By Bivins S.B. No. 10
77R13396 PB/ESH/GJH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to benefits, including group benefits coverage, for
1-3 certain participants of the Teacher Retirement System of Texas and
1-4 employees of certain charter schools.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 ARTICLE 1. OPTIONAL COVERAGE PLAN FOR ACTIVE EMPLOYEES
1-7 SECTION 1.01. Subchapter E, Chapter 3, Insurance Code, is
1-8 amended by adding Article 3.50-7 to read as follows:
1-9 Art. 3.50-7. TEXAS ACTIVE SCHOOL EMPLOYEES UNIFORM GROUP
1-10 BENEFITS ACT
1-11 Sec. 1. SHORT TITLE. This article may be cited as the Texas
1-12 Active School Employees Uniform Group Benefits Act.
1-13 Sec. 2. DEFINITIONS. In this article:
1-14 (1) "Administering firm" means any firm designated by
1-15 the trustee to administer any coverages, services, benefits, or
1-16 requirements under this article and the trustee's rules adopted
1-17 under this article.
1-18 (2) "Charter school" means an open-enrollment charter
1-19 school established under Subchapter D, Chapter 12, Education Code.
1-20 (3) "Employee" means a participating member of the
1-21 Teacher Retirement System of Texas who is employed by a school
1-22 district or a regional education service center and who is not
1-23 covered by a group insurance program under the Texas Employees
1-24 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
2-1 Texas Insurance Code) or the Texas State College and University
2-2 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
2-3 Texas Insurance Code). The term does not include a person
2-4 performing personal services for a participating entity as an
2-5 independent contractor.
2-6 (4) "Health benefits plan" means any group policy or
2-7 contract, medical, dental, or hospital service agreement,
2-8 membership or subscription contract, salary continuation plan,
2-9 health maintenance organization agreement, preferred provider
2-10 arrangement, or any similar group arrangement or any combination of
2-11 those policies, plans, contracts, agreements, or arrangements
2-12 provided for the purpose of providing, paying for, or reimbursing
2-13 expenses for health care services.
2-14 (5) "Participating employee" means an employee who is
2-15 participating in the program.
2-16 (6) "Participating entity" means an entity
2-17 participating in the group benefits program established under this
2-18 article. The term includes:
2-19 (A) a school district;
2-20 (B) a regional education service center; and
2-21 (C) a charter school.
2-22 (7) "Program" means the group benefits program
2-23 established under this article.
2-24 (8) "Regional education service center" means a
2-25 regional education service center established under Chapter 8,
2-26 Education Code.
2-27 (9) "Trustee" means the Teacher Retirement System of
3-1 Texas.
3-2 (10) "School district" means a public school district
3-3 of this state.
3-4 Sec. 3. ADMINISTRATION BY TRUSTEE. The Teacher Retirement
3-5 System of Texas, as trustee, shall implement and administer the
3-6 program.
3-7 Sec. 4. POWERS AND DUTIES OF TRUSTEE. (a) The trustee may
3-8 take the actions it considers necessary to devise, administer, and
3-9 implement the program.
3-10 (b) The trustee may hire and compensate employees as
3-11 necessary to implement the program. The trustee may contract with
3-12 an independent and experienced group insurance consultant or
3-13 actuary for advice and counsel in implementing and administering
3-14 the program.
3-15 (c) The trustee may adopt rules relating to the program as
3-16 considered necessary by the trustee.
3-17 (d) In contracting for any benefits under this article,
3-18 competitive bidding shall be required under rules adopted by the
3-19 trustee. The trustee is not required to select the lowest bid but
3-20 may consider also ability to service contracts, past experiences,
3-21 financial stability, and other relevant criteria. If the trustee
3-22 awards a contract to an entity whose bid deviates from that
3-23 advertised, the deviation shall be recorded and the reasons for the
3-24 deviation shall be fully justified in the minutes of the next
3-25 meeting of the trustee.
3-26 (e) The trustee may enter into interagency contracts with
3-27 any agency of the state, including the Employees Retirement System
4-1 of Texas and the Texas Department of Insurance, for the purpose of
4-2 assistance in implementing the program.
4-3 (f) The trustee has the same powers with regard to the
4-4 program that the Employees Retirement System of Texas has in
4-5 administering the Texas Employees Uniform Group Insurance Benefits
4-6 Act (Article 3.50-2, Vernon's Texas Insurance Code), including the
4-7 power to adjudicate claims and to expel participants from the
4-8 program for cause.
4-9 Sec. 5. GROUP COVERAGE PLANS. (a) The trustee shall
4-10 establish plans of group coverages for employees of participating
4-11 entities and their dependents. The plans of group benefits must
4-12 include at least five tiers of group coverage, with benefits at
4-13 different levels in each tier, ranging from the first tier basic
4-14 coverage plan to the standard plan. Each tier must contain a
4-15 health benefits plan. The standard plan of group benefits shall be
4-16 comparable in scope and, to the greatest extent possible, in cost
4-17 to the health benefit plan coverages provided under the Texas
4-18 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
4-19 Vernon's Texas Insurance Code).
4-20 (b) In addition to health benefit plans, the coverages may
4-21 include accidental death and dismemberment coverages, coverages
4-22 against short-term or long-term loss of salary, and other coverages
4-23 considered advisable by the trustee.
4-24 Sec. 6. PARTICIPATION IN PROGRAM BY ENTITY. (a) Beginning
4-25 September 1, 2002, a school district, regional education service
4-26 center, or charter school may elect to participate in the program
4-27 provided by this article.
5-1 (b) A school district, regional education service center, or
5-2 charter school that elects to participate in the program is
5-3 required to participate for a minimum of three years. The beginning
5-4 of the entity's participation in the program must coincide with the
5-5 beginning of a school year in an odd-numbered year.
5-6 (c) The trustee by rule shall establish a biennial deadline
5-7 for notification of the trustee of an election to begin
5-8 participation. The rule must require notification by the school
5-9 district, regional education service center, or charter school to
5-10 the trustee at least three months before the entity begins
5-11 participation.
5-12 (d) A participating entity may elect to discontinue
5-13 participation by notifying the trustee in the manner prescribed by
5-14 the trustee at least three months before the entity discontinues
5-15 participation.
5-16 (e) Only a participating entity is eligible to receive the
5-17 state contribution described under Section 9 of this article.
5-18 Sec. 7. PARTICIPATION IN PROGRAM BY EMPLOYEE. (a) In this
5-19 section, "full-time employee" and "part-time employee" have the
5-20 meanings defined by trustee rules.
5-21 (b) Each full-time employee of a participating entity is
5-22 automatically covered by the first tier basic coverage plan unless
5-23 the employee:
5-24 (1) specifically waives coverage under this article in
5-25 the manner prescribed by trustee rule;
5-26 (2) selects a higher tier coverage plan; or
5-27 (3) is expelled from the program.
6-1 (c) Each part-time employee of a participating entity is
6-2 eligible to participate in the program on application in the manner
6-3 provided by the trustee, unless the employee has been expelled from
6-4 the program. A participating entity shall notify each of its
6-5 part-time employees of the employee's eligibility to participate in
6-6 the program.
6-7 (d) A participating employee may select coverage in any
6-8 coverage plan offered by the trustee under this article. The
6-9 employee is required to participate in the selected coverage plan
6-10 for one year. An employee who selects coverage in a coverage plan
6-11 other than the first tier basic coverage plan is not required to
6-12 maintain participation in that coverage plan and, after the
6-13 expiration of the one-year term, may waive coverage or select
6-14 coverage in a lower tier coverage plan.
6-15 (e) A participating entity is not entitled to a state
6-16 contribution under Section 9 of this article as to an employee who
6-17 waives coverage under Subsection (b)(1) of this section. After a
6-18 waiver of coverage, an employee may elect to participate in the
6-19 coverage based only on a change in status or another reason
6-20 approved by the trustee.
6-21 Sec. 8. FUND. (a) The Texas school employees uniform group
6-22 benefits trust fund is created as a trust fund with the comptroller
6-23 and shall be administered by the trustee on behalf of the
6-24 participants in the program.
6-25 (b) All contributions from employees, amounts paid by
6-26 participating entities, contributions for optional coverages,
6-27 investment income, appropriations for implementation of the
7-1 program, and other money required or authorized to be paid into the
7-2 fund shall be paid into the fund.
7-3 (c) Except as provided by Subsection (e) of this section,
7-4 the trustee may use amounts in the fund only to provide group
7-5 coverages under this article and to pay the expenses of
7-6 administering the program.
7-7 (d) The trustee may invest assets of the fund in the manner
7-8 provided by Section 67(a)(3), Article XVI, Texas Constitution.
7-9 (e) Notwithstanding any other provision of this article, the
7-10 trustee may use amounts in the fund to perform the comparability
7-11 study required under Section 22.004(e), Education Code.
7-12 Sec. 9. STATE CONTRIBUTION. (a) The state shall assist
7-13 employees of participating school districts in the purchase of
7-14 health benefits plan coverages under this article by providing the
7-15 amount specified for a covered employee in the General
7-16 Appropriations Act. The state contribution shall be distributed
7-17 through the school finance formulas under Chapters 41 and 42,
7-18 Education Code, and used by school districts as provided by
7-19 Sections 42.2513 and 42.260, Education Code.
7-20 (b) The state shall assist employees of participating
7-21 regional education service centers and charter schools in the
7-22 purchase of health benefits plan coverages under this article by
7-23 providing to the employing service center or charter school the
7-24 amount specified for a covered employee in the General
7-25 Appropriations Act.
7-26 Sec. 10. PARTICIPATING ENTITY CONTRIBUTION. (a) Except as
7-27 otherwise provided by this section, effective September 1, 2002, a
8-1 participating entity shall contribute to the fund a sum certain
8-2 multiplied by the number of persons employed by the entity. The
8-3 sum certain must be set at a level that, in combination with the
8-4 amount the participating entity receives from the state as provided
8-5 by Section 9 of this article, is adequate to provide, at a minimum,
8-6 100 percent of the cost of employee-only coverage under the first
8-7 tier basic coverage plan.
8-8 (b) Effective September 1, 2002, a participating entity
8-9 that, for the 2000-2001 school year, paid amounts to share with
8-10 employees the cost of coverage under a group health benefits plan
8-11 shall contribute, for each fiscal year, an amount computed as
8-12 provided by this subsection. The participating entity shall divide
8-13 the amount that the entity paid during the 2000-2001 school year
8-14 for the prior group health benefits plan by the total number of
8-15 employees of the participating entity during the 2000-2001 school
8-16 year and multiply the result by the number of participating
8-17 employees employed by the entity in the fiscal year for which the
8-18 computation is made. The required contribution is 80 percent of
8-19 the resulting amount.
