78R6187 PB-D
By: Delisi H.B. No. 3360
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of a defined contribution health care
benefits program for state employees, retired state employees,
active school employees, and retired school employees that is
operated through the establishment of medical savings accounts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. PROGRAM FOR STATE EMPLOYEES AND ANNUITANTS
SECTION 1.01. Section 1551.002, Insurance Code, as
effective June 1, 2003, is amended to read as follows:
Sec. 1551.002. PURPOSES. The purposes of this chapter are
to:
(1) [provide uniformity in life, accident, and health
benefit coverages for all state officers and employees and their
dependents;
[(2)] enable the state to attract and retain competent
and able employees by providing employees and their dependents with
life, accident, and health benefit coverages at least equal to
those commonly provided in private industry;
(2) [(3)] foster, promote, and encourage employment
by and service to the state as a career profession for individuals
of high standards of competence and ability;
(3) [(4)] recognize and protect the state's investment
in each permanent employee by promoting and preserving economic
security and good health among employees and their dependents;
(4) [(5)] foster and develop high standards of
employer-employee relationships between the state and its
employees; and
(5) [(6)] recognize the long and faithful service and
dedication of state officers and employees and encourage them to
remain in state service until eligible for retirement by providing
health benefits for them and their dependents.
SECTION 1.02. Section 1551.003, Insurance Code, as
effective June 1, 2003, is amended by adding Subdivision (10-a) to
read as follows:
(10-a) "Medical savings account program" means the
program operated under Subchapter K.
SECTION 1.03. Section 1551.011, Insurance Code, as
effective June 1, 2003, is amended to read as follows:
Sec. 1551.011. EXEMPTION FROM EXECUTION. All benefit
payments, state contributions, contributions of employees and
annuitants, and optional benefit payments, any rights, benefits, or
payments accruing to a person under this chapter, and all money in a
fund created by this chapter:
(1) are exempt from execution, attachment,
garnishment, or any other process; and
(2) may not be assigned, except:
(A) for direct payment that a participant may
assign to a provider of health care services; and
(B) as specifically provided by this chapter.
SECTION 1.04. Section 1551.055, Insurance Code, as
effective June 1, 2003, is amended to read as follows:
Sec. 1551.055. GENERAL POWERS OF BOARD OF TRUSTEES
REGARDING COVERAGE PLANS. The board of trustees may:
(1) prepare specifications for a coverage provided
under this chapter;
(2) prescribe the time and conditions under which an
employee, annunitant, or dependent [individual] is eligible for a
coverage provided under this chapter;
(3) determine the methods and procedures of claims
administration;
(4) determine the amount of payroll deductions and
reductions applicable to employees and annuitants and establish
procedures to implement those deductions and reductions;
(5) establish procedures for the board of trustees to
decide contested cases arising from a coverage provided under this
chapter;
(6) study, on an ongoing basis, the operation of all
coverages provided under this chapter, including gross and net
costs, administration costs, benefits, utilization of benefits,
and claims administration;
(7) administer the employees life, accident, and
health insurance and benefits fund;
(8) provide the beginning and ending dates of
coverages of participants under all [benefit] plans;
(9) develop basic group coverage plans applicable to
all individuals eligible to participate in the group benefits
program under Sections 1551.101 and 1551.102;
(10) provide for optional group coverage plans in
addition to the basic group coverage plans;
(11) provide, as the board of trustees determines is
appropriate, either additional statewide optional coverage plans
or individual agency coverage plans;
(12) develop the medical savings account program in a
manner [health benefit plans] that permits [permit] access to
high-quality, cost-effective health care;
(13) design, implement, and monitor the medical
savings account program [health benefit plan] features intended to
discourage excessive utilization, promote efficiency, and contain
costs;
(14) develop and refine, on an ongoing basis, a health
care delivery [benefit] strategy consistent with evolving benefit
delivery systems; and
(15) develop a funding strategy that efficiently uses
employer contributions to achieve the purposes of this chapter [and
that is reasonable and ensures participants a fair choice among
health benefit plans as provided by Section 1551.302].
SECTION 1.05. Section 1551.113(a), Insurance Code, as
effective June 1, 2003, is amended to read as follows:
(a) An individual described by Subsection (b) is entitled to
receive the state contribution [contributions] required to provide
health benefit plan coverage under the medical savings account
[group benefits] program for two months after the effective date of
the individual's separation from state service.
SECTION 1.06. Sections 1551.159(a) and (g), Insurance Code,
as effective June 1, 2003, are amended to read as follows:
(a) Subject to any applicable limit in the General
Appropriations Act, the board of trustees shall use money
appropriated for state [employer] contributions to fund 80 percent
of the cost of basic coverage for a child who:
(1) is a dependent of an employee;
(2) would be eligible, if the child were not the
dependent of the employee, for benefits under the program
established by the state to implement Title XXI, Social Security
Act (42 U.S.C. Section 1397aa et seq.), as amended; and
(3) is not eligible for the state Medicaid program.
