1,
17-69 1990, the amount of state and active employee contributions to the
18-1 fund is raised by the legislature above the percentages provided by
18-2 Subsections (a) and (b) of this section to provide adequate funding
18-3 for the program, the ratio between the state's contribution and the
18-4 active employees' contributions must be maintained at two to one.]
18-5 [(d)] Contributions from active employees become the
18-6 property of the fund on receipt by the trustee and may not be
18-7 refunded to the active employee under any circumstances, including
18-8 termination of employment.
18-9 (d) [(e)] Contributions to the fund deducted from the salary
18-10 of an active employee are included in "annual compensation" for
18-11 purposes of the Teacher Retirement System of Texas.
18-12 (e) [(f)] Before the first day of November preceding each
18-13 regular session of the legislature, the trustee shall certify to
18-14 the Legislative Budget Board and the budget division of the
18-15 governor's office the amounts necessary to pay the contributions of
18-16 the state to the fund under this article for information and
18-17 review. Not later than August 31 of each year, the trustee shall
18-18 certify to the comptroller of public accounts the estimated amount
18-19 of state contributions to be received by the fund for the next
18-20 fiscal year under the appropriations authorized by this article.
18-21 (f) [(g)] Contributions allocated and appropriated under
18-22 this section shall be paid from the General Revenue Fund in equal
18-23 monthly installments, based on the annual estimate certified by the
18-24 trustee to the comptroller of public accounts for that year, and
18-25 subject to any express limitations specified in the Act making the
18-26 appropriation. Variations between the certified amount and the
18-27 actual amount due for the year shall be reconciled at the close of
18-28 the fiscal year and proper adjustments in the annual contributions
18-29 to the fund shall be made.
18-30 (g) [(h)] An employing district that fails to remit, before
18-31 the 11th day after the last day of the month, all member deposits
18-32 required by this section to be remitted by the district for the
18-33 month shall pay to the Texas public school retired employees group
18-34 insurance fund, in addition to the deposits, interest on the unpaid
18-35 amounts at the annual rate of six percent compounded monthly.
18-36 (h) [(i)] An employing district and its trustees hold
18-37 amounts due to the Texas public school retired employees group
18-38 insurance fund under this article in trust for the fund and its
18-39 participants and may not divert the amounts for any other purpose.
18-40 SECTION 4.11. (a) Monthly payments of a death or retirement
18-41 benefit annuity by the Teacher Retirement System of Texas are
18-42 increased in accordance with this section beginning with the
18-43 payment due at the end of September 2001.
18-44 (b) The increase does not apply to payments under Section
18-45 824.304(a), 824.404, or 824.501, Government Code.
18-46 (c) For the purpose of computing the monthly payments of
18-47 annuities for retirees who retired on or before August 31, 2000,
18-48 the amount of the monthly payment is equal to the amount of the
18-49 last monthly payment made before the effective date of this Act
18-50 multiplied by 1.06.
18-51 (d) After making the computations required by Subsection (c)
18-52 of this section, the Teacher Retirement System of Texas shall
18-53 increase the monthly payment of each annuity made by the system
18-54 beginning on September 1, 2001, other than an annuity under Section
18-55 824.304(a), 824.404, or 824.501, Government Code, by 2.27 percent,
18-56 which is a benefit equivalent to the benefit provided by using a
18-57 2.25-percent multiplier for computing annuities.
18-58 SECTION 4.12 Notwithstanding Sections 824.861 and 824.862,
18-59 Government Code, as added by this Act, a contribution may not be
18-60 made or credited to the 401(h) account established under Subchapter
18-61 J, Chapter 824, Government Code, until the board of trustees of the
18-62 Teacher Retirement System of Texas receives appropriate approval
18-63 from the Internal Revenue Service.
18-64 SECTION 4.13. Except as provided by Section 7.01 of this
18-65 Act, this article takes effect September 1, 2001.
18-66 ARTICLE 5. CONFORMING AMENDMENTS; REPEALER
18-67 SECTION 5.01. Article 3.50-4, Insurance Code, is amended by
18-68 adding Section 3A to read as follows:
18-69 Sec. 3A. TRANSFER OF RECORDS. The trustee shall transfer
19-1 from the program established under this article all records
19-2 relating to that program that apply to a school district, regional
19-3 education service center, or charter school that elects to
19-4 participate in the group benefits program established under Article
19-5 3.50-7 of this code to the group benefits program not later than
19-6 the 60th day after the date on which the school district, regional
19-7 education service center, or charter school begins participation in
19-8 the group benefits program.