8-20 (c) If the amount contributed by a participating entity
8-21 subject to Subsection (b) of this section, when combined with the
8-22 state contribution described by Section 9 of this article, exceeds
8-23 the amount necessary to provide 100 percent of the cost of
8-24 employee-only coverage under the standard plan, the entity may use
8-25 the excess amount only to provide employee benefits, which may
8-26 include contributions to cover the cost of dependent and optional
8-27 coverages and increased employee compensation.
9-1 Sec. 11. EMPLOYEE CONTRIBUTION. Each participating employee
9-2 shall pay 100 percent of the cost of optional coverage or dependent
9-3 coverage selected by the employee unless the participating entity
9-4 employing the employee:
9-5 (1) pays all or part of the cost of that coverage
9-6 under Section 10 of this article; or
9-7 (2) elects to pay all or part of the cost of that
9-8 coverage under Section 22.004, Education Code.
9-9 SECTION 1.02. Article 3.50-4, Insurance Code, is amended by
9-10 adding Section 5A to read as follows:
9-11 Sec. 5A. TIERS OF COVERAGE. The trustee shall offer to each
9-12 retiree participating in the program at least five tiers of group
9-13 coverage. The coverage plans offered under this section must be
9-14 comparable to the coverage plans offered by the trustee to active
9-15 employees under Section 5, Article 3.50-7, of this code.
9-16 SECTION 1.03. (a) The Teacher Retirement System of Texas
9-17 shall begin enrollment in the program provided under Article
9-18 3.50-7, Insurance Code, as added by this Act, to begin with the
9-19 2002-2003 school year.
9-20 (b) A school district, regional education service center, or
9-21 charter school that elects to participate in the program provided
9-22 under Article 3.50-7, Insurance Code, as added by this Act,
9-23 beginning with the 2002-2003 school year, shall notify the Teacher
9-24 Retirement System of Texas of the election not later than March 1,
9-25 2002. An employee of a participating school district, regional
9-26 education service center, or charter school who waives coverage
9-27 under the program shall give notice of the waiver in the manner
10-1 prescribed by Article 3.50-7, Insurance Code, as added by this Act,
10-2 or rules adopted under that article not later than September 1,
10-3 2002.
10-4 (c) The Teacher Retirement System of Texas shall adopt rules
10-5 establishing coverage plans under Article 3.50-7, Insurance Code,
10-6 as added by this Act, not later than June 1, 2002.
10-7 SECTION 1.04. The Teacher Retirement System of Texas shall
10-8 transfer to the fund established under Section 8, Article 3.50-7,
10-9 Insurance Code, as added by this Act, any outstanding balance held
10-10 by the Teacher Retirement System of Texas as of December 31, 2001,
10-11 in the school employees group insurance fund established under
10-12 Section 15, Article 3.50-4, Insurance Code, that was designated for
10-13 use in programs relating to active school district employees.
10-14 SECTION 1.05. Except as provided by Section 7.01 of this
10-15 Act, this article takes effect January 1, 2002.
10-16 ARTICLE 2. SCHOOL FINANCE
10-17 SECTION 2.01. Effective September 1, 2001, Section
10-18 21.402(a), Education Code, is amended to read as follows:
10-19 (a) Except as provided by Subsection (d), (e), or (f), a
10-20 school district must pay each classroom teacher, full-time
10-21 librarian, full-time counselor certified under Subchapter B, or
10-22 full-time school nurse not less than the minimum monthly salary,
10-23 based on the employee's level of experience, determined by the
10-24 following formula:
10-25 MS = SF X FS
10-26 where:
10-27 "MS" is the minimum monthly salary;
11-1 "SF" is the applicable salary factor specified by Subsection
11-2 (c); and
11-3 "FS" is:
11-4 (1) for a school district that participates in the
11-5 group benefits program established under Article 3.50-7, Insurance
11-6 Code, the amount, as determined by the commissioner under
11-7 Subsection (b), of state and local funds per weighted student
11-8 available to a district eligible to receive state assistance under
11-9 Section 42.302 with an enrichment tax rate, as defined by Section
11-10 42.302, equal to the maximum rate authorized under Section 42.303,
11-11 using a guaranteed level of state and local funds per weighted
11-12 student per cent of tax effort that is equal to the sum of:
11-13 (A) the guaranteed level in effect for the
11-14 2000-2001 school year, or a greater amount provided by
11-15 appropriation; and
11-16 (B) 20 percent of the increase in the guaranteed
11-17 level made by ____.B. No. ____, Acts of the 77th Legislature,
11-18 Regular Session, 2001; and
11-19 (2) for a school district that does not participate in
11-20 the group benefits program established under Article 3.50-7,
11-21 Insurance Code, the amount, as determined by the commissioner under
11-22 Subsection (b), of state and local funds per weighted student
11-23 available to a district eligible to receive state assistance under
11-24 Section 42.302 with an enrichment tax rate, as defined by Section
11-25 42.302, equal to the maximum rate authorized under Section 42.303,
11-26 using the guaranteed level of state and local funds per weighted
11-27 student per cent of tax effort in effect for the 2000-2001 school
12-1 year, or a greater amount provided by appropriation.
12-2 SECTION 2.02. Effective September 1, 2001, Section
12-3 41.002(a), Education Code, is amended to read as follows:
12-4 (a) A school district may not have a wealth per student that
12-5 exceeds ________ or a greater amount for any year provided by
12-6 appropriation [$295,000].
12-7 SECTION 2.03. Effective September 1, 2002, Section 41.002(a),
12-8 Education Code, is amended to read as follows:
12-9 (a) Subject to Section 41.0021, a [A] school district may
12-10 not have a wealth per student that exceeds ________ or a greater
12-11 amount for any year provided by appropriation [$295,000].
12-12 SECTION 2.04. Subchapter A, Chapter 41, Education Code, is
12-13 amended by adding Section 41.0021 to read as follows:
12-14 Sec. 41.0021. EQUALIZED WEALTH LEVEL FOR SCHOOL DISTRICTS
12-15 NOT PARTICIPATING IN GROUP BENEFITS PROGRAM. Notwithstanding
12-16 Section 41.002, for a school district that does not participate in
12-17 the group benefits program established under Article 3.50-7,
12-18 Insurance Code, the wealth per student to which the district is
12-19 entitled is the wealth per student to which the district was
12-20 entitled for the 2000-2001 school year or a greater amount for any
12-21 year provided by appropriation.
12-22 SECTION 2.05. Subchapter E, Chapter 42, Education Code, is
12-23 amended by adding Section 42.2513 to read as follows:
12-24 Sec. 42.2513. ADDITIONAL STATE AID FOR SCHOOL EMPLOYEE
12-25 BENEFITS. (a) For each school year, a school district, including a
12-26 school district that is otherwise ineligible for state aid under
12-27 this chapter, that participates in the group benefits program
13-1 established under Article 3.50-7, Insurance Code, is entitled to
13-2 state aid in an amount, as determined by the commissioner, equal to
13-3 the difference, if any, between:
13-4 (1) the amount determined by multiplying the amount
13-5 specified in the General Appropriations Act for that year for
13-6 purposes of the state contribution under Section 9, Article 3.50-7,
13-7 Insurance Code, by the number of district employees participating
13-8 in the group benefits program under that article; and
13-9 (2) an amount equal to 80 percent of the amount of
13-10 additional funds to which the district is entitled due to the
13-11 increase made by .B. No. , Acts of the 77th Legislature,
13-12 Regular Session, 2001, to:
13-13 (A) the equalized wealth level under Section
13-14 41.002; and
13-15 (B) the guaranteed level of state and local
13-16 funds per weighted student per cent of tax effort under Section
13-17 42.302.
13-18 (b) A school district may use state aid received under this
13-19 section only to pay contributions as required by Article 3.50-7,
13-20 Insurance Code.
13-21 (c) A determination by the commissioner under this section
13-22 is final and may not be appealed.
13-23 (d) The commissioner may adopt rules to implement this
13-24 section.
13-25 SECTION 2.06. Section 42.253(a), Education Code, is amended
13-26 to read as follows:
13-27 (a) Subject to Section 42.2531, for [For] each school year
14-1 the commissioner shall determine:
14-2 (1) the amount of money to which a school district is
14-3 entitled under Subchapters B and C;
14-4 (2) the amount of money to which a school district is
14-5 entitled under Subchapter F;
14-6 (3) the amount of money allocated to the district from
14-7 the available school fund;
14-8 (4) the amount of each district's tier one local share
14-9 under Section 42.252; and
14-10 (5) the amount of each district's tier two local share
14-11 under Section 42.302.
14-12 SECTION 2.07. Subchapter E, Chapter 42, Education Code, is
14-13 amended by adding Section 42.2531 to read as follows:
14-14 Sec. 42.2531. FUNDING FOR SCHOOL DISTRICTS NOT PARTICIPATING
14-15 IN GROUP BENEFITS PROGRAM. Notwithstanding Section 42.253, for a
14-16 school district that does not participate in the group benefits
14-17 program established under Article 3.50-7, Insurance Code, the
14-18 amount of money to which the district is entitled under Subchapter
14-19 F is computed using the guaranteed level of state and local funds
14-20 per weighted student per cent of tax effort under Section 42.302
14-21 for the 2000-2001 school year or a greater amount for any year
14-22 provided by appropriation.
14-23 SECTION 2.08. Effective September 1, 2001, Subchapter E,
14-24 Chapter 42, Education Code, is amended by adding Section 42.2591 to
14-25 read as follows:
14-26 Sec. 42.2591. USE OF CERTAIN FUNDS. (a) For the 2001-2002
14-27 school year, the commissioner shall certify to each school district
15-1 the amount of additional funds to which the district is entitled
15-2 due to the increase made by __.B. No. _____, Acts of the 77th
15-3 Legislature, Regular Session, 2001, to:
15-4 (1) the equalized wealth level under Section 41.002;
15-5 or
15-6 (2) the guaranteed level of state and local funds per
15-7 weighted student per cent of tax effort under Section 42.302.
15-8 (b) Notwithstanding any other provision of this code, a
15-9 school district may use an amount of funds equal to 80 percent of
15-10 the amount certified for the district under Subsection (a) only to
15-11 pay:
15-12 (1) a nonrecurring expense, including a capital
15-13 outlay; or
15-14 (2) debt service.
15-15 (c) A determination by the commissioner under this section
15-16 is final and may not be appealed.
15-17 (d) The commissioner may adopt rules to implement this
15-18 section.
15-19 (e) This section expires September 1, 2002.
15-20 SECTION 2.09. Subchapter E, Chapter 42, Education Code, is
15-21 amended by adding Section 42.260 to read as follows:
15-22 Sec. 42.260. USE OF CERTAIN FUNDS. (a) For each year, the
15-23 commissioner shall certify to each school district that
15-24 participates in the group benefits program established under
15-25 Article 3.50-7, Insurance Code, the amount of additional funds to
15-26 which the district is entitled due to the increase made by ___.B.
