By Carona S.B. No. 135 77R1529 PB-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to a statewide group insurance program for employees and 1-3 retirees of school districts. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Subchapter E, Chapter 3, Insurance Code, is 1-6 amended by adding Article 3.50-7 to read as follows: 1-7 Art. 3.50-7. TEXAS SCHOOL EMPLOYEES UNIFORM GROUP HEALTH 1-8 INSURANCE BENEFITS ACT 1-9 Sec. 1. SHORT TITLE. This article may be cited as the 1-10 Texas School Employees Uniform Group Health Insurance Benefits Act. 1-11 Sec. 2. DEFINITIONS. In this article: 1-12 (1) "Administering firm" means any entity designated 1-13 by the trustee to administer any coverages, services, benefits, or 1-14 requirements under this article and the trustee's rules adopted 1-15 under this article. 1-16 (2) "Basic coverage" means the program of group 1-17 coverages determined by the trustee in which each full-time 1-18 employee and retiree participates automatically unless 1-19 participation is specifically waived. 1-20 (3) "Cafeteria plan" means a plan as defined and 1-21 authorized by Section 125, Internal Revenue Code of 1986 (26 U.S.C. 1-22 Section 125) and its subsequent amendments. 1-23 (4) "Employee" means a participating member of the 1-24 Teacher Retirement System of Texas who is employed by a 2-1 participating school district and who is not covered by a group 2-2 insurance program under the Texas Employees Uniform Group Insurance 2-3 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) or the 2-4 Texas State College and University Employees Uniform Insurance 2-5 Benefits Act (Article 3.50-3, Vernon's Texas Insurance Code). The 2-6 term does not include an individual performing personal services 2-7 for a school district as an independent contractor. 2-8 (5) "Health benefit plan" means any group policy or 2-9 contract, medical, dental, or hospital service agreement, 2-10 membership or subscription contract, salary continuation plan, 2-11 health maintenance organization agreement, preferred provider 2-12 arrangement, or any similar group arrangement or any combination of 2-13 those policies, plans, contracts, agreements, or arrangements that 2-14 provides for, pays for, or reimburses expenses for health care 2-15 services, including comparable health care services for employees 2-16 and retirees who rely solely on spiritual means through prayer for 2-17 healing in accordance with the teaching of a recognized church or 2-18 denomination. 2-19 (6) "Retiree" means a person who: 2-20 (A) has retired under the Teacher Retirement 2-21 System of Texas with at least 10 years of credit for service in 2-22 public schools of this state or has retired under the Teacher 2-23 Retirement System of Texas for disability and is entitled to 2-24 receive an annuity from the system based on the person's service; 2-25 and 2-26 (B) is not eligible to participate in the group 2-27 insurance program provided under the Texas Employees Uniform Group 3-1 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance 3-2 Code) or the Texas State College and University Employees Uniform 3-3 Insurance Benefits Act (Article 3.50-3, Vernon's Texas Insurance 3-4 Code). 3-5 (7) "Trustee" means the Teacher Retirement System of 3-6 Texas. 3-7 Sec. 3. ADMINISTRATION. (a) The Teacher Retirement System 3-8 of Texas, as trustee, shall implement and administer the statewide 3-9 uniform group insurance program described by this article. 3-10 (b) The trustee may hire and compensate employees. 3-11 (c) The trustee may, on a competitive bid basis, contract 3-12 with a qualified, experienced firm of group insurance specialists 3-13 or an administering firm who will act for the trustee in the 3-14 capacity of independent administrators and managers of the program 3-15 authorized under this article. The independent administrator 3-16 selected by the trustee shall assist the trustee to ensure the 3-17 proper administration of this article and the coverages, services, 3-18 and benefits provided for or authorized by this article and shall 3-19 be paid by the trustee. 3-20 (d) The trustee may enter into interagency contracts with 3-21 any agency of the state, including the Employees Retirement System 3-22 of Texas, for the purpose of assistance in implementing the program 3-23 provided by this article. 3-24 (e) The trustee has the powers with regard to the program 3-25 described by this article that the Employees Retirement System of 3-26 Texas has in administering the Texas Employees Uniform Group 3-27 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance 4-1 Code), including the power to adjudicate claims, expel participants 4-2 from the program for cause, and adopt rules to administer this 4-3 article. 4-4 Sec. 4. PARTICIPATION IN PROGRAM. (a) Each school 4-5 district is required to participate in the program. 4-6 (b) Each full-time employee or retiree of a school district 4-7 is automatically covered by the basic coverage for employees or 4-8 retirees, as applicable, unless the employee or retiree 4-9 specifically waives coverage or unless the employee or retiree is 4-10 expelled from the program. 4-11 (c) Each part-time employee of a participating school 4-12 district is eligible to participate in the program provided by this 4-13 article on application in the manner provided by the trustee, 4-14 unless the employee has been expelled from the program. A 4-15 participating school district shall notify each of its part-time 4-16 employees of the employee's eligibility for participation in the 4-17 program. 4-18 Sec. 5. GROUP COVERAGES. (a) The trustee shall establish 4-19 plans of group coverages for employees and retirees of school 4-20 districts and their dependents. The coverages shall be comparable 4-21 in scope and, to the greatest extent possible, in cost to the 4-22 coverages provided under the Texas Employees Uniform Group 4-23 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance 4-24 Code) and may include group life coverages, health benefit plans, 4-25 accidental death and dismemberment coverages, coverages against 4-26 short-term or long-term loss of salary, and other coverages 4-27 considered advisable by the trustee. Comparable plans of each type 5-1 of coverage established must be offered to employees and retirees 5-2 of all school districts. 