SRC-MSY, EPT S.B. 1169 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 1169
By: Janek
State Affairs
4/1/2003
As Filed


DIGEST AND PURPOSE 

In an effort to control escalating health insurance costs there has been
development of consumerdriven health benefit plans.  Medical Savings
Accounts are one type of consumer-driven health benefit plan.  Since the
legislature met in 2001, a new benefit plan "Health Reimbursement Account"
has been introduced.  As proposed, S.B. 1169 provides state employees with
the opportunity to participate in health reimbursement accounts, a new
IRS-approved health plan similar to medical savings accounts but with the
"roll-over" of unused health care dollars from year to year. 

RULEMAKING AUTHORITY

Rulemaking authority is granted to the board of trustees established under
Chapter 815, Government Code, to administer the Employees Retirement
System of Texas in SECTION 1 (Section 1551.218, Insurance Code), of this
bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter E, Chapter 1551, Insurance Code, as
effective June 1, 2003, by adding Section 1551.218, as follows: 
 
Sec. 1551.218.  HEALTH REIMBURSEMENT ARRANGEMENTS.  (a)  Requires the
board of trustees of the Employees Retirement System to offer coverage
through health reimbursement arrangements.  Requires the board of trustees
to develop, implement, and administer health reimbursement arrangements. 
 
(b)  Authorizes health reimbursement arrangements offered under this
section to only reimburse expenses for medical care, as defined by Section
213(d), Internal Revenue Code of 1986. 
 
(c)  Requires the board of trustees by rule to establish the maximum
dollar amount for a coverage period that may be reimbursed under a health
reimbursement arrangement.  Requires any unused portion of the maximum
dollar amount at the end of a coverage period to be carried forward to
increase the maximum reimbursement amount in subsequent coverage periods. 
 
(d)  Authorizes the board of trustees to enter into a contract or
agreement with an independent and qualified agency, individual, or entity
to: 

(1)  develop, implement, or administer health reimbursement arrangements;
or 

  (2)  assist in those activities.

SECTION 2.  Amends Subchapter G, Chapter 1551, Insurance Code, as
effective June 1, 2003, by adding Section 1551.321, as follows: 
 
Sec. 1551.321.  FUNDING OF HEALTH REIMBURSEMENT ARRANGEMENTS. Requires
health reimbursement arrangements offered under Section 1551.218 to be
paid  for solely by the employer.  Prohibits employer contributions to
health reimbursement arrangements from being attributable to salary
reductions or otherwise provided under the cafeteria plan. 
 
SECTION 3.  Provides that the board of trustees of the Employees
Retirement System of Texas is not required to offer health reimbursement
arrangements, as required by Section 1551.218, Insurance Code, as added by
this Act, before September 1, 2004. 
 
SECTION 4.  Requires the board of trustees of the Employees Retirement
System of Texas to adopt rules as required under Section 1551.218,
Insurance Code, as added by this Act, by June 1, 2004. 
 
SECTION 5.  Effective date:  September 1, 2003.