By: Duncan S.B. No. 1369
(In the Senate - Filed March 13, 2003; March 19, 2003, read
first time and referred to Committee on State Affairs;
April 22, 2003, rereferred to Committee on Finance; May 7, 2003,
reported adversely, with favorable Committee Substitute by the
following vote: Yeas 9, Nays 3; May 7, 2003, sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1369 By: Duncan
A BILL TO BE ENTITLED
AN ACT
relating to certain group benefits for retired school employees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1575.002, Insurance Code, as effective
June 1, 2003, is amended by repealing Subdivision (2), amending
Subdivisions (1), (3), (4), and (7) and adding Subdivision (6-a) 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 section was derived, and further
amended to read as follows:
(1) "Active employee" means a contributing member of
the Teacher Retirement System of Texas [an employee as defined by
Section 821.001, Government Code], who:
(A) is employed by a public school [a member of
the system]; and
(B) is not entitled to coverage under a plan
provided under Chapter 1551 or 1601.
(3) "Carrier" means an insurance company or hospital
service corporation authorized by the department under this code or
another insurance law of this state to provide any of the insurance
coverages, benefits, or services provided by this chapter.
(4) "Fund" means the retired [Texas public] school
employees group insurance fund.
(6-a) "Public school" means:
(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
established under Chapter 8, Education Code; or
(D) an open-enrollment charter school
established under Subchapter D, Chapter 12, Education Code.
(7) "Trustee" ["System"] means the Teacher Retirement
System of Texas.
SECTION 2. Section 1575.004, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 1575.004. DEFINITION OF RETIREE. In this chapter,
"retiree" means:
(1) an individual not eligible for coverage under a
plan provided under Chapter 1551 or 1601 who:
(A) is at least 65 years of age and has taken a
service retirement under the Teacher Retirement System of Texas
[system] with at least 10 years of service credit in the system for
actual service in public schools in this state; or
(B) has taken a service retirement under the
Teacher Retirement System of Texas and who has at least 10 years of
service credit for actual public service in the public schools in
this state, and the sum of the individual's age and amount of
service credit, excluding any service credit purchased under
Section 823.405, Government Code, equals or exceeds the number 80
[and
[(B) is not eligible for coverage under a plan
provided under Chapter 1551 or 1601]; or
(2) an individual who:
(A) has taken a disability retirement under the
Teacher Retirement System of Texas [system]; and
(B) is entitled to receive monthly benefits from
the Teacher Retirement System of Texas [system].
SECTION 3. (a) Section 1575.153, Insurance Code, as
effective June 1, 2003, is amended to conform to Section 3.10,
Chapter 1187, Acts of the 77th Legislature, Regular Session, 2001,
and further amended 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 retiree [individual]
defrauded or attempted to defraud the group program.
(b) Section 3.10, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 4. Subchapter D, Chapter 1575, Insurance Code, as
effective June 1, 2003, is amended by adding Sections 1575.161 and
1575.162 to read as follows:
Sec. 1575.161. OPEN ENROLLMENT; ADDITIONAL ENROLLMENT
PERIODS. (a) A retiree eligible for coverage under the group
program may select any coverage provided under this chapter for
which the person is otherwise eligible:
(1) on the date that the person retires; and
(2) during any open enrollment periods for retirees
set by the trustee by rule.
(b) In addition to the enrollment periods authorized under
Subsection (a), a retiree who:
(1) is enrolled in the group program as of August 31,
2004, and who is 65 years of age or older on that date may select
coverage as described by Subsections (c) and (d) on September 1,
2004; or
(2) enrolls in the group program on or after
September 1, 2004, and who is 65 years of age or older on or after
that date may select coverage as described in Subsections (c) and
(d) on the date that the retiree is 65 years of age.
(c) If a retiree described by Subsection (b) is not covered
by the Medicare program, the retiree may enroll in the next-higher
coverage tier under the group program and may add dependent
coverage in that same coverage tier effective September 1, 2004.
(d) If a retiree described by Subsection (b) is covered by
the Medicare program, the retiree may enroll in any coverage tier
under the group program and may add dependent coverage in that same
coverage tier.
(e) This section does not affect the right of a retiree
enrolled in a coverage tier under the group program to select a
lower level of coverage at any time.