(g) If the program established under Chapter 62, Health and
Safety Code, using federal funding under Title XXI, Social Security
Act (42 U.S.C. Section 1397aa et seq.), as amended, is terminated,
the use of state contributions for benefits for those eligible
under Subsection (a) also terminates.
SECTION 1.07. Section 1551.201, Insurance Code, as
effective June 1, 2003, is amended by amending Subsection (b) and by
adding Subsection (d) to read as follows:
(b) The group coverage plans may, in the board of trustees'
discretion, include:
(1) life coverage;
(2) accidental death and dismemberment coverage;
(3) [health benefit coverage, including coverage for:
[(A) hospital care and benefits;
[(B) surgical care and treatment;
[(C) medical care and treatment;
[(D) dental care;
[(E) obstetrical benefits;
[(F) prescribed drugs, medicines, and prosthetic
devices; and
[(G) supplemental benefits, supplies, and
services in accordance with this chapter;
[(4)] coverage providing protection against either
long-term or short-term loss of salary; and
(4) [(5)] any other group coverage that the board of
trustees[, in consultation with the group benefits advisory
committee created under Subchapter J,] considers advisable.
(d) The group coverage plans shall include health benefit
coverage through the medical savings account program established
under Subchapter K.
SECTION 1.08. Section 1551.202(c), Insurance Code, as
effective June 1, 2003, is amended to read as follows:
(c) Basic coverage must include basic health coverage. The
basic health coverage shall [may] be offered through the medical
savings account program established under Subchapter K [any health
benefit plan].
SECTION 1.09. Chapter 1551, Insurance Code, as effective
June 1, 2003, is amended by adding Subchapter K to read as follows:
SUBCHAPTER K. PROVISION OF STATE EMPLOYEE HEALTH CARE
BENEFITS THROUGH MEDICAL SAVINGS ACCOUNT PROGRAM
Sec. 1551.501. DEFINITIONS. In this subchapter:
(1) "Account" means a medical savings account
established under this subchapter for a participating employee or
annuitant.
(2) "Account administrator" means a person qualified
to act as an account administrator under Section 1551.505.
(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 an employee or annuitant
enrolled in the program.
(6) "Program" means the medical savings account
program 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. 1551.502. ESTABLISHMENT OF PROGRAM. (a) The Texas
state employees medical savings account program is established for
the benefit of state employees and annuitants and their dependents.
(b) The board of trustees shall adopt rules, plans, and
procedures as necessary to administer this subchapter.
Sec. 1551.503. CONTRACTS. On a competitive bid basis, the
board of trustees 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; or
(3) an administering firm to act for the board of
trustees in the capacity of account administrator.
Sec. 1551.504. REQUIREMENTS FOR MEDICAL SAVINGS ACCOUNTS.
(a) The board of trustees shall request in writing a ruling or
opinion from the Internal Revenue Service as to whether medical
savings accounts adopted under this subchapter and the state rules
governing those accounts qualify the accounts for appropriate
federal tax exemptions. Based on the response of the Internal
Revenue Service, the board of trustees shall:
(1) modify the rules, plans, and procedures adopted
under Section 1551.502 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 board of trustees and approved by the Internal Revenue
Service, the board of trustees shall:
(1) solicit bids for the development and establishment
of the medical savings account program; and
(2) provide information to participating employees
and annuitants regarding the operation of the medical savings
accounts adopted under this subchapter.
Sec. 1551.505. 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 board of trustees.
(c) The account administrator is the fiduciary of the
participating employee or annuitant who has an account under this
subchapter.
Sec. 1551.506. ANNUAL REPORT OF PROGRAM ACTIVITIES. (a)
Not later than June 1 of each year, the board of trustees 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 medical
savings account program in the calendar year preceding the year in
which the report is submitted.
Sec. 1551.507. REQUIRED PARTICIPATION; PARTICIPATION
OBLIGATIONS. (a) Each state agency shall participate in the
medical savings account program as provided by this subchapter.
(b) Participation in the medical savings account program
includes compliance with rules adopted by the board of trustees for
the administration of the program and provision of a notice to each
employee and annuitant as prescribed by the board of trustees
relating to the existence of the program. The notice must contain a
mailing address and the address of an Internet site from which an
employee or annuitant may obtain information about:
(1) the coverage offered by the program;
(2) eligibility requirements for and costs of that
coverage;
(3) the contribution that the employee or annuitant is
eligible to receive from the state for the costs of the coverage;
and
(4) other information considered useful by the board
of trustees.
Sec. 1551.508. PROVISION OF COVERAGE. The medical savings
account program shall provide, through medical savings accounts,
health benefit plan coverage as provided by this subchapter to an
employee or annuitant who is eligible for that coverage under this
chapter and, as provided by this chapter, to that person's
dependents.