5-3 (b) The trustee by rule may define the basic coverage in 5-4 which each full-time employee or retiree participates unless 5-5 specifically waived. Basic coverage must include a health benefit 5-6 plan. The trustee by rule may define optional coverage, which may 5-7 include coverage for dependents, and voluntary coverage. 5-8 (c) The trustee may provide a cafeteria plan for employees 5-9 of school districts. 5-10 (d) The trustee may determine that plans of coverages be 5-11 provided directly from the fund described by Section 7 of this 5-12 article rather than through the purchase of coverage. Any 5-13 self-funded plan of coverages is exempt from any other provision of 5-14 this code unless the law specifically applies to the plan or to 5-15 this article. 5-16 Sec. 6. PAYMENT OF CONTRIBUTIONS. (a) The state shall 5-17 contribute for each employee and retiree covered by the program an 5-18 amount equal to the amount the state contributes for participants 5-19 in the program provided under the Texas Employees Uniform Group 5-20 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance 5-21 Code). 5-22 (b) Each employee and retiree covered by the program shall 5-23 pay that portion of the cost of coverage selected by the employee 5-24 or retiree that exceeds the amount of state contributions. 5-25 Sec. 7. FUND. (a) Contributions collected under Section 6 5-26 of this article and any amounts appropriated by the legislature for 5-27 contingency reserves or administrative expenses shall be deposited 6-1 in the Texas school employees uniform group insurance trust fund. 6-2 The fund is a trust fund with the comptroller. The trustee may use 6-3 amounts in the fund only to provide group coverages under this 6-4 article and to pay the expenses of administering the program. 6-5 (b) The trustee may invest assets of the fund in the manner 6-6 provided by Section 67(a)(3), Article XVI, Texas Constitution. 6-7 SECTION 2. Article 3.50-4, Insurance Code, is amended by 6-8 adding Section 3A to read as follows: 6-9 Sec. 3A. TERMINATION OF PROGRAM AND TRANSFER OF PROPERTY. 6-10 (a) The trustee shall transfer from the program established under 6-11 this article all coverages provided under the program and all 6-12 records relating to the program to the group insurance program 6-13 established under Article 3.50-7 of this code not later than the 6-14 date on which the program of coverages provided under Article 6-15 3.50-7 of this code is implemented. 6-16 (b) The comptroller shall transfer from the program 6-17 established under this article all assets and liabilities of that 6-18 program to the group insurance program established under Article 6-19 3.50-7 of this code not later than the date on which the program of 6-20 coverages provided under Article 3.50-7 of this code is 6-21 implemented. 6-22 (c) On the transfer of property described by this section, 6-23 the program provided by this article is terminated. 6-24 SECTION 3. Article 3.51, Insurance Code, is amended by 6-25 adding Section 3 to read as follows: 6-26 Sec. 3. Notwithstanding any other provision of this article, 6-27 a common or independent school district or any other agency or 7-1 subdivision of the public school system of this state may not 7-2 procure insurance contracts under this article and may not renew an 7-3 insurance contract procured under this article after the date on 7-4 which the program of coverages provided under Article 3.50-7 of 7-5 this code is implemented. 7-6 SECTION 4. Section 26.036, Insurance Code, is amended by 7-7 adding Subsection (c) to read as follows: 7-8 (c) An independent school district may not participate in 7-9 the small employer market under this article and may not renew an 7-10 insurance contract obtained in accordance with this article after 7-11 the date on which the program of coverages provided under Article 7-12 3.50-7 of this code is implemented. 7-13 SECTION 5. Section 22.004, Education Code, is amended by 7-14 adding Subsection (h) to read as follows: 7-15 (h) Notwithstanding any other provision of this section, a 7-16 district may not make group health coverage available to its 7-17 employees under this section after the date on which the program of 7-18 coverages provided under Article 3.50-7, Insurance Code, is 7-19 implemented. A district is required to begin participating in the 7-20 program provided under Article 3.50-7, Insurance Code, on the later 7-21 of: 7-22 (1) the first day of the first school year beginning 7-23 after the date of implementation of Article 3.50-7, Insurance Code; 7-24 or 7-25 (2) the date on which the district's contract for 7-26 group health insurance coverage expires. 7-27 SECTION 6. (a) During the 2001-2002 school year, the 8-1 Teacher Retirement System of Texas shall develop the plan or plans 8-2 to be implemented and administered under Article 3.50-7, Insurance 8-3 Code, as added by this Act. The system may employ persons as 8-4 necessary to implement this subsection. 8-5 (b) The Employees Retirement System of Texas shall enroll 8-6 persons in the program provided under Article 3.50-7, Insurance 8-7 Code, as added by this Act, beginning with the first school year 8-8 for which the legislature makes an appropriation of contributions 8-9 required by Section 6(a) of that article. 8-10 SECTION 7. (a) Except as provided by Subsection (b) of this 8-11 section, this Act takes effect September 1, 2001. 8-12 (b) The Teacher Retirement System of Texas shall adopt rules 8-13 as necessary to implement Section 6 of this Act not later than 8-14 December 31, 2001.