78R4228 PB-D
By: Eissler H.B. No. 2824
A BILL TO BE ENTITLED
AN ACT
relating to adoption of a medical savings account program for the
provision of health benefits coverage to active employees of school
districts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. MEDICAL SAVINGS ACCOUNT PROGRAM
SECTION 1.01. Subtitle H, Title 8, Insurance Code, is
amended by adding Chapter 1579 to read as follows:
CHAPTER 1579. TEXAS PUBLIC SCHOOL EMPLOYEES MEDICAL SAVINGS
ACCOUNT PROGRAM
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1579.001. DEFINITIONS. In this chapter:
(1) "Account" means a medical savings account
established under this chapter for a participating employee.
(2) "Account administrator" means a person qualified
to act as an account administrator under Section 1579.054.
(3) "Benefit options" include:
(A) long-term care coverage;
(B) long-term disability coverage;
(C) short-term disability coverage;
(D) accidental death and dismemberment coverage;
(E) group term life insurance coverage;
(F) vision care coverage;
(G) dental coverage;
(H) prescription drug coverage;
(I) prosthetic device coverage;
(J) obstetrical coverage; and
(K) any other supplemental coverage considered
appropriate by the board of trustees.
(4) "Charter school" means an open-enrollment charter
school established under Subchapter D, Chapter 12, Education Code.
(5) "Dependent" means:
(A) the spouse of a person;
(B) an unmarried child of the person if that
child is under 25 years of age, including:
(i) an adopted child;
(ii) a stepchild, foster child, or other
child who has a regular parent-child relationship with the person;
or
(iii) a recognized natural child; or
(C) the person's recognized natural child,
adopted child, foster child, stepchild, or other child who has a
regular parent-child relationship with the participating employee,
without regard to the age of the child, if the child lives with or
has care provided by the person on a regular basis and is mentally
retarded or physically incapacitated to an extent that the child is
dependent on the person for care or support, as determined by the
trustee.
(6) "District" means a public school district of this
state.
(7) "Employee" means an individual who is employed by
a participating entity and who is not covered by a group insurance
program under Chapter 1551 or 1601. The term does not include an
individual performing personal services for a participating entity
as an independent contractor.
(8) "Health benefits plan" means a plan designed to
provide, pay for, or reimburse expenses for health care services.
The term includes:
(A) a group insurance policy, contract, or
certificate;
(B) a medical or hospital service agreement; and
(C) a similar group arrangement, including
coverage through a health maintenance organization regulated under
Chapter 843.
(9) "Health benefits plan provider" means an entity
that provides health benefits plan coverage in this state. The term
includes:
(A) an insurance company authorized to do
business in this state;
(B) a group hospital service corporation
operating under Chapter 842;
(C) a health maintenance organization regulated
under Chapter 843;
(D) a stipulated premium insurance company
operating under Chapter 884;
(E) a multiple employer welfare arrangement
subject to Chapter 846;
(F) an approved nonprofit health corporation
that holds a certificate of authority issued under Chapter 844; and
(G) any other entity providing a plan of health
insurance or health benefits coverage subject to state regulation
by the department.
(10) "Participant" means a person enrolled in the
program.
(11) "Participating entity" means an entity
participating in the medical savings account 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 1579.102.
(12) "Program" means the Texas public school employees
medical savings account program established by this chapter.
(13) "Qualified health care expense" means an expense
paid by a participating employee for medical care, as defined by 26
U.S.C. Section 213(d), as amended, for the employee or the
employee's dependents, as defined by 26 U.S.C. Section 152, as
amended.
(14) "Regional education service center" means a
regional education service center established under Chapter 8,
Education Code.
(15) "Trustee" means the board of trustees of the
Teacher Retirement System of Texas.
Sec. 1579.002. APPLICABILITY OF OTHER LAW. This chapter
does not prohibit a district from providing additional or
supplemental insurance coverage under Article 3.51 or 26.036 of
this code or Section 22.005, Education Code.
[Sections 1579.003-1579.050 reserved for expansion]
SUBCHAPTER B. ESTABLISHMENT OF MEDICAL SAVINGS ACCOUNT
PROGRAM; POWERS AND DUTIES OF BOARD OF TRUSTEES
Sec. 1579.051. CREATION OF PROGRAM; ADMINISTRATION; RULES.
