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2003S0500-1 03/05/03


By:  Janek                                                        S.B. No. 1169


A BILL TO BE ENTITLED

AN ACT

relating to offering health reimbursement arrangements under the 
Texas Employees Group Benefits Act.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter E, Chapter 1551, Insurance Code, as 
effective June 1, 2003, is amended by adding Section 1551.218 to 
read as follows:
	Sec. 1551.218.  HEALTH REIMBURSEMENT ARRANGEMENTS.  
(a)  The board of trustees shall offer coverage through health 
reimbursement arrangements.  The board of trustees shall develop, 
implement, and administer health reimbursement arrangements.
	(b)  Health reimbursement arrangements offered under this 
section may only reimburse expenses for medical care, as defined by 
Section 213(d), Internal Revenue Code of 1986.
	(c)  The board of trustees by rule shall establish the 
maximum dollar amount for a coverage period that may be reimbursed 
under a health reimbursement arrangement.  Any unused portion of 
the maximum dollar amount at the end of a coverage period shall be 
carried forward to increase the maximum reimbursement amount in 
subsequent coverage periods.
	(d)  The board of trustees may enter into a contract or 
agreement with an independent and qualified agency, individual, or 
entity to:
		(1)  develop, implement, or administer health 
reimbursement arrangements; or
		(2)  assist in those activities.                                       
	SECTION 2.  Subchapter G, Chapter 1551, Insurance Code, as 
effective June 1, 2003, is amended by adding Section 1551.321 to 
read as follows:
	Sec. 1551.321.  FUNDING OF HEALTH REIMBURSEMENT 
ARRANGEMENTS.  Health reimbursement arrangements offered under 
Section 1551.218 shall be paid for solely by the employer.  Employer 
contributions to health reimbursement arrangements may not be 
attributable to salary reductions or otherwise provided under the 
cafeteria plan.
	SECTION 3.  The board of trustees of the Employees 
Retirement System of Texas is not required to offer health 
reimbursement arrangements, as required by Section 1551.218, 
Insurance Code, as added by this Act, before September 1, 2004.
	SECTION 4.  The board of trustees of the Employees 
Retirement System of Texas shall adopt rules as required under 
Section 1551.218, Insurance Code, as added by this Act, not later 
than June 1, 2004.
	SECTION 5.  This Act takes effect September 1, 2003.