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78R2219 PB-D
By: Miller H.B. No. 410
A BILL TO BE ENTITLED
AN ACT
relating to the operation by the regional education service centers
of certain group coverage programs for certain school and
educational employees and their dependents.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. OPERATION OF GROUP COVERAGE PROGRAMS
BY REGIONAL EDUCATION SERVICE CENTERS
SECTION 1.01. (a) Subtitle H, Title 8, Insurance Code, is
amended to conform to the enactment of Articles 3.50-7, 3.50-8, and
3.50-9, Insurance Code, by Sections 1.01, 1.02, and 1.03, Chapter
1187, Acts of the 77th Legislature, Regular Session, 2001, by
adding Chapters 1579, 1580, and 1581 and amending those chapters to
read as follows:
CHAPTER 1579. TEXAS SCHOOL EMPLOYEES GROUP HEALTH COVERAGE
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1579.001. SHORT TITLE. This chapter may be cited as the
Texas School Employees Group Health Coverage Act.
Sec. 1579.002. GENERAL DEFINITIONS. In this chapter:
(1) "Administering firm" means any entity designated
by a board of directors to administer any coverages, services,
benefits, or requirements under this chapter and the board of
directors' rules and policies adopted under this chapter and
Chapter 8, Education Code.
(2) "Board of directors" means the board of directors
of a regional education service center.
(3) "Charter school" means an open-enrollment charter
school established under Subchapter D, Chapter 12, Education Code.
(4) "Health coverage plan" means any group policy or
contract, hospital service agreement, health maintenance
organization agreement, preferred provider arrangement, or any
similar group arrangement or any combination of those policies,
contracts, agreements, or arrangements that provides for, pays for,
or reimburses expenses for health care services.
(5) "Participating entity" means an entity
participating in a group coverage program established under this
chapter. The term includes:
(A) a school district;
(B) another educational district whose employees
are members of the Teacher Retirement System of Texas;
(C) a regional education service center; and
(D) a charter school that meets the requirements
of Section 1579.153.
(6) "Regional education service center" means a
regional education service center established under Chapter 8,
Education Code.
Sec. 1579.003. DEFINITION OF EMPLOYEE. In this chapter,
"employee" means a participating member of the Teacher Retirement
System of Texas who is employed by a participating entity and who is
not receiving coverage from a program under Chapter 1551, 1575, or
1601. The term does not include an individual performing personal
services as an independent contractor.
Sec. 1579.004. DEFINITION OF DEPENDENT. In this chapter,
"dependent" means:
(1) a spouse of a full-time employee or part-time
employee;
(2) an unmarried child of a full-time or part-time
employee if the child is younger than 25 years of age, including:
(A) an adopted child;
(B) a foster child, stepchild, or other child who
is in a regular parent-child relationship; and
(C) a recognized natural child;
(3) a full-time or part-time employee's recognized
natural child, adopted child, foster child, stepchild, or other
child without regard to the age of the child, if the child is in a
regular parent-child relationship, lives with or has the child's
care provided by the employee or the surviving spouse on a regular
basis, and is mentally retarded or physically incapacitated to an
extent that the child is dependent on the employee or surviving
spouse for care or support, as determined by the board of directors
of the regional education service center within whose boundaries
the employee resides; and
(4) notwithstanding any other provision of this code,
any other dependent of a full-time or part-time employee specified
by rules adopted by the board of directors of the regional education
service center within whose boundaries the employee resides.
[Sections 1579.005-1579.050 reserved for expansion]
SUBCHAPTER B. ADMINISTRATION
Sec. 1579.051. ADMINISTRATION OF GROUP PROGRAMS. Each
board of directors shall implement and administer a group coverage
program as described by this chapter for employees and eligible
dependants of participating entities located within the boundaries
of the regional education service center.
Sec. 1579.052. AUTHORITY TO ADOPT RULES; OTHER AUTHORITY.
(a) A board of directors may adopt rules relating to the group
coverage program as considered necessary by the board of directors.
(b) A board of directors may adopt rules to administer its
group coverage program, including rules relating to adjudication of
claims and expelling participants from the program for cause.
(c) A board of directors may contract with an independent
and experienced group insurance consultant or actuary for advice
and counsel in implementing and administering its group coverage
program.
(d) A board of directors may enter into contracts with any
agency of the state, including the Teacher Retirement System of
Texas, the Employees Retirement System of Texas, and the
department, for the purpose of assistance in implementing its group
coverage program.
Sec. 1579.053. PERSONNEL. A board of directors may hire and
compensate employees as necessary to implement its group coverage
program.
Sec. 1579.054. COMPETITIVE BIDDING REQUIREMENTS; RULES. A
contract to provide health coverage through a group health coverage
program established under this chapter may be awarded only through
competitive bidding under rules adopted by the applicable board of
directors.
Sec. 1579.055. CONTRACT AWARD; CONSIDERATIONS. (a) In
awarding a contract to provide group benefits under this chapter, a
board of directors is not required to select the lowest bid and may
consider also any relevant criteria, including the bidder's:
(1) ability to service contracts;
(2) past experiences; and
(3) financial stability.
(b) If a board of directors awards a contract to a bidder
whose bid deviates from that advertised, the board shall record the
deviation and fully justify the reason for the deviation in the
minutes of the next board meeting.
[Sections 1579.056-1579.100 reserved for expansion]
SUBCHAPTER C. COVERAGES
Sec. 1579.101. PLANS OF GROUP COVERAGES. (a) Each board of
directors by rule shall establish plans of group coverages for
employees participating in its group coverage program and their
dependents.
(b) The plans must include at least two tiers of group
coverage, with coverage at different levels in each tier, ranging
from the catastrophic care coverage plan to the primary care
coverage plan. Each tier must contain a health coverage plan.
(c) A board of directors by rule shall define the
requirements of each coverage plan and tier of coverage offered
under its group coverage program.
(d) Comparable coverage plans of each tier of coverage
established must be offered to employees of all participating
entities located within the boundaries of the regional education
service center.
Sec. 1579.102. OPTIONAL COVERAGES. A board of directors
may offer optional coverages to employees participating in its
group coverage program. The board of directors by rule may define
the types of optional coverages offered under this section.
Sec. 1579.103. PREEXISTING CONDITION LIMITATION. During
the initial period of eligibility, coverage provided under a group
coverage program may not be made subject to a preexisting condition
limitation.
[Sections 1579.104-1579.150 reserved for expansion]
SUBCHAPTER D. PARTICIPATING ENTITIES
Sec. 1579.151. PARTICIPATION BY SCHOOL DISTRICTS AND
CERTAIN OTHER EDUCATIONAL DISTRICTS. (a) Each school district
located within the boundaries of a regional education service
center and each other educational district that is located within
the boundaries of the center and whose employees are members of the
Teacher Retirement System of Texas are eligible to participate in
the group coverage program established by the board of directors of
that center.
(b) Each school district and other educational district
that elects to participate in the group coverage program shall
notify the board of directors of the decision to participate as
provided by Section 1579.154.
Sec. 1579.152. PARTICIPATION OF CENTER EMPLOYEES. (a) An
employee of a regional education service center may elect to
participate in the group coverage program established by the board
of directors of that center.