(a) The Texas public school employees medical savings account
program is established for the benefit of active public school
employees and those employees' dependents.
(b) The board of trustees of the Teacher Retirement System
of Texas is the trustee for the program and shall administer the
program.
(c) The trustee shall adopt rules, plans, and procedures as
necessary for the administration of the medical savings account
program adopted under this chapter.
Sec. 1579.052. CONTRACTS. On a competitive bid basis, the
trustee shall, as necessary to implement this article, contract
with:
(1) a qualified, experienced firm of group insurance
specialists;
(2) a qualified, experienced firm of specialists in
any of the benefit options authorized under this chapter; and
(3) an administering firm to act for the trustee in the
capacity of account administrator.
Sec. 1579.053. REQUIREMENTS FOR MEDICAL SAVINGS ACCOUNTS.
(a) The trustee shall request in writing a ruling or opinion from
the Internal Revenue Service as to whether the medical savings
accounts adopted under this chapter and the state rules governing
those accounts qualify the accounts for appropriate federal tax
exemptions. Based on the response of the Internal Revenue Service,
the trustee shall:
(1) modify the rules, plans, and procedures adopted
under Section 1579.051 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.
(b) Once finalized rules, plans, and procedures are adopted
by the trustee and approved by the Internal Revenue Service, the
trustee shall:
(1) solicit bids for the development and establishment
of the medical savings account program; and
(2) provide information to participating employees
regarding the operation of the medical savings accounts adopted
under this chapter.
Sec. 1579.054. ACCOUNT ADMINISTRATOR. (a) The following
persons may act as an account administrator under this chapter:
(1) a bank, savings and loan association, savings
bank, or credit union chartered under the laws of this state or the
United States;
(2) a trust company authorized to act as a fiduciary;
(3) an insurance company authorized to engage in the
business of health insurance in this state, a group hospital
service corporation authorized under Chapter 842 to engage in
business in this state, or a health maintenance organization
authorized under Chapter 843 to engage in business in this state;
(4) a third-party administrator holding a certificate
of authority issued under Article 21.07-6 of this code; or
(5) a certified public accountant licensed by the
Texas State Board of Public Accountancy.
(b) An account administrator may charge a fee for services
performed as the administrator of an account. The amount of the fee
shall be established in the contract between the account
administrator and the trustee.
(c) The account administrator is the fiduciary of the
participating employee who has an account under this chapter.
Sec. 1579.055. PERSONNEL. The trustee may employ persons
as necessary to assist the trustee in administering this chapter.
Sec. 1579.056. ANNUAL REPORT OF PROGRAM ACTIVITIES. (a)
Not later than June 1 of each year, the trustee shall submit a
report to the governor, the lieutenant governor, the speaker of the
house of representatives, and the commissioner.
(b) The report must summarize the activities of the program
in the calendar year preceding the year in which the report is
submitted.
[Sections 1579.057-1579.100 reserved for expansion]
SUBCHAPTER C. PROGRAM PARTICIPATION AND COVERAGE
Sec. 1579.101. REQUIRED PARTICIPATION; PARTICIPATION
OBLIGATIONS. (a) Each participating entity shall participate in
the program as provided by this subchapter.
(b) Participation in the program includes compliance with
rules adopted by the trustee for the administration of the program
and provision of a notice to each employee as prescribed by the
trustee relating to the existence of the program that contains the
address from which an employee may obtain information about:
(1) the coverage offered by the program;
(2) eligibility requirements for and costs of that
coverage;
(3) the contribution that the employee is eligible to
receive from the state and the employing participating entity for
the costs of the coverage; and
(4) other information considered useful by the
trustee.
Sec. 1579.102. PARTICIPATION BY CHARTER SCHOOLS;
ELIGIBILITY. (a) A charter school is eligible to participate in
the program if the school agrees:
(1) that all records of the school relating to
participation in the program are open to inspection by the trustee,
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 program annually audited by a certified public
accountant at the school's expense.
(b) A charter school must notify the trustee of the school's
intent to participate in the program in the manner and within the
time required by board rule.
Sec. 1579.103. PROVISION OF COVERAGE. The program shall
provide, through the medical savings accounts, group health
benefits plan coverage as provided by this chapter to an active
employee who is eligible for that coverage under this chapter and,
as provided by this chapter, to that employee's dependents.