Sec. 1551.509. COVERAGE PLANS. (a) The medical savings
account 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 employee-only and
employee and dependents coverage and annuitant-only and annuitant
and dependents coverage.
(c) The board of trustees shall establish an annual
deductible of $4,000 for the catastrophic care coverage plan
provided in conjunction with the medical savings account program.
Sec. 1551.510. PARTICIPATION BY EMPLOYEES AND ANNUITANTS.
(a) Each employee and each annuitant is eligible to participate in
the medical savings account program established under this
subchapter. An employee or annuitant who elects to participate
shall be enrolled in the primary care coverage plan unless the
employee or annuitant elects in writing to participate only in the
catastrophic care coverage plan.
(b) Participation in the medical savings account program
qualifies an employee or annuitant to receive a contribution to the
employee's or annuitant's account, as authorized under Section
1551.515. An employee or annuitant who elects not to participate in
the program is ineligible to receive a contribution.
Sec. 1551.511. COVERAGE FOR DEPENDENTS. (a) A
participating employee or annuitant is entitled to obtain for a
dependent of the participating employee or annuitant coverage in
the plan selected by the employee or annuitant in the manner
determined by the board of trustees.
(b) The participating employee or annuitant shall make any
required additional contribution payments for the dependent
coverage in the manner prescribed by the board of trustees.
Sec. 1551.512. IDENTIFICATION CARDS. (a) The account
administrator shall issue to each participating employee and
annuitant an identification card indicating:
(1) the name of the employee or annuitant and any
dependent of the employee or annuitant for whom eligible expenses
may be paid under the medical savings account program;
(2) the name, address, and phone number of the account
administrator; and
(3) a description of the coverage plan in which the
employee or annuitant 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. 1551.513. USE OF ACCOUNT. (a) The account
administrator shall use money in an employee's or annuitant's
account to pay:
(1) the costs of the health benefit plan coverage
selected by:
(A) the employee for the employee and the
employee's dependents; or
(B) the annuitant for the annuitant and the
annuitant's dependents; and
(2) any additional eligible medical expenses of the
participating employee, annuitant, or dependents or to reimburse
the employee or annuitant for those expenses.
(b) A medical expense is eligible for payment or
reimbursement under Subsection (a)(2) if:
(1) it is a medical expense described under Section
213(d), Internal Revenue Code of 1986, as amended; and
(2) payment or reimbursement for the expense is not
otherwise provided for under the coverage plan selected by the
employee or annuitant or under another insurance policy, including
a motor vehicle or workers' compensation insurance policy.
Sec. 1551.514. 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. 1551.515. STATE CONTRIBUTION. For each participating
employee or annuitant, the state shall annually contribute $3,000
or the amount specified in the General Appropriations Act to the
medical savings account established for that employee or annuitant
for the payment of qualified health care expenses if the board of
trustees has determined that those accounts meet the requirements
described by Section 1551.504.
Sec. 1551.516. EMPLOYEE CONTRIBUTIONS. (a) Each
participating employee or annuitant shall contribute any amounts
required to cover health benefit options selected by the employee
beyond the state contribution under Section 1551.515.
(b) The participating employee or annuitant shall make the
contributions in the manner prescribed by the board of trustees.
Sec. 1551.517. CONFIDENTIALITY OF RECORDS. (a) Section
1551.063 applies to information in records relating to an employee,
annuitant, or other participant under the medical savings account
program.
(b) The program may disclose to a health benefit plan
provider information in the records of an individual that the board
of trustees determines is necessary to administer the program.
Sec. 1551.518. 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 board of trustees 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 board of trustees.
(d) Each health benefit plan provider shall prepare any
other report required by rule by the board of trustees.
(e) A health benefit plan provider may not assess an
additional charge for preparation of an accounting report.
Sec. 1551.519. ASSISTANCE. In implementing and
administering this subchapter, the board of trustees may obtain the
assistance of any state agency the board of trustees considers
appropriate.
Sec. 1551.520. ROLLOVER. At the end of a plan year, the
unexpended and unobligated balance of any state contribution
deposited in an employee's or annuitant's medical savings account
under this subchapter during that plan year remains in the medical
savings account and may be spent only as authorized by this
subchapter for a qualified health care expense.
SECTION 1.10. Sections 1551.003(5) and (12), 1551.005,
1551.060, 1551.205, 1551.206, 1551.207, 1551.302, 1551.309,
1551.402, 1551.403, and 1551.404, Insurance Code, are repealed.
SECTION 1.11. The Employees Retirement System of Texas
shall develop the medical savings account program to be implemented
under Chapter 1551, 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 1.12. The Employees Retirement System of Texas
shall continue to operate the health benefit coverage offered under
the group benefits program established under Chapter 1551,
Insurance Code, as that chapter existed before amendment by this
article, until September 1, 2004.
