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78R4429 PB-D
By: Alonzo H.B. No. 3120
A BILL TO BE ENTITLED
AN ACT
relating to the operation and funding of certain group coverage
programs for certain educational employees and their dependents.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. OPERATION AND FUNDING OF GROUP COVERAGE PROGRAM
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 UNIFORM GROUP HEALTH COVERAGE
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1579.001. SHORT TITLE. This chapter may be cited as
the Texas School Employees Uniform Group Health Coverage Act.
Sec. 1579.002. GENERAL DEFINITIONS. In this chapter:
(1) "Administering firm" means any entity designated
by the board of trustees to administer any coverages, services,
benefits, or requirements under this chapter and the trustee's
rules adopted under this chapter.
(2) "Charter school" means an open-enrollment charter
school established under Subchapter D, Chapter 12, Education Code.
(3) "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.
(4) "Participating entity" means an entity
participating in the uniform 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 1579.154.
(5) "Program" means the uniform group coverage program
established under this chapter.
(6) "Regional education service center" means a
regional education service center established under Chapter 8,
Education Code.
(7) "Trustee" means the Teacher Retirement System of
Texas.
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 who is in a regular parent-child relationship and who lives
with or has his or her care provided by the employee or the
surviving spouse on a regular basis, regardless of the child's age,
if the child 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 trustee; 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 trustee.
[Sections 1579.005-1579.050 reserved for expansion]
SUBCHAPTER B. ADMINISTRATION
Sec. 1579.051. ADMINISTRATION OF GROUP PROGRAM. The
Teacher Retirement System of Texas, as trustee, shall implement and
administer the uniform group coverage program described by this
chapter.
Sec. 1579.052. AUTHORITY TO ADOPT RULES; OTHER AUTHORITY.
(a) The trustee may adopt rules relating to the program as
considered necessary by the trustee.
(b) The trustee may adopt rules to administer the program,
including rules relating to adjudication of claims and expelling
participants from the program for cause.
(c) The trustee may contract with an independent and
experienced group insurance consultant or actuary for advice and
counsel in implementing and administering the program.
(d) The trustee may enter into interagency contracts with
any agency of the state, including the Employees Retirement System
of Texas and the department, for the purpose of assistance in
implementing the program.
Sec. 1579.053. PERSONNEL. The trustee may hire and
compensate employees as necessary to implement the program.
Sec. 1579.054. COMPETITIVE BIDDING REQUIREMENTS; RULES. A
contract to provide group health coverage under this chapter may be
awarded only through competitive bidding under rules adopted by the
trustee.
Sec. 1579.055. CONTRACT AWARD; CONSIDERATIONS. (a) In
awarding a contract to provide group benefits under this chapter,
the trustee 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 the trustee awards a contract to a bidder whose bid
deviates from that advertised, the trustee shall record the
deviation and fully justify the reason for the deviation in the
minutes of the next trustee meeting.
[Sections 1579.056-1579.100 reserved for expansion]
SUBCHAPTER C. COVERAGES
Sec. 1579.101. PLANS OF GROUP COVERAGES. (a) The trustee
by rule shall establish plans of group coverages for employees
participating in the 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) The trustee by rule shall define the requirements of
each coverage plan and tier of coverage.
(d) Comparable coverage plans of each tier of coverage
established must be offered to employees of all participating
entities.
Sec. 1579.102. CATASTROPHIC CARE COVERAGE PLAN. The
coverage provided under the catastrophic care coverage plan shall
be prescribed by the trustee by rule and must provide coverage at
least as extensive as the coverage provided under the TRS-Care 2
plan operated under Chapter 1575.
Sec. 1579.103. PRIMARY CARE COVERAGE PLAN. The coverage
provided under the primary care coverage plan must be comparable in
scope, and in cost to the employee, to the coverage provided under
Chapter 1551.
Sec. 1579.104. OPTIONAL COVERAGES. The trustee may offer
optional coverages to employees participating in the program. The
trustee by rule may define the types of optional coverages offered
under this section.
Sec. 1579.105. PREEXISTING CONDITION LIMITATION. During
the initial period of eligibility, coverage provided under the
program may not be made subject to a preexisting condition
limitation.
[Sections 1579.106-1579.150 reserved for expansion]
SUBCHAPTER D. PARTICIPATING ENTITIES
Sec. 1579.151. REQUIRED PARTICIPATION OF SCHOOL DISTRICTS
WITH 500 OR FEWER EMPLOYEES. (a) Each school district with 500 or
fewer employees and each regional education service center is
required to participate in the program.
(b) Notwithstanding Subsection (a), a school district
otherwise subject to Subsection (a) that, on January 1, 2001, was
individually self-funded for the provision of health coverage to
its employees may elect not to participate in the program.
