By: Delisi H.B. No. 3286
A BILL TO BE ENTITLED
AN ACT
relating to relating to the establishment of a defined contribution
health care benefits program for retired school employees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. PROGRAM FOR RETIRED SCHOOL EMPLOYEES
SECTION 1.01. (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Legislature, Regular Session, 2001, is repealed.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 1.02. (a) Section 1575.002, Insurance Code, is
amended to conform to Section 3.03, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, by amending Subdivisions (4),
(5), and (7) and further amended by adding Subdivision (6-a) to read
as follows:
(4) "Fund" means the Texas public school retired
employees group insurance fund.
(5) "Group program" means the Texas Retired Public
School Employees Group Insurance Program authorized by this
chapter.
(6-a) "Health reimbursement arrangement program"
means the program operated under Subchapter L.
(7) "Trustee" ["System"] means the Teacher Retirement
System of Texas.
(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 1.03. (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 1.04. (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, and further
amended, 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].
(c) The trustee by rule shall establish the health
reimbursement arrangement program under Subchapter L.
(b) Section 3.05, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 1.05. (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
and further amending that section 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 health reimbursement arrangement program
established under Chapter 1579 is implemented, transfer from the
program any records relating to active employees participating in
any group health coverage program established under this chapter
and operated 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 1.06. (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 1.07. Section 1575.151, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, and further amended to read as follows:
Sec. 1575.151. TYPES OF COVERAGES. (a) The trustee [board
of trustees] may include in a plan any coverage it considers
advisable, including:
(1) life insurance;
(2) accidental death and dismemberment coverage; and
(3) [coverage for:
[(A) hospital care and benefits;
[(B) surgical care and treatment;
[(C) medical care and treatment;
[(D) dental care;
[(E) eye care;
[(F) obstetrical benefits;
[(G) long-term care;
[(H) prescribed drugs, medicines, and prosthetic
devices; and
[(I) supplemental benefits, supplies, and
services in accordance with this chapter; and
[(4)] protection against loss of salary.
(b) The group coverage plan shall provide health benefit
coverage through the health reimbursement arrangement program
established under Subchapter L.
SECTION 1.08. (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 1.09. (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 1.10. Section 1575.201, Insurance Code, is amended
to read as follows:
Sec. 1575.201. [ADDITIONAL] STATE CONTRIBUTIONS FOR HEALTH
CARE. For each participating retiree, the [The] state through the
trustee [system] shall annually contribute from money in the fund
the amount specified in the General Appropriations Act to the
health reimbursement arrangement established for that retiree for
the payment of qualified health care expenses if the trustee has
determined that those accounts meet the requirements described by
Section 1575.554 [the total cost of the basic plan covering each
participating retiree].
SECTION 1.11. Section 1575.202, Insurance Code, is amended
to read as follows:
Sec. 1575.202. ADDITIONAL STATE CONTRIBUTION FOR OTHER
COVERAGES [BASED ON ACTIVE EMPLOYEE COMPENSATION]. [(a)] Each
state fiscal year, the state shall contribute to the fund an amount
as determined by the General Appropriations Act to pay all or part
of coverages provided under the plan other than health benefit
coverages provided through the health reimbursement arrangement
program [equal to 0.5 percent of the salary of each active
employee].
[(b) The state may contribute to the fund an amount in
addition to the contribution required by Subsection (a).]
SECTION 1.12. Section 1575.205, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, to read as follows:
Sec. 1575.205. PARTICIPANT CONTRIBUTION FOR OPTIONAL PLAN.
(a) A retiree, surviving spouse, or surviving dependent child who
elects an optional plan shall pay a monthly contribution to cover
the cost of the plan. The trustee [board of trustees] shall adopt
rules for the collection of additional contributions.
(b) As a condition of electing coverage under an optional
plan, a retiree or surviving spouse must, in writing, authorize the
trustee [board of trustees] to deduct the amount of the
contribution from the person's monthly annuity payment.
(c) The trustee [board of trustees] may spend a part of the
money received for the group program to offset a part of the costs
for optional coverage paid by retirees if the expenditure does not
reduce the period the group program is projected to remain
financially solvent by more than one year in a biennium.
(d) Amounts contributed under this section shall not be
contributed to the health reimbursement arrangement provided to the
employee or annuitant, but may be contributed to any other account
or arrangement established under this, or another chapter, or by
rule, to the extent allowed by federal law and regulation.
SECTION 1.13. Section 1575.207, Insurance Code, is amended
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. An employing school
district that does not remit to the trustee [board of trustees] all
contributions required by this subchapter before the 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.