19-9 SECTION 5.02. Section 1, Article 3.50-4, Insurance Code, is
19-10 amended to read as follows:
19-11 Sec. 1. SHORT TITLE. This article may be cited as the Texas
19-12 Public School Retired Employees Group Insurance Act.
19-13 SECTION 5.03. Sections 2(3) and (4), Article 3.50-4,
19-14 Insurance Code, are amended to read as follows:
19-15 (3) "Dependent" means:
19-16 (A) a spouse of a retiree [or active member];
19-17 (B) a retiree's[, an active member's,] or a
19-18 deceased active member's unmarried child who is younger than 25
19-19 years of age including:
19-20 (i) an adopted child;
19-21 (ii) a foster child, a stepchild, or other
19-22 child who is in a regular parent-child relationship; and
19-23 (iii) a recognized natural child; and
19-24 (C) a retiree's [or active member's] recognized
19-25 natural child, adopted child, foster child, stepchild, or other
19-26 child who is in a regular parent-child relationship and who lives
19-27 with or whose care is provided by the retiree[, active member,] or
19-28 surviving spouse on a regular basis, regardless of the child's age,
19-29 if the child is mentally retarded or physically incapacitated to
19-30 such an extent as to be dependent on the retiree[, active member,]
19-31 or surviving spouse for care or support, as determined by the
19-32 trustee, or in the case of a deceased active member, a recognized
19-33 natural child, adopted child, foster child, stepchild, or other
19-34 child who was in a regular parent-child relationship and who lived
19-35 with or whose care was provided by the deceased active member on a
19-36 regular basis, regardless of the child's age, if the child is
19-37 mentally retarded or physically incapacitated to such an extent as
19-38 to have been dependent on the deceased active member or surviving
19-39 spouse for care or support, as determined by the trustee.
19-40 (4) "Fund" means the retired [Texas public] school
19-41 employees group insurance fund.
19-42 SECTION 5.04. Section 3(a), Article 3.50-4, Insurance Code,
19-43 is amended to read as follows:
19-44 (a) The Texas Public School Retired Employees Group
19-45 Insurance Program is established to provide for an insurance plan
19-46 or plans under this article.
19-47 SECTION 5.05. Section 5(a), Article 3.50-4, Insurance Code,
19-48 is amended to read as follows:
19-49 (a) The trustee may adopt rules, plans, procedures, and
19-50 orders reasonably necessary to implement this article, including:
19-51 (1) establishment of minimum benefit and financing
19-52 standards for group insurance coverage to be provided to all
19-53 retirees, [active employees,] dependents, surviving spouses, and
19-54 surviving dependent children;
19-55 (2) establishment of basic and optional group coverage
19-56 to be provided to retirees, [active employees,] dependents,
19-57 surviving spouses, and surviving dependent children;
19-58 (3) establishment of the procedures for contributions
19-59 and deductions;
19-60 (4) establishment of periods for enrollment and
19-61 selection of optional coverage and procedures for enrolling and
19-62 exercising options under the plan;
19-63 (5) determination of methods and procedures for claims
19-64 administration;
19-65 (6) study of the operation of all insurance coverage
19-66 provided under this article;
19-67 (7) administration of the fund;
19-68 (8) adoption of a timetable for the development of
19-69 minimum benefit and financial standards for group insurance
20-1 coverage, establishment of group insurance plans, and the taking of
20-2 bids for and awarding of contracts for insurance plans; and
20-3 (9) contracting with an independent and experienced
20-4 group insurance consultant or actuary[, who does not receive
20-5 insurance commissions from any insurance company,] for advice and
20-6 counsel in implementing and administering this program.
20-7 SECTION 5.06. Sections 8(e) and (i), Article 3.50-4,
20-8 Insurance Code, are amended to read as follows:
20-9 (e) The trustee may contract for and make available to all
20-10 retirees, dependents, surviving spouses, and surviving dependent
20-11 children optional group health benefit plans in addition to the
20-12 basic plans. The optional coverage may include a smaller
20-13 deductible, lower coinsurance, or additional categories of benefits
20-14 permitted under Subsection (b) of this section to provide
20-15 additional levels of coverages and benefits. The trustee may
20-16 utilize a portion of the funds received for the Texas Public School
20-17 Retired Employees Group Insurance Program to offset some portion of
20-18 costs paid by the retiree for optional coverage if such utilization
20-19 does not reduce the period the program is projected to remain
20-20 financially solvent by more than one year in a biennium. Any
20-21 additional contributions for these optional plans shall be paid for
20-22 by the retiree, surviving spouse, or surviving dependent children.