SECTION 1.13. Not later than July 31, 2004, the Employees
Retirement System of Texas shall provide written information to
employees eligible to participate in the medical savings account
program under Chapter 1551, Insurance Code, as amended by this
article, that provides a general description of the requirements
for such a program as adopted under Chapter 1551, Insurance Code, as
amended by this article.
SECTION 1.14. During the initial implementation of Chapter
1551, Insurance Code, as amended by this article, and
notwithstanding any bidding requirements or other requirements set
forth in Chapter 1551, Insurance Code, as that chapter existed
before amendment by this article, the Employees 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 1551,
Insurance Code, as amended by this article.
SECTION 1.15. The unexpended balance as of September 1,
2004, of any payments made by a state employee for participation in
a cafeteria plan under Section 1551.206, Insurance Code, as that
section existed before repeal by this Act, shall be held in trust
with the comptroller for the exclusive benefit for that employee
and that employee's beneficiaries.
ARTICLE 2. PROGRAM FOR ACTIVE SCHOOL EMPLOYEES
PART A. MEDICAL SAVINGS ACCOUNT PROGRAM
SECTION 2.01. Subtitle H, Title 8, Insurance Code, is
amended by adding Chapter 1579 to read as follows:
CHAPTER 1579. TEXAS PUBLIC SCHOOL EMPLOYEES
MEDICAL SAVINGS ACCOUNT PROGRAM
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1579.001. DEFINITIONS. In this chapter:
(1) "Account" means a medical savings account
established under this chapter for a participating employee.
(2) "Account administrator" means a person qualified
to act as an account administrator under Section 1579.054.
(3) "Charter school" means an open-enrollment charter
school established under Subchapter D, Chapter 12, Education Code.
(4) "Dependent" means:
(A) the spouse of a person;
(B) an unmarried child of the person if that
child is under 25 years of age, including:
(i) an adopted child;
(ii) a stepchild, foster child, or other
child who has a regular parent-child relationship with the person;
or
(iii) a recognized natural child; or
(C) the person's recognized natural child,
adopted child, foster child, stepchild, or other child who is in a
regular parent-child relationship with the participating employee
and who lives with or has his or her care provided by the person 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 person for care or support, as determined by the
trustee.
(5) "District" means a public school district of this
state.
(6) "Employee" means an individual who is employed by
a participating entity and who is not covered by a group insurance
program under Chapter 1551 or 1601. The term does not include an
individual performing personal services for a participating entity
as an independent contractor.
(7) "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.
(8) "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.
(9) "Participant" means a person enrolled in the
program.
(10) "Participating entity" means an entity
participating in the medical savings account program established
under this chapter. The term includes:
(A) a school district;
(B) another educational district whose employees
are members of the Teacher Retirement System of Texas;
(C) a regional education service center; and
(D) a charter school that meets the requirements
of Section 1579.102.
(11) "Program" means the Texas public school employees
medical savings account program established by this chapter.
(12) "Qualified health care expense" means an expense
paid by a participating employee for medical care, as defined by 26
U.S.C. Section 213(d), as amended, for the employee or the
employee's dependents, as defined by 26 U.S.C. Section 152, as
amended.
(13) "Regional education service center" means a
regional education service center established under Chapter 8,
Education Code.
(14) "Trustee" means the board of trustees of the
Teacher Retirement System of Texas.
Sec. 1579.002. APPLICABILITY OF OTHER LAW. This chapter
does not prohibit a participating entity from providing additional
or supplemental insurance coverage under Article 3.51 or 26.036 of
this code or Section 22.005, Education Code.
[Sections 1579.003-1579.050 reserved for expansion]
SUBCHAPTER B. ESTABLISHMENT OF MEDICAL SAVINGS ACCOUNT
PROGRAM; POWERS AND DUTIES OF BOARD OF TRUSTEES
Sec. 1579.051. CREATION OF PROGRAM; ADMINISTRATION; RULES.
(a) The Texas public school employees medical savings account
program is established for the benefit of active public school
employees and those employees' dependents.
(b) The board of trustees of the Teacher Retirement System
of Texas is the trustee for the program and shall administer the
program.
(c) The trustee shall adopt rules, plans, and procedures as
necessary for the administration of the medical savings account
program adopted under this chapter.
Sec. 1579.052. CONTRACTS. On a competitive bid basis, the
trustee shall, as necessary to implement this chapter, 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; or
(3) an administering firm to act for the trustee in the
capacity of account administrator.
Sec. 1579.053. REQUIREMENTS FOR MEDICAL SAVINGS ACCOUNTS.