SECTION 1.14. Section 1575.208, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, to read as follows:
Sec. 1575.208. CERTIFICATION OF AMOUNT NECESSARY TO PAY
STATE CONTRIBUTIONS. Not later than October 31 preceding each
regular session of the legislature, the trustee [board of trustees]
shall certify the amount necessary to pay the state contributions
to the fund to:
(1) the Legislative Budget Board; and
(2) the budget division of the governor's office.
SECTION 1.15. Section 1575.209, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, to read as follows:
Sec. 1575.209. CERTIFICATION OF AMOUNT OF STATE
CONTRIBUTIONS. Not later than August 31 of each year, the trustee
[board of trustees] shall certify to the comptroller the estimated
amount of state contributions to be received by the fund for the
next fiscal year under the appropriations authorized by this
chapter.
SECTION 1.16. Section 1575.210(a), Insurance Code, is
amended to conform more closely to the source law from which the
section was derived, to read as follows:
(a) Contributions allocated and appropriated under this
subchapter for a state fiscal year shall be:
(1) paid from the general revenue fund in equal
monthly installments;
(2) based on the estimated amount certified by the
trustee [board of trustees] to the comptroller for that year; and
(3) subject to any express limitations specified in
the Act making the appropriation.
SECTION 1.17. Section 1575.253, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, to read as follows:
Sec. 1575.253. MONTHLY CERTIFICATION. An employer shall
monthly certify to the trustee [board of trustees] in a form
prescribed by the trustee [board]:
(1) the total amount of salary paid from federal funds
and private grants; and
(2) the total amount of state contributions provided
by the funds and grants.
SECTION 1.18. Section 1575.254, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, to read as follows:
Sec. 1575.254. MONTHLY MAINTENANCE OF INFORMATION. An
employer shall monthly maintain:
(1) the name of each employee whose salary is paid
wholly or partly from a grant;
(2) the source of the grant;
(3) the amount of the employee's salary paid from the
grant;
(4) the amount of the money provided by the grant for
state contributions for the employee; and
(5) any other information the trustee [board of
trustees] determines is necessary to enforce this subchapter.
SECTION 1.19. Section 1575.255, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, to read as follows:
Sec. 1575.255. PROOF OF COMPLIANCE. The trustee [board of
trustees] may:
(1) require an employer to report an application for
federal or private money;
(2) require evidence that the application includes a
request for funds available to pay state contributions for active
employees; and
(3) examine the records of an employer to determine
compliance with this subchapter and rules adopted under this
subchapter.
SECTION 1.20. Section 1575.257(b), Insurance Code, is
amended to conform more closely to the source law from which the
section was derived, to read as follows:
(b) The trustee [board of trustees] shall report an alleged
noncompliance with this subchapter to the attorney general, the
Legislative Budget Board, the comptroller, and the governor.
SECTION 1.21. (a) Section 1575.301, Insurance Code, is
amended to conform to Section 3.11, 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. 1575.301. FUND; ADMINISTRATION. (a) The retired
[Texas public school] employees group insurance fund is a trust
fund with the comptroller, who is custodian of the fund.
(b) The trustee [board of trustees] shall administer 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. RETIRED [TEXAS PUBLIC] SCHOOL EMPLOYEES GROUP
INSURANCE FUND
(c) Section 3.11, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 1.22. Section 1575.303, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, and further amended, to read as follows:
Sec. 1575.303. PAYMENTS FROM FUND. (a) The following
shall, without state fiscal year limitation, be paid from the fund:
(1) the appropriate premiums to a carrier providing
group coverage under a plan under this chapter, including payments
made under the health reimbursement arrangement program
established under Subchapter L;
(2) claims for benefits under the group coverage; and
(3) money spent by the trustee [board of trustees] to
administer the group program.
(b) The appropriate portion of the contributions to the fund
to provide for incurred but unreported claim reserves and
contingency reserves, as determined by the trustee [board of
trustees], shall be retained in the fund.
SECTION 1.23. Section 1575.304, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, to read as follows:
Sec. 1575.304. TRANSFER OF CERTAIN CONTRIBUTIONS. The
trustee [board of trustees] shall transfer into the fund the
amounts deducted from annuities for contributions.
SECTION 1.24. Section 1575.305, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, to read as follows:
Sec. 1575.305. INVESTMENT OF FUND. The trustee [board of
trustees] may invest money in the fund in the manner provided by
Subchapter D, Chapter 825, Government Code, for assets of the
system.
