C.S.S.B. 1370 78(R) BILL ANALYSIS
C.S.S.B. 1370
By: Duncan
State Health Care Expenditures, Select
Committee Report (Substituted)
BACKGROUND AND PURPOSE
Currently, the Texas Employees Retirement System (ERS), University of
Texas System, Texas A&M University System, and Teacher Retirement System
of Texas(TRS) provide group health insurance benefits to over 1 million
Texans. S.B. 1370 implements cost-saving measures for these programs.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is expressly
granted to the Teacher Retirement System of Texas in SECTION SECTION 1.01
(Section 2, Article 3.50-8, Insurance Code) of this bill.
ANALYSIS
ARTICLE 1. TEXAS SCHOOL EMPLOYEES UNIFORM GROUP HEALTH COVERAGE ACT AND
BENEFITS FOR SCHOOL EMPLOYEES
SECTION 1.01. Amends Section 2, Article 3.50-8, Insurance Code, by adding
Subsections (e), (f), and (g), as follows:
(e) Provides that a member of the professional staff of a district,
charter school, or service
center described by Subsection (a) of this section is not eligible to
receive state funds under Subsection (a) of this section.
(f) Provides that for purposes of this section, a member of the
professional staff of a district, charter school, or service center
described by Subsection (a) of this section has the meaning defined by
rule by the trustee.
(g) Provides that an employee is not eligible to receive a state
contribution under this article until the 90th day after the date the
employee is employed by an entity described by Section 1(2)(A) of this
article.
SECTION 1.02. Requires the state, notwithstanding Article 3.50-8,
Insurance Code, to pay the state contribution for active employee health
coverage or supplemental compensation authorized under Section 2, Article
3.50-8, Insurance Code, for the last month of state fiscal year 2005 not
earlier than the first day of the first month of state fiscal year 2006.
SECTION 1.03. 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.
ARTICLE 2. TEXAS EMPLOYEES GROUP BENEFITS ACT
SECTION 2.01. Amends Sections 1551.003(3), (9), and (11), Insurance Code,
as effective June 1, 2003, as follows:
(3) Redefines "basic coverage."
(9) Redefines "full-time employee."
(11) Redefines "part-time employee."
SECTION 2.02. Amends Section 1551.101(a), Insurance Code, as effective
June 1, 2003, to make eligible an elected or appointed officer or employee
who has certain characteristics to participate in the group benefits
program as an employee on the date specified by Section 1551.1055.
SECTION 2.03. Amends Section (a) 1551.102, Insurance Code, as effective
June 1, 2003, to
conform to Section 27, Chapter 1231, Acts of the 77th Legislature, Regular
Session, 2001, and
further amended to read as follows:
(a) to provide that an individual who has at least a number of, rather
than three, years of service credit, for which the individual was eligible
to participate in the group benefits program under Section 1551.101 or who
has at least five years of membership and five years of military service
credited in ERS, and who retires in a manner described by this section, is
eligible, subject to Section 1551.1055, to participate as an annuitant in
the group benefits program. This subsection excludes certain classes of
individuals that participate in the Employees Retirement System.
SECTION 2.04. Amends Section 1551.102, Insurance Code, as effective June
1, 2003, by
amending Subsections (b), (c), (d), (f), and (g), and adding Subsection
(h), as follows:
(b) Modifies the criteria for an individual's participation in the group
benefits program.
(c) Modifies the criteria for an individual's participation in the group
benefits program.
(d) Modifies the criteria for an individual's participation in the group
benefits program to require the individual to be at least 65 years of age,
or that the individuals age plus service credit equals or exceeds the
number 80 would be eligible for retirement.
(f) Modifies the criteria for an individual's participation in the group
benefits program.
(g) Modifies the criteria for an individual's participation in the group
benefits program.
(h) Authorizes a person eligible to participate and participating in the
group benefits program as an annuitant on September 1, 2003, to continue
to participate in the program as an annuitant if a lapse in coverage has
not occurred.
SECTION 2.05. Amends Section 1551.104(a), Insurance Code, as effective
June 1, 2003, to make conforming changes.
SECTION 2.06. Amends Subchapter C, Chapter 1551, Insurance Code, as
effective June 1, 2003,
by adding Section 1551.1055, as follows:
Sec. 1551.1055. DATE ELIGIBILITY BEGINS; WAITING PERIOD. (a) Provides
that,
except as provided by Subsection (c) and (d), eligibility under Section
1551.101 begins on the first day of the calendar month that begins after
the 90th day after the date the employee performs services for a state
agency or is qualified for and begins to hold elected or appointed office.
(b) Provides that, except as provided by Subsection (c), for an individual
who does not retire at the end of the last month for which the individual
is on the payroll of a state agency before retirement, eligibility under
Section 1551.102 begins on the first day of the calendar month that begins
after the 90th day after the date the individual retires.