20-23 (i) In contracting for any benefits under this article,
20-24 competitive bidding shall be required under rules adopted by the
20-25 trustee. [The rules must require that prospective bidders provide
20-26 information, for each area consisting of a county and all adjacent
20-27 counties, on the number and types of qualified providers willing to
20-28 participate in the coverage or plan for which the bid is made. The
20-29 rules may provide criteria to determine qualified providers. The
20-30 trustee shall consider the information before awarding a contract
20-31 but may not require a bidder to demonstrate a minimum standard of
20-32 provider participation.] The trustee is not required to select the
20-33 lowest bid but may consider also ability to service contracts, past
20-34 experiences, financial stability, and other relevant criteria. If
20-35 the trustee awards a contract to an entity whose bid deviates from
20-36 that advertised, the deviation shall be recorded and the reasons
20-37 for the deviation shall be fully justified in the minutes of the
20-38 next meeting of the trustee.
20-39 SECTION 5.07. Section 9, Article 3.50-4, Insurance Code, is
20-40 amended to read as follows:
20-41 Sec. 9. BENEFIT CERTIFICATES. At such times, or upon such
20-42 events, as designated by the trustee, each insurance carrier shall
20-43 issue to each retiree, [active employee,] surviving spouse, or
20-44 surviving dependent child insured under this article a certificate
20-45 of insurance that:
20-46 (1) states the benefits to which the person is
20-47 entitled;
20-48 (2) states to whom the benefits are payable;
20-49 (3) states to whom the claims must be submitted; and
20-50 (4) summarizes the provisions of the policy
20-51 principally affecting the person.
20-52 SECTION 5.08. Section 10(a), Article 3.50-4, Insurance Code,
20-53 is amended to read as follows:
20-54 (a) Not later than the 180th day after the end of each state
20-55 fiscal year, the trustee shall make a written report to the Texas
20-56 Department [State Board] of Insurance concerning the insurance
20-57 coverages provided and the benefits and services being received by
20-58 persons insured under this article.
20-59 SECTION 5.09. Section 12, Article 3.50-4, Insurance Code, is
20-60 amended to read as follows:
20-61 Sec. 12. DEATH CLAIMS: BENEFICIARIES. The amount of group
20-62 life insurance and group accidental death and dismemberment
20-63 insurance covering a retiree, [active employee,] surviving spouse,
20-64 dependent, or surviving dependent child at the date of death shall
20-65 be paid, on the establishment of a valid claim, only:
20-66 (1) to the beneficiary or beneficiaries designated by
20-67 the person in a signed and witnessed written document received
20-68 before death in the trustee's office; or
20-69 (2) if no beneficiary is properly designated or in
21-1 existence, to persons in accordance with the trustee's death
21-2 benefit provisions in Subsection (b), Section 824.103, Government
21-3 Code.
21-4 SECTION 5.10. Section 13, Article 3.50-4, Insurance Code, is
21-5 amended to read as follows:
21-6 Sec. 13. AUTOMATIC COVERAGE. A retiree [or active employee]
21-7 who applies during an enrollment period may not be denied any of
21-8 the group insurance basic coverage provided under this article
21-9 unless the person has been found under Section 18A of this article
21-10 to have defrauded or attempted to defraud the Texas Public School
21-11 Retired Employees Group Insurance Program.
21-12 SECTION 5.11. Section 15, Article 3.50-4, Insurance Code, is
21-13 amended to read as follows:
21-14 Sec. 15. RETIRED SCHOOL EMPLOYEES GROUP INSURANCE FUND.
21-15 (a) The retired school employees group insurance fund is created.
21-16 The comptroller is the custodian of the fund, and the trustee shall
21-17 administer the fund. All contributions from active employees,
21-18 retirees, and the state, contributions for optional coverages,
21-19 investment income, appropriations for implementation of this
21-20 program, and other money required or authorized to be paid into the
21-21 fund shall be paid into the fund. From the fund shall be paid,
21-22 without state fiscal year limitation, the appropriate premiums to
21-23 the carrier or carriers providing group coverage under the plan or
21-24 plans under this article, claims for benefits under the group
21-25 coverage, and the amounts expended by the trustee for
21-26 administration of the program. The appropriate portion of the
21-27 contributions to the fund to provide for incurred but unreported
21-28 claim reserves and contingency reserves, as determined by the
21-29 trustee, shall be retained in the fund.