SECTION 1.25. Section 1575.404, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, to read as follows:
Sec. 1575.404. VACANCY. The trustee [board of trustees]
shall fill a vacancy on the committee by appointing a person who
meets the qualifications applicable to the vacated position.
SECTION 1.26. Section 1575.405(a), Insurance Code, is
amended to conform more closely to the source law from which the
section was derived, to read as follows:
(a) The committee shall meet:
(1) at least twice each year; and
(2) at the call of the trustee [board of trustees].
SECTION 1.27. Section 1575.406, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, to read as follows:
Sec. 1575.406. DUTIES. The committee shall:
(1) hold public hearings on group coverage;
(2) recommend to the trustee [board of trustees]
minimum standards and features of a plan under the group program
that the committee considers appropriate; and
(3) recommend to the trustee [board of trustees]
desirable changes in rules and legislation affecting the group
program.
SECTION 1.28 Section 1575.407, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, to read as follows:
Sec. 1575.407. PROCEDURAL RULES. The trustee [board of
trustees] shall adopt procedural rules for the committee to follow
in implementing its powers and duties under this subchapter.
SECTION 1.29. Sections 1575.451(b) and (c), Insurance Code,
are amended to conform more closely to the source law from which the
section was derived, to read as follows:
(b) Group coverage purchased under this chapter must
provide for an accounting to the trustee [board of trustees] by each
carrier providing the coverage.
(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 [board of
trustees].
SECTION 1.30. Section 1575.452, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, and further amended, to read as follows:
Sec. 1575.452. ANNUAL REPORT. Not later than the 180th day
after the last day of each state fiscal year, the trustee [board of
trustees] shall submit a written report to the department
concerning the group coverages provided to and the benefits and
services being received by individuals covered under this chapter.
The report must include a summary of the report required under
Section 1575.556.
SECTION 1.31. Section 1575.453, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, to read as follows:
Sec. 1575.453. STUDY AND REPORT BY TRUSTEE [BOARD OF
TRUSTEES]. (a) The trustee [board of trustees] shall study the
operation and administration of this chapter, including:
(1) conducting surveys and preparing reports on
financing group coverages and health benefit plans available to
participants; and
(2) studying the experience and projected cost of
coverage.
(b) The trustee [board of trustees] shall report to the
legislature at each regular session on the operation and
administration of this chapter.
SECTION 1.32. Section 1575.454, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, to read as follows:
Sec. 1575.454. REPORTS BY AND EXAMINATION OF CARRIER. Each
contract entered into under this chapter between the trustee [board
of trustees] and a carrier must require the carrier to:
(1) furnish to the trustee [board] in a timely manner
reasonable reports that the trustee [board] determines are
necessary to implement this chapter; and
(2) permit the trustee [board] and the state auditor
to examine records of the carrier as necessary to implement this
chapter.
SECTION 1.33. (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 further
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 trustee or in the custody of an
account or other administrator, carrier, health benefit plan
provider, agent, attorney, consultant, or governmental body acting
in cooperation with or on behalf of the trustee 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 1.34. (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 1.35. Section 1575.502, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, to read as follows:
Sec. 1575.502. HEARING. On receipt of a complaint or on its
own motion, the trustee [board of trustees] may call and hold a
hearing to determine whether an individual has acted in the manner
described by Section 1575.501.
SECTION 1.36. Section 1575.504, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, to read as follows:
Sec. 1575.504. EXPULSION AT CONCLUSION OF HEARING. At the
conclusion of the hearing under Section 1575.502, if the trustee
[board of trustees] determines that the individual acted in the
manner described by Section 1575.501, the trustee [board] shall
expel the individual from participation in the group program.
SECTION 1.37. Section 1575.505, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, and further amended, to read as follows:
Sec. 1575.505. EFFECT OF EXPULSION. An individual expelled
from participation in the group program may not be covered by a
[health benefit] plan offered under the group program, including
the health reimbursement arrangement program, for a period
determined by the trustee [board of trustees], not to exceed five
years, beginning on the date the expulsion takes effect.
SECTION 1.38. Section 1575.506, Insurance Code, is amended
to conform more closely to the source law from which the section was
derived, to read as follows:
Sec. 1575.506. APPEAL. An appeal of a determination by the
trustee [board of trustees] under this subchapter is under the
substantial evidence rule.
SECTION 1.39. Chapter 1575, Insurance Code, is amended by
adding Subchapter L to read as follows:
SUBCHAPTER L. PROVISION OF RETIREE HEALTH CARE BENEFITS THROUGH
HEALTH REIMBURSEMENT ARRANGEMENT PROGRAM
Sec. 1575.551. DEFINITIONS. In this subchapter:
(1) "Account" means a health reimbursement
arrangement established under this subchapter for a participating
retiree.