(c) Provides that the waiting period established by Subsections (a) and
(b) applies only to the determination of initial eligibility to
participate in the group health benefits program and does not apply to
the determination of initial eligibility to participate in optional and
voluntary insurance coverages under the group benefits program.
(d) Provides that eligibility under Section 1551.101 may not begin earlier
than the first day that an employee performs services for an institution
of higher education, if any amount paid for premium incurred before the
date specified in Subsection (a) for the employee and any dependents of
the employee is paid from money not appropriated out of the general
revenue fund, in accordance with policy and procedures established by the
governing board of the institution of higher education.
SECTION 2.07. Amends Section 1551.109(a), Insurance Code, as effective
June 1, 2003, to
provide that, subject to Section 1551.351, on application to the board of
trustees of ERS and
arrangement for payment of contributions, an individual participating in
the group benefits program on August 31, 2003, as a current or former
member of a governing body with administrative responsibility over a state
agency created under a statute of this state that has statewide
jurisdiction and whose employees are covered by this chapter or as a
current or former member of the State Board of Education, the governing
body of an institution of higher education remains eligible for
participation in a health benefit plan offered under this chapter if a
lapse in coverage has not occurred.
SECTION 2.08. Amends Section 1551.111(b), Insurance Code, as effective
June 1, 2003, to limit
participation to individuals with certain characteristics.
SECTION 2.09. Amends Section 1551.112(a), Insurance Code, as effective
June 1, 2003, to provide that an individual and their dependants may
participate as an annuitant, subject to Section 1551.1055, if they began
employment or became an officer of the Texas Turnpike Authority on August
31, 1997, or the three year period preceding August 31, 1997, is at least
65 years of age and is eligible to retire with at least 10 years of
service credit under the proportionate retirement program.
SECTION 2.10. Amends Section 1551.319, Insurance Code, as effective June
1, 2003, by adding
Subsection (c), (d) and (e), as follows:
(c) Requires the superintendents of the Texas School for the Deaf and the
Texas School for the Blind and Visually Impaired to determine whether an
educational professional employee under contract with the school under
Section 30.024 or 30.055, Education Code, as applicable, is a full-time
employee for purposes of this section.
(d) Provides that the executive head of the Windham School District can
determine if an educational profession is a full time employee for
purposes of this chapter
(e) Provides that an institution of higher education can contribute in
excess of monies that are appropriated for a part time employee as
described in Section 1551.101(e)(2) by using money that is not
appropriated from the general revenue fund.
SECTION 2.11. Repealer: Section 27 (amending the definitions of
"annuitant" and "dependent"),
Chapter 1231, Acts of the 77th Legislature, Regular Session, 2001.
SECTION 2.12. Repealers: Sections 1551.101(c) and (d) (pertaining to
eligibility for the program), Insurance Code, as effective June 1, 2003.
ARTICLE 3. TEXAS RETIRED SCHOOL EMPLOYEES GROUP BENEFITS ACT
SECTION 3.01 Amends Section 1575.002, Insurance Code, as effective June
1, 2003, is amended to conform to Section 3.03, Chapter 1187, Acts of the
77th Legislature and source law it was derived from, and further amends as
follows:
(1) Redefines "Active employee."
(2) Redefines "Carrier."
(3) Redefines "Fund."
(4) Redefines "Group program."
(5) Redefines "Health benefit plan."
(6) Redefines "Public School."
(7) Redefines "Trustee."
SECTION 3.02. Amends Section 1575.202 (a), Insurance Code, that each
state fiscal year, the state is required to contribute to the Texas
public school employees group insurance fund an amount equal to 1 percent,
rather than 0.5 percent of the employee's salary.
SECTION 3.03. 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 Texas public school employees group
insurance fund an amount equal to 0.5, rather than 0.25, percent of the
employee's salary.
SECTION 3.04. Amends Section 1575.204, Insurance Code, as effective June
1, 2003, as follows:
Sec. 1575.204. New heading: PUBLIC SCHOOL CONTRIBUTION.
Requires each employing school district, each state fiscal year, to
contribute to the Texas public school employees group insurance fund the
amount prescribed by the General Appropriations Act, which may not be less
than 0.25 percent or greater than 0.75 percent of the salary of each
active employee of the school district. Deletes text regarding the ratio
of state and active employee contributions.
ARTICLE 4. UNIFORM INSURANCE BENEFITS ACT FOR EMPLOYEES OF THE
UNIVERSITY OF TEXAS SYSTEM AND THE TEXAS A&M UNIVERSITY SYSTEM
SECTION 4.01. Amends Section 1601.101(a), Insurance Code, as effective
June 1, 2003, to make a conforming change.
SECTION 4.02. Amends Section 1601.102, Insurance Code, as effective June
1, 2003, by
amending Subsection (a) and adding Subsections (f) and (g), as follows:
(a) Provides that an individual who retires in a manner described by this
section and who meets the requirements of Subsection (f) is eligible to
participate, subject to Section 1601.1045, as a retired employee in the
uniform program.