(a) The trustee shall request in writing a ruling or opinion from
the Internal Revenue Service as to whether the medical savings
accounts adopted under this chapter and the state rules governing
those accounts qualify the accounts for appropriate federal tax
exemptions. Based on the response of the Internal Revenue Service,
the trustee shall:
(1) modify the rules, plans, and procedures adopted
under Section 1579.051 as necessary to ensure the qualification of
those accounts for appropriate federal tax exemptions; and
(2) certify the information regarding federal tax
qualifications to the comptroller.
(b) Once finalized rules, plans, and procedures are adopted
by the trustee and approved by the Internal Revenue Service, the
trustee shall:
(1) solicit bids for the development and establishment
of the medical savings account program; and
(2) provide information to participating employees
regarding the operation of the medical savings accounts adopted
under this chapter.
Sec. 1579.054. ACCOUNT ADMINISTRATOR. (a) The following
persons may act as an account administrator under this chapter:
(1) a bank, savings and loan association, savings
bank, or credit union chartered under the laws of this state or the
United States;
(2) a trust company authorized to act as a fiduciary;
(3) an insurance company authorized to engage in the
business of health insurance in this state, a group hospital
service corporation authorized under Chapter 842 to engage in
business in this state, or a health maintenance organization
authorized under Chapter 843 to engage in business in this state;
(4) a third-party administrator holding a certificate
of authority issued under Article 21.07-6 of this code; or
(5) a certified public accountant licensed by the
Texas State Board of Public Accountancy.
(b) An account administrator may charge a fee for services
performed as the administrator of an account. The amount of the fee
shall be established in the contract between the account
administrator and the trustee.
(c) The account administrator is the fiduciary of the
participating employee who has an account under this chapter.
Sec. 1579.055. PERSONNEL. The trustee may employ persons
as necessary to assist the trustee in administering this chapter.
Sec. 1579.056. ANNUAL REPORT OF PROGRAM ACTIVITIES. (a)
Not later than June 1 of each year, the trustee shall submit a
report to the governor, the lieutenant governor, the speaker of the
house of representatives, and the commissioner.
(b) The report must summarize the activities of the program
in the calendar year preceding the year in which the report is
submitted.
[Sections 1579.057-1579.100 reserved for expansion]
SUBCHAPTER C. PROGRAM PARTICIPATION AND COVERAGE
Sec. 1579.101. REQUIRED PARTICIPATION; PARTICIPATION
OBLIGATIONS. (a) Each participating entity shall participate in
the program as provided by this chapter.
(b) Participation in the program includes compliance with
rules adopted by the trustee for the administration of the program
and provision of a notice to each employee as prescribed by the
trustee relating to the existence of the program. The notice must
contain a mailing address and the address of an Internet site from
which an employee may obtain information about:
(1) the coverage offered by the program;
(2) eligibility requirements for and costs of that
coverage;
(3) contributions that the employee is eligible to
receive from the state and the employing participating entity for
the costs of the coverage; and
(4) other information considered useful by the
trustee.
Sec. 1579.102. PARTICIPATION BY CHARTER SCHOOLS;
ELIGIBILITY. (a) A charter school is eligible to participate in
the program if the school agrees:
(1) that all records of the school relating to
participation in the program are open to inspection by the trustee,
the administering firm, the commissioner of education, or a
designee of any of those entities; and
(2) to have the school's accounts relating to
participation in the program annually audited by a certified public
accountant at the school's expense.
(b) A charter school must notify the trustee of the school's
intent to participate in the program in the manner and within the
time required by rule by the trustee.
Sec. 1579.103. PROVISION OF COVERAGE. The program shall
provide, through the medical savings accounts, health benefit plan
coverage as provided by this chapter to an active employee who is
eligible for that coverage under this chapter and, as provided by
this chapter, to that employee's dependents.
Sec. 1579.104. COVERAGE PLANS. (a) The program must
include:
(1) a primary care coverage plan comparable in scope
and, to the greatest extent possible, in cost to the primary care
coverage plan provided to state employees under Chapter 1551; and
(2) a catastrophic care coverage plan.
(b) The catastrophic care coverage plan must be less
expensive for employee-only and employee and dependents coverage
than the primary care coverage plan.
(c) The trustee shall establish an annual deductible of
$4,000 for the catastrophic care coverage plan provided in
conjunction with the medical savings account program.
Sec. 1579.105. PARTICIPATION BY EMPLOYEES. (a) Each
active employee is eligible to participate in the program
established under this chapter. An employee who elects to
participate shall be enrolled in the primary care coverage plan
unless the employee elects in writing to participate only in the
catastrophic care coverage plan.
(b) Participation in the program qualifies an employee to
receive a contribution to the employee's account as authorized
under Subchapter D. An employee who elects not to participate in
the program is ineligible to receive a contribution.
Sec. 1579.106. COVERAGE FOR DEPENDENTS. (a) A
participating employee is entitled to obtain for a dependent of the
participating employee coverage in the plan selected by the
employee in the manner determined by the trustee.