(c) An educational district described by Section
1579.002(4)(B) that, on January 1, 2001, had 500 or fewer employees
may elect not to participate in the program.
(d) Notwithstanding Subsection (a), a school district
otherwise subject to Subsection (a) that is a party to a contract
for the provision of insurance coverage to the employees of the
district that is in effect on September 1, 2002, is not required to
participate in the program until the expiration of the contract
period. A school district subject to this subsection shall notify
the trustee in the manner prescribed by the trustee. This
subsection expires March 1, 2004.
Sec. 1579.152. PARTICIPATION OF OTHER SCHOOL DISTRICTS.
Effective September 1, 2003, a school district with more than 500
employees may elect to participate in the program. A school
district that elects to participate under this section shall apply
for participation in the manner prescribed by the trustee by rule.
Sec. 1579.153. PARTICIPATION BY CERTAIN RISK POOLS. (a) In
determining the number of employees of a school district for
purposes of Sections 1579.151 and 1579.152, school districts that,
on January 1, 2001, were members of a risk pool established under
the authority of Chapter 172, Local Government Code, as provided by
Section 22.004, Education Code, may elect to be treated as a single
unit.
(b) A risk pool in existence on January 1, 2001, that, as of
that date, provided group health coverage to 500 or fewer school
district employees may elect to participate in the program.
(c) For purposes of this section, participation in the
program by school districts covered by a risk pool is limited to
school districts covered by the risk pool as of January 1, 2001.
Sec. 1579.154. 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 trustee rule.
[Sections 1579.155-1579.200 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
trustee rules.
Sec. 1579.202. ELIGIBLE EMPLOYEES. (a) Except as provided
by Section 1579.204, participation in the program is limited to
employees of participating entities 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 trustee
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
trustee.
(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 trustee 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 the program 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 an amount equal to an amount
sufficient to cover 100 percent of employee-only coverage premiums
and 50 percent of dependent coverage premiums, minus the amount of
the required contribution made by the participating entity under
Chapter 1581. 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(4)(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, an
amount equal to an amount sufficient to cover 100 percent of
employee-only coverage premiums and 50 percent of dependent
coverage premiums, minus the amount of the required contribution
made by the participating entity under Chapter 1581.
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 the program 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. TEXAS SCHOOL EMPLOYEES
UNIFORM GROUP COVERAGE TRUST FUND
Sec. 1579.301. FUND; ADMINISTRATION. The Texas school
employees uniform group coverage trust fund is a trust fund with the
comptroller.
Sec. 1579.302. COMPOSITION OF FUND. The fund is composed
of:
(1) all contributions made to the 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. The trustee may use
amounts in the fund only to provide group coverages under this
chapter and to pay the expenses of administering the program.
Sec. 1579.304. INVESTMENT OF FUND. The trustee may invest
assets of the fund in the manner provided by Section 67(a)(3),
Article XVI, Texas Constitution.
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) "Trustee" means the Teacher Retirement System of
Texas.
Sec. 1580.002. AUTHORITY TO ADOPT RULES; OTHER AUTHORITY.
(a) The trustee may adopt rules to implement this chapter.
(b) The trustee 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 OF STATE FUNDS BY TRUSTEE
Sec. 1580.051. DISTRIBUTION BY TRUSTEE. Each year, the
trustee 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 trustee, 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 trustee 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 trustee 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 TRUSTEE FINAL. A
determination by the trustee 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; or
(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 trustee 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 trustee 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. TRUSTEE RULES. The trustee, by rule, shall
specify the requirements for a medical savings account established
under this chapter.
Sec. 1580.153. QUALIFICATION OF ACCOUNT. (a) The trustee
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 trustee 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 Texas school employees uniform 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. The excess must be
distributed equally to all employees on a per capita basis.
[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 Teachers
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 21.402(a), Education Code, is amended
to read as follows:
(a) Except as provided by Subsection (d), (e), or (f), a
school district must pay each classroom teacher, full-time
librarian, full-time counselor certified under Subchapter B, or
full-time school nurse not less than the minimum monthly salary,
based on the employee's level of experience, determined by the
following formula:
MS = SF X FS
where:
"MS" is the minimum monthly salary;
"SF" is the applicable salary factor specified by Subsection
(c); and
"FS" is the amount, as determined by the commissioner under
Subsection (b), of state and local funds per weighted student
available to a district eligible to receive state assistance under
Section 42.302 with an enrichment tax rate, as defined by Section
42.302, equal to the maximum rate authorized under Section 42.303,
except that the amount of state and local funds per weighted student
does not include the amount attributable to the increase in the
guaranteed level made by:
(1) Chapter 1187 [H.B. No. 3343], Acts of the 77th
Legislature, Regular Session, 2001; or
(2) __.B. No. _____, Acts of the 78th Legislature,
Regular Session, 2003.