21-30 (b) The trustee shall transfer the amounts deducted from
21-31 annuities for contributions into the fund.
21-32 (c) Expenses for the development and administration of the
21-33 program shall be spent as provided by a budget adopted by the
21-34 trustee.
21-35 (d) The trustee may invest and reinvest the money in the
21-36 fund as provided by Subchapter D, Chapter 825, Government Code, for
21-37 assets of the Teacher Retirement System of Texas.
21-38 SECTION 5.12. Section 18A, Article 3.50-4, Insurance Code,
21-39 is amended to read as follows:
21-40 Sec. 18A. EXPULSION FROM PROGRAM FOR FRAUD. (a) After
21-41 notice and hearing as provided by this section, the trustee may
21-42 expel from participation in the Texas Public School Retired
21-43 Employees Group Insurance Program any retiree, [active employee,]
21-44 surviving spouse, dependent, or surviving dependent child who
21-45 submits a fraudulent claim under, or has defrauded or attempted to
21-46 defraud, any health benefits plan offered under the program.
21-47 (b) On its motion or on the receipt of a complaint, the
21-48 trustee may call and hold a hearing to determine whether a person
21-49 has submitted a fraudulent claim under, or has defrauded or
21-50 attempted to defraud, any health benefits plan offered under the
21-51 Texas Public School Retired Employees Group Insurance Program.
21-52 (c) A proceeding under this section is a contested case
21-53 under Chapter 2001, Government Code [the Administrative Procedure
21-54 and Texas Register Act (Article 6252-13a, Vernon's Texas Civil
21-55 Statutes)].
21-56 (d) If the trustee, at the conclusion of the hearing, issues
21-57 a decision that finds that the accused submitted a fraudulent claim
21-58 or has defrauded or attempted to defraud any health benefits plan
21-59 offered under the Texas Public School Retired Employees Group
21-60 Insurance Program, the trustee shall expel the person from
21-61 participation in the program.
21-62 (e) The substantial evidence rule shall be used on any
21-63 appeal of a decision of the trustee under this section.
21-64 (f) A person expelled from the Texas Public School Retired
21-65 Employees Group Insurance Program may not be insured by any health
21-66 insurance plan offered by the program for a period, to be
21-67 determined by the trustee, of up to five years from the date the
21-68 expulsion takes effect.
21-69 SECTION 5.13. Section 18B(a), Article 3.50-4, Insurance
22-1 Code, is amended to read as follows:
22-2 (a) Section 825.507, Government Code, concerning the
22-3 confidentiality and disclosure of records, applies to [of
22-4 information in] records that are in the custody of the Teacher
22-5 Retirement System of Texas or[, applies to information in records
22-6 that are] in the custody of an administrator, carrier, agent,
22-7 attorney, consultant, or governmental body acting in cooperation
22-8 with or on behalf of the retirement system regarding retirees,
22-9 active employees, annuitants, or beneficiaries under the Texas
22-10 Public School Retired Employees Group Insurance Program.
22-11 SECTION 5.14. Sections 18C(c), (d), and (i), Article 3.50-4,
22-12 Insurance Code, are amended to read as follows:
22-13 (c) The trustee, the Texas public school retired employees
22-14 group insurance program, the retired school employees group
22-15 insurance fund, and the board of trustees, officers, advisory
22-16 committee members, and employees of the trustee are not liable for
22-17 damages arising from the acts or omissions of health care providers
22-18 who are participating health care providers in the coordinated care
22-19 network established by the trustee. Those health care providers
22-20 are independent contractors and are responsible for their own acts
22-21 and omissions.
22-22 (d) The trustee, the Texas public school retired employees
22-23 group insurance program, the retired school employees group
22-24 insurance fund, or a member of a credentialing committee, or the
22-25 board of trustees, officers, advisory committee members, or
22-26 employees of the trustee are not liable for damages arising from
22-27 any act, statement, determination, recommendation made, or act
22-28 reported, without malice, in the course of the evaluation of the
22-29 qualifications of health care providers or of the patient care
22-30 rendered by those providers.
22-31 (i) A credentialing committee, a person participating in a
22-32 credentialing review, a health care provider, the trustee, the
22-33 Texas public school retired employees group insurance program, or
22-34 the board of trustees, officers, advisory committee members, or
22-35 employees of the trustee that are named as defendants in any civil
22-36 action filed as a result of participation in the credentialing
22-37 process may use otherwise confidential information obtained for
22-38 legitimate internal business and professional purposes, including
22-39 use in their own defense. Use of information under this subsection
22-40 does not constitute a waiver of the confidential and privileged
22-41 nature of the information.