(2) "Account administrator" means a person qualified
to act as an account administrator under Section 1575.555.
(3) "Health benefit 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 operating under
Chapter 843.
(4) "Health benefit plan provider" means an entity
that provides health benefit 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 operating
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.
(5) "Participant" means a retiree enrolled in the
program.
(6) "Program" means the Health reimbursement
arrangement established under this subchapter.
(7) "Qualified health care expense" means an expense
paid by a participant for medical care, as defined by 26 U.S.C.
Section 213(d), as amended, for the participant or the
participant's dependents as defined by 26 U.S.C. Section 152, as
amended.
Sec. 1575.552. ESTABLISHMENT OF PROGRAM. (a) The Texas
school retirees health reimbursement arrangement program is
established for the benefit of retirees and their dependents.
(b) The trustee shall adopt rules, plans, and procedures as
necessary to administer this subchapter.
Sec. 1575.553. CONTRACTS. On a competitive bid basis, the
trustee shall, as necessary to implement this subchapter, 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. 1575.554. REQUIREMENTS FOR HEALTH REIMBURSEMENT
ARRANGEMENTS. (a) The trustee shall request in writing a ruling or
opinion from the Internal Revenue Service as to whether health
reimbursement arrangements adopted under this subchapter and the
state rules governing those accounts qualify the arrangements 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 1575.552 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 health reimbursement arrangement program; and
(2) provide information to participating retirees
regarding the operation of the health reimbursement arrangements
adopted under this subchapter.
Sec. 1575.555. ACCOUNT ADMINISTRATOR. (a) The following
persons may act as an account administrator under this subchapter:
(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 retiree who has an account under this subchapter.
Sec. 1575.556. 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 health
reimbursement arrangement program in the calendar year preceding
the year in which the report is submitted.
Sec. 1575.557. PARTICIPATION OBLIGATIONS. (a) Each
retiree is eligible to participate in the health reimbursement
arrangement program as provided by Subchapter D and this
subchapter.
(b) Participation in the health reimbursement arrangement
program includes compliance with rules adopted by the trustee for
the administration of the program and provision of a notice to each
retiree as prescribed by the trustee relating to the existence of
the program that contains the address from which a retiree 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 retiree is eligible to
receive from the state for the costs of the coverage; and
(4) other information considered useful by the
trustee.
Sec. 1575.558. PROVISION OF COVERAGE. The health
reimbursement arrangement program shall provide, through health
reimbursement arrangements, health benefit plan coverage as
provided by this subchapter to a retiree who is eligible for that
coverage under this subchapter and, as provided by this subchapter,
to the retiree's dependents.
Sec. 1575.559. COVERAGE PLANS. (a) The health
reimbursement arrangement program must include:
(1) a primary care coverage plan; and
(2) a catastrophic care coverage plan.
(b) The catastrophic care coverage plan must be less
expensive than the primary care coverage plan for retiree and
retiree and dependents coverage.
(c) The trustee shall establish an annual deductible of
$4,000 for the catastrophic care coverage plan provided in
conjunction with the health reimbursement arrangement program.
Sec. 1575.560. PARTICIPATION BY RETIREES. (a) Each
retiree who elects to participate shall be enrolled in the primary
care coverage plan unless the retiree elects in writing to
participate only in the catastrophic care coverage plan.
(b) Participation in the Health reimbursement arrangement
qualifies a retiree to receive a contribution to the retiree's
account, as authorized under Section 1575.565. A retiree who
elects not to participate in the program is ineligible to receive a
contribution.
Sec. 1575.561. COVERAGE FOR DEPENDENTS. (a) A
participating retiree is entitled to obtain coverage for a
dependent of the participating retiree in the plan selected by the
retiree in the manner determined by the trustee.
(b) The participating retiree shall make any required
additional contribution payments for the dependent coverage in the
manner prescribed by the trustee.
(c) Amounts contributed under this section shall not be
contributed to the health reimbursement arrangement provided to the
employee or annuitant, but may be contributed to any other account
or arrangement established under this, or another chapter, or by
rule, to the extent allowed by federal law and regulation.
Sec. 1575.562. IDENTIFICATION CARDS. (a) The account
administrator shall issue to each participating retiree an
identification card indicating:
(1) the name of the retiree and any dependent of the
retiree for whom eligible expenses may be paid under the health
reimbursement arrangement program;
(2) the name, address, and phone number of the account
administrator; and
(3) a description of the coverage plan in which the
retiree is participating.