Sec. 1579.104. COVERAGE PLANS. (a) The program must
include:
(1) a primary care coverage plan comparable in scope
and, to the greatest extent possible, in cost to the basic coverage
for health care provided to state employees under Chapter 1551; and
(2) a catastrophic care coverage plan.
(b) The catastrophic care coverage plan must be less
expensive for employee-only and employee and dependents coverage
than the primary care coverage plan.
Sec. 1579.105. PARTICIPATION BY EMPLOYEES. (a) Each
active employee is eligible to participate in the program
established under this chapter. An employee who elects to
participate shall be enrolled in the primary care coverage plan
unless the employee elects in writing to participate only in the
catastrophic care coverage plan.
(b) Participation in the program qualifies an employee to
receive a contribution to the employee's account as authorized
under Subchapter D. An employee who elects not to participate in
the program is ineligible to receive a contribution.
Sec. 1579.106. COVERAGE FOR DEPENDENTS. (a) A
participating employee is entitled to obtain for a dependent of the
participating employee coverage in the plan selected by the
employee in the manner determined by the trustee.
(b) The participating employee shall make any required
additional contribution payments for the dependent coverage in the
manner prescribed by the trustee.
(c) A participating entity is not prohibited by this chapter
from voluntarily contributing to the cost of dependent coverage.
Sec. 1579.107. IDENTIFICATION CARDS. (a) The account
administrator shall issue to each participating employee an
identification card indicating:
(1) the name of the employee and any dependent of the
employee for whom eligible expenses may be paid under the program;
(2) the name, address, and phone number of the account
administrator; and
(3) a description of the coverage plan in which the
employee is participating.
(b) The account administrator shall issue a duplicate
identification card to each of the employee's dependents for whom
eligible expenses may be paid under the program.
Sec. 1579.108. USE OF ACCOUNT. (a) The account
administrator shall use money in an employee's account to pay:
(1) the costs of the health benefit plan coverage
selected by the employee for the employee and the employee's
dependents; and
(2) any additional eligible medical expenses of the
participating employee or the employee's dependents or to reimburse
the employee for those expenses.
(b) A medical expense is eligible for payment or
reimbursement under Subsection (a)(2) if:
(1) it is a medical expense described under Section
213(d), Internal Revenue Code of 1986, as amended; and
(2) payment or reimbursement for the expense is not
otherwise provided for under the coverage plan selected by the
employee or under another insurance policy, including a motor
vehicle or workers' compensation insurance policy.
Sec. 1579.109. PROMPT PAYMENT OF CLAIMS. (a) Except as
provided by Subsection (b), the account administrator shall pay a
claim for an expense that is eligible for payment or reimbursement
from the account not later than the 30th day after the date the
claim is submitted to the account administrator.
(b) The account administrator may request documents
necessary to verify whether an expense is eligible for payment or
reimbursement from the account. If the account administrator makes
a request under this subsection, the account administrator shall
pay a claim for an expense that is eligible for payment or
reimbursement from the account not later than the 30th day after the
date the documents are received by the account administrator.
[Sections 1579.110-1579.200 reserved for expansion]
SUBCHAPTER D. CONTRIBUTIONS
Sec. 1579.201. STATE CONTRIBUTION. (a) For each
participating employee, the state shall annually contribute $1,900
or the amount specified in the General Appropriations Act to the
medical savings account established for that employee for the
payment of qualified health care expenses if the trustee has
determined that those accounts meet the requirements described by
Section 1579.053.
(b) For each participating employee of a school district or
charter school:
(1) $900 of the state contribution, or a greater
amount as provided by the General Appropriations Act for purposes
of this chapter, 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; and
(2) $1,000 of the state contribution, or a greater
amount as provided by the General Appropriations Act for purposes
of this chapter, shall be delivered by the trustee.
(c) A school district that is ineligible for state aid under
Chapter 42, Education Code, is entitled to the funds delivered
under Subsection (b)(2).
(d) Each year, the trustee shall deliver to each
participating entity other than a school district or charter school
the amount to which the entity is entitled under Subsection (a).
Sec. 1579.202. EMPLOYEE CONTRIBUTIONS. (a) Each
participating employee shall contribute any amounts required to
cover benefit options selected by the employee beyond the state
contribution under Section 1579.201.
(b) The participating employee shall make the employee's
contributions in the manner prescribed by the trustee.
