SRC-JEC S.B. 1369 78(R)BILL ANALYSIS


Senate Research CenterS.B. 1369
By: Duncan
Finance
6/24/2003
Enrolled


DIGEST AND PURPOSE 

In 1985, the legislature created a comprehensive group health benefit plan
for eligible retired Texas public school employees and their eligible
dependents.  Historically, the program has been funded through a
combination of state, active teacher, and retiree contributions.  However,
program expenditures are now exceeding revenues.  S.B. 1369 sets forth
changes to the Texas Public School Employees Group Benefit Act. 

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the Teacher Retirement System
of Texas in SECTION  4 (Section 1575.161, Insurance Code) and SECTION  8
(Section 1575.212, Insurance Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION  1.  Amends Section 1575.002, Insurance Code, as effective June 1,
2003, by repealing Subdivision (2) (defining "board of trustees"),
amending Subdivisions (1), (3), (4), and (7), and adding Subdivision
(6-a), to conform to Section 3.03, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, and to conform more closely to the
source law from which the section was derived, and further, as follows: 

(1)  Redefines "active employee."

(3)  Redefines "carrier."

(4)  Redefines "fund."

(6-a)  Defines "public school."

(7)  Defines "trustee" rather than "system."

SECTION  2.  Amends Section 1575.004, Insurance Code, as effective June 1,
2003, to redefine "retiree." 

SECTION  3.  (a)  Amends Section 1575.153, Insurance Code, as effective
June 1, 2003, to conform to Section 3.10, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, and further, as follows: 

Sec. 1575.153.  New heading:  BASIC COVERAGE.  Prohibits the denial of
coverage of a retiree who applies for coverage during an enrollment period
in a basic plan provided under this chapter unless the Teacher Retirement
System of Texas (TRS), rather than board of trustees, finds under
Subchapter K that the retiree, rather than individual, defrauded or
attempted to defraud the group program. 

 (b)  Repealer:  Section 3.10 (relating to automatic coverage), Chapter
1187, Acts of the 77th Legislature, Regular Session, 2001. 

SECTION  4.  Amends Subchapter D, Chapter 1575, Insurance Code, as
effective June 1, 2003, by adding Sections 1575.161 and 1575.162, as
follows: 

Sec. 1575.161.  OPEN ENROLLMENT; ADDITIONAL ENROLLMENT PERIODS.  (a)
Authorizes a retiree eligible for coverage under the group program to
select any coverage provided under this chapter for which the person is
otherwise eligible during certain time periods. 

(b)  Authorizes certain retirees to select coverage during alternative
time periods under certain circumstances. 

(c)  Authorizes a retiree described by Subsection (b), if the retiree is
not covered by the Medicare program, to enroll in the next-higher coverage
tier under the group program and to add dependent coverage in that same
coverage tier. 

(d)  Authorizes a retiree described by Subsection (b), if the retiree is
covered by the Medicare program, to enroll in any coverage tier under the
group program and to add dependent coverage in that same coverage tier. 

(e)  Provides that this section does not affect the right of a retiree
enrolled in a coverage tier under the group program to select a lower
level of coverage at any time. 

Sec. 1575.162.  SPECIAL ENROLLMENTS.  Provides that this chapter does not
limit the ability of an individual to enroll in the group program if the
individual meets certain criteria. 

SECTION  5.  Amends Section 1575.201, Insurance Code, as effective June 1,
2003, as follows: 

Sec. 1575.201.  New heading:  ADDITIONAL STATE CONTRIBUTIONS; CERTAIN
CONTRIBUTIONS.  (a)  Requires the state, through TRS, to contribute from
money in the retired school employees group insurance fund the total cost
of the basic plan covering each participating retiree, and for each
participating dependent, surviving spouse, and surviving dependent child,
the amount prescribed by the General Appropriations Act to cover part of
the cost of the basic plan covering the dependent, surviving spouse, and
surviving dependent child. 

(b)  Requires TRS to collect the amount of premium required for basic
coverage under the group program that exceeds the amount contributed by
the state for those individuals described by Subsection (a)(2). 

SECTION  6.  Amends Section 1575.202(a), Insurance Code, as effective June
1, 2003, to require the state, each state fiscal year, to contribute to
the fund an amount equal to one, rather than 0.5, percent of the salary of
each active employee. 

SECTION  7.  Amends Section 1575.203(a), Insurance Code, as effective June
1, 2003, to require each active employee, each state fiscal year, as a
condition of employment, to contribute to the retired school employees
group insurance fund an amount equal to 0.5, rather than 0.25 percent of
the employee's salary. 

SECTION  8.  Amends Subchapter E, Chapter 1575, Insurance Code, as
effective June 1, 2003, by adding Sections 1575.211 and 1575.212, as
follows: 

Sec. 1575.211.  COST SHARING.  (a)  Requires the total costs for the
operation of the group program to be shared among the state, the public
schools, the active employees, and the  retirees in the manner prescribed
by the General Appropriations Act. 

(b)  Requires that, in determining the allocation of total costs under
this section, the state pay not more than 55 percent of the total costs;
retirees pay at least 30 percent of the total costs; and the balance be
paid by active employees and public schools. 

Sec. 1575.212.  PAYMENT BY RETIREES; RANGES.  (a)  Requires TRS by rule to
establish ranges for payment of the share of total costs allocated under
Section 1575.211 to retirees, with different levels for certain retirees. 

(b)  Authorizes TRS, in establishing ranges for payment of the share of
total costs allocated under Section 1575.211 to retirees, to consider the
years of service credit accrued by a retiree and to reward those retirees
with more years of service credit. 

SECTION  9.  Repealers:  Section 1575.154 (Enrollment in Basic Plan by
Retirees Required), Insurance Code, as effective June 1, 2003; and Section
823.401(h) (pertaining to out-of-state service credit), Government Code. 

SECTION  10.  Requires the comptroller of public accounts, effective
September 1, 2003, to transfer $42 million from the Texas school employees
uniform group coverage trust fund established under Section 8, Article
3.50-7, Insurance Code, to the retired school employees group insurance
fund described by Subchapter G, Chapter 1575, Insurance Code, to
compensate the retired school employees group insurance fund for money
transferred from that fund under Section 4.01, Chapter 1187, Acts of the
77th Legislature, Regular Session, 2001. 

SECTION  11.  Provides that the change in law made by this Act to Section
1575.202(a), Section 1575.203(a), and Section 1575.211, Insurance Code,
takes effect September 1, 2003. 

SECTION  12.  Provides that, to the extent of any conflict, this Act
prevails over another Act of the 78th Legislature, Regular Session, 2003,
relating to nonsubstantive additions to and corrections in enacted codes. 

SECTION  13.  Effective date:  September 1, 2004, except as otherwise
provided by this Act.