(b) The account administrator shall issue a duplicate
identification card to each dependent for whom eligible expenses
may be paid under the program.
Sec. 1575.563. USE OF ACCOUNT. (a) The account
administrator shall use money in a retiree's account to pay:
(1) the costs of the health benefit plan coverage
selected by the retiree for the retiree and the retiree's
dependents; and
(2) any additional eligible medical expenses of the
participating retiree or dependents or to reimburse the retiree 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
retiree or under another insurance policy, including a motor
vehicle or workers' compensation insurance policy.
Sec. 1575.564. 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.
Sec. 1575.565. STATE CONTRIBUTION. For each participating
retiree, the state shall annually contribute to the Texas public
school retired employees group insurance fund the amount specified
in the General Appropriations Act for distribution to the health
reimbursement arrangement established for that retiree for the
payment of qualified health care expenses if the trustee has
determined that those accounts meet the requirements described by
Section 1575.554.
Sec. 1575.566. RETIREE CONTRIBUTIONS. (a) Each
participating retiree shall contribute any amounts required to
cover health benefit options selected by the retiree beyond the
state contribution under Section 1575.565.
(b) The participating retiree shall make the contributions
in the manner prescribed by the trustee.
(c) Amounts contributed under this section shall not be
contributed to the health reimbursement arrangement provided to the
employee or annuitant, but may be contributed to any other account
or arrangement established under this, or another chapter, or by
rule, to the extent allowed by federal law and regulation.
Sec. 1575.567. CONFIDENTIALITY OF RECORDS. (a) Section
1575.456, applies to records relating to a retiree under the health
reimbursement arrangement program.
(b) The program may disclose to a health benefit plan
provider information in the records of an individual that the
trustee determines is necessary to administer the program.
Sec. 1575.568. ANNUAL ACCOUNTING. (a) In this subchapter,
"plan year" means the period beginning on September 1 and ending the
following August 31.
(b) Coverage purchased under this subchapter must provide
for an accounting to the trustee by each health benefit 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 benefit plan provider shall prepare any
other report required by rule by the trustee.
(e) A health benefit plan provider may not assess an
additional charge for preparation of an accounting report.
Sec. 1575.569. ASSISTANCE. In implementing and
administering this subchapter, the trustee may obtain the
assistance of any state agency the trustee considers appropriate.
Sec. 1575.570. ROLLOVER. (a) At the end of a plan year, the
unexpended and unobligated balance of any state contribution
deposited in a retiree's health reimbursement arrangement under
this subchapter during that plan year remains in the health
reimbursement arrangement and may be spent only as authorized by
this subchapter for a qualified health care expense.
(b) At the end of a plan year, the unexpended and
unobligated balance of any state contributions that have rolled
over from previous plan years remain in the health reimbursement
arrangement.
SECTION 1.40. The following laws are repealed:
(1) Sections 1575.109, 1575.152, 1575.158, 1575.159,
and 1575.204, Insurance Code; and
(2) Subchapter H, Chapter 1575, Insurance Code.
SECTION 1.41. The Teacher Retirement System of Texas shall
develop the health reimbursement arrangement program to be
implemented under Chapter 1575, Insurance Code, as amended by this
article, beginning September 1, 2003, and shall develop enrollment
requirements for the program during 2004, with coverage beginning
September 1, 2004.
SECTION 1.42. The Teacher Retirement System of Texas shall
continue to operate the uniform group health coverage program
established under Chapter 1575, Insurance Code, as that chapter
existed before amendment by this article, until September 1, 2004.
SECTION 1.43. Not later than July 31, 2004, the Teacher
Retirement System of Texas shall provide written information to
retirees eligible to participate in the health reimbursement
arrangement program under Chapter 1575, Insurance Code, as amended
by this article, that provides a general description of the
requirements for such a program as adopted under Chapter 1575,
Insurance Code, as amended by this article.
SECTION 1.44. During the initial implementation of Chapter
1575, Insurance Code, as amended by this article, and
notwithstanding any bidding requirements or other requirements set
forth in Chapter 1575, Insurance Code, as that chapter existed
before amendment by this article, the Teacher Retirement System of
Texas may amend any agreement in effect on September 1, 2003, that
it has entered into as necessary to comply with Chapter 1575,
Insurance Code, as amended by this article.
ARTICLE 2. GENERAL TRANSITION; EFFECTIVE DATE
SECTION 2.01. 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 2.02. Except as otherwise provided by this Act,
this Act takes effect September 1, 2003.