[Sections 1579.203-1579.250 reserved for expansion]
SUBCHAPTER E. RECORDS, PROCEEDINGS, AND ACCOUNTING;
INVESTMENT AUTHORITY
Sec. 1579.251. CONFIDENTIALITY OF RECORDS. (a) Section
825.507, Government Code, applies to information in records
relating to an employee or other participant under the program.
(b) The program may disclose to a health benefits plan
provider information in the records of an individual that the
trustee determines is necessary to administer the program.
Sec. 1579.252. CLAIM DENIAL; EXPULSION FROM PROGRAM. (a) A
participant may appeal a claim denial or expulsion from the program
to the trustee.
(b) Adjudication of claim disputes and expulsions from the
program are subject to the contested case provisions of Chapter
2001, Government Code.
Sec. 1579.253. HEARING EXAMINER. The trustee may delegate
its authority to adjudicate claim disputes and expulsions to a
qualified hearing examiner.
Sec. 1579.254. APPEAL. (a) A decision of the trustee or
hearing examiner is subject to review by a district court in the
county in which the claimant resides.
(b) An appeal of a determination under this section is under
the substantial evidence rule.
Sec. 1579.255. ANNUAL ACCOUNTING. (a) In this article,
"plan year" means the period beginning on September 1 and ending the
following August 31.
(b) Coverage purchased under this chapter must provide for
an accounting to the trustee by each health benefits plan provider.
(c) The accounting must be submitted:
(1) not later than the 90th day after the last day of
each plan year; and
(2) on a form approved by the trustee.
(d) Each health benefits plan provider shall prepare any
other report required by rule by the trustee.
(e) A health benefits plan provider may not assess an
additional charge for preparation of an accounting report.
Sec. 1579.256. ASSISTANCE. In implementing and
administering this chapter, the trustee may obtain the assistance
of any state agency the trustee considers appropriate.
ARTICLE 2. CONFORMING AMENDMENTS--EDUCATION CODE
SECTION 2.01. Sections 22.004(a), (b), (c), (g), and (j),
Education Code, are amended to read as follows:
(a) A district shall participate in the medical savings
account [uniform group coverage] program established under Chapter
1579 [Article 3.50-7], Insurance Code[, as provided by Section 5 of
that article].
(b) In addition to participation in the medical savings
account program under Chapter 1579, Insurance Code, a [A] district
may [that does not participate in 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 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 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 any 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 Section 9, Article 3.50-7, Insurance Code, or by
Article 3.50-8, Insurance Code].
(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.
(j) This section does not preclude a district that is
participating in the medical savings account [uniform group
coverage] program established under Chapter 1579 [Article 3.50-7],
Insurance Code, from voluntarily entering into contracts to provide
optional insurance coverages for the employees of the district.
SECTION 2.02. Sections 42.2514(a), (b), and (c), Education
Code, are amended to read as follows:
(a) In this section, "participating charter school" means
an open-enrollment charter school that participates in the medical
savings account [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
$1,900 [$900] or the amount specified in the General Appropriations
Act for that year for purposes of the state contribution under
Subchapter D, Chapter 1579 [Section 9, Article 3.50-7], Insurance
Code, by the number of district or school employees who participate
in the medical savings account program [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:
(A) [(i)] the equalized wealth level under
Section 41.002; and
(B) [(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].
(c) A school district or participating charter school may
use state aid received under this section only to pay contributions
under the medical savings account program under Chapter 1579,
Insurance Code [a group health coverage plan for district or school
employees].
SECTION 2.03. Sections 42.260(b) and (c), Education Code,
are amended to read as follows:
(b) For each year, the commissioner shall certify to each
school district or participating charter school the amount of[:
[(1)] 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:
(1) [(A)] the equalized wealth level under Section
41.002; or
(2) [(B)] the guaranteed level of state and local
funds per weighted student per cent of tax effort under Section
42.302[; or
[(2) additional state aid to which the district or
school is entitled under Section 42.2513].
(c) Notwithstanding any other provision of this code, a
school district or participating charter school may use an amount
equal to 75 percent of the amount certified for the district or
school under Subsection (b) [the following amount of funds] only to
pay contributions under the medical savings account program under
Chapter 1579, Insurance Code [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 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 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 2
of that article for that year].