(b) An employee subject to this section shall apply for
participation in the manner provided by rules adopted by the board
of directors of that center.
Sec. 1579.153. PARTICIPATION BY CHARTER SCHOOLS;
ELIGIBILITY. (a) A charter school located within the boundaries of
a regional education service center is eligible to participate in
the group coverage program established by the board of directors of
that center if the school agrees:
(1) that all records of the school relating to
participation in the group coverage program are open to inspection
by the board of directors, the administering firm, the commissioner
of education, or a designee of any of those entities; and
(2) to have the school's accounts relating to
participation in the group coverage program annually audited by a
certified public accountant at the school's expense.
(b) A charter school that elects to participate in the group
coverage program shall notify the board of directors as provided by
Section 1579.154.
Sec. 1579.154. NOTICE REQUIREMENTS; COMMENCEMENT OF
COVERAGE. (a) Each participating entity shall provide the notice
of the entity's election to participate in the group coverage
program to the applicable board of directors in the manner and
within the time prescribed by rule by the board of directors, but
not later than August 1 of the year preceding the year in which the
entity seeks to participate in the group coverage program.
(b) Coverage for a participating entity under the group
coverage program begins on:
(1) the first day of the academic year commencing
after the first anniversary of the date of the notice; or
(2) another date prescribed by rule by the applicable
board of directors.
Sec. 1579.155. WITHDRAWAL FROM PARTICIPATION. A
participating entity may elect to withdraw from participation in a
group coverage program. A participating entity that elects to
withdraw must notify the board of directors of the applicable
regional education service center in the manner and within the time
prescribed by board of directors rule.
[Sections 1579.156-1579.200 reserved for expansion]
SUBCHAPTER E. PARTICIPATION BY EMPLOYEE
Sec. 1579.201. DEFINITION. In this subchapter, "full-time
employee" and "part-time employee" have the meanings assigned by
the rules adopted by the board of directors of the regional
education service center within whose boundaries the employee
resides.
Sec. 1579.202. ELIGIBLE EMPLOYEES. (a) Except as provided
by Section 1579.204, participation in a group coverage program is
limited to employees of participating entities located within the
boundaries of the applicable regional education service center who
are full-time employees and to part-time employees who are
participating members in the Teacher Retirement System of Texas.
(b) An employee described by Subsection (a) who applies for
coverage during an open enrollment period prescribed by the board
of directors is automatically covered by the catastrophic care
coverage plan unless the employee:
(1) specifically waives coverage under this chapter;
(2) selects a higher tier coverage plan; or
(3) is expelled from the program.
Sec. 1579.203. SELECTION OF COVERAGE. (a) A participating
employee may select coverage in any coverage plan offered by the
applicable board of directors.
(b) The employee is not required to continue participation
in the coverage plan initially selected and may select a higher or
lower tier coverage plan than the plan initially selected by the
employee in the manner provided by board of directors rule.
(c) If the combined contributions received from the state
and the employing participating entity under Subchapter F exceed
the cost of a coverage plan selected by the employee, the employee
may use the excess amount of contributions to obtain coverage under
a higher tier coverage plan or to pay all or part of the cost of
coverage for the employee's dependents.
(d) A married couple, both of whom are eligible for coverage
under the program, may pool the amount of contributions to which the
couple are entitled under the program to obtain coverage for
themselves and dependent coverage.
Sec. 1579.204. CERTAIN PART-TIME EMPLOYEES. A part-time
employee of a participating entity who is not a participating
member in the Teacher Retirement System of Texas is eligible to
participate in a group coverage program established under this
chapter only if the employee pays all of the premiums and other
costs associated with the health coverage plan selected by the
employee.
Sec. 1579.205. PAYMENT BY PARTICIPATING ENTITY.
Notwithstanding Section 1579.204, a participating entity may pay
any portion of what otherwise would be the employee share of
premiums and other costs associated with the coverage selected by
the employee.
[Sections 1579.206-1579.250 reserved for expansion]
SUBCHAPTER F. CONTRIBUTIONS
Sec. 1579.251. STATE ASSISTANCE. (a) The state shall
assist employees of participating school districts and charter
schools in the purchase of group health coverage under this chapter
by providing for each covered employee the amount of $900 each state
fiscal year or a greater amount as provided by the General
Appropriations Act. The state contribution shall be distributed
through the school finance formulas under Chapters 41 and 42,
Education Code, and used by school districts and charter schools as
provided by Sections 42.2514 and 42.260, Education Code.
(b) The state shall assist employees of participating
regional education service centers and educational districts
described by Section 1579.002(5)(B) in the purchase of group health
coverage under this chapter by providing to the employing service
center or educational district, for each covered employee, the
amount of $900 each state fiscal year or a greater amount as
provided by the General Appropriations Act.
Sec. 1579.252. CONTRIBUTION BY PARTICIPATING ENTITIES. A
participating entity shall make contributions for the program as
provided by Chapter 1581.
Sec. 1579.253. CONTRIBUTION BY EMPLOYEE. (a) An employee
covered by a group coverage program established under this chapter
shall pay that portion of the cost of coverage selected by the
employee that exceeds the amount of the state contribution under
Section 1579.251 and the participating entity contribution under
Section 1579.252.
(b) The employee may pay the employee's contribution under
this subsection from the amount distributed to the employee under
Chapter 1580.
(c) Notwithstanding Subsection (a), a participating entity
may pay any portion of what otherwise would be the employee share of
premiums and other costs associated with the coverage selected by
the employee.
[Sections 1579.254-1579.300 reserved for expansion]
SUBCHAPTER G. GROUP COVERAGE TRUST FUNDS
Sec. 1579.301. FUND; ADMINISTRATION. The regional
education service center group coverage trust funds are trust funds
with the comptroller. The comptroller shall maintain a trust fund
under this subchapter for each regional education service center
that operates a group coverage program under this chapter.
Sec. 1579.302. COMPOSITION OF FUNDS. Each trust fund is
composed of:
(1) all contributions made to that fund under this
chapter from employees, participating entities, and the state;
(2) contributions made by employees or participating
entities for optional coverages;
(3) investment income;
(4) any additional amounts appropriated by the
legislature for contingency reserves, administrative expenses, or
other expenses; and
(5) any other money required or authorized to be paid
into the fund.
Sec. 1579.303. PAYMENTS FROM FUND. A board of directors may
use amounts in its fund only to provide group coverages under this
chapter and to pay the expenses of administering its group coverage
program.
Sec. 1579.304. INVESTMENT OF FUND. A board of directors may
invest assets of its fund in the manner provided by law for the
investments of a political subdivision of this state.
CHAPTER 1580. ACTIVE EMPLOYEE HEALTH COVERAGE
OR COMPENSATION SUPPLEMENTATION
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1580.001. DEFINITIONS. In this chapter:
(1) "Cafeteria plan" means a plan as defined and
authorized by Section 125, Internal Revenue Code of 1986, and its
subsequent amendments.
(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 program
established under Chapter 1575.
(3) "Participating charter school" means an
open-enrollment charter school established under Subchapter D,
Chapter 12, Education Code, that participates in the program
established under Chapter 1579.
(4) "Regional education service center" means a
regional education service center established under Chapter 8,
Education Code.
(5) "Board of trustees" means the Teacher Retirement
System of Texas.
Sec. 1580.002. AUTHORITY TO ADOPT RULES; OTHER AUTHORITY.
(a) The board of trustees may adopt rules to implement this
chapter.
(b) The board of trustees may enter into interagency
contracts with any agency of this state for the purpose of
assistance in implementing this chapter.
[Sections 1580.003-1580.050 reserved for expansion]
SUBCHAPTER B. DISTRIBUTION BY BOARD OF TRUSTEES
Sec. 1580.051. DISTRIBUTION BY BOARD OF TRUSTEES. Each
year, the board of trustees shall 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 funds in an amount, as determined by the board of
trustees, 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 chapter.
Sec. 1580.052. EQUAL INSTALLMENTS. The board of trustees
shall distribute funds under this chapter in equal monthly
installments.
Sec. 1580.053. FUNDS HELD IN TRUST. All funds received by a
school district, other educational district, participating charter
school, or regional education service center under this chapter are
held in trust for the benefit of the active employees on whose
behalf the district, school, or service center received the funds.
Sec. 1580.054. RECOVERY OF DISTRIBUTIONS. The board of
trustees is entitled to recover from a school district, other
educational district, participating charter school, or regional
education service center any amount distributed under this chapter
to which the district, school, or service center was not entitled.
Sec. 1580.055. DETERMINATION OF BOARD OF TRUSTEES FINAL. A
determination by the board of trustees under this subchapter is
final and may not be appealed.
[Sections 1580.056-1580.100 reserved for expansion]
SUBCHAPTER C. EMPLOYEE ELECTION
Sec. 1580.101. EMPLOYEE COVERED BY CAFETERIA PLAN. (a) If
an active employee is covered by a cafeteria plan of a school
district, other educational district, participating charter
school, or regional education service center, the state
contribution under this chapter shall be deposited in the cafeteria
plan, and the employee may elect among the options provided by the
cafeteria plan.
(b) A cafeteria plan receiving state contributions under
this chapter may include a medical savings account option and must
include, at a minimum, the following options:
(1) a health care reimbursement account;
(2) a benefit or coverage other than that provided
under Chapter 1579, or any employee coverage or dependent coverage
available under Chapter 1579 but not otherwise fully funded by the
state or the employer contributions, any of which must be a
"qualified benefit" under Section 125, Internal Revenue Code of
1986, and its subsequent amendments;
(3) an option for the employee to receive the state
contribution as supplemental compensation; and
(4) an option to divide the state contribution among
two or more of the other options provided under this subsection.
Sec. 1580.102. EMPLOYEE NOT COVERED BY CAFETERIA PLAN. If
an active employee is not covered by a cafeteria plan of a school
district, other educational district, participating charter
school, or regional education service center, the state
contribution under this chapter shall be paid to the active
employee as supplemental compensation.
Sec. 1580.103. SUPPLEMENTAL COMPENSATION. Supplemental
compensation under this subchapter must be in addition to the rate
of compensation that:
(1) the school district, other educational district,
participating charter school, or regional education service center
paid the employee in the preceding school year; or
(2) the district, school, or service center would have
paid the employee in the preceding school year if the employee had
been employed by the district, school, or service center in the same
capacity in the preceding school year.
Sec. 1580.104. TIME FOR ELECTION. For each state fiscal
year, an election under this subchapter must be made before the
later of:
(1) August 1 of the preceding state fiscal year; or
(2) the 31st day after the date the employee is hired.
Sec. 1580.105. WRITTEN EXPLANATION; ELECTION FORM. (a) The
board of trustees shall prescribe and distribute to each school
district, other educational district, participating charter
school, and regional education service center:
(1) a model explanation written in English and Spanish
of the options active employees may elect under this section and the
effect of electing each option; and
(2) an election form to be completed by active
employees.
(b) Each state fiscal year, a school district, other
educational district, participating charter school, or regional
education service center shall prepare and distribute to each
active employee a written explanation in English and Spanish, as
appropriate, of the options the employee may elect under this
section. The explanation must be based on the model explanation
prepared by the board of trustees under Subsection (a) and must
reflect all available health coverage options available to the
employee. The explanation must be distributed to an employee
before the later of:
(1) July 1 of the preceding state fiscal year; or
(2) the fifth day after the date the employee is hired.
(c) The written explanation under Subsection (b) must be
accompanied by a copy of the election form prescribed under
Subsection (a)(2).
Sec. 1580.106. RETURN OF UNENCUMBERED FUNDS. Any
unencumbered funds that are returned to the school district from
accounts established under Section 1580.101 may be used only to
provide employee compensation, benefits, or both.
[Sections 1580.107-1580.150 reserved for expansion]
SUBCHAPTER D. MEDICAL SAVINGS ACCOUNT
Sec. 1580.151. DEFINITION. In this subchapter, "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.
Sec. 1580.152. BOARD RULES. The board of trustees, by rule,
shall specify the requirements for a medical savings account
established under this chapter.
Sec. 1580.153. QUALIFICATION OF ACCOUNT. (a) The board of
trustees shall request in writing a ruling or opinion from the
Internal Revenue Service as to whether the medical savings accounts
established under this chapter and the state rules governing those
accounts qualify the accounts for appropriate federal tax
exemptions.
(b) Based on the response of the Internal Revenue Service
under Subsection (a), the board of trustees shall:
(1) modify the rules, plans, and procedures adopted
under this section as necessary to ensure the qualification of
those accounts for appropriate federal tax exemptions; and
(2) certify the information regarding federal tax
qualifications to the comptroller.
Sec. 1580.154. EMPLOYEE ELECTION. An employee who elects
under Section 1580.101 to have state funds distributed under this
chapter placed in a medical savings account may use the money in
that account only for a qualified health care expense.
CHAPTER 1581. EMPLOYER EXPENDITURES
FOR SCHOOL EMPLOYEE HEALTH COVERAGE PLANS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1581.001. DEFINITIONS. In this chapter:
(1) "Participating employee" means an employee of 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 who
participates in a group health coverage plan provided by or through
the district, school, or service center.
(2) "Participating charter school" means an
open-enrollment charter school established under Subchapter D,
Chapter 12, Education Code, that participates in the uniform group
coverage program established under Chapter 1579.
(3) "Regional education service center" means a
regional education service center established under Chapter 8,
Education Code.
[Sections 1581.002-1581.050 reserved for expansion]
SUBCHAPTER B. MAINTENANCE OF EFFORT; MINIMUM EFFORT
Sec. 1581.051. MAINTENANCE OF EFFORT FOR 2000-2001 SCHOOL
YEAR. (a) Subject to Sections 1581.052 and 1581.053, and except as
provided by Section 1581.054, 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 that, for the 2000-2001 school year, paid
amounts to share with employees the cost of coverage under a group
health coverage plan shall, for each fiscal year, use to provide
health coverage an amount for each participating employee at least
equal to the amount computed as provided by this section.