15-27 No. ___, Acts of the 77th Legislature, Regular Session, 2001, to:
16-1 (1) the equalized wealth level under Section 41.002;
16-2 or
16-3 (2) the guaranteed level of state and local funds per
16-4 weighted student per cent of tax effort under Section 42.302.
16-5 (b) Notwithstanding any other provision of this code, a
16-6 school district may use an amount of funds equal to 80 percent of
16-7 the amount certified for the district under Subsection (a) only to
16-8 provide coverages authorized under Article 3.50-7, Insurance Code.
16-9 (c) A determination by the commissioner under this section
16-10 is final and may not be appealed.
16-11 (d) The commissioner may adopt rules to implement this
16-12 section.
16-13 SECTION 2.10. Effective September 1, 2001, Section 42.302(a),
16-14 Education Code, is amended to read as follows:
16-15 (a) Each school district is guaranteed a specified amount
16-16 per weighted student in state and local funds for each cent of tax
16-17 effort over that required for the district's local fund assignment
16-18 up to the maximum level specified in this subchapter. The amount
16-19 of state support, subject only to the maximum amount under Section
16-20 42.303, is determined by the formula:
16-21 GYA = (GL X WADA X DTR X 100) - LR
16-22 where:
16-23 "GYA" is the guaranteed yield amount of state funds to be
16-24 allocated to the district;
16-25 "GL" is the dollar amount guaranteed level of state and local
16-26 funds per weighted student per cent of tax effort, which is
16-27 [$24.99] or a greater amount for any year provided by
17-1 appropriation;
17-2 "WADA" is the number of students in weighted average daily
17-3 attendance, which is calculated by dividing the sum of the school
17-4 district's allotments under Subchapters B and C, less any allotment
17-5 to the district for transportation, any allotment under Section
17-6 42.158, and 50 percent of the adjustment under Section 42.102, by
17-7 the basic allotment for the applicable year;
17-8 "DTR" is the district enrichment tax rate of the school
17-9 district, which is determined by subtracting the amounts specified
17-10 by Subsection (b) from the total amount of maintenance and
17-11 operations taxes collected by the school district for the
17-12 applicable school year and dividing the difference by the quotient
17-13 of the district's taxable value of property as determined under
17-14 Subchapter M, Chapter 403, Government Code, or, if applicable,
17-15 under Section 42.2521, divided by 100; and
17-16 "LR" is the local revenue, which is determined by multiplying
17-17 "DTR" by the quotient of the district's taxable value of property
17-18 as determined under Subchapter M, Chapter 403, Government Code, or,
17-19 if applicable, under Section 42.2521, divided by 100.
17-20 SECTION 2.11. Effective September 1, 2002, Section 42.302(a),
17-21 Education Code, is amended to read as follows:
17-22 (a) Each school district is guaranteed a specified amount
17-23 per weighted student in state and local funds for each cent of tax
17-24 effort over that required for the district's local fund assignment
17-25 up to the maximum level specified in this subchapter. The amount
17-26 of state support, subject only to the maximum amount under Section
17-27 42.303, is determined by the formula:
18-1 GYA = (GL X WADA X DTR X 100) - LR
18-2 where:
18-3 "GYA" is the guaranteed yield amount of state funds to be
18-4 allocated to the district;
18-5 "GL" is the dollar amount guaranteed level of state and local
18-6 funds per weighted student per cent of tax effort, which is
18-7 [$24.99] or a greater amount for any year provided by
18-8 appropriation;
18-9 "WADA" is the number of students in weighted average daily
18-10 attendance, which is calculated by dividing the sum of the school
18-11 district's allotments under Subchapters B and C, less any allotment
18-12 to the district for transportation, any allotment under Section
18-13 42.158, and 50 percent of the adjustment under Section 42.102, by
18-14 the basic allotment for the applicable year;
18-15 "DTR" is the district enrichment tax rate of the school
18-16 district, which is determined by subtracting the amounts specified
18-17 by Subsection (b) from the total amount of maintenance and
18-18 operations taxes collected by the school district for the
18-19 applicable school year and dividing the difference by the quotient
18-20 of the district's taxable value of property as determined under
18-21 Subchapter M, Chapter 403, Government Code, or, if applicable,
18-22 under Section 42.2521, divided by 100; and
18-23 "LR" is the local revenue, which is determined by multiplying
18-24 "DTR" by the quotient of the district's taxable value of property
18-25 as determined under Subchapter M, Chapter 403, Government Code, or,
18-26 if applicable, under Section 42.2521, divided by 100.
18-27 SECTION 2.12. Except as otherwise provided by this article
19-1 or as provided by Section 7.01 of this Act, this article takes
19-2 effect September 1, 2002.
19-3 ARTICLE 3. COVERAGE FOR DEPENDENT CHILDREN
19-4 OF CERTAIN SCHOOL DISTRICT EMPLOYEES
19-5 SECTION 3.01. Subchapter E, Chapter 3, Insurance Code, is
19-6 amended by adding Article 3.50-8 to read as follows:
19-7 Art. 3.50-8. HEALTH BENEFIT PLAN COVERAGE FOR DEPENDENT
19-8 CHILDREN OF CERTAIN SCHOOL DISTRICT EMPLOYEES
19-9 Sec. 1. DEFINITIONS. In this article:
19-10 (1) "Charter school" means an open-enrollment charter
19-11 school established under Subchapter D, Chapter 12, Education Code.
19-12 (2) "Employee" means a participating member of the
19-13 Teacher Retirement System of Texas who is employed by a school
19-14 district or a regional education service center, or a person
19-15 employed by a charter school. The term does not include an
19-16 individual performing personal services for a school district,
19-17 regional education service center, or charter school as an
19-18 independent contractor.
19-19 (3) "Health coverage plan" means any group policy or
19-20 contract, medical, dental, or hospital service agreement,
19-21 membership or subscription contract, salary continuation plan,
19-22 health maintenance organization agreement, preferred provider
19-23 arrangement, or any similar group arrangement or any combination of
19-24 those policies, plans, contracts, agreements, or arrangements that
19-25 provides for, pays for, or reimburses expenses for health care
19-26 services.
19-27 (4) "Regional education service center" means a
20-1 regional education service center established under Chapter 8,
20-2 Education Code.
20-3 (5) "Trustee" means the Teacher Retirement System of
20-4 Texas.
20-5 Sec. 2. CONTRIBUTIONS FOR COVERAGE. (a) Subject to any
20-6 applicable limit in the General Appropriations Act, the trustee
20-7 shall use money appropriated for employer contributions to fund 80
20-8 percent of the cost of health coverage under this article for a
20-9 child who:
20-10 (1) is a dependent of an employee;
20-11 (2) would be eligible, if the child were not the
20-12 dependent of the employee, for benefits under the program
20-13 established by this state to implement Title XXI of the Social
20-14 Security Act (42 U.S.C. Section 1397aa et seq.), as amended; and
20-15 (3) is not eligible for the state Medicaid program.
20-16 (b) The coverage provided under this article must provide
20-17 benefits equivalent to the benefits provided under the state child
20-18 health plan operated under Chapter 62, Health and Safety Code.
20-19 (c) Notwithstanding Subsection (a) of this section, the
20-20 trustee may pay a higher percentage of the cost of coverage for a
20-21 child described by Subsection (a) of this section if money becomes
20-22 available for that purpose.
20-23 Sec. 3. NOTIFICATION TO EMPLOYEES. The trustee shall
20-24 notify employees that:
20-25 (1) the employee may be eligible for dependent child
20-26 coverage under Section 2 of this article; and
20-27 (2) the employee may apply for the coverage as
21-1 provided by Section 4 of this article.
21-2 Sec. 4. APPLICATION FOR COVERAGE. (a) An employee who
21-3 desires dependent child coverage under this article shall apply to
21-4 the Texas Department of Human Services or other agency designated
21-5 by the Health and Human Services Commission to perform eligibility
21-6 screening under this article.
21-7 (b) The eligibility screening shall be coordinated with
21-8 eligibility screening for the state Medicaid program. The agency
21-9 that performs the eligibility screening shall certify to the
21-10 trustee in writing whether a child is eligible for dependent child
21-11 coverage under Section 2 of this article.
21-12 (c) If an employee does not obtain dependent child coverage
21-13 under this article at the time the employee is initially employed,
21-14 the employee may apply for the coverage during any open enrollment
21-15 period applicable to the employee's coverage under Article 3.50-4
21-16 or 3.50-7 of this code or any other applicable state law. The
21-17 trustee may:
21-18 (1) continue the coverage until the next open
21-19 enrollment period applicable to the employee's coverage, without
21-20 regard to any change in status of the child; or
21-21 (2) adopt rules requiring an employee, during the
21-22 period the coverage is in effect, to report a change in status that
21-23 would make the dependent child ineligible for coverage and may
21-24 terminate the coverage on receipt of the report of a change in
21-25 status.
21-26 (d) The trustee may require an employee to reapply for
21-27 dependent child coverage under this article during each annual open
22-1 enrollment period applicable to the employee's coverage. The
22-2 trustee and the Texas Department of Human Services or other agency
22-3 designated by the Health and Human Services Commission to perform
22-4 eligibility screening under this article shall cooperate to develop
22-5 a cost-effective method for annual reevaluation of eligibility
22-6 determinations for dependent child coverage under this article.
22-7 Sec. 5. TERMINATION OF PROGRAM. If the program established
22-8 under Chapter 62, Health and Safety Code, that uses federal funding
22-9 under Title XXI of the Social Security Act (42 U.S.C. Section
22-10 1397aa et seq.), as amended, is terminated, state contributions for
22-11 benefits for those eligible under Section 2 of this article end on
22-12 the date of that termination.
22-13 SECTION 3.02. (a) Except as provided by Section 7.01 of
22-14 this Act, this article takes effect September 1, 2001.
22-15 (b) Article 3.50-8, Insurance Code, as added by this
22-16 article, does not apply to the purchase of health benefit plan
22-17 coverage for a dependent child by the Teacher Retirement System of
22-18 Texas before fiscal year 2003.
22-19 ARTICLE 4. RETIREMENT BENEFITS AND CONTRIBUTIONS
22-20 SECTION 4.01. Section 824.001, Government Code, is amended to
22-21 read as follows:
22-22 Sec. 824.001. TYPES OF BENEFITS. The types of benefits
22-23 payable by the retirement system are:
22-24 (1) service retirement benefits;
22-25 (2) disability retirement benefits; [and]
22-26 (3) death benefits; and
22-27 (4) retiree health care benefits permitted under
23-1 Section 401(h), Internal Revenue Code of 1986, and its subsequent
23-2 amendments.
23-3 SECTION 4.02. Sections 824.203(a) and (e), Government Code,
23-4 are amended to read as follows:
23-5 (a) Except as provided by Subsections (c), (d), and (e), the
23-6 standard service retirement annuity is an amount computed on the
23-7 basis of the member's average annual compensation for the three
23-8 years of service, whether or not consecutive, in which the member
23-9 received the highest annual compensation, times 2.25 [2.2] percent
23-10 for each year of service credit in the retirement system.