SECTION 2.04. The following laws are repealed:
(1) Sections 22.004(d), (e), (f), and (i), Education
Code; and
(2) Section 42.253(e-1), Education Code.
ARTICLE 3. CONFORMING AMENDMENT--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; and
(10) [supplemental compensation received by an
employee under Article 3.50-8, Insurance Code; and
[(11)] any compensation not described by [in]
Subsection (b).
ARTICLE 4. CONFORMING AMENDMENTS--INSURANCE CODE
SECTION 4.01. (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 4.02. (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, and to conform more closely to
the source law from which the subdivision was derived, 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 member [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 who[, without regard to the age of the child, if the child] is
in a regular parent-child relationship and who[,] lives with or has
his or her [the child's] care provided by the retiree[, active
employee,] or surviving spouse on a regular basis regardless of the
child's age, if the child[, 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 trustee [board of trustees]; or
(D) a deceased active member's [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 member
[employee] was alive, the child:
(i) lived with or had the child's care
provided by the active member [employee] on a regular basis; and
(ii) was mentally retarded or physically
incapacitated to an extent that the child was dependent on the
active member [employee] or surviving spouse for care or support,
as determined by the trustee [board of trustees].
(c) Section 3.03, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 4.03. (a) Section 1575.005, Insurance Code, is
amended to conform to Section 3.07, 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, to read as
follows:
Sec. 1575.005. ISSUANCE OF CERTIFICATE OF COVERAGE. At the
time and in the circumstances specified by the trustee [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 4.04. (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 4.05. (a) Section 1575.052, Insurance Code, is
amended to conform to Section 3.05, 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, to read as
follows:
Sec. 1575.052. AUTHORITY TO ADOPT RULES AND PROCEDURES;
OTHER AUTHORITY. (a) The trustee [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 trustee [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 4.06. (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 trustee shall, not later than the 30th day after the
date on which the medical savings account program established under
Chapter 1579 is implemented, transfer from the program any records
relating to active employees participating in any group health
coverage program under the jurisdiction of the trustee.
(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 4.07. (a) Section 1575.106, Insurance Code, is
amended to conform to Section 3.06, 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, 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
trustee [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 trustee [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, and to conform more closely to
the source law from which the subsection was derived, to read as
follows:
(a) In awarding a contract to provide group benefits under
this chapter, the trustee [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 4.08. (a) Section 1575.153, Insurance Code, is
amended to conform to Section 3.10, 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, 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 trustee [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 4.09. (a) Section 1575.160, Insurance Code, is
amended to conform to Section 3.09, 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, 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 trustee 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 4.10. (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 4.11. (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, and to conform more closely to
the source law from which the subsection was derived, and amended 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
account or other 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 4.12. (a) Section 1575.501, Insurance Code, is
amended to conform to Section 3.12, 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, to read as
follows:
Sec. 1575.501. EXPULSION FOR FRAUD. After notice and
hearing as provided by this subchapter, the trustee [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 4.13. Sections 3.04, 3.08, 3.14, and 3.15, Chapter
1187, Acts of the 77th Legislature, Regular Session, 2001, are
repealed.
SECTION 4.14. The following laws are repealed:
(1) Articles 3.50-7, 3.50-8, and 3.50-9, Insurance
Code;
(2) Section 3, Article 3.51, Insurance Code; and
(3) Article 26.036(c), Insurance Code.
ARTICLE 5. CONFORMING AMENDMENT--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 AMENDMENT--TAX CODE
SECTION 6.01. Sections 26.08(k), (l), and (m), Tax Code,
are repealed.
ARTICLE 7. TRANSITION; EFFECTIVE DATE
SECTION 7.01. The Teacher Retirement System of Texas shall
develop the medical savings account program to be implemented under
Chapter 1579, Insurance Code, as added by this Act, beginning
September 1, 2003, and shall develop enrollment requirements for
the program during the 2003-2004 school year, with coverage
beginning September 1, 2004.
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, 2004.
SECTION 7.03. Not later than July 31, 2003, the Teacher
Retirement System of Texas shall provide written information to
school districts eligible to participate in the medical savings
account 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. 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 7.05. 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 7.06. (a) Except as provided by Subsection (b) of
this section, this Act takes effect September 1, 2003.
(b) Articles 2, 3, and 6 of this Act take effect September 1,
2004, and apply beginning with the 2004-2005 school year.