(b) The school district, other educational district,
participating charter school, or regional education service center
shall divide the amount that the district, school, or service
center paid during the 2000-2001 school year for the prior group
health coverage plan by the total number of full-time employees of
the district, school, or service center in the 2000-2001 school
year and multiply the result by the number of full-time employees of
the district, school, or service center in the fiscal year for which
the computation is made. If, for the 2000-2001 school year, a
school district, other educational district, participating charter
school, or regional education service center provided group health
coverage to its employees through a self-funded insurance plan, the
amount the district, school, or service center paid during that
school year for the plan includes only the amount of regular
contributions made by the district, school, or service center to
the plan.
(c) Amounts used as required by this section shall be
deposited, as applicable, in a fund described by Section
1581.052(b).
Sec. 1581.052. REQUIRED MINIMUM EFFORT. (a) A school
district, other educational district, participating charter
school, or regional education service center shall, for each fiscal
year, use to provide health coverage an amount equal to the number
of participating employees of the district, school, or service
center multiplied by $1,800.
(b) Amounts used as required by this section shall be
deposited, as applicable, in:
(1) the applicable Texas group coverage trust fund
established under Subchapter G, Chapter 1579; or
(2) another fund established for the payment of
employee health coverage that meets requirements for those funds
prescribed by the Texas Education Agency.
Sec. 1581.053. USE OF STATE FUNDS. (a) To comply with
Section 1581.052, a school district or participating charter school
may use state funds received under Chapter 42, Education Code,
other than funds that may be used under that chapter only for a
specific purpose.
(b) Notwithstanding Subsection (a), amounts a district or
school is required to use to pay contributions under a group health
coverage plan for district or school employees under Section
42.2514 or 42.260, Education Code, other than amounts described by
Section 42.260(c)(2)(B), are not used in computing whether the
district or school complies with Section 1581.052.
Sec. 1581.054. EXCESS OF MAINTENANCE OF EFFORT. If the
amount a school district, other educational district, or
participating charter school is required to use to provide health
coverage under Section 1581.051 for a fiscal year exceeds the
amount necessary for the district or school to comply with Section
1581.052(a) for that year, the district or school may use the excess
only to provide employee compensation at a rate greater than the
rate of compensation that the district or school paid an employee in
the 2000-2001 school year, benefits, or both.
[Sections 1581.055-1581.100 reserved for expansion]
SUBCHAPTER C. STATE ASSISTANCE FOR MEETING MINIMUM EFFORT
Sec. 1581.101. STATE FISCAL YEARS AFTER AUGUST 31, 2001.
For any state fiscal year beginning with the fiscal year ending
August 31, 2003, except as provided by Section 1581.102, a school
district that imposes maintenance and operations taxes at the
maximum rate permitted under Section 45.003(d), Education Code, is
entitled to state funds in an amount equal to the difference, if
any, between:
(1) an amount equal to the number of participating
employees of the district multiplied by $1,800; and
(2) if the following amount is less than the amount
specified by Subdivision (1), the sum of:
(A) the amount the district is required to use to
provide health coverage under Section 1581.051 for that fiscal
year; and
(B) the difference, if any, between:
(i) the amount determined under Section
42.2514(b)(2), Education Code; and
(ii) the amount determined under Section
42.2514(b)(1), Education Code, if that amount is less than the
amount specified by Subparagraph (i).
Sec. 1581.1015. CERTAIN FISCAL YEARS. (a) For the state
fiscal year beginning September 1, 2003, a school district or
participating charter school is entitled to state funds in an
amount equal to the difference, if any, between:
(1) an amount equal to the number of participating
employees of the district or school multiplied by $1,500; and
(2) if the following amount is less than the amount
specified by Subdivision (1), the sum of:
(A) the amount the district or school is required
to use to provide health coverage under Section 1581.051 for that
fiscal year; and
(B) the difference, if any, between:
(i) the amount determined under Section
42.2514(b)(2), Education Code; and
(ii) the amount determined under Section
42.2514(b)(1), Education Code, if that amount is less than the
amount specified by Subparagraph (i).
(b) For the state fiscal year beginning September 1, 2004, a
school district or participating charter school is entitled to
state funds in an amount equal to the difference, if any, between:
(1) an amount equal to the number of participating
employees of the district or school multiplied by $1,200; and
(2) if the following amount is less than the amount
specified by Subdivision (1), the sum of:
(A) the amount the district or school is required
to use to provide health coverage under Section 1581.051 for that
fiscal year; and
(B) the difference, if any, between:
(i) the amount determined under Section
42.2514(b)(2), Education Code; and
(ii) the amount determined under Section
42.2514(b)(1), Education Code, if that amount is less than the
amount specified by Subparagraph (i).
(c) For the state fiscal year beginning September 1, 2005, a
school district or participating charter school is entitled to
state funds in an amount equal to the difference, if any, between:
(1) an amount equal to the number of participating
employees of the district or school multiplied by $900; and
(2) if the following amount is less than the amount
specified by Subdivision (1), the sum of:
(A) the amount the district or school is required
to use to provide health coverage under Section 1581.051 for that
fiscal year; and
(B) the difference, if any, between:
(i) the amount determined under Section
42.2514(b)(2), Education Code; and
(ii) the amount determined under Section
42.2514(b)(1), Education Code, if that amount is less than the
amount specified by Subparagraph (i).
(d) For the state fiscal year beginning September 1, 2006, a
school district or participating charter school is entitled to
state funds in an amount equal to the difference, if any, between:
(1) an amount equal to the number of participating
employees of the district or school multiplied by $600; and
(2) if the following amount is less than the amount
specified by Subdivision (1), the sum of:
(A) the amount the district or school is required
to use to provide health coverage under Section 1581.051 for that
fiscal year; and
(B) the difference, if any, between:
(i) the amount determined under Section
42.2514(b)(2), Education Code; and
(ii) the amount determined under Section
42.2514(b)(1), Education Code, if that amount is less than the
amount specified by Subparagraph (i).
(e) For the state fiscal year beginning September 1, 2007, a
school district or participating charter school is entitled to
state funds in an amount equal to the difference, if any, between:
(1) an amount equal to the number of participating
employees of the district or school multiplied by $300; and
(2) if the following amount is less than the amount
specified by Subdivision (1), the sum of:
(A) the amount the district or school is required
to use to provide health coverage under Section 1581.051 for that
fiscal year; and
(B) the difference, if any, between:
(i) the amount determined under Section
42.2514(b)(2), Education Code; and
(ii) the amount determined under Section
42.2514(b)(1), Education Code, if that amount is less than the
amount specified by Subparagraph (i).
(f) A school district that receives state funds under
Section 1581.101 for a state fiscal year is not entitled to state
funds under Subsection (a), (b), (c), (d), or (e).
(g) This section expires September 1, 2008.
Sec. 1581.102. MAXIMUM AMOUNT OF STATE FUNDS. For any state
fiscal year, the amount of state funds a school district receives
under Section 1581.101 may not exceed the amount of state funds the
district received under this subchapter for the year preceding the
year in which the district first receives funds under Section
1581.101.
Sec. 1581.103. DISTRIBUTION OF FUNDS. (a) The Teacher
Retirement System of Texas shall distribute state funds to school
districts and participating charter schools under this subchapter
in equal monthly installments. State funds received under this
subchapter shall be deposited in a fund described by Section
1581.052(b).