23-11 (e) The annual standard service retirement annuity for a
23-12 person who immediately before retirement holds a position as a
23-13 classroom teacher or full-time librarian, or the annual death
23-14 benefit annuity based on the service of a member who at the time of
23-15 death held a position as a classroom teacher or full-time
23-16 librarian, may not be less than an amount computed on the basis of
23-17 the minimum annual salary provided by the Education Code for a
23-18 classroom teacher or full-time librarian, multiplied by 2.25 [2.2]
23-19 percent for each year of service credit in the retirement system.
23-20 SECTION 4.03. Chapter 824, Government Code, is amended by
23-21 adding Subchapter J to read as follows:
23-22 SUBCHAPTER J. RETIREE HEALTH CARE BENEFITS
23-23 Sec. 824.851. DEFINITIONS. In this subchapter:
23-24 (1) "401(h) account" means the 401(h) account
23-25 established under this subchapter.
23-26 (2) "Active employee" means an employee who is a
23-27 member of the Teacher Retirement System of Texas and who is not
24-1 entitled to coverage under a health benefit plan provided under the
24-2 Texas Employees Uniform Group Insurance Benefits Act (Article
24-3 3.50-2, Vernon's Texas Insurance Code) or under the Texas State
24-4 College and University Employees Uniform Insurance Benefits Act
24-5 (Article 3.50-3, Vernon's Texas Insurance Code).
24-6 (3) "Carrier" means any insurance company or hospital
24-7 service corporation authorized by the Texas Department of Insurance
24-8 to provide any of the insurance coverages, benefits, or services
24-9 provided by this subchapter under the insurance laws of this state.
24-10 (4) "Dependent" means:
24-11 (A) a spouse of a retiree; or
24-12 (B) a retiree's unmarried child who is younger
24-13 than 25 years of age, including an adopted child, a foster child, a
24-14 stepchild, or other child who is in a regular parent-child
24-15 relationship, and a recognized natural child; and a retiree's
24-16 recognized natural child, adopted child, foster child, stepchild,
24-17 or other child who is in a regular parent-child relationship and
24-18 who lives with or whose care is provided by the retiree or
24-19 surviving spouse on a regular basis, regardless of the child's age,
24-20 if the child is mentally retarded or physically incapacitated to
24-21 such an extent as to be dependent on the retiree or surviving
24-22 spouse for care or support, as determined by the trustee.
24-23 (5) "Health benefit plan" means a group insurance
24-24 policy, contract, or certificate, medical or hospital service
24-25 agreement, membership or subscription contract, salary continuation
24-26 plan, or similar group arrangement to provide, or pay for or
24-27 reimburse expenses for, health care services.
25-1 (6) "Medicare" means the health insurance program for
25-2 the aged and disabled that is provided by the United States
25-3 government.
25-4 (7) "Minimum premium contract" means a contract
25-5 entered into with the carrier by the board of trustees that
25-6 provides that an appropriate amount will be paid to the carrier to
25-7 cover its cost of direct claims administration, cost of other
25-8 administration, risk charges with stop-loss provisions, and profit
25-9 and the remainder of the funds will be used to reimburse the
25-10 carrier to cover claims as they are paid, to pay the administrative
25-11 expenses, and to provide the assets to cover all reserves necessary
25-12 for the trustee to operate on a financially sound basis.
25-13 (8) "Policy year" means the period beginning on
25-14 September 1 of one year and ending on August 31 of the following
25-15 year.
25-16 (9) "Qualified retiree" means a person who is:
25-17 (A) a retiree with at least 10 years of service
25-18 credit in the retirement system for actual service in a public
25-19 school in this state and who is not eligible to be covered by a
25-20 health benefit plan provided under the Texas Employees Uniform
25-21 Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
25-22 Insurance Code) or under the Texas State College and University
25-23 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
25-24 Texas Insurance Code); or
25-25 (B) a disability retiree entitled to receive
25-26 monthly benefits from the retirement system.
25-27 (10) "Surviving dependent child" means the dependent
26-1 child of a deceased retiree who has survived the deceased retiree
26-2 and the deceased retiree's spouse.
26-3 (11) "Surviving spouse" means the surviving spouse of
26-4 a deceased retiree.
26-5 Sec. 824.852. APPLICABILITY OF OTHER LAWS. Article 3.51,
26-6 Insurance Code, does not apply to insurance purchased under this
26-7 subchapter.
26-8 Sec. 824.853. ACCOUNT. (a) The 401(h) account is
26-9 established to provide for medical benefits under this subchapter.
26-10 (b) The board of trustees shall take the actions it
26-11 considers necessary to devise, administer, and implement the 401(h)
26-12 account.
26-13 (c) The 401(h) account is created in the retirement system
26-14 and is part of the trust assets of the retirement system.
26-15 (d) The comptroller is the custodian of the 401(h) account,
26-16 and the board of trustees shall administer the 401(h) account.
26-17 (e) Money required to be paid into the 401(h) account,
26-18 including contributions from active employees, and the state and
26-19 investment income, shall be paid into the 401(h) account.
26-20 (f) From the 401(h) account, the board of trustees may pay,
26-21 without state fiscal year limitation, appropriate premiums to the
26-22 carrier or carriers providing group coverage under this subchapter,
26-23 claims for benefits under the group coverage, and the amounts
26-24 expended by the board of trustees for administration.
26-25 (g) The appropriate portion of the contributions to the
26-26 401(h) account to provide for incurred but unreported claim
26-27 reserves and contingency reserves, as determined by the board of
27-1 trustees, shall be retained in the 401(h) account.
27-2 (h) Expenses for the development and administration of the
27-3 401(h) account shall be spent as provided by a budget adopted by
27-4 the board of trustees.
27-5 (i) The board of trustees may invest and reinvest the money
27-6 in the 401(h) account as provided by Subchapter D, Chapter 825, for
27-7 assets of the retirement system.
27-8 Sec. 824.854. BOARD POWERS AND DUTIES. (a) The board of
27-9 trustees may adopt rules, plans, and procedures that are reasonably
27-10 necessary to implement this subchapter, including:
27-11 (1) establishing minimum benefit and financing
27-12 standards for group insurance coverage to be provided to all
27-13 qualified retirees, dependents, surviving spouses, and surviving
27-14 dependent children;
27-15 (2) establishing procedures for contributions and
27-16 deductions;
27-17 (3) determining methods and procedures for claims
27-18 administration;
27-19 (4) administering the 401(h) account;
27-20 (5) adopting a timetable for the development of
27-21 minimum benefit and financial standards for group insurance
27-22 coverage;
27-23 (6) establishing group insurance plans;
27-24 (7) taking bids for and awarding contracts for
27-25 insurance;
27-26 (8) contracting with an independent and experienced
27-27 group insurance consultant or actuary for advice and counsel in
28-1 implementing and administering the 401(h) account;
28-2 (9) establishing the 401(h) account;
28-3 (10) creating and adopting appropriate health benefit
28-4 plan documents; and
28-5 (11) establishing appropriate accounts and reserves
28-6 within the 401(h) account.
28-7 (b) The board of trustees may adopt other rules relating to
28-8 the 401(h) account as are considered necessary by the board of
28-9 trustees.
28-10 Sec. 824.855. EMPLOYEES. (a) The board of trustees may
28-11 employ persons to assist the board in carrying out this subchapter.
28-12 (b) The board of trustees shall determine the duties and
28-13 compensation of the employees.
28-14 Sec. 824.856. PARTICIPATION. Each qualified retiree must be
28-15 enrolled in the group insurance program authorized by Article
28-16 3.50-4, Insurance Code, to be eligible for benefits under this
28-17 subchapter.
28-18 Sec. 824.857. BENEFITS. (a) The board of trustees shall be
28-19 designated as the group policyholder for any insurance purchased
28-20 under this subchapter.
28-21 (b) The board of trustees may establish one or more health
28-22 benefit plans that are self-insured.
28-23 (c) The coverages provided under the 401(h) account may
28-24 include hospital care and benefits, surgical care and treatment,
28-25 medical care and treatment, dental care, eye care, obstetrical
28-26 benefits, eligible long-term care as defined in Sections 213 and
28-27 7702B of the Internal Revenue Code of 1986, and its subsequent
29-1 amendments, prescribed drugs, medicines, and prosthetic devices,
29-2 and other supplemental benefits, supplies, and services as provided
29-3 by this subchapter.
29-4 (d) Coverages under Subsection (c) are limited to benefits
29-5 permissible under Section 213 of the Internal Revenue Code of 1986,
29-6 and its subsequent amendments.
29-7 (e) Benefits, if any, shall be paid only to the extent there
29-8 are assets available in the 401(h) account, taking into
29-9 consideration reserves established by the board of trustees.
29-10 (f) A health care claim shall be processed under the 401(h)
29-11 account first, and, to the extent the claim is not covered under
29-12 this subchapter or funds are not available, the claim shall be sent
29-13 to the board of trustees for processing under the group insurance
29-14 program authorized under Article 3.50-4, Insurance Code.
29-15 (g) The board of trustees may provide different benefits for
29-16 retirees and surviving spouses covered by Medicare than the
29-17 benefits provided for retirees and surviving spouses who are not
29-18 covered by Medicare.
29-19 (h) New contracts for coverages under this subchapter shall
29-20 be submitted for competitive bidding at least every six years.
29-21 (i) Any contract shall be based on the terms and conditions
29-22 agreed on between the board of trustees and the entity selected to
29-23 provide the coverage and benefits.
29-24 (j) Any contract for group benefits awarded by the board of
29-25 trustees must meet the minimum benefit and financial standards
29-26 adopted by the board of trustees.
29-27 (k) The coverage provided by this subchapter shall follow
30-1 the coordination of benefit rules under Article 3.50-4, Insurance
30-2 Code.
30-3 (l) In contracting for any benefits under this subchapter,
30-4 competitive bidding shall be required under rules adopted by the
30-5 board of trustees. The board of trustees is not required to select
30-6 the lowest bid but may consider also ability to service contracts,
30-7 past experiences, financial stability, and other relevant criteria.
30-8 If the board of trustees awards a contract to an entity whose bid
30-9 deviates from that advertised, the deviation shall be recorded and
30-10 the reasons for the deviation shall be fully justified in the
30-11 minutes of the next meeting of the board of trustees.
30-12 (m) Notwithstanding any other provision of this subchapter,
30-13 the board of trustees may:
30-14 (1) self-insure any benefits available under this
30-15 subchapter; and
30-16 (2) engage private entities to collect contributions
30-17 from or to settle claims in connection with benefits established by
30-18 the board of trustees under this subchapter.
30-19 (n) The board of trustees may contract directly with health
30-20 care providers, including health maintenance organizations,
30-21 preferred provider organizations, carriers, administrators, and
30-22 other qualified vendors, to provide benefits to participants.