(b) The participating employee shall make any required
additional contribution payments for the dependent coverage in the
manner prescribed by the trustee.
(c) A participating entity is not prohibited by this chapter
from voluntarily contributing to the cost of dependent coverage.
Sec. 1579.107. IDENTIFICATION CARDS. (a) The account
administrator shall issue to each participating employee an
identification card indicating:
(1) the name of the employee and any dependent of the
employee for whom eligible expenses may be paid under the program;
(2) the name, address, and phone number of the account
administrator; and
(3) a description of the coverage plan in which the
employee is participating.
(b) The account administrator shall issue a duplicate
identification card to each of the employee's dependents for whom
eligible expenses may be paid under the program.
Sec. 1579.108. USE OF ACCOUNT. (a) The account
administrator shall use money in an employee's account to pay:
(1) the costs of the health benefit plan coverage
selected by the employee for the employee and the employee's
dependents; and
(2) any additional eligible medical expenses of the
participating employee or the employee's dependents or to reimburse
the employee for those expenses.
(b) A medical expense is eligible for payment or
reimbursement under Subsection (a)(2) if:
(1) it is a medical expense described under Section
213(d), Internal Revenue Code of 1986, as amended; and
(2) payment or reimbursement for the expense is not
otherwise provided for under the coverage plan selected by the
employee or under another insurance policy, including a motor
vehicle or workers' compensation insurance policy.
Sec. 1579.109. PROMPT PAYMENT OF CLAIMS. (a) Except as
provided by Subsection (b), the account administrator shall pay a
claim for an expense that is eligible for payment or reimbursement
from the account not later than the 30th day after the date the
claim is submitted to the account administrator.
(b) The account administrator may request documents
necessary to verify whether an expense is eligible for payment or
reimbursement from the account. If the account administrator makes
a request under this subsection, the account administrator shall
pay a claim for an expense that is eligible for payment or
reimbursement from the account not later than the 30th day after the
date the documents are received by the account administrator.
[Sections 1579.110-1579.200 reserved for expansion]
SUBCHAPTER D. CONTRIBUTIONS
Sec. 1579.201. STATE CONTRIBUTION. (a) For each
participating employee, the state shall annually contribute $3,000
or the amount specified in the General Appropriations Act to the
medical savings account established for that employee for the
payment of qualified health care expenses if the trustee has
determined that those accounts meet the requirements described by
Section 1579.053.
(b) Each year, the trustee shall contribute to the medical
savings account of the participating employees of a participating
entity the amount to which the employee is entitled under
Subsection (a). The contributions shall be made in equal monthly
installments.
(c) A school district that is ineligible for state aid under
Chapter 42, Education Code, is entitled to the funds delivered
under this section.
Sec. 1579.202. EMPLOYEE CONTRIBUTIONS. (a) Each
participating employee shall contribute any amounts required to
cover benefit options selected by the employee beyond the state
contribution under Section 1579.201.
(b) The participating employee shall make the employee's
contributions in the manner prescribed by the trustee.
[Sections 1579.203-1579.250 reserved for expansion]
SUBCHAPTER E. RECORDS, PROCEEDINGS, AND ACCOUNTING;
INVESTMENT AUTHORITY
Sec. 1579.251. CONFIDENTIALITY OF RECORDS. (a) Section
825.507, Government Code, concerning confidentiality and
disclosure of records, applies to 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 relating to an employee or other participant
under the 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. 1579.252. CLAIM DENIAL; EXPULSION FROM PROGRAM. (a) A
participant may appeal a claim denial or expulsion from the program
to the trustee.
(b) Adjudication of claim disputes and expulsions from the
program are subject to the contested case provisions of Chapter
2001, Government Code.
Sec. 1579.253. HEARING EXAMINER. The trustee may delegate
its authority to adjudicate claim disputes and expulsions to a
qualified hearing examiner.
Sec. 1579.254. APPEAL. (a) A decision of the trustee or
hearing examiner is subject to review by a district court in the
county in which the claimant resides.
(b) An appeal of a determination under this section is under
the substantial evidence rule.
Sec. 1579.255. ANNUAL ACCOUNTING. (a) In this subchapter,
"plan year" means the period beginning on September 1 and ending the
following August 31.
(b) Coverage purchased under this chapter must provide for
an accounting to the trustee by each health 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. 1579.256. ASSISTANCE. In implementing and
administering this chapter, the trustee may obtain the assistance
of any state agency the trustee considers appropriate.
Sec. 1579.257. ROLLOVER. At the end of a plan year, the
unexpended and unobligated balance of any state contribution
deposited in a participating employee's medical savings account
under this chapter during that plan year remains in the medical
savings account and may be spent only as authorized by this chapter
for a qualified health care expense.