(b) The Texas Education Agency shall provide to the
retirement system information necessary for the retirement system
to determine a district's or school's eligibility for state funds
under this subchapter. The Teacher Retirement System of Texas may
enter into interagency contracts with any agency of this state for
the purpose of assistance in distributing funds under this chapter.
Sec. 1581.104. RECOVERY OF DISTRIBUTIONS. The Teacher
Retirement System of Texas is entitled to recover from a school
district or participating charter school any amount distributed
under this subchapter to which the district or school was not
entitled.
Sec. 1581.105. DETERMINATION OF TEACHER RETIREMENT SYSTEM
OF TEXAS FINAL. A determination by the Teacher Retirement System of
Texas under this subchapter is final and may not be appealed.
[Sections 1581.106-1581.700 reserved for expansion]
SUBCHAPTER O. ADDITIONAL SUPPORT FOR CERTAIN
SCHOOL DISTRICTS
Sec. 1581.701. APPLICABILITY OF SUBCHAPTER. This
subchapter applies only to a school district that:
(1) pays taxes under Section 3111(a), Internal Revenue
Code of 1986, and its subsequent amendments, for employees covered
by the social security retirement program; and
(2) covered all employees under that program before
January 1, 2001.
Sec. 1581.702. ADDITIONAL SUPPORT. The state shall provide
additional support for a school district to which this section
applies in an amount computed by multiplying the total amount of
supplemental compensation received by district employees under
Chapter 1580 by 0.062.
Sec. 1581.703. AUTHORITY TO ADOPT RULES. The Teacher
Retirement System of Texas may adopt rules as necessary to
implement this subchapter.
Sec. 1581.704. EXPIRATION. This subchapter expires
September 1, 2008.
(b) Articles 3.50-7, 3.50-8, and 3.50-9, Insurance Code, as
added by Sections 1.01, 1.02, and 1.03, Chapter 1187, Acts of the
77th Legislature, Regular Session, 2001, are repealed.
ARTICLE 2. CONFORMING AMENDMENTS--EDUCATION CODE
SECTION 2.01. Section 8.001(c), Education Code, is amended
to read as follows:
(c) Except as provided by Section 8.0511, the [The]
commissioner may decide any matter concerning the operation or
administration of the regional education service centers,
including:
(1) the number and location of centers;
(2) the regional boundaries of centers; and
(3) the allocation among centers of state and federal
funds administered by the agency.
SECTION 2.02. Subchapter B, Chapter 8, Education Code, is
amended by adding Section 8.0511 to read as follows:
Sec. 8.0511. GROUP HEALTH COVERAGE PROGRAMS. Each regional
education service center board of directors shall, through rules
adopted by the board of directors, adopt a group coverage program as
provided by Chapter 1579, Insurance Code. Rules adopted by a board
of directors under this subsection are subject to Chapter 2001,
Government Code.
SECTION 2.03. Sections 22.004(a), (b), (c), (d), (e), (f),
(g), (i), and (j), Education Code, are amended to read as follows:
(a) A district may [shall] participate in a [the uniform]
group coverage program established under Chapter 1579 [Article
3.50-7], Insurance Code[, as provided by Section 5 of that
article].
(b) A district that does not participate in a [the] program
described by Subsection (a) shall make available to its employees
group health coverage provided by a risk pool established by one or
more school districts under Chapter 172, Local Government Code, or
under a policy of insurance or group contract issued by an insurer,
a group hospital service corporation [company] subject to Chapter
842 [20], Insurance Code, or a health maintenance organization
subject to Chapter 843, Insurance Code [under the Texas Health
Maintenance Organization Act (Chapter 20A, Vernon's Texas
Insurance Code)]. The coverage must meet the substantive coverage
requirements of Article 3.51-6, Insurance Code, and any other law
applicable to group health insurance policies or contracts issued
in this state. The coverage must include major medical treatment
but may exclude experimental procedures. In this subsection,
"major medical treatment" means a medical, surgical, or diagnostic
procedure for illness or injury. The coverage may include managed
care or preventive care and must be comparable to the basic health
coverage provided under Chapter 1551, Insurance Code [the] (Texas
Employees [Uniform] Group [Insurance] Benefits Act) [(Article
3.50-2, Vernon's Texas Insurance Code)]. The board of trustees of
the Teacher Retirement System of Texas shall adopt rules to
determine whether a school district's group health coverage is
comparable to the basic health coverage specified by this
subsection. The rules must provide for consideration of the
following factors concerning the district's coverage in
determining whether the district's coverage is comparable to the
basic health coverage specified by this subsection:
(1) the deductible amount for service provided inside
and outside of the network;
(2) the coinsurance percentages for service provided
inside and outside of the network;
(3) the maximum amount of coinsurance payments a
covered person is required to pay;
(4) the amount of the copayment for an office visit;
(5) the schedule of benefits and the scope of
coverage;
(6) the lifetime maximum benefit amount; and
(7) verification that the coverage is issued by a
provider licensed to do business in this state by the Texas
Department of Insurance or is provided by a risk pool authorized
under Chapter 172, Local Government Code, or that a district is
capable of covering the assumed liabilities in the case of coverage
provided through district self-insurance.
(c) The cost of the coverage provided under a [the] program
described by Subsection (a) shall be paid by the state, the
district, and the employees in the manner provided by Chapter 1579
[Article 3.50-7], Insurance Code. The cost of coverage provided
under a plan adopted under Subsection (b) shall be shared by the
employees and the district using the contributions by the state
described by Subchapter F, Chapter 1579 [Section 9, Article
3.50-7], Insurance Code, or by Chapter 1580 [Article 3.50-8],
Insurance Code.
(d) Each district shall report the district's compliance
with this section to the executive director of the Teacher
Retirement System of Texas not later than March 1 of each
even-numbered year in the manner required by the board of trustees
of the Teacher Retirement System of Texas. For a district that does
not participate in a [the] program described by Subsection (a), the
report must be based on the district group health coverage plan in
effect during the current plan year and must include:
(1) appropriate documentation of:
(A) the district's contract for group health
coverage with a provider licensed to do business in this state by
the Texas Department of Insurance or a risk pool authorized under
Chapter 172, Local Government Code; or
(B) a resolution of the board of trustees of the
district authorizing a self-insurance plan for district employees
and of the district's review of district ability to cover the
liability assumed;
(2) the schedule of benefits;
(3) the premium rate sheet, including the amount paid
by the district and employee;
(4) the number of employees covered by the health
coverage plan offered by the district; and
(5) any other information considered appropriate by
the executive director of the Teacher Retirement System of Texas.
(e) Based on the criteria prescribed by Subsection (b), the
executive director of the Teacher Retirement System of Texas shall,
for each district that does not participate in a [the] program
described by Subsection (a), certify whether a district's coverage
is comparable to the basic health coverage provided under Chapter
1551, Insurance Code [the] (Texas Employees [Uniform] Group
[Insurance] Benefits Act) [(Article 3.50-2, Vernon's Texas
Insurance Code)]. If the executive director of the Teacher
Retirement System of Texas determines that the group health
coverage offered by a district is not comparable, the executive
director shall report that information to the district and to the
Legislative Budget Board. The executive director shall submit a
report to the legislature not later than September 1 of each
even-numbered year describing the status of each district's group
health coverage program based on the information contained in the
report required by Subsection (d) and the certification required by
this subsection.