22-42 SECTION 5.15. Section 19, Article 3.50-4, Insurance Code, is
22-43 amended to read as follows:
22-44 Sec. 19. ASSISTANCE. In implementing and administering this
22-45 article, the Texas Department [State Board] of Insurance, as
22-46 requested by the trustee, shall assist the trustee in carrying out
22-47 this article.
22-48 SECTION 5.16. Section 22.004, Education Code, is amended to
22-49 read as follows:
22-50 Sec. 22.004. GROUP HEALTH BENEFITS FOR SCHOOL EMPLOYEES.
22-51 (a) Each district may participate in the group benefits program
22-52 established under Article 3.50-7, Insurance Code.
22-53 (b) A district that does not elect to participate in the
22-54 program described by Subsection (a) shall make available to its
22-55 employees group health coverage provided by a risk pool established
22-56 by one or more school districts under Chapter 172, Local Government
22-57 Code, or under a policy of insurance or group contract issued by an
22-58 insurer, a company subject to Chapter 20, Insurance Code, or a
22-59 health maintenance organization under the Texas Health Maintenance
22-60 Organization Act (Chapter 20A, Vernon's Texas Insurance Code). The
22-61 coverage must meet the substantive coverage requirements of Article
22-62 3.51-6, Insurance Code, and any other law applicable to group
22-63 health insurance policies or contracts issued in this state. The
22-64 coverage must include major medical treatment but may exclude
22-65 experimental procedures. In this subsection, "major medical
22-66 treatment" means a medical, surgical, or diagnostic procedure for
22-67 illness or injury. The coverage may include managed care or
22-68 preventive care and must be comparable to the basic health coverage
22-69 provided under the Texas Employees Uniform Group Insurance Benefits
23-1 Act (Article 3.50-2, Vernon's Texas Insurance Code). The board of
23-2 trustees of the Teacher Retirement System of Texas shall adopt
23-3 rules to determine whether a school district's group health
23-4 coverage is comparable to the basic health coverage specified by
23-5 this subsection. The rules must provide for consideration of the
23-6 following factors concerning the district's coverage in determining
23-7 whether the district's coverage is comparable to the basic health
23-8 coverage specified by this subsection:
23-9 (1) the deductible amount for service provided inside
23-10 and outside of the network;
23-11 (2) the coinsurance percentages for service provided
23-12 inside and outside of the network;
23-13 (3) the maximum amount of coinsurance payments a
23-14 covered person is required to pay;
23-15 (4) the amount of the copayment for an office visit;
23-16 (5) the schedule of benefits and the scope of
23-17 coverage;
23-18 (6) the lifetime maximum benefit amount; and
23-19 (7) verification that the coverage is issued by a
23-20 provider licensed to do business in this state by the Texas
23-21 Department of Insurance or is provided by a risk pool authorized
23-22 under Chapter 172, Local Government Code, or that a district is
23-23 capable of covering the assumed liabilities in the case of coverage
23-24 provided through district self-insurance.
23-25 (c) [(b)] The cost of the coverage provided under the
23-26 program described by Subsection (a) shall be paid by the state, the
23-27 district, and the employees in the manner provided by Article
23-28 3.50-7, Insurance Code. The cost of coverage provided under a plan
23-29 adopted under Subsection (b) shall [may] be shared by the employees
23-30 and the district without contribution by the state.
23-31 (d) [(c)] Each district shall report the district's
23-32 compliance with this section [subsection] to the executive director
23-33 of the Teacher Retirement System of Texas not later than March 1 of
23-34 each even-numbered year in the manner required by the board of
23-35 trustees of the Teacher Retirement System of Texas. For a district
23-36 that does not elect to participate in the program described by
23-37 Subsection (a), the [The] report must be based on the district
23-38 group health coverage plan in effect during the current plan year
23-39 and must include:
23-40 (1) appropriate documentation of:
23-41 (A) the district's contract for group health
23-42 coverage with a provider licensed to do business in this state by
23-43 the Texas Department of Insurance or a risk pool authorized under
23-44 Chapter 172, Local Government Code; or
23-45 (B) a resolution of the board of trustees of the
23-46 district authorizing a self-insurance plan for district employees
23-47 and of the district's review of district ability to cover the
23-48 liability assumed;
23-49 (2) the schedule of benefits;
23-50 (3) the premium rate sheet, including the amount paid
23-51 by the district and employee;
23-52 (4) the number of employees covered by the [each]
23-53 health coverage plan offered by the district; and
23-54 (5) any other information considered appropriate by
23-55 the executive director of the Teacher Retirement System of Texas.