(f) Sets forth criteria which must be met by an individual to be eligible
to participate in the uniform group program, notwithstanding Subsections
(b)-(d).
(g) Authorizes a person eligible to participate and participating in the
uniform program as an annuitant on September 1, 2003, to continue to
participate in the program as annuitant if a lapse in coverage has not
occurred.
SECTION 4.03. Amends Subchapter C, Chapter 1601, Insurance Code, as
effective June 1, 2003,
by adding Section 1601.1045, as follows:
Sec. 1601.1045. DATE ELIGIBILITY BEGINS; WAITING PERIOD. (a) Provides
that,
except as provided by Subsection (c) or (d), eligibility under Section
1601.101 begins on the first day of the calendar month that begins after
the 90th day after the date the employee performs services for a system.
(b) Provides that, except as provided by Subsection (c), eligibility
under Section
1601.102, for an individual who does not retire at the end of the last
month for which the individual is on the payroll of a system before
retirement, begins on the first day of the calendar month that begins
after the 90th day after the date the individual retires.
(c) Provides that the waiting period established by Subsections (a) and
(b) applies only to the determination of initial eligibility to
participate in the group health benefits program and does not apply to
the determination of initial eligibility to participate in optional
coverages under the uniform program.
(d) Provides that eligibility under Section 1601.101 may not begin
earlier than the first day that an employee performs services for a
system, if any amount paid for premium incurred before the date specified
in Subsection (a) for the employee and any dependents of the employee is
paid from money not appropriated out of the general revenue fund, in
accordance with policy and procedures established by the system.
SECTION 4.04. Amends Section 1601.201, Insurance Code, as effective June
1, 2003, as follows:
Sec. 1601.201. New heading: PAYMENT FOR COVERAGE. (a) Prohibits a system
from contributing more than the amounts specified by this section for
coverages provided under the uniform program. Deletes the existing text of
Subsections (a) and (b).
(b) Specifies amounts for coverages provided under the uniform program for
an employee who works more than 40 hours or more a week.
(c) Specifies amounts for coverages provided under the uniform program for
an employee who works less than 40 hours a week.
(d) Provides that an institution of higher education can contribute in
excess of monies that are appropriated for a part time employee as
described in Section 1551.101(e)(2) by using non general revenue funds.
ARTICLE 5. EFFECTIVE DATE; GENERAL TRANSITION
SECTION 5.01. Provides that, to the extent of any conflict, this Act
prevails over another Act of the 78th Legislature, Regular Session, 2003,
relating to nonsubstantive codifications of law or
nonsubstantive additions to and corrections in enacted codes.
SECTION 5.02. Effective date: September 1, 2003.
EFFECTIVE DATE
This act takes effect September 1, 2003.
COMPARISON OF ORIGINAL TO SUBSTITUTE
The substitute removes SECTION 1.01 of the original bill which amended
Subchapter E, Chapter 3, Insurance Code, and renumbers the bill
accordingly.
The substitute removes in the original bill SECTION 1.02, Section 2,
Article 3.50-8, Insurance Code, Subsection (a).
The substitute removes in the original bill SECTION 2.10, Section
1551.205, Insurance Code, Subsection (b).
The substitute removes the amended Section 1575, Insurance Code, as
effective June 1, 2003, by adding Section 1575.16. in SECTION 3.02, and
replaces it by amending Section 1575.202, Subsection (a), Insurance Code.
The substitute removes from the original bill "as determined by the board
of trustees," and replaces it with "except as provided by Subsection
(b)(2)(C) or Subsection (f)," in SECTION 2.03 Section 1551.102 (a) of the
Insurance Code.
The substitute inserts in Section 1551.102 (c) (1) between "credit" and
";" the following language, "including not more than five years of
military service credited in the Employees Retirement System of Texas, or
has five years of eligible service credit and is the sole surviving spouse
of military personnel who was killed in action;".
The substitute inserts in Subchapter C, Chapter 1551, Section 1551.1055,
Insurance Code, a new Subsection (d).
The substitute removes SECTION 2.10 of the original bill relating to
conforming changes to Section 1551.205 of the Insurance Code and
provision relating to "LIMITATIONS."
The substitute inserts in Section 1551.319, Insurance Code, a new
Subsection (d). Subsection (d) of the original bill is renumbered as
Subsection (e).
The substitute removes SECTION 3.02 of the original bill relating to
provision on "LIMITATIONS." The substitute replaces Section 3.02 of the
original bill with Section 1575.002, Insurance Code, which amends
Subsection (a).
The substitute inserts in Section 1601.1045 (a) between "(c)" and "," the
following language, "or (d)".
The substitute inserts in Section 1601.1045, Insurance Code, a new
Subsection (d).