(f) A school district that does not participate in a [the]
program described by Subsection (a) may not contract with an
insurer, a group hospital service corporation [company] subject to
Chapter 842 [20], Insurance Code, or a health maintenance
organization subject to Chapter 843, Insurance Code, to issue a
policy or contract under this section, or with any person to assist
the school district in obtaining or managing the policy or contract
unless, before the contract is entered into, the insurer,
corporation [company], organization, or person provides the
district with an audited financial statement showing the financial
condition of the insurer, corporation [company], organization, or
person.
(g) An insurer, a group hospital service corporation
[company] subject to Chapter 842 [20], Insurance Code, or a health
maintenance organization subject to Chapter 843, Insurance Code,
that issues a policy or contract under this section and any person
that assists the school district in obtaining or managing the
policy or contract for compensation shall provide an annual audited
financial statement to the school district showing the financial
condition of the insurer, corporation [company], organization, or
person.
(i) Notwithstanding any other provision of this section, a
district participating in a [the uniform] group coverage program
established under Chapter 1579 [Article 3.50-7], Insurance Code,
may not make group health coverage available to its employees under
this section after the date on which the district begins
participation in that program [of coverages provided under Article
3.50-7, Insurance Code, is implemented].
(j) This section does not preclude a district that is
participating in a [the uniform] group coverage program established
under Chapter 1579 [Article 3.50-7], Insurance Code, from entering
into contracts to provide optional insurance coverages for the
employees of the district.
SECTION 2.04. Sections 42.2514(a) and (b), Education Code,
are amended to read as follows:
(a) In this section, "participating charter school" means
an open-enrollment charter school that participates in a [the
uniform] group coverage program established under Chapter 1579
[Article 3.50-7], Insurance Code.
(b) For each school year, a school district, including a
school district that is otherwise ineligible for state aid under
this chapter, or a participating charter school is entitled to
state aid in an amount, as determined by the commissioner, equal to
the difference, if any, between:
(1) the amount determined by multiplying the amount of
$900 or the amount specified in the General Appropriations Act for
that year for purposes of the state contribution under Subchapter
F, Chapter 1579 [Section 9, Article 3.50-7], Insurance Code, by the
number of district or school employees who participate in a group
health coverage plan provided by or through the district or school;
and
(2) an amount equal to 75 percent of the amount of:
(A) additional funds to which the district or
school is entitled due to the increase made by Chapter 1187 [H.B.
No. 3343], Acts of the 77th Legislature, Regular Session, 2001, to:
(i) the equalized wealth level under
Section 41.002; and
(ii) the guaranteed level of state and
local funds per weighted student per cent of tax effort under
Section 42.302; or
(B) additional state aid to which the district is
entitled under Section 42.2513.
SECTION 2.05. Section 42.253(e-1), Education Code, is
amended to read as follows:
(e-1) For the 2003-2004, 2004-2005, 2005-2006, 2006-2007,
2007-2008, or 2008-2009 school year, the limit authorized under
Subsection (e) is increased by an amount equal to the portion of a
school district's maintenance and operations tax for that year
necessary for the district, when added to state funds received
under this chapter for that portion of the tax, to comply with
Section 1581.052 [Section 3, Article 3.50-9], Insurance Code. For
the 2005-2006 and 2007-2008 school years, the limit authorized
under Subsection (e) does not include any portion of a school
district's maintenance and operations tax rate for which the limit
under Subsection (e) applicable to the district was increased under
this subsection. The commissioner may adopt rules necessary to
administer this subsection. A determination of the commissioner
under this subsection is final and may not be appealed. This
subsection expires September 1, 2009.
SECTION 2.06. Section 42.260(c), Education Code, is amended
to read as follows:
(c) Notwithstanding any other provision of this code, a
school district or participating charter school may use the
following amount of funds only to pay contributions under a group
health coverage plan for district or school employees:
(1) an amount equal to 75 percent of the amount
certified for the district or school under Subsection (b); or
(2) if the following amount is less than the amount
specified by Subdivision (1), the sum of:
(A) the amount determined by multiplying the
amount of $900 or the amount specified in the General
Appropriations Act for that year for purposes of the state
contribution under Subchapter F, Chapter 1579 [Section 9, Article
3.50-7], Insurance Code, by the number of district or school
employees who participate in a group health coverage plan provided
by or through the district or school; and
(B) the difference between the amount necessary
for the district or school to comply with Section 1581.052 [Section
3, Article 3.50-9], Insurance Code, for the school year and the
amount the district or school is required to use to provide health
coverage under Section 1581.051, Insurance Code, [2 of that
article] for that year.
ARTICLE 3. CONFORMING AMENDMENTS--GOVERNMENT CODE
SECTION 3.01. Section 822.201(c), Government Code, is
amended to read as follows:
(c) Excluded from salary and wages are:
(1) expense payments;
(2) allowances;
(3) payments for unused vacation or sick leave;
(4) maintenance or other nonmonetary compensation;
(5) fringe benefits;
(6) deferred compensation other than as provided by
Subsection (b)(3);
(7) compensation that is not made pursuant to a valid
employment agreement;
(8) payments received by an employee in a school year
that exceed $5,000 for teaching a driver education and traffic
safety course that is conducted outside regular classroom hours;
(9) the benefit replacement pay a person earns as a
result of a payment made under Subchapter B or C, Chapter 661;
(10) supplemental compensation received by an
employee under Chapter 1580 [Article 3.50-8], Insurance Code; and
(11) any compensation not described by [in] Subsection
(b).
SECTION 3.02. Subchapter A, Chapter 2001, Government Code,
is amended by adding Section 2001.008 to read as follows:
Sec. 2001.008. APPLICATION TO REGIONAL EDUCATION SERVICE
CENTERS. A regional education service center established under
Chapter 8, Education Code, shall be treated as a state agency under
this chapter for purposes of rulemaking under Section 8.0511,
Education Code, and Chapter 1579, Insurance Code. Subchapter B
applies to rules adopted by the board of directors of such a center.
ARTICLE 4. CONFORMING AMENDMENTS--INSURANCE CODE
SECTION 4.01. Section 3(a), Article 3.51, Insurance Code,
is amended to read as follows:
(a) Notwithstanding any other provision of this article, a
common or independent school district or any other agency or
subdivision of the public school system of this state that is
participating in a [the uniform] group coverage program established
under Chapter 1579 [Article 3.50-7] of this code may not procure
contracts under this article for health insurance coverage and may
not renew a health insurance contract procured under this article
after the date on which that [the] program [of coverages provided
under Article 3.50-7 of this code] is implemented.
SECTION 4.02. Article 26.036(c), Insurance Code, is amended
to read as follows:
(c) An independent school district that is participating in
a [the uniform] group coverage program established under Chapter
1579 [Article 3.50-7] of this code may not participate in the small
employer market under this article for health insurance coverage
and may not renew a health insurance contract obtained in
accordance with this article after the date on which that [the]
program [of coverages provided under Article 3.50-7 of this code]
is implemented. This subsection does not affect a contract for the
provision of optional coverages not included in a health benefits
plan under this chapter.