23-56 (e) [(d)] Based on the criteria prescribed by Subsection (b)
23-57 [(a)], the executive director of the Teacher Retirement System of
23-58 Texas shall, for each district that does not elect to participate
23-59 in the program described by Subsection (a), certify whether a
23-60 district's coverage is comparable to the basic health coverage
23-61 provided under the Texas Employees Uniform Group Insurance Benefits
23-62 Act (Article 3.50-2, Vernon's Texas Insurance Code). If the
23-63 executive director of the Teacher Retirement System of Texas
23-64 determines that the group health coverage offered by a district is
23-65 not comparable, the executive director shall report that
23-66 information to the district and to the Legislative Budget Board.
23-67 The executive director shall submit a report to the legislature not
23-68 later than September 1 of each even-numbered year describing the
23-69 status of each district's group health coverage program based on
24-1 the information contained in the report required by Subsection (d)
24-2 [(c)] and the certification required by this subsection.
24-3 (f) [(e)] A school district that does not elect to
24-4 participate in the program described by Subsection (a) may not
24-5 contract with an insurer, a company subject to Chapter 20,
24-6 Insurance Code, or a health maintenance organization to issue a
24-7 policy or contract under this section, or with any person to assist
24-8 the school district in obtaining or managing the policy or contract
24-9 unless, before the contract is entered into, the insurer, company,
24-10 organization, or person provides the district with an audited
24-11 financial statement showing the financial condition of the insurer,
24-12 company, organization, or person.
24-13 (g) [(f)] An insurer, a company subject to Chapter 20,
24-14 Insurance Code, or a health maintenance organization that issues a
24-15 policy or contract under this section and any person that assists
24-16 the school district in obtaining or managing the policy or contract
24-17 for compensation shall provide an annual audited financial
24-18 statement to the school district showing the financial condition of
24-19 the insurer, company, organization, or person.
24-20 (h) [(g)] An audited financial statement provided under this
24-21 section must be made in accordance with rules adopted by the
24-22 commissioner of insurance or state auditor, as applicable.
24-23 SECTION 5.17. Sections 7A and 20, Article 3.50-4, Insurance
24-24 Code, are repealed.
24-25 SECTION 5.18. Except as provided by Section 7.01 of this
24-26 Act, this article takes effect September 1, 2002.
24-27 ARTICLE 6. TRANSITION
24-28 SECTION 6.01. (a) During the 2001-2002 school year, the
24-29 Teacher Retirement System of Texas shall develop the plan or plans
24-30 to be implemented and administered under Article 3.50-7, Insurance
24-31 Code, as added by this Act.
24-32 (b) Coverage under the plan or plans authorized under
24-33 Article 3.50-7, Insurance Code, as added by this Act, shall begin
24-34 with the 2002-2003 school year, but not later than September 1,
24-35 2002.
24-36 (c) Coverage provided to a retiree under the plan or plans
24-37 authorized under Article 3.50-4, Insurance Code, as amended by this
24-38 Act, must be at least equal to the coverage provided to the retiree
24-39 under that article as that article existed on August 31, 2002.
24-40 SECTION 6.02. The Teacher Retirement System of Texas shall
24-41 adopt rules as necessary to implement Section 4.02 of this Act not
24-42 later than March 1, 2002.
24-43 SECTION 6.03. Except as provided by Section 7.01 of this
24-44 Act, this article takes effect September 1, 2001.
24-45 ARTICLE 7. CONTINGENT EFFECT
24-46 SECTION 7.01. (a) Except as provided by this section, this
24-47 Act takes effect only if the constitutional amendment proposed by
24-48 the 77th Legislature, Regular Session, 2001, relating to the use of
24-49 contributions to the pension fund of the Teacher Retirement System
24-50 of Texas to finance health care benefits for retirees of the system
24-51 is approved by the voters.
24-52 (b) Except as provided by this section, if the proposed
24-53 constitutional amendment described by Subsection (a) of this
24-54 section is not approved by the voters, this Act has no effect.
24-55 (c) Subsections (a) and (b) of this section do not apply to
24-56 Sections 2.02, 2.05, 2.09, 2.11, 4.02, and 4.11 of this Act.
24-57 * * * * *