SECTION 2.02. Sections 22.004(a), (b), (c), (e), (f), (g),
(i), and (j), Education Code, are amended to read as follows:
(a) A district shall participate in the uniform group
coverage program established under Chapter 1579 [Article 3.50-7],
Insurance Code, as provided by Subchapter D of that chapter
[Section 5 of that article].
(b) A district 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 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 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.
(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 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 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 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 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 2.03. Section 41.002(a), Education Code, is amended
to read as follows:
(a) A school district may not have a wealth per student that
exceeds $_______ [$305,000].
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 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
required [of $900 or the amount specified in the General
Appropriations Act] for that year for purposes of the state
contribution for covered employees 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:
(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].
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. 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:
(A) the equalized wealth level under Section
41.002; or
(B) the guaranteed level of state and local funds
per weighted student per cent of tax effort under Section 42.302; or
(2) additional funds to which the district or school
is entitled due to the increase made by __.B. No. _____, Acts of the
78th Legislature, Regular Session, 2003, to:
(A) the equalized wealth level under Section
41.002; or
(B) the guaranteed level of state and local funds
per weighted student per cent of tax effort under Section 42.302
[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 the
following amount of funds only to pay contributions under a group
health coverage plan for district or school employees:
(1) the sum of:
(A) an amount equal to 75 percent of the amount
certified for the district or school under Subsection (b)(1) [(b)];
and
(B) the amount certified for the district or
school under Subsection (b)(2); 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 required [of $900 or the amount specified in the General
Appropriations Act] for that year for purposes of the state
contribution for covered employees 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.
SECTION 2.07. Section 42.302(a), Education Code, is amended
to read as follows:
(a) Each school district is guaranteed a specified amount
per weighted student in state and local funds for each cent of tax
effort over that required for the district's local fund assignment
up to the maximum level specified in this subchapter. The amount of
state support, subject only to the maximum amount under Section
42.303, is determined by the formula:
GYA = (GL X WADA X DTR X 100) - LR
where:
"GYA" is the guaranteed yield amount of state funds to be
allocated to the district;
"GL" is the dollar amount guaranteed level of state and local
funds per weighted student per cent of tax effort, which is $_____
[$27.14] or a greater amount for any year provided by
appropriation;
"WADA" is the number of students in weighted average daily
attendance, which is calculated by dividing the sum of the school
district's allotments under Subchapters B and C, less any allotment
to the district for transportation, any allotment under Section
42.158, and 50 percent of the adjustment under Section 42.102, by
the basic allotment for the applicable year;
"DTR" is the district enrichment tax rate of the school
district, which is determined by subtracting the amounts specified
by Subsection (b) from the total amount of maintenance and
operations taxes collected by the school district for the
applicable school year and dividing the difference by the quotient
of the district's taxable value of property as determined under
Subchapter M, Chapter 403, Government Code, or, if applicable,
under Section 42.2521, divided by 100; and
"LR" is the local revenue, which is determined by multiplying
"DTR" by the quotient of the district's taxable value of property as
determined under Subchapter M, Chapter 403, Government Code, or, if
applicable, under Section 42.2521, divided by 100.
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;
(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).
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 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
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, and to conform more closely to
the source law from which it 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 4.05. (a) Section 1575.005, Insurance Code, is
amended to conform to Section 3.07, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, 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 4.06. (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, 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 4.08. (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 trustee shall, not later than the 30th day after the
date on which the uniform group coverage program established under
Chapter 1579 is implemented, transfer from the program any records
relating to active employees participating in the uniform 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 4.09. (a) Section 1575.106, Insurance Code, is
amended to conform to Section 3.06, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, 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 section 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 4.10. (a) Section 1575.153, Insurance Code, is
amended to conform to Section 3.10, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, 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 4.11. (a) Section 1575.160, Insurance Code, is
amended to conform to Section 3.09, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, 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 4.12. (a) Section 1575.207, Insurance Code, is
amended to conform to Section 24, Chapter 1229, 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. 1575.207. INTEREST ASSESSED ON LATE PAYMENT OF
DEPOSITS BY EMPLOYING SCHOOL DISTRICTS. (a) An employing school
district that does not remit to the trustee [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 trustee 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, and to conform more closely to
the source law from which the section was derived 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 Teacher Retirement System of Texas
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, 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 4.16. 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 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 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. 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 7.02. 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 7.03. This Act takes effect September 1, 2003.