SECTION 4.03. (a) Section 1575.001, Insurance Code, is
amended to conform to Section 3.02, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, to read as follows:
Sec. 1575.001. SHORT TITLE. This chapter may be cited as the
Texas Public School Retired Employees Group Benefits Act.
(b) Section 3.02, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 4.04. (a) Section 1575.002(4), Insurance Code, is
amended to conform to Section 3.03, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, to read as follows:
(4) "Fund" means the Texas public school retired
employees group insurance fund.
(b) Section 1575.003(1), Insurance Code, is amended to
conform to Section 3.03, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, to read as follows:
(1) "Dependent" means:
(A) the spouse of a retiree [or active employee];
(B) an unmarried child of a retiree[, active
employee,] or deceased active employee if the child is younger than
25 years of age, including:
(i) an adopted child;
(ii) a foster child, stepchild, or other
child who is in a regular parent-child relationship; or
(iii) a recognized natural child;
(C) a retiree's [or active employee's] recognized
natural child, adopted child, foster child, stepchild, or other
child, without regard to the age of the child, if the child is in a
regular parent-child relationship, lives with or has the child's
care provided by the retiree[, active employee,] or surviving
spouse on a regular basis, and is mentally retarded or physically
incapacitated to an extent that the child is dependent on the
retiree[, active employee,] or surviving spouse for care or
support, as determined by the board of trustees; or
(D) a deceased active employee's recognized
natural child, adopted child, foster child, stepchild, or other
child who is in a regular parent-child relationship, without regard
to the age of the child, if, while the active employee was alive,
the child:
(i) lived with or had the child's care
provided by the active employee on a regular basis; and
(ii) was mentally retarded or physically
incapacitated to an extent that the child was dependent on the
active employee or surviving spouse for care or support, as
determined by the board of trustees.
(c) Section 3.03, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 4.05. (a) Section 1575.005, Insurance Code, is
amended to conform to Section 3.07, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, to read as follows:
Sec. 1575.005. ISSUANCE OF CERTIFICATE OF COVERAGE. At the
time and in the circumstances specified by the board of trustees, a
carrier shall issue to each retiree, surviving spouse, or surviving
dependent child[, or active employee of a participating school
district] covered under this chapter a certificate of coverage
that:
(1) states the benefits to which the person is
entitled;
(2) states to whom the benefits are payable;
(3) states to whom a claim must be submitted; and
(4) summarizes the provisions of the coverage
principally affecting the person.
(b) Section 3.07, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 4.06. (a) Section 1575.008, Insurance Code, is
repealed to conform to the repeal of Section 21, Article 3.50-4,
Insurance Code, the source law from which that section was derived,
by Section 3.20, Chapter 1187, Acts of the 77th Legislature,
Regular Session, 2001.
(b) Subchapter R, Chapter 1575, Insurance Code, is repealed
to conform to the repeal of Sections 7A and 20, Article 3.50-4,
Insurance Code, the source law from which that subchapter was
derived, by Section 3.20, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001.
SECTION 4.07. (a) Section 1575.052, Insurance Code, is
amended to conform to Section 3.05, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, to read as follows:
Sec. 1575.052. AUTHORITY TO ADOPT RULES AND PROCEDURES;
OTHER AUTHORITY. (a) The board of trustees may adopt rules, plans,
procedures, and orders reasonably necessary to implement this
chapter, including:
(1) minimum benefit and financing standards for group
coverage for retirees, dependents, surviving spouses, and
surviving dependent children[, and active employees of
participating school districts];
(2) basic and optional group coverage for retirees,
dependents, surviving spouses, and surviving dependent children[,
and active employees of participating school districts];
(3) procedures for contributions and deductions;
(4) periods for enrollment and selection of optional
coverage and procedures for enrolling and exercising options under
the group program;
(5) procedures for claims administration;
(6) procedures to administer the fund; and
(7) a timetable for:
(A) developing minimum benefit and financial
standards for group coverage;
(B) establishing group plans; and
(C) taking bids and awarding contracts for group
plans.
(b) The board of trustees may:
(1) study the operation of all group coverage provided
under this chapter; and
(2) contract for advice and counsel in implementing
and administering the group program with an independent and
experienced group insurance consultant or actuary [who does not
receive a commission from any insurance company].
(b) Section 3.05, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 4.08. (a) Subchapter B, Chapter 1575, Insurance
Code, is amended to conform to Section 3A, Article 3.50-4,
Insurance Code, as added by Section 3.01, Chapter 1187, Acts of the
77th Legislature, Regular Session, 2001, by adding Section 1575.056
to read as follows:
Sec. 1575.056. TRANSFER OF RECORDS RELATING TO ACTIVE
EMPLOYEES. The board of trustees shall, not later than the 30th day
after the date on which a group coverage program established under
Chapter 1579 is implemented, transfer from the program any records
relating to active employees participating in a uniform group
health coverage program under the jurisdiction of the board of
trustees.
(b) Section 3A, Article 3.50-4, Insurance Code, as added by
Section 3.01, Chapter 1187, Acts of the 77th Legislature, Regular
Session, 2001, is repealed.
SECTION 4.09. (a) Section 1575.106, Insurance Code, is
amended to conform to Section 3.06, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, to read as follows:
Sec. 1575.106. COMPETITIVE BIDDING REQUIREMENTS; RULE. (a)
A contract to provide group benefits under this chapter may be
awarded only through competitive bidding under rules adopted by the
board of trustees.
(b) [The rules:
[(1) must require that a prospective bidder provide,
for each area consisting of a county and all adjacent counties,
information on the number and types of qualified providers willing
to participate in the plan for which the bid is made; and
[(2) may provide criteria for determining whether a
provider is qualified.
[(c) The board of trustees may not require a bidder to
demonstrate a minimum standard of provider participation.
[(d)] The board of trustees shall submit for competitive
bidding at least every six years each contract under this chapter.
(b) Section 1575.107(a), Insurance Code, is amended to
conform to Section 3.06, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, to read as follows:
(a) In awarding a contract to provide group benefits under
this chapter, the board of trustees is not required to select the
lowest bid and[:
[(1) shall consider information obtained under Section
1575.106; and
[(2)] may consider any relevant criteria, including
the bidder's:
(1) [(A)] ability to service contracts;
(2) [(B)] past experiences; and
(3) [(C)] financial stability.
(c) Section 3.06, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 4.10. (a) Section 1575.153, Insurance Code, is
amended to conform to Section 3.10, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, to read as follows:
Sec. 1575.153. AUTOMATIC BASIC COVERAGE. A retiree [or
active employee of a participating school district] who applies for
coverage during an enrollment period may not be denied coverage in a
basic plan provided under this chapter unless the board of trustees
finds under Subchapter K that the individual defrauded or attempted
to defraud the group program.
