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Floor Packet Page No. 24                                                    

	
Amend CSHB 1 as follows:                                                     
	1.  On page I-40 of the bill pattern for the Employees 
Retirement System, insert the following new language:
	5.  State Contribution to Group Insurance for General State 
Employees.  Funds identified above for group insurance are intended 
to fund:
		a.  the total cost of the basic life and health coverage 
for all active and retired employees;
		b.  fifty percent of the total cost of health coverage 
for the spouses and dependent children of all active and retired 
employees who enroll in coverage categories which include a spouse 
and/or dependent children; and
	In no event shall the total amount of state contributions 
allocated to fund coverage in an optional health plan exceed the 
actuarially determined total amount of state contributions that 
would be required to fund basic health coverage for those active 
employees and retirees who have elected to participate in that 
optional health plan.
	During each fiscal year, the state's monthly contribution 
shall be determined by multiplying (1) the per capita monthly 
contribution as certified herein by (2) the total number of 
full-time active and retired employees enrolled for coverage during 
that month.
	Each year, upon adoption of group insurance rates by the 
Board of Trustees, Employees Retirement System (ERS) must notify 
the Comptroller, the Legislative Budget Board, and the Governor of 
the per capita monthly contribution required in accordance with 
this rider for each full-time active and retired employee enrolled 
for coverage during the fiscal year.
	It is the intent of the Legislature that the Employees 
Retirement System reduce provider payments by renegotiating 
contracts or implementing a program of selective contracting with 
certain providers participating in HealthSelect to reduce both high 
cost providers and other providers that will not hinder compliance 
with Texas Department of Insurance access to provider standards.  
Furthermore, it is the intent of the Legislature that the Employees 
Retirement System control the cost of the group insurance program 
by not providing rate increases to health care providers 
participating in HealthSelect during the 2004-05 biennium.
	In order to fund the Employees Retirement System (ERS) 
projected health plan costs for the 2004-05 Biennium, the 
Legislature directs the Employees Retirement System to reduce total 
health plan costs by $499.9 million in All Funds and $304.7 million 
in General Revenue.  This reduction will be accomplished through 
benefit design changes made by the Employees Retirement System 
provided that these benefit design changes exclude mandatory use of 
mail order for maintenance medications.  The Employees Retirement 
System is directed to replace the cost savings related to mandatory 
mail order for maintenance medications with other benefit design 
changes.  It is the intent of the Legislature that the Employees 
Retirement System achieve this reduction, to the extent possible, 
with the least impact on participants.