30-23 Sec. 824.858. BENEFIT CERTIFICATES. The board of trustees
30-24 may require each insurance carrier to issue to each retiree,
30-25 surviving spouse, or surviving dependent child insured under this
30-26 subchapter a certificate of insurance that:
30-27 (1) states the benefits to which the person is
31-1 entitled;
31-2 (2) states to whom the benefits are payable;
31-3 (3) states to whom the claims must be submitted; and
31-4 (4) summarizes the provisions of the policy
31-5 principally affecting the person.
31-6 Sec. 824.859. ANNUAL REPORT AND ACCOUNTING. (a) Not later
31-7 than the 180th day after the end of each state fiscal year, the
31-8 board of trustees shall make a written report to the Texas
31-9 Department of Insurance concerning the coverages provided and the
31-10 benefits and services being received by persons under this
31-11 subchapter.
31-12 (b) Insurance coverage purchased under this subchapter shall
31-13 provide for an accounting to the board of trustees by each carrier
31-14 providing coverage not later than the 90th day after the end of
31-15 each policy year.
31-16 (c) The accounting shall be on a form approved by the board
31-17 of trustees.
31-18 (d) Other reports shall be prepared by each carrier if
31-19 considered necessary by the board of trustees.
31-20 (e) An extra charge may not be assessed by the carrier for
31-21 the accounting reports.
31-22 (f) All reports required by this subchapter shall be made
31-23 available for public inspection in a form that protects the
31-24 identity of the individual claimants.
31-25 Sec. 824.860. EXEMPTION FROM EXECUTION AND TAXATION. (a)
31-26 All insurance benefit payments, active employee and state
31-27 contributions, qualified retiree, surviving spouse, and surviving
32-1 dependent child contributions, and optional benefits payments and
32-2 any rights, benefits, or payments accruing to any person under this
32-3 subchapter, as well as all money in the 401(h) account created by
32-4 this subchapter, are exempt from execution, attachment,
32-5 garnishment, or any other process and may not be assigned except
32-6 for direct payment to benefit providers as authorized by the board
32-7 of trustees by contract, rule, or otherwise.
32-8 (b) A premium or contribution on a policy, insurance
32-9 contract, or agreement authorized as provided by this subchapter is
32-10 not subject to any state tax, regulatory fee, or surcharge,
32-11 including premium or maintenance taxes or fees.
32-12 Sec. 824.861. CONTRIBUTIONS. (a) For each state fiscal
32-13 year, each active employee, as a condition of employment, shall
32-14 contribute to the 401(h) account an amount equal to 0.25 percent of
32-15 the employee's salary.
32-16 (b) Each month the employer of an active employee shall
32-17 deduct the contributions from the employee's salary and shall remit
32-18 the contributions to the board of trustees as provided by any
32-19 procedures that the board of trustees may require.
32-20 (c) Instead of deducting the contributions from salaries, an
32-21 employer may assume and pay the total contributions due from its
32-22 active employees for any month.
32-23 (d) Whether the employer deducts the contributions from
32-24 salaries or assumes and pays the total contributions, contributions
32-25 under this subsection shall be picked up under Section 414(h) of
32-26 the Internal Revenue Code of 1986, and its subsequent amendments,
32-27 by the employer and paid to the 401(h) account, subject to approval
33-1 of the board of trustees and the board's receipt of a favorable
33-2 private letter ruling from the Internal Revenue Service.
33-3 (e) The board of trustees shall establish any procedures and
33-4 forms necessary or appropriate to accomplish this pickup.
33-5 (f) From September 1, 2002, to August 31, 2010, the state
33-6 shall contribute to the 401(h) account an amount equal to two
33-7 percent of the aggregate annual compensation of each active
33-8 employee. This amount is included within the total amount that the
33-9 state actually appropriates to the retirement system for state
33-10 contributions described by Section 825.404.
33-11 (g) Contributions from active employees become the property
33-12 of the 401(h) account on receipt by the board of trustees and may
33-13 not be refunded to the active employee under any circumstances,
33-14 including termination of employment.
33-15 (h) Contributions to the 401(h) account deducted from the
33-16 salary of an active employee are included in annual compensation of
33-17 the employee for purposes of the retirement system.
33-18 (i) Before the first day of November preceding each regular
33-19 session of the legislature, the board of trustees shall certify to
33-20 the Legislative Budget Board and the budget division of the
33-21 governor's office the amounts necessary to pay the state
33-22 contributions to the 401(h) account under this subchapter for
33-23 information and review.
33-24 (j) Not later than August 31 of each year, the board of
33-25 trustees shall certify to the comptroller the estimated amount of
33-26 state contributions to be received by the 401(h) account for the
33-27 next fiscal year under the appropriations authorized by this
34-1 subchapter.
34-2 (k) Contributions allocated under this section and
34-3 appropriated shall be paid from the general revenue fund in equal
34-4 monthly installments, based on the annual estimate certified by the
34-5 board of trustees to the comptroller for that year and subject to
34-6 any express limitations specified in the Act making the
34-7 appropriation. Variations between the certified amount and the
34-8 actual amount due for the year shall be reconciled at the close of
34-9 the fiscal year and proper adjustments in the annual contributions
34-10 to the 401(h) account shall be made.
34-11 (l) An employing district that fails to remit, in the period
34-12 prescribed by Section 825.408, all deposits required by this
34-13 subchapter shall pay to the 401(h) account, in addition to the
34-14 deposits, interest on the unpaid amounts at the annual rate of six
34-15 percent compounded annually.
34-16 (m) An employing district and its board of trustees hold
34-17 amounts due to the 401(h) account under this subchapter in trust
34-18 for its participants and may not divert the amounts for any other
34-19 purpose.
34-20 Sec. 824.862. COLLECTION OF CONTRIBUTIONS FROM FEDERAL OR
34-21 PRIVATE SOURCES. If an employer applies for money provided by the
34-22 United States, an agency of the United States, or a privately
34-23 sponsored source and if any of the money will pay part or all of an
34-24 active employee's salary, the employer shall apply for any legally
34-25 available money to pay state contributions required by this
34-26 subchapter to be paid to the 401(h) account, using the same
34-27 procedures provided by Section 825.406.
35-1 Sec. 824.863. STUDIES, REPORTS, AND AUDITS. (a) The board
35-2 of trustees shall study the operation and administration of this
35-3 subchapter.
35-4 (b) The board of trustees shall make a report to the
35-5 legislature at each regular legislative session relating to the
35-6 operation and administration of this subchapter.
35-7 (c) Each contract entered into under this subchapter shall
35-8 include provisions requiring carriers to:
35-9 (1) furnish to the board of trustees on a timely basis
35-10 reasonable reports that the board of trustees determines are
35-11 necessary to carry out its functions under this subchapter; and
35-12 (2) permit the board of trustees and state auditor to
35-13 examine records of the carriers as may be necessary to carry out
35-14 this subchapter.
35-15 Sec. 824.864. COVERAGE FOR DEPENDENTS, SURVIVING SPOUSES,
35-16 AND SURVIVING DEPENDENT CHILDREN. (a) Any qualified retiree
35-17 participating in the program is entitled to secure for the
35-18 retiree's dependents group insurance coverages provided for the
35-19 board of trustees.
35-20 (b) The additional contribution payments for the coverages
35-21 for dependents shall be deducted from the annuities of the
35-22 qualified retiree in the manner and form determined by the board of
35-23 trustees.
35-24 (c) A surviving spouse who is entitled to insurance benefits
35-25 under this subchapter may elect to retain or obtain the insurance
35-26 coverage for the spouse or the qualified retiree's dependents, at
35-27 the applicable rates for retirees, provided the surviving spouse
36-1 provides payment of applicable contributions in the manner
36-2 established by the board of trustees.
36-3 (d) A surviving dependent child, the guardian of the child's
36-4 estate, or the person having custody of the child may elect to
36-5 retain or obtain insurance coverage for the surviving dependent
36-6 child at rates applicable for dependents if applicable
36-7 contributions are made in the manner established by the board of
36-8 trustees.
36-9 Sec. 824.865. EXPULSION FROM PROGRAM FOR FRAUD. (a) After
36-10 notice and a hearing as provided by this section, the board of
36-11 trustees may expel from participation in the 401(h) account any
36-12 qualified retiree, surviving spouse, dependent, or surviving
36-13 dependent child who submits a fraudulent claim under, or has
36-14 defrauded or attempted to defraud, any health benefit plan offered
36-15 under this subchapter.
36-16 (b) On its own motion or on the receipt of a complaint, the
36-17 board of trustees may call and hold a hearing to determine whether
36-18 a person has submitted a fraudulent claim under or has defrauded or
36-19 attempted to defraud under this subchapter.
36-20 (c) A proceeding under this section is a contested case
36-21 under Chapter 2001.
36-22 (d) If the board of trustees, at the conclusion of the
36-23 hearing, issues a decision that finds that the accused submitted a
36-24 fraudulent claim or has defrauded or attempted to defraud under
36-25 this subchapter, the board of trustees shall expel the person from
36-26 participation in the program.
36-27 (e) The substantial evidence rule shall be used on any
37-1 appeal of a decision of the board of trustees under this section.
37-2 (f) A person expelled from coverage may not be insured by
37-3 any benefits for a period, to be determined by the board of
37-4 trustees, of up to five years from the date the expulsion takes
37-5 effect.
37-6 Sec. 824.866. CONFIDENTIALITY OF RECORDS. (a) Section
37-7 825.507, concerning the confidentiality and disclosure of records,
37-8 applies to records that are in the custody of the retirement
37-9 system, or in the custody of an administrator, carrier, agent,
37-10 attorney, consultant, or governmental body acting in cooperation
37-11 with or on behalf of the retirement system, regarding retirees,
37-12 annuitants, or beneficiaries under the 401(h) account.
37-13 (b) The retirement system may disclose to health and benefit
37-14 providers information in the records of an individual that the
37-15 retirement system determines to be necessary to administer this
37-16 subchapter.
37-17 Sec. 824.867. COORDINATED CARE NETWORK. The board of
37-18 trustees may take action as it determines necessary to implement
37-19 and administer a coordinated care network for the 401(h) account,
37-20 under Section 18C, Article 3.50-4, Insurance Code.
37-21 Sec. 824.868. ASSISTANCE. The Texas Department of Insurance,
37-22 as requested by the board of trustees, shall assist the board of
37-23 trustees in implementing and administering this subchapter.
37-24 Sec. 824.869. EFFECTIVE DATE OF COVERAGE. Coverage under the
37-25 401(h) account authorized by this subchapter shall begin on the
37-26 later of September 1, 2002, or the date the board of trustees has
37-27 appropriate approval from the Internal Revenue Service.