(b) Section 3.10, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 4.11. (a) Section 1575.160, Insurance Code, is
amended to conform to Section 3.09, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, to read as follows:
Sec. 1575.160. GROUP LIFE OR ACCIDENTAL DEATH AND
DISMEMBERMENT INSURANCE: PAYMENT OF CLAIM. The amount of group
life insurance or group accidental death and dismemberment
insurance covering a retiree, [active employee,] dependent,
surviving spouse, or surviving dependent child on the date of death
shall be paid, on the establishment of a valid claim, only to:
(1) the beneficiary designated by the person in a
signed and witnessed document received before death in the office
of the system; or
(2) a person in the order prescribed by Section
824.103(b), Government Code, if a beneficiary is not properly
designated or a beneficiary does not exist.
(b) Section 3.09, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 4.12. (a) Section 1575.207, Insurance Code, is
amended to conform to Section 24, Chapter 1229, Acts of the 77th
Legislature, Regular Session, 2001, to read as follows:
Sec. 1575.207. INTEREST ASSESSED ON LATE PAYMENT OF
DEPOSITS BY EMPLOYING SCHOOL DISTRICTS. (a) An employing school
district that does not remit to the board of trustees all
contributions required by this subchapter before the seventh [11th]
day after the last day of the month shall pay to the fund:
(1) the contributions; and
(2) interest on the unpaid amounts at the annual rate
of six percent compounded monthly.
(b) On request, the board of trustees may grant a waiver of
the deadline imposed by this section based on an employing school
district's financial or technological resources.
(b) Section 24, Chapter 1229, Acts of the 77th Legislature,
Regular Session, 2001, is repealed.
SECTION 4.13. (a) Section 1575.301(a), Insurance Code, is
amended to conform to Section 3.11, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, to read as follows:
(a) The Texas public school retired employees group
insurance fund is a trust fund with the comptroller, who is
custodian of the fund.
(b) The heading to Subchapter G, Chapter 1575, Insurance
Code, is amended to conform to Section 3.11, Chapter 1187, Acts of
the 77th Legislature, Regular Session, 2001, to read as follows:
SUBCHAPTER G. TEXAS PUBLIC SCHOOL RETIRED EMPLOYEES
GROUP INSURANCE FUND
(c) Section 3.11, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 4.14. (a) Section 1575.456(a), Insurance Code, is
amended to conform to Section 3.13, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, to read as follows:
(a) Section 825.507, Government Code, concerning
confidentiality and disclosure of records applies to [information
in] records in the custody of the system or in the custody of an
administrator, carrier, agent, attorney, consultant, or
governmental body acting in cooperation with or on behalf of the
system relating to a retiree, active employee, annuitant, or
beneficiary under the group program.
(b) Section 3.13, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 4.15. (a) Section 1575.501, Insurance Code, is
amended to conform to Section 3.12, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, to read as follows:
Sec. 1575.501. EXPULSION FOR FRAUD. After notice and
hearing as provided by this subchapter, the board of trustees may
expel from participation in the group program a retiree, [active
employee,] dependent, surviving spouse, or surviving dependent
child who:
(1) submits a fraudulent claim or application for
coverage under the group program; or
(2) defrauds or attempts to defraud a health benefit
plan offered under the group program.
(b) Section 3.12, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 4.16. Sections 3.04, 3.08, 3.14, and 3.15, Chapter
1187, Acts of the 77th Legislature, Regular Session, 2001, are
repealed.
ARTICLE 5. CONFORMING AMENDMENTS--HEALTH AND SAFETY CODE
SECTION 5.01. Section 62.1015(a), Health and Safety Code,
is amended to read as follows:
(a) In this section, "charter school," "employee," and
"regional education service center" have the meanings assigned by
Subchapter A, Chapter 1579 [Section 2, Article 3.50-7], Insurance
Code.
ARTICLE 6. CONFORMING AMENDMENTS--TAX CODE
SECTION 6.01. Section 26.08(k), Tax Code, is amended to read
as follows:
(k) For purposes of this section, for the 2003, 2004, 2005,
2006, 2007, or 2008 tax year, for a school district that is entitled
to state funds under Section 1581.1015 [4(a-1), (a-2), (a-3),
(a-4), (a-5), or (a-6), Article 3.50-9], Insurance Code, the
rollback tax rate of the district is the sum of:
(1) the tax rate that, applied to the current total
value for the district, would impose taxes in an amount that, when
added to state funds that would be distributed to the district under
Chapter 42, Education Code, for the school year beginning in the
current tax year using that tax rate, would provide the same amount
of state funds distributed under Chapter 42 and maintenance and
operations taxes of the district per student in weighted average
daily attendance for that school year that would have been
available to the district in the preceding year if the funding
elements for Chapters 41 and 42, Education Code, for the current
year had been in effect for the preceding year;
(2) the tax rate that, applied to the current total
value for the district, would impose taxes in the amount that, when
added to state funds that would be distributed to the district under
Chapter 42, Education Code, for the school year beginning in the
current tax year using that tax rate, permits the district to comply
with Section 1581.052 [Section 3, Article 3.50-9], Insurance Code;
(3) the rate of $0.06 per $100 of taxable value; and
(4) the district's current debt rate.
ARTICLE 7. TRANSITION; EFFECTIVE DATE
SECTION 7.01. The board of directors of each regional
education service center shall develop the group coverage program
to be implemented by that board under Chapter 1579, Insurance Code,
as added by this Act, beginning September 1, 2003, and shall develop
the requirements for the program during the 2003-2004 school year,
with coverage beginning September 1, 2005.
SECTION 7.02. The Teacher Retirement System of Texas shall
continue to operate the uniform group health coverage program
established under Article 3.50-7, Insurance Code, as added by
Chapter 1187, Acts of the 77th Legislature, Regular Session, 2001,
until September 1, 2005.
SECTION 7.03. Not later than July 31, 2004, the Teacher
Retirement System of Texas shall provide written information to
school districts eligible to participate in a group coverage
program under Chapter 1579, Insurance Code, as added by this Act,
that provides a general description of the requirements for such a
program as adopted under Chapter 1579, Insurance Code, as added by
this Act.
SECTION 7.04. Notwithstanding Section 1579.154, Insurance
Code, as added by this Act, an entity that becomes eligible to
participate in a group coverage program established under Chapter
1579, Insurance Code, as added by this Act, as provided by
Subchapter D of that chapter and that elects to participate in the
program beginning September 1, 2005, must notify the board of
directors of the applicable regional education service center of
the election not later than January 1, 2005.
SECTION 7.05. During the initial implementation of Chapter
1579, Insurance Code, as added by this Act, and notwithstanding any
bidding requirements or other requirements set forth in Article
3.50-4, Insurance Code, or Article 3.50-7, Insurance Code, as added
by Chapter 1187, Acts of the 77th Legislature, Regular Session,
2001, the Teacher Retirement System of Texas may amend any
agreement in effect on September 1, 2003, that it has entered into
under Article 3.50-4, Insurance Code, or Article 3.50-7, Insurance
Code, as added by Chapter 1187, Acts of the 77th Legislature,
Regular Session, 2001, as necessary to comply with Chapter 1579,
Insurance Code, as added by this Act.
SECTION 7.06. To the extent of any conflict, this Act
prevails over another Act of the 78th Legislature, Regular Session,
2003, relating to nonsubstantive additions and corrections in
enacted codes.
SECTION 7.07. This Act takes effect September 1, 2003.