Sec. 1575.162. SPECIAL ENROLLMENTS. This chapter does not
limit the ability of an individual to enroll in the group program if
the individual:
(1) experiences a special enrollment event as provided
by the Health Insurance Portability and Accountability Act of 1996
(Pub. L. No. 104-191, 110 Stat. 1936 (1996)), as amended; and
(2) is otherwise eligible to enroll in the group
program.
SECTION 5. Section 1575.201, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 1575.201. ADDITIONAL STATE CONTRIBUTIONS; CERTAIN
CONTRIBUTIONS. (a) The state through the trustee [system] shall
contribute from money in the fund:
(1) the total cost of the basic plan covering each
participating retiree; and
(2) for each participating individual to whom
Subdivision (1) does not apply, the amount prescribed by the
General Appropriations Act to cover part of the cost of the basic
plan covering the individual.
(b) The trustee shall collect from an individual described
by Subsection (a)(2) the amount of premium required for basic
coverage under the group program that exceeds the amount
contributed by the state.
SECTION 6. Subsection (a), Section 1575.203, Insurance
Code, as effective June 1, 2003, is amended to read as follows:
(a) Each state fiscal year, each active employee shall, as a
condition of employment, contribute to the fund an amount equal to
0.5 [0.25] percent of the employee's salary.
SECTION 7. Section 1575.204, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 1575.204. PUBLIC SCHOOL CONTRIBUTION [RATIO OF STATE
AND ACTIVE EMPLOYEE CONTRIBUTIONS]. Each state fiscal year, each
public school shall contribute to the fund the amount prescribed by
the General Appropriations Act, which may not be less than 0.25
percent or greater than 0.75 percent of the salary of each active
employee of the public school. The public school shall make the
contributions on a monthly basis and as otherwise prescribed by the
trustee [If the amount of state and active employee contributions
to the fund is raised by the legislature above the percentages
provided by Sections 1575.202 and 1575.203 to provide adequate
funding for the group program, the ratio between the state's
contribution and the active employees' contributions must be
maintained at two to one].
SECTION 8. Subchapter E, Chapter 1575, Insurance Code, as
effective June 1, 2003, is amended by adding Sections 1575.211 and
1575.212 to read as follows:
Sec. 1575.211. COST SHARING. (a) The total costs for the
operation of the group program shall be shared among the state, the
public schools, the active employees, and the retirees in the
manner prescribed by the General Appropriations Act.
(b) In determining the allocation of total costs under this
section, the state shall pay not more than 55 percent of the total
costs, retirees shall pay at least 30 percent of the total costs,
and the balance shall be paid by active employees and public
schools.
Sec. 1575.212. PAYMENT BY RETIREES; RANGES. (a) The
trustee by rule shall establish ranges for payment of the share of
total costs allocated under Section 1575.211 to retirees, with
different levels for:
(1) retirees who are not eligible to participate in
Part A of the Medicare program;
(2) retirees who are eligible for participation but
are not participating in Part A of the Medicare program; and
(3) retirees who are eligible for participation in the
Medicare program and are participating in Part A of the Medicare
program.
(b) In establishing ranges for payment of the share of total
costs allocated under Section 1575.211 to retirees, the trustee may
consider the years of service credit accrued by a retiree and may
reward those retirees with more years of service credit.
SECTION 9. The following laws are repealed:
(1) Section 1575.154, Insurance Code, as effective
June 1, 2003; and
(2) Subsection (h), Section 823.401, Government Code.
SECTION 10. Effective September 1, 2003, the comptroller of
public accounts shall transfer $42 million from the Texas school
employees uniform group coverage trust fund established under
Section 8, Article 3.50-7, Insurance Code, to the retired school
employees group insurance fund described by Subchapter G, Chapter
1575, Insurance Code, to compensate the retired school employees
group insurance fund for money transferred from that fund under
Section 4.01, Chapter 1187, Acts of the 77th Legislature, Regular
Session, 2001.
SECTION 11. The change in law made by this Act to Subsection
(a), Section 1575.203, and Sections 1575.204 and 1575.211,
Insurance Code, takes effect September 1, 2003.
SECTION 12. 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 13. Except as otherwise provided by this Act, this
Act takes effect September 1, 2004.
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