38-1 SECTION 4.04. Section 825.402, Government Code, is amended to
38-2 read as follows:
38-3 Sec. 825.402. RATE OF MEMBER CONTRIBUTIONS. The rate of
38-4 contributions for each member of the retirement system is:
38-5 (1) five percent of the member's annual compensation
38-6 or $180, whichever is less, for service rendered after August 31,
38-7 1937, and before September 1, 1957;
38-8 (2) six percent of the first $8,400 of the member's
38-9 annual compensation for service rendered after August 31, 1957, and
38-10 before September 1, 1969;
38-11 (3) six percent of the member's annual compensation
38-12 for service rendered after August 31, 1969, and before the first
38-13 day of the 1977-78 school year;
38-14 (4) 6.65 percent of the member's annual compensation
38-15 for service rendered after the last day of the period described by
38-16 Subdivision (3) and before September 1, 1985; and
38-17 (5) 6.4 percent of the member's annual compensation
38-18 for service rendered after August 31, 1985, plus the percentage
38-19 required under Section 824.861(a).
38-20 SECTION 4.05. Section 825.306, Government Code, is amended
38-21 to read as follows:
38-22 Sec. 825.306. CREDITING SYSTEM ASSETS. The assets of the
38-23 retirement system shall be credited, according to the purpose for
38-24 which they are held, to one of the following accounts:
38-25 (1) member savings account;
38-26 (2) state contribution account;
38-27 (3) retired reserve account;
39-1 (4) interest account;
39-2 (5) expense account; [or]
39-3 (6) deferred retirement option account; or
39-4 (7) the 401(h) account under Subchapter J, Chapter
39-5 824.
39-6 SECTION 4.06. Sections 825.307(a) and (b), Government Code,
39-7 are amended to read as follows:
39-8 (a) Except as provided by Subchapter J, Chapter 824, the
39-9 [The] retirement system shall deposit in a member's individual
39-10 account in the member savings account:
39-11 (1) the amount of contributions to the retirement
39-12 system that is deducted from the member's compensation;
39-13 (2) the portion of a deposit made on or after
39-14 resumption of membership that represents the amount of retirement
39-15 benefits received;
39-16 (3) the portion of a deposit to reinstate service
39-17 credit previously canceled that represents the amount withdrawn or
39-18 refunded;
39-19 (4) the portion of a deposit to establish membership
39-20 service credit previously waived that is required by Section
39-21 823.202(b)(1);
39-22 (5) the portion of a deposit to establish membership
39-23 service credit for service performed after retirement that is
39-24 required by Section 823.502(c)(3);
39-25 (6) the portion of a deposit to establish military
39-26 service credit required by Section 823.302(c);
39-27 (7) the portion of a deposit to establish equivalent
40-1 membership service credit required by Section 823.401(d),
40-2 823.402(e)(1) or (e)(2), 823.404(c), or 823.3021(f)(1); and
40-3 (8) interest earned on money in the account as
40-4 provided by Subsections (b) and (c) and Section 825.313(c).
40-5 (b) Interest on a member's contribution other than interest
40-6 on the portion of the member's contribution deposited in the 401(h)
40-7 account under Subchapter J, Chapter 824, is earned monthly and
40-8 computed at the rate of five percent a year. Except as provided by
40-9 Subsection (c), interest is computed based on the mean balance in
40-10 the member's account during that fiscal year and shall be credited
40-11 on August 31 of each year.
40-12 SECTION 4.07. Section 825.308, Government Code, is amended to
40-13 read as follows:
40-14 Sec. 825.308. STATE CONTRIBUTION ACCOUNT. The retirement
40-15 system shall deposit in the state contribution account:
40-16 (1) [all] state contributions to the retirement system
40-17 required by Section 825.404 other than contributions deposited in
40-18 the 401(h) account under Subchapter J, Chapter 824;
40-19 (2) amounts from the interest account as provided by
40-20 Section 825.313(b)(2) [825.313(b)(5)];
40-21 (3) retirement annuities waived or forfeited in
40-22 accordance with Section 824.601 or 824.004;
40-23 (4) fees collected under Section 825.403(h);
40-24 (5) fees and interest for reinstatement of service
40-25 credit or establishment of membership service credit as provided by
40-26 Section 823.202, 823.501, or 823.502;
40-27 (6) the portion of a deposit required by Section
41-1 823.302 to establish military service credit that represents a fee;
41-2 and
41-3 (7) the portion of a deposit required by Section
41-4 823.401(e) to establish out-of-state service credit that represents
41-5 a fee.
41-6 SECTION 4.08. Section 825.312(a), Government Code, is amended
41-7 to read as follows:
41-8 (a) The retirement system shall deposit in the expense
41-9 account:
41-10 (1) money transferred from the interest account under
41-11 Section 825.313(d); and
41-12 (2) money received from the Texas Public School
41-13 Employees Group Insurance Program or another health insurance
41-14 program for school employees or retirees for service performed for
41-15 the program by the retirement system.
41-16 SECTION 4.09. Section 825.404(e), Government Code, is amended
41-17 to read as follows:
41-18 (e) Except for money appropriated by the state to the 401(h)
41-19 account under Subchapter J, Chapter 824, all [All] money
41-20 appropriated by the state to the retirement system under this
41-21 subtitle shall be paid to the state contribution account in equal
41-22 monthly installments as provided by Section 403.093(c), [Government
41-23 Code,] except money appropriated under Subsection (d), which
41-24 remains in the general revenue fund until expenses are approved
41-25 under Chapter 2103.
41-26 SECTION 4.10. Section 16, Article 3.50-4, Insurance Code, is
41-27 amended to read as follows:
42-1 Sec. 16. CONTRIBUTIONS. (a) For each [the] state fiscal
42-2 year in which active employee contributions are not required to be
42-3 deposited in the 401(h) account under Subchapter J, Chapter 824,
42-4 Government Code [beginning September 1, 1985, and for each
42-5 subsequent state fiscal year], each active employee, as a condition
42-6 of employment, shall contribute to the fund an amount equal to .25
42-7 percent of the employee's salary. Each month the employer of an
42-8 active employee shall deduct the contributions from the employee's
42-9 salary and shall remit the contributions to the trustee as provided
42-10 by any procedures that the trustee may require. In lieu of
42-11 deducting the contributions from salaries, an employer may assume
42-12 and pay the total contributions due from its active employees for
42-13 any month.
42-14 (b) The state shall contribute as the state's contribution
42-15 to the fund each fiscal year an amount equal to one [.50] percent
42-16 of the salary of each active employee. The state may contribute
42-17 amounts in addition to the contribution required by this
42-18 subsection.
42-19 (c) [If after the state fiscal year beginning September 1,
42-20 1990, the amount of state and active employee contributions to the
42-21 fund is raised by the legislature above the percentages provided by
42-22 Subsections (a) and (b) of this section to provide adequate funding
42-23 for the program, the ratio between the state's contribution and the
42-24 active employees' contributions must be maintained at two to one.]
42-25 [(d)] Contributions from active employees become the
42-26 property of the fund on receipt by the trustee and may not be
42-27 refunded to the active employee under any circumstances, including
43-1 termination of employment.
43-2 (d) [(e)] Contributions to the fund deducted from the salary
43-3 of an active employee are included in "annual compensation" for
43-4 purposes of the Teacher Retirement System of Texas.
43-5 (e) [(f)] Before the first day of November preceding each
43-6 regular session of the legislature, the trustee shall certify to
43-7 the Legislative Budget Board and the budget division of the
43-8 governor's office the amounts necessary to pay the contributions of
43-9 the state to the fund under this article for information and
43-10 review. Not later than August 31 of each year, the trustee shall
43-11 certify to the comptroller of public accounts the estimated amount
43-12 of state contributions to be received by the fund for the next
43-13 fiscal year under the appropriations authorized by this article.
43-14 (f) [(g)] Contributions allocated and appropriated under
43-15 this section shall be paid from the General Revenue Fund in equal
43-16 monthly installments, based on the annual estimate certified by the
43-17 trustee to the comptroller of public accounts for that year, and
43-18 subject to any express limitations specified in the Act making the
43-19 appropriation. Variations between the certified amount and the
43-20 actual amount due for the year shall be reconciled at the close of
43-21 the fiscal year and proper adjustments in the annual contributions
43-22 to the fund shall be made.
43-23 (g) [(h)] An employing district that fails to remit, before
43-24 the 11th day after the last day of the month, all member deposits
43-25 required by this section to be remitted by the district for the
43-26 month shall pay to the Texas public school retired employees group
43-27 insurance fund, in addition to the deposits, interest on the unpaid
44-1 amounts at the annual rate of six percent compounded monthly.
44-2 (h) [(i)] An employing district and its trustees hold
44-3 amounts due to the Texas public school retired employees group
44-4 insurance fund under this article in trust for the fund and its
44-5 participants and may not divert the amounts for any other purpose.
44-6 SECTION 4.11. (a) Monthly payments of a death or retirement
44-7 benefit annuity by the Teacher Retirement System of Texas are
44-8 increased in accordance with this section beginning with the
44-9 payment due at the end of September 2001.
44-10 (b) The increase does not apply to payments under Section
44-11 824.304(a), 824.404, or 824.501, Government Code.
44-12 (c) For the purpose of computing the monthly payments of
44-13 annuities for retirees who retired on or before August 31, 2000,
44-14 the amount of the monthly payment is equal to the amount of the
44-15 last monthly payment made before the effective date of this Act
44-16 multiplied by 1.06.
44-17 (d) After making the computations required by Subsection (c)
44-18 of this section, the Teacher Retirement System of Texas shall
44-19 increase the monthly payment of each annuity made by the system
44-20 beginning on September 1, 2001, other than an annuity under Section
44-21 824.304(a), 824.404, or 824.501, Government Code, by 2.27 percent,
44-22 which is a benefit equivalent to the benefit provided by using a
44-23 2.25-percent multiplier for computing annuities.
44-24 SECTION 4.12. Notwithstanding Sections 824.861 and 824.862,
44-25 Government Code, as added by this Act, a contribution may not be
44-26 made or credited to the 401(h) account established under Subchapter
44-27 J, Chapter 824, Government Code, until the board of trustees of the
45-1 Teacher Retirement System of Texas receives appropriate approval
45-2 from the Internal Revenue Service.
45-3 SECTION 4.13. Except as provided by Section 7.01 of this Act,
45-4 this article takes effect September 1, 2001.
45-5 ARTICLE 5. CONFORMING AMENDMENTS; REPEALER
45-6 SECTION 5.01. Article 3.50-4, Insurance Code, is amended by
45-7 adding Section 3A to read as follows:
45-8 Sec. 3A. TRANSFER OF RECORDS. The trustee shall transfer
45-9 from the program established under this article all records
45-10 relating to that program that apply to a school district, regional
45-11 education service center, or charter school that elects to
45-12 participate in the group benefits program established under Article
45-13 3.50-7 of this code to the group benefits program not later than
45-14 the 60th day after the date on which the school district, regional
45-15 education service center, or charter school begins participation in
45-16 the group benefits program.
45-17 SECTION 5.02. Section 1, Article 3.50-4, Insurance Code, is
45-18 amended to read as follows:
45-19 Sec. 1. SHORT TITLE. This article may be cited as the Texas
45-20 Public School Retired Employees Group Insurance Act.
45-21 SECTION 5.03. Sections 2(3) and (4), Article 3.50-4,
45-22 Insurance Code, are amended to read as follows:
45-23 (3) "Dependent" means:
45-24 (A) a spouse of a retiree [or active member];
45-25 (B) a retiree's[, an active member's,] or a
45-26 deceased active member's unmarried child who is younger than 25
45-27 years of age including:
46-1 (i) an adopted child;
46-2 (ii) a foster child, a stepchild, or other
46-3 child who is in a regular parent-child relationship; and
46-4 (iii) a recognized natural child; and
46-5 (C) a retiree's [or active member's] recognized
46-6 natural child, adopted child, foster child, stepchild, or other
46-7 child who is in a regular parent-child relationship and who lives
46-8 with or whose care is provided by the retiree[, active member,] or
46-9 surviving spouse on a regular basis, regardless of the child's age,
46-10 if the child is mentally retarded or physically incapacitated to
46-11 such an extent as to be dependent on the retiree[, active member,]
46-12 or surviving spouse for care or support, as determined by the
46-13 trustee, or in the case of a deceased active member, a recognized
46-14 natural child, adopted child, foster child, stepchild, or other
46-15 child who was in a regular parent-child relationship and who lived
46-16 with or whose care was provided by the deceased active member on a
46-17 regular basis, regardless of the child's age, if the child is
46-18 mentally retarded or physically incapacitated to such an extent as
46-19 to have been dependent on the deceased active member or surviving
46-20 spouse for care or support, as determined by the trustee.
46-21 (4) "Fund" means the retired [Texas public] school
46-22 employees group insurance fund.
46-23 SECTION 5.04. Section 3(a), Article 3.50-4, Insurance Code,
46-24 is amended to read as follows:
46-25 (a) The Texas Public School Retired Employees Group
46-26 Insurance Program is established to provide for an insurance plan
46-27 or plans under this article.
47-1 SECTION 5.05. Section 5(a), Article 3.50-4, Insurance Code,
47-2 is amended to read as follows:
47-3 (a) The trustee may adopt rules, plans, procedures, and
47-4 orders reasonably necessary to implement this article, including:
47-5 (1) establishment of minimum benefit and financing
47-6 standards for group insurance coverage to be provided to all
47-7 retirees, [active employees,] dependents, surviving spouses, and
47-8 surviving dependent children;
47-9 (2) establishment of basic and optional group coverage
47-10 to be provided to retirees, [active employees,] dependents,
47-11 surviving spouses, and surviving dependent children;
47-12 (3) establishment of the procedures for contributions
47-13 and deductions;
47-14 (4) establishment of periods for enrollment and
47-15 selection of optional coverage and procedures for enrolling and
47-16 exercising options under the plan;
47-17 (5) determination of methods and procedures for claims
47-18 administration;
47-19 (6) study of the operation of all insurance coverage
47-20 provided under this article;
47-21 (7) administration of the fund;
47-22 (8) adoption of a timetable for the development of
47-23 minimum benefit and financial standards for group insurance
47-24 coverage, establishment of group insurance plans, and the taking of
47-25 bids for and awarding of contracts for insurance plans; and
47-26 (9) contracting with an independent and experienced
47-27 group insurance consultant or actuary[, who does not receive
48-1 insurance commissions from any insurance company,] for advice and
48-2 counsel in implementing and administering this program.
48-3 SECTION 5.06. Sections 8(e) and (i), Article 3.50-4,
48-4 Insurance Code, are amended to read as follows:
48-5 (e) The trustee may contract for and make available to all
48-6 retirees, dependents, surviving spouses, and surviving dependent
48-7 children optional group health benefit plans in addition to the
48-8 basic plans. The optional coverage may include a smaller
48-9 deductible, lower coinsurance, or additional categories of benefits
48-10 permitted under Subsection (b) of this section to provide
48-11 additional levels of coverages and benefits. The trustee may
48-12 utilize a portion of the funds received for the Texas Public School
48-13 Retired Employees Group Insurance Program to offset some portion of
48-14 costs paid by the retiree for optional coverage if such utilization
48-15 does not reduce the period the program is projected to remain
48-16 financially solvent by more than one year in a biennium. Any
48-17 additional contributions for these optional plans shall be paid for
48-18 by the retiree, surviving spouse, or surviving dependent children.
48-19 (i) In contracting for any benefits under this article,
48-20 competitive bidding shall be required under rules adopted by the
48-21 trustee. [The rules must require that prospective bidders provide
48-22 information, for each area consisting of a county and all adjacent
48-23 counties, on the number and types of qualified providers willing to
48-24 participate in the coverage or plan for which the bid is made. The
48-25 rules may provide criteria to determine qualified providers. The
48-26 trustee shall consider the information before awarding a contract
48-27 but may not require a bidder to demonstrate a minimum standard of
49-1 provider participation.] The trustee is not required to select the
49-2 lowest bid but may consider also ability to service contracts, past
49-3 experiences, financial stability, and other relevant criteria. If
49-4 the trustee awards a contract to an entity whose bid deviates from
49-5 that advertised, the deviation shall be recorded and the reasons
49-6 for the deviation shall be fully justified in the minutes of the
49-7 next meeting of the trustee.
49-8 SECTION 5.07. Section 9, Article 3.50-4, Insurance Code, is
49-9 amended to read as follows:
49-10 Sec. 9. BENEFIT CERTIFICATES. At such times, or upon such
49-11 events, as designated by the trustee, each insurance carrier shall
49-12 issue to each retiree, [active employee,] surviving spouse, or
49-13 surviving dependent child insured under this article a certificate
49-14 of insurance that:
49-15 (1) states the benefits to which the person is
49-16 entitled;
49-17 (2) states to whom the benefits are payable;
49-18 (3) states to whom the claims must be submitted; and
49-19 (4) summarizes the provisions of the policy
49-20 principally affecting the person.
49-21 SECTION 5.08. Section 10(a), Article 3.50-4, Insurance Code,
49-22 is amended to read as follows:
49-23 (a) Not later than the 180th day after the end of each state
49-24 fiscal year, the trustee shall make a written report to the Texas
49-25 Department [State Board] of Insurance concerning the insurance
49-26 coverages provided and the benefits and services being received by
49-27 persons insured under this article.
50-1 SECTION 5.09. Section 12, Article 3.50-4, Insurance Code, is
50-2 amended to read as follows:
50-3 Sec. 12. DEATH CLAIMS: BENEFICIARIES. The amount of group
50-4 life insurance and group accidental death and dismemberment
50-5 insurance covering a retiree, [active employee,] surviving spouse,
50-6 dependent, or surviving dependent child at the date of death shall
50-7 be paid, on the establishment of a valid claim, only:
50-8 (1) to the beneficiary or beneficiaries designated by
50-9 the person in a signed and witnessed written document received
50-10 before death in the trustee's office; or
50-11 (2) if no beneficiary is properly designated or in
50-12 existence, to persons in accordance with the trustee's death
50-13 benefit provisions in Subsection (b), Section 824.103, Government
50-14 Code.
50-15 SECTION 5.10. Section 13, Article 3.50-4, Insurance Code, is
50-16 amended to read as follows:
50-17 Sec. 13. AUTOMATIC COVERAGE. A retiree [or active employee]
50-18 who applies during an enrollment period may not be denied any of
50-19 the group insurance basic coverage provided under this article
50-20 unless the person has been found under Section 18A of this article
50-21 to have defrauded or attempted to defraud the Texas Public School
50-22 Retired Employees Group Insurance Program.
50-23 SECTION 5.11. Section 15, Article 3.50-4, Insurance Code, is
50-24 amended to read as follows:
50-25 Sec. 15. RETIRED SCHOOL EMPLOYEES GROUP INSURANCE FUND.
50-26 (a) The retired school employees group insurance fund is created.
50-27 The comptroller is the custodian of the fund, and the trustee shall
51-1 administer the fund. All contributions from active employees,
51-2 retirees, and the state, contributions for optional coverages,
51-3 investment income, appropriations for implementation of this
51-4 program, and other money required or authorized to be paid into the
51-5 fund shall be paid into the fund. From the fund shall be paid,
51-6 without state fiscal year limitation, the appropriate premiums to
51-7 the carrier or carriers providing group coverage under the plan or
51-8 plans under this article, claims for benefits under the group
51-9 coverage, and the amounts expended by the trustee for
51-10 administration of the program. The appropriate portion of the
51-11 contributions to the fund to provide for incurred but unreported
51-12 claim reserves and contingency reserves, as determined by the
51-13 trustee, shall be retained in the fund.
51-14 (b) The trustee shall transfer the amounts deducted from
51-15 annuities for contributions into the fund.
51-16 (c) Expenses for the development and administration of the
51-17 program shall be spent as provided by a budget adopted by the
51-18 trustee.
51-19 (d) The trustee may invest and reinvest the money in the
51-20 fund as provided by Subchapter D, Chapter 825, Government Code, for
51-21 assets of the Teacher Retirement System of Texas.
51-22 SECTION 5.12. Section 18A, Article 3.50-4, Insurance Code,
51-23 is amended to read as follows:
51-24 Sec. 18A. EXPULSION FROM PROGRAM FOR FRAUD. (a) After
51-25 notice and hearing as provided by this section, the trustee may
51-26 expel from participation in the Texas Public School Retired
51-27 Employees Group Insurance Program any retiree, [active employee,]
52-1 surviving spouse, dependent, or surviving dependent child who
52-2 submits a fraudulent claim under, or has defrauded or attempted to
52-3 defraud, any health benefits plan offered under the program.
52-4 (b) On its motion or on the receipt of a complaint, the
52-5 trustee may call and hold a hearing to determine whether a person
52-6 has submitted a fraudulent claim under, or has defrauded or
52-7 attempted to defraud, any health benefits plan offered under the
52-8 Texas Public School Retired Employees Group Insurance Program.
52-9 (c) A proceeding under this section is a contested case
52-10 under Chapter 2001, Government Code [the Administrative Procedure
52-11 and Texas Register Act (Article 6252-13a, Vernon's Texas Civil
52-12 Statutes)].
52-13 (d) If the trustee, at the conclusion of the hearing, issues
52-14 a decision that finds that the accused submitted a fraudulent claim
52-15 or has defrauded or attempted to defraud any health benefits plan
52-16 offered under the Texas Public School Retired Employees Group
52-17 Insurance Program, the trustee shall expel the person from
52-18 participation in the program.
52-19 (e) The substantial evidence rule shall be used on any
52-20 appeal of a decision of the trustee under this section.
52-21 (f) A person expelled from the Texas Public School Retired
52-22 Employees Group Insurance Program may not be insured by any health
52-23 insurance plan offered by the program for a period, to be
52-24 determined by the trustee, of up to five years from the date the
52-25 expulsion takes effect.