PART B. CONFORMING AMENDMENTS--EDUCATION CODE
SECTION 2.02. Sections 22.004(a), (b), (c), (g), and (j),
Education Code, are amended to read as follows:
(a) A district shall participate in the medical savings
account [uniform group coverage] program established under Chapter
1579 [Article 3.50-7], Insurance Code[, as provided by Section 5 of
that article].
(b) In addition to participation in the medical savings
account program under Chapter 1579, Insurance Code, a [A] district
may [that does not participate in the program described by
Subsection (a) shall] make available to its employees group health
coverage provided by a risk pool established by one or more school
districts under Chapter 172, Local Government Code, or under a
policy of insurance or group contract issued by an insurer, a group
hospital service corporation [company] subject to Chapter 842 [20],
Insurance Code, or a health maintenance organization subject to
Chapter 843, Insurance Code [under the Texas Health Maintenance
Organization Act (Chapter 20A, Vernon's Texas Insurance Code)].
[The coverage must meet the substantive coverage requirements of
Article 3.51-6, Insurance Code, and any other law applicable to
group health insurance policies or contracts issued in this state.
The coverage must include major medical treatment but may exclude
experimental procedures. In this subsection, "major medical
treatment" means a medical, surgical, or diagnostic procedure for
illness or injury. The coverage may include managed care or
preventive care and must be comparable to the basic health coverage
provided under the Texas Employees Uniform Group Insurance Benefits
Act (Article 3.50-2, Vernon's Texas Insurance Code). The board of
trustees of the Teacher Retirement System of Texas shall adopt
rules to determine whether a school district's group health
coverage is comparable to the basic health coverage specified by
this subsection. The rules must provide for consideration of the
following factors concerning the district's coverage in
determining whether the district's coverage is comparable to the
basic health coverage specified by this subsection:
[(1) the deductible amount for service provided inside
and outside of the network;
[(2) the coinsurance percentages for service provided
inside and outside of the network;
[(3) the maximum amount of coinsurance payments a
covered person is required to pay;
[(4) the amount of the copayment for an office visit;
[(5) the schedule of benefits and the scope of
coverage;
[(6) the lifetime maximum benefit amount; and
[(7) verification that the coverage is issued by a
provider licensed to do business in this state by the Texas
Department of Insurance or is provided by a risk pool authorized
under Chapter 172, Local Government Code, or that a district is
capable of covering the assumed liabilities in the case of coverage
provided through district self-insurance.]
(c) The cost of the coverage provided under the program
described by Subsection (a) shall be paid by the state[, the
district,] and the employees in the manner provided by Chapter 1579
[Article 3.50-7], Insurance Code. The cost of any coverage
provided under a plan adopted under Subsection (b) shall be shared
by the employees and the district [using the contributions by the
state described by Section 9, Article 3.50-7, Insurance Code, or by
Article 3.50-8, Insurance Code].
(g) An insurer, a group hospital service corporation
[company] subject to Chapter 842 [20], Insurance Code, or a health
maintenance organization subject to Chapter 843, Insurance Code,
that issues a policy or contract under this section and any person
that assists the school district in obtaining or managing the
policy or contract for compensation shall provide an annual audited
financial statement to the school district showing the financial
condition of the insurer, corporation [company], organization, or
person.
(j) This section does not preclude a district that is
participating in the medical savings account [uniform group
coverage] program established under Chapter 1579 [Article 3.50-7],
Insurance Code, from voluntarily entering into contracts to provide
optional insurance coverages for the employees of the district.
SECTION 2.03. 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 $297,500 [$305,000].
SECTION 2.04. 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 $25.53
[$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.
SECTION 2.05. Sections 22.004(d), (e), (f), and (i),
42.2514, 42.253(e-1), and 42.260, Education Code, are repealed.
PART C. CONFORMING AMENDMENT--GOVERNMENT CODE
SECTION 2.06. Section 822.201(c), Government Code, is
amended to read as follows:
(c) Excluded from salary and wages are:
(1) expense payments;
(2) allowances;
(3) payments for unused vacation or sick leave;
(4) maintenance or other nonmonetary compensation;
(5) fringe benefits;
(6) deferred compensation other than as provided by
Subsection (b)(3);
(7) compensation that is not made pursuant to a valid
employment agreement;
(8) payments received by an employee in a school year
that exceed $5,000 for teaching a driver education and traffic
safety course that is conducted outside regular classroom hours;
(9) the benefit replacement pay a person earns as a
result of a payment made under Subchapter B or C, Chapter 661; and
(10) [supplemental compensation received by an
employee under Article 3.50-8, Insurance Code; and
[(11)] any compensation not described by [in]
Subsection (b).
PART D. CONFORMING AMENDMENT--HEALTH AND SAFETY CODE
SECTION 2.07. 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.
PART E. CONFORMING AMENDMENT--TAX CODE
SECTION 2.08. Sections 26.08(k), (l), and (m), Tax Code,
are repealed.
