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.