52-26 SECTION 5.13. Section 18B(a), Article 3.50-4, Insurance
52-27 Code, is amended to read as follows:
53-1 (a) Section 825.507, Government Code, concerning the
53-2 confidentiality and disclosure of records, applies to [of
53-3 information in] records that are in the custody of the Teacher
53-4 Retirement System of Texas or[, applies to information in records
53-5 that are] in the custody of an administrator, carrier, agent,
53-6 attorney, consultant, or governmental body acting in cooperation
53-7 with or on behalf of the retirement system regarding retirees,
53-8 active employees, annuitants, or beneficiaries under the Texas
53-9 Public School Retired Employees Group Insurance Program.
53-10 SECTION 5.14. Sections 18C(c), (d), and (i), Article 3.50-4,
53-11 Insurance Code, are amended to read as follows:
53-12 (c) The trustee, the Texas public school retired employees
53-13 group insurance program, the retired school employees group
53-14 insurance fund, and the board of trustees, officers, advisory
53-15 committee members, and employees of the trustee are not liable for
53-16 damages arising from the acts or omissions of health care providers
53-17 who are participating health care providers in the coordinated care
53-18 network established by the trustee. Those health care providers
53-19 are independent contractors and are responsible for their own acts
53-20 and omissions.
53-21 (d) The trustee, the Texas public school retired employees
53-22 group insurance program, the retired school employees group
53-23 insurance fund, or a member of a credentialing committee, or the
53-24 board of trustees, officers, advisory committee members, or
53-25 employees of the trustee are not liable for damages arising from
53-26 any act, statement, determination, recommendation made, or act
53-27 reported, without malice, in the course of the evaluation of the
54-1 qualifications of health care providers or of the patient care
54-2 rendered by those providers.
54-3 (i) A credentialing committee, a person participating in a
54-4 credentialing review, a health care provider, the trustee, the
54-5 Texas public school retired employees group insurance program, or
54-6 the board of trustees, officers, advisory committee members, or
54-7 employees of the trustee that are named as defendants in any civil
54-8 action filed as a result of participation in the credentialing
54-9 process may use otherwise confidential information obtained for
54-10 legitimate internal business and professional purposes, including
54-11 use in their own defense. Use of information under this subsection
54-12 does not constitute a waiver of the confidential and privileged
54-13 nature of the information.
54-14 SECTION 5.15. Section 19, Article 3.50-4, Insurance Code, is
54-15 amended to read as follows:
54-16 Sec. 19. ASSISTANCE. In implementing and administering this
54-17 article, the Texas Department [State Board] of Insurance, as
54-18 requested by the trustee, shall assist the trustee in carrying out
54-19 this article.
54-20 SECTION 5.16. Section 22.004, Education Code, is amended to
54-21 read as follows:
54-22 Sec. 22.004. GROUP HEALTH BENEFITS FOR SCHOOL EMPLOYEES. (a)
54-23 Each district may participate in the group benefits program
54-24 established under Article 3.50-7, Insurance Code.
54-25 (b) A district that does not elect to participate in the
54-26 program described by Subsection (a) shall make available to its
54-27 employees group health coverage provided by a risk pool established
55-1 by one or more school districts under Chapter 172, Local Government
55-2 Code, or under a policy of insurance or group contract issued by an
55-3 insurer, a company subject to Chapter 20, Insurance Code, or a
55-4 health maintenance organization under the Texas Health Maintenance
55-5 Organization Act (Chapter 20A, Vernon's Texas Insurance Code). The
55-6 coverage must meet the substantive coverage requirements of Article
55-7 3.51-6, Insurance Code, and any other law applicable to group
55-8 health insurance policies or contracts issued in this state. The
55-9 coverage must include major medical treatment but may exclude
55-10 experimental procedures. In this subsection, "major medical
55-11 treatment" means a medical, surgical, or diagnostic procedure for
55-12 illness or injury. The coverage may include managed care or
55-13 preventive care and must be comparable to the basic health coverage
55-14 provided under the Texas Employees Uniform Group Insurance Benefits
55-15 Act (Article 3.50-2, Vernon's Texas Insurance Code). The board of
55-16 trustees of the Teacher Retirement System of Texas shall adopt
55-17 rules to determine whether a school district's group health
55-18 coverage is comparable to the basic health coverage specified by
55-19 this subsection. The rules must provide for consideration of the
55-20 following factors concerning the district's coverage in determining
55-21 whether the district's coverage is comparable to the basic health
55-22 coverage specified by this subsection:
55-23 (1) the deductible amount for service provided inside
55-24 and outside of the network;
55-25 (2) the coinsurance percentages for service provided
55-26 inside and outside of the network;
55-27 (3) the maximum amount of coinsurance payments a
56-1 covered person is required to pay;
56-2 (4) the amount of the copayment for an office visit;
56-3 (5) the schedule of benefits and the scope of
56-4 coverage;
56-5 (6) the lifetime maximum benefit amount; and
56-6 (7) verification that the coverage is issued by a
56-7 provider licensed to do business in this state by the Texas
56-8 Department of Insurance or is provided by a risk pool authorized
56-9 under Chapter 172, Local Government Code, or that a district is
56-10 capable of covering the assumed liabilities in the case of coverage
56-11 provided through district self-insurance.
56-12 (c) [(b)] The cost of the coverage provided under the
56-13 program described by Subsection (a) shall be paid by the state, the
56-14 district, and the employees in the manner provided by Article
56-15 3.50-7, Insurance Code. The cost of coverage provided under a plan
56-16 adopted under Subsection (b) shall [may] be shared by the employees
56-17 and the district without contribution by the state.
56-18 (d) [(c)] Each district shall report the district's
56-19 compliance with this section [subsection] to the executive director
56-20 of the Teacher Retirement System of Texas not later than March 1 of
56-21 each even-numbered year in the manner required by the board of
56-22 trustees of the Teacher Retirement System of Texas. For a district
56-23 that does not elect to participate in the program described by
56-24 Subsection (a), the [The] report must be based on the district
56-25 group health coverage plan in effect during the current plan year
56-26 and must include:
56-27 (1) appropriate documentation of:
57-1 (A) the district's contract for group health
57-2 coverage with a provider licensed to do business in this state by
57-3 the Texas Department of Insurance or a risk pool authorized under
57-4 Chapter 172, Local Government Code; or
57-5 (B) a resolution of the board of trustees of the
57-6 district authorizing a self-insurance plan for district employees
57-7 and of the district's review of district ability to cover the
57-8 liability assumed;
57-9 (2) the schedule of benefits;
57-10 (3) the premium rate sheet, including the amount paid
57-11 by the district and employee;
57-12 (4) the number of employees covered by the [each]
57-13 health coverage plan offered by the district; and
57-14 (5) any other information considered appropriate by
57-15 the executive director of the Teacher Retirement System of Texas.
57-16 (e) [(d)] Based on the criteria prescribed by Subsection (b)
57-17 [(a)], the executive director of the Teacher Retirement System of
57-18 Texas shall, for each district that does not elect to participate
57-19 in the program described by Subsection (a), certify whether a
57-20 district's coverage is comparable to the basic health coverage
57-21 provided under the Texas Employees Uniform Group Insurance Benefits
57-22 Act (Article 3.50-2, Vernon's Texas Insurance Code). If the
57-23 executive director of the Teacher Retirement System of Texas
57-24 determines that the group health coverage offered by a district is
57-25 not comparable, the executive director shall report that
57-26 information to the district and to the Legislative Budget Board.
57-27 The executive director shall submit a report to the legislature not
58-1 later than September 1 of each even-numbered year describing the
58-2 status of each district's group health coverage program based on
58-3 the information contained in the report required by Subsection (d)
58-4 [(c)] and the certification required by this subsection.
58-5 (f) [(e)] A school district that does not elect to
58-6 participate in the program described by Subsection (a) may not
58-7 contract with an insurer, a company subject to Chapter 20,
58-8 Insurance Code, or a health maintenance organization to issue a
58-9 policy or contract under this section, or with any person to assist
58-10 the school district in obtaining or managing the policy or contract
58-11 unless, before the contract is entered into, the insurer, company,
58-12 organization, or person provides the district with an audited
58-13 financial statement showing the financial condition of the insurer,
58-14 company, organization, or person.
58-15 (g) [(f)] An insurer, a company subject to Chapter 20,
58-16 Insurance Code, or a health maintenance organization that issues a
58-17 policy or contract under this section and any person that assists
58-18 the school district in obtaining or managing the policy or contract
58-19 for compensation shall provide an annual audited financial
58-20 statement to the school district showing the financial condition of
58-21 the insurer, company, organization, or person.
58-22 (h) [(g)] An audited financial statement provided under this
58-23 section must be made in accordance with rules adopted by the
58-24 commissioner of insurance or state auditor, as applicable.
58-25 SECTION 5.17. Sections 7A and 20, Article 3.50-4, Insurance
58-26 Code, are repealed.
58-27 SECTION 5.18. Except as provided by Section 7.01 of this Act,
59-1 this article takes effect September 1, 2002.
59-2 ARTICLE 6. TRANSITION
59-3 SECTION 6.01. (a) During the 2001-2002 school year, the
59-4 Teacher Retirement System of Texas shall develop the plan or plans
59-5 to be implemented and administered under Article 3.50-7, Insurance
59-6 Code, as added by this Act.
59-7 (b) Coverage under the plan or plans authorized by Article
59-8 3.50-7, Insurance Code, as added by this Act, shall begin with the
59-9 2002-2003 school year, but not later than September 1, 2002.
59-10 SECTION 6.02. The Teacher Retirement System of Texas shall
59-11 adopt rules as necessary to implement Section 4.02 of this Act not
59-12 later than March 1, 2002.
59-13 SECTION 6.03. Except as provided by Section 7.01 of this Act,
59-14 this article takes effect September 1, 2001.
59-15 ARTICLE 7. CONTINGENT EFFECT
59-16 SECTION 7.01. (a) Except as provided by this section, this
59-17 Act takes effect only if:
59-18 (1) the constitutional amendment proposed by the 77th
59-19 Legislature, Regular Session, 2001, relating to the use of income
59-20 and appreciation of the permanent school fund is approved by the
59-21 voters; and
59-22 (2) the constitutional amendment proposed by the 77th
59-23 Legislature, Regular Session, 2001, relating to the use of
59-24 contributions to the pension fund of the Teacher Retirement System
59-25 of Texas to finance health care benefits for retirees of the system
59-26 is approved by the voters.
59-27 (b) Except as provided by this section, if either of the
60-1 proposed constitutional amendments described by Subsection (a) of
60-2 this section is not approved by the voters, this Act has no effect.
60-3 (c) Subsections (a) and (b) of this section do not apply to
60-4 Sections 2.01, 2.02, 2.08, 2.10, 4.02, and 4.11 of this Act.