Amend CSSB 1952 (house committee report), in PART 10 of the
bill, by inserting the following new ARTICLE in that PART,
appropriately numbered (page 230, between lines 21 and 22):
ARTICLE _____. TEXAS SCHOOL EMPLOYEES UNIFORM GROUP HEALTH
COVERAGE ACT AND BENEFITS FOR SCHOOL EMPLOYEES
SECTION 10_____.01. The heading to Article 3.50-8, Insurance
Code, is amended to read as follows:
Art. 3.50-8. ACTIVE EMPLOYEE HEALTH REIMBURSEMENT
ARRANGEMENT [COVERAGE OR COMPENSATION SUPPLEMENTATION]
SECTION 10_____.02. The heading to Section 1, Article
3.50-8, Insurance Code, is amended to read as follows:
Sec. 1. GENERAL DEFINITIONS.
SECTION 10_____.03. Section 1, Article 3.50-8, Insurance
Code, is amended by amending Subdivisions (1) and (2) and adding
Subdivisions (1-a), (1-b), (1-c), (2-a), (2-b), (2-c), (2-d),
(3-a), and (3-b) to read as follows:
(1) "Account" means a health reimbursement arrangement
account established under this article for a participating employee
["Cafeteria plan" means a plan as defined and authorized by Section
125, Internal Revenue Code of 1986, and its subsequent amendments].
(1-a) "Administering firm" means any entity designated by
the trustee to administer any coverages, services, benefits, or
requirements under this article and the trustee's rules adopted
under this article.
(1-b) "Approved health benefit plan provider" means an
entity approved by the trustee to offer health benefit plan
coverage under this article.
(1-c) "Dependent" means:
(A) the spouse of a person;
(B) an unmarried child of the person if that child is
under 25 years of age, including:
(I) an adopted child;
(ii) a stepchild, foster child, or other child
who has a regular parent-child relationship with the person; or
(iii) a recognized natural child; or
(C) the person's recognized natural child, adopted
child, foster child, stepchild, or other child who is in a regular
parent-child relationship with the participating employee and who
lives with or has his or her care provided by the person on a regular
basis regardless of the child's age if the child is mentally
retarded or physically incapacitated to an extent that the child is
dependent on the person for care or support, as determined by the
trustee.
(2) "Employee" means a participating member of the Teacher
Retirement System of Texas who:
(A) is employed by a school district, other educational
district whose employees are members of the Teacher Retirement
System of Texas, participating charter school, or regional
education service center; [and]
(B) is not a retiree covered under the Texas Public
School Retired Employees Group Insurance Program established under
Article 3.50-4 of this code;
(C) is not covered by a group insurance program under
Chapter 1551 or 1601 of this code; and
(D) is not an individual performing personal services
for a participating entity as an independent contractor.
(2-a) "Health benefit plan" means a plan designed to
provide, pay for, or reimburse expenses for health care services.
The term includes:
(A) an insurance policy, contract, or certificate;
(B) a medical or hospital service agreement; and
(C) a similar arrangement, including coverage through
a health maintenance organization operating under Chapter 843.
(2-b) "Health benefit plan issuer" means an entity that
provides health benefit plan coverage in this state. The term
includes:
(A) an insurance company authorized to do business in
this state;
(B) a group hospital service corporation operating
under Chapter 842 of this code;
(C) a health maintenance organization operating under
Chapter 843 of this code;
(D) a stipulated premium insurance company operating
under Chapter 884 of this code;
(E) a multiple employer welfare arrangement subject to
Chapter 846 of this code;
(F) an approved nonprofit health corporation that
holds a certificate of authority issued under Chapter 844 of this
code; and
(G) any other entity providing a plan of health
insurance or health benefits coverage subject to state regulation
by the department.
(2-c) "Health reimbursement arrangement" is a health benefit
plan that:
(A) is paid for solely by the employer;
(B) is not provided under a salary reduction election;
(C) reimburses a participant for a qualified health
care expense incurred by the participant or the participant's
dependent;
(D) provides reimbursements up to a maximum dollar
amount at the end of a coverage period; and
(E) provides that any unused portion of the maximum
dollar amount at the end of a coverage period is carried forward to
increase the maximum reimbursement amount in subsequent coverage
periods.
(2-d) "Participant" means a person enrolled in the program.
(3-a) "Program" means the health reimbursement arrangement
program established under this article.
(3-b) "Qualified health care expense" means an expense paid
by an employee for medical care, as defined by Section 213(d),
Internal Revenue Code of 1986, and its subsequent amendments, for
the employee or the employee's dependents, as defined by Section
152, Internal Revenue Code of 1986, and its subsequent amendments.
SECTION 10_____.04. Article 3.50-8, Insurance Code, is
amended by adding Section 1A to read as follows:
Sec. 1A. DEFINITION OF EMPLOYER. (a) For purposes of
qualification under federal law of a health reimbursement
arrangement established under this article, "employer" means this
state and a school district, another educational district whose
employees are members of the Teacher Retirement System of Texas, a
participating charter school, or a regional education service
center.
(b) This article does not make an employee an employee of
this state for any purpose other than the limited purpose described
by Subsection (a) of this section.
SECTION 10_____.05. Section 2, Article 3.50-8, Insurance
Code, is amended to read as follows:
Sec. 2. ACTIVE EMPLOYEE HEALTH REIMBURSEMENT ARRANGEMENT
PROGRAM; STATE CONTRIBUTION [COVERAGE OR COMPENSATION
SUPPLEMENTATION]. (a) For each employee, the state shall annually
contribute $1,000 or the amount specified in the General
Appropriations Act to the health reimbursement arrangement account
established for that employee for the payment of qualified health
care expenses.
(b) Each year, the trustee shall contribute to the health
reimbursement arrangement account of each employee of [deliver to]
each school district, including a school district that is
ineligible for state aid under Chapter 42, Education Code, each
other educational district that is a member of the Teacher
Retirement System of Texas, each participating charter school, and
each regional education service center state the amount to which
the employee is entitled under Subsection (a) of this section
[funds in an amount, as determined by the trustee, equal to the
product of the number of active employees employed by the district,
school, or service center multiplied by $1,000 or a greater amount
as provided by the General Appropriations Act for purposes of this
article]. The contributions shall be made in equal monthly
installments.
(c) Each employee shall direct the expenditure of the amount
of the state contribution made under this section and that is
allocated to the employee in accordance with the General
Appropriations Act and this article.
(d) Money described by Subsection (c) of this section may be
used by an employee only in accordance with this article for the
employee and the employee's dependents for health benefit plan
coverage offered by approved health benefit plan providers and for
other qualified health care expenses.
(e) Any funds in a cafeteria plan authorized by Section 125,
Internal Revenue Code of 1986, and its subsequent amendments, and
described by Section 3(a) of this article, for an employee who
received the funds under this article, as this article existed
immediately before September 1, 2003, that were designated by the
employee for health care expenses and are unspent as of September 1,
2003, must be spent by the employee for qualified health care
expenses before the employee may spend any funds from the health
reimbursement arrangement account established for that employee
under this section. [(b) All funds received by a school district,
other educational district, participating charter school, or
regional education service center under this article are held in