PART F. REPEALER
SECTION 2.09. Effective September 1, 2004, the following
laws are repealed:
(1) Articles 3.50-7, 3.50-8, and 3.50-9, Insurance
Code;
(2) Section 3, Article 3.51, Insurance Code; and
(3) Article 26.036(c), Insurance Code.
PART G. TRANSITION; EFFECTIVE DATE
SECTION 2.10. The Teacher Retirement System of Texas shall
develop the medical savings account program to be implemented under
Chapter 1579, Insurance Code, as added by this Act, beginning
September 1, 2003, and shall develop enrollment requirements for
the program during the 2003-2004 school year, with coverage
beginning September 1, 2004.
SECTION 2.11. The Teacher Retirement System of Texas shall
continue to operate the uniform group health coverage program
established under Article 3.50-7, Insurance Code, as added by
Chapter 1187, Acts of the 77th Legislature, Regular Session, 2001,
until September 1, 2004.
SECTION 2.12. Not later than July 31, 2004, the Teacher
Retirement System of Texas shall provide written information to
school districts eligible to participate in the medical savings
account program under Chapter 1579, Insurance Code, as added by
this Act, that provides a general description of the requirements
for such a program as adopted under Chapter 1579, Insurance Code, as
added by this Act.
SECTION 2.13. 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 2.14. (a) Except as provided by Subsection (b) of
this section, this article takes effect September 1, 2003.
(b) Parts B, C, D, and E of this article take effect
September 1, 2004, and apply beginning with the 2004-2005 school
year.
ARTICLE 3. PROGRAM FOR RETIRED SCHOOL EMPLOYEES
SECTION 3.01. (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 3.02. (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) "Medical savings account 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 3.03. (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 3.04. (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 medical savings
account program under Subchapter L.
(b) Section 3.05, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 3.05. (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 medical savings account program established under
Chapter 1579 is implemented, transfer from the program any records
relating to active employees participating in any group health
coverage program 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 3.06. (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 3.07. 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 medical savings account program established
under Subchapter L.
SECTION 3.08. (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 3.09. (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 3.10. 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
$3,000 or the amount specified in the General Appropriations Act to
the medical savings account 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 3.11. 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 medical savings account 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 3.12. 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.
SECTION 3.13. 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 3.14. 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 3.15. 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 3.16. 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 3.17. 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 3.18. 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 3.19. 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 3.20. 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 3.21. (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 3.22. 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 medical savings account 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 3.23. 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 3.24. 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 3.25. 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 3.26. 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 3.27. 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 3.28 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 3.29. 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 3.30. 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 3.31. 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 3.32. 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 3.33. (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 3.34. (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 3.35. 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 3.36. 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 3.37. 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 medical savings account 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 3.38. 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 3.39. Chapter 1575, Insurance Code, is amended by
adding Subchapter L to read as follows:
SUBCHAPTER L. PROVISION OF RETIREE HEALTH CARE BENEFITS
THROUGH MEDICAL SAVINGS ACCOUNT PROGRAM
Sec. 1575.551. DEFINITIONS. In this subchapter:
(1) "Account" means a medical savings account
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 medical savings account
program 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 medical savings account 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 MEDICAL SAVINGS ACCOUNTS.
(a) The trustee shall request in writing a ruling or opinion from
the Internal Revenue Service as to whether medical savings accounts
adopted under this subchapter and the state rules governing those
accounts qualify the accounts for appropriate federal tax
exemptions. Based on the response of the Internal Revenue Service,
the trustee shall:
(1) modify the rules, plans, and procedures adopted
under Section 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 medical savings account program; and
(2) provide information to participating retirees
regarding the operation of the medical savings accounts 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 medical
savings account 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 medical savings account
program as provided by Subchapter D and this subchapter.
(b) Participation in the medical savings account 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 medical savings
account program shall provide, through medical savings accounts,
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 medical savings
account 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 medical savings account 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 medical savings account program
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.
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 medical
savings account 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 $3,000 or the amount
specified in the General Appropriations Act for distribution to the
medical savings account 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.
Sec. 1575.567. CONFIDENTIALITY OF RECORDS. (a) Section
1575.456, applies to records relating to a retiree under the
medical savings account 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. At the end of a plan year, the
unexpended and unobligated balance of any state contribution
deposited in a retiree's medical savings account under this
subchapter during that plan year remains in the medical savings
account and may be spent only as authorized by this subchapter for a
qualified health care expense.
SECTION 3.40. 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 3.41. The Teacher Retirement System of Texas shall
develop the medical savings account 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 3.42. 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 3.43. Not later than July 31, 2004, the Teacher
Retirement System of Texas shall provide written information to
retirees eligible to participate in the medical savings account
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 3.44. 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 4. GENERAL TRANSITION; EFFECTIVE DATE
SECTION 4.01. 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 4.02. Except as otherwise provided by this Act, this
Act takes effect September 1, 2003.