S.B. No. 1370
AN ACT
relating to certain group benefit plans provided to certain
governmental officers, employees, and retirees and their
dependents.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. TEXAS SCHOOL EMPLOYEES UNIFORM GROUP HEALTH COVERAGE
ACT AND BENEFITS FOR SCHOOL EMPLOYEES
SECTION 1.01. Section 2, Article 3.50-8, Insurance Code, is
amended by adding Subsection (a-1) to read as follows:
(a-1) Notwithstanding any other provision of this article or
other law, on and after September 1, 2005, each year, the trustee
shall deliver to each school district, including a school district
that is ineligible for state aid under Chapter 42, Education Code,
each other educational district that is a member of the Teacher
Retirement System of Texas, each participating charter school, and
each regional education service center state funds in an amount, as
determined by the trustee, equal to the product of the number of
active employees employed by the district, school, or service
center multiplied by $1,000 or a greater amount as provided by the
General Appropriations Act for purposes of this article.
SECTION 1.02. 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.
ARTICLE 2. TEXAS EMPLOYEES GROUP BENEFITS ACT
SECTION 2.01. Subdivisions (3), (9), and (11), Section
1551.003, Insurance Code, as effective June 1, 2003, are amended to
read as follows:
(3) "Basic coverage" means the group coverage plans
determined by the board of trustees in which each eligible
full-time employee and annuitant participates automatically unless
participation is specifically waived.
(9) "Full-time employee" means an employee designated as
a full-time employee under Section 1551.319(c) or (d) or an employee
designated by the employer as working 40 [20] or more hours a week.
(11) "Part-time employee" means an employee
designated by the employer as working less than 40 [20] hours a
week. For purposes of this chapter, an individual described by
Section 1551.101(e)(2) is considered a part-time employee.
SECTION 2.02. Section 1551.006, Insurance Code, as
effective June 1, 2003, is amended by adding Subsection (c) to read
as follows:
(c) Notwithstanding Subsection (b), The Texas A&M
University System, including the Texas Veterinary Medical
Diagnostic Laboratory, participates in the group benefits program
if, not later than November 1, 2004, the system notifies the board
of trustees of the system's election to participate. If notice is
provided as required by this subsection, the employees and
annuitants of the system, including the veterinary medical
laboratory, and the dependents of those employees and annuitants,
participate in the group benefits program effective not later than
September 1, 2005.
SECTION 2.03. Subsection (a), Section 1551.101, Insurance
Code, as effective June 1, 2003, is amended to read as follows:
(a) An elected or appointed officer or employee who performs
service, other than as an independent contractor, for this state,
including an institution of higher education, and who is described
by this section is eligible to participate in the group benefits
program as an employee on the date specified by Section 1551.1055.
SECTION 2.04. Subsection (a), Section 1551.102, Insurance
Code, as effective June 1, 2003, is amended to conform to Section
27, Chapter 1231, Acts of the 77th Legislature, Regular Session,
2001, and further amended to read as follows:
(a) An individual who has at least 10 [three] years of
service credit, as determined by the board of trustees, for which
the individual was eligible to participate in the group benefits
program under Section 1551.101 or who has at least five years of
membership and five years of military service credited in the
Employees Retirement System of Texas and who retires in a manner
described by this section is eligible, subject to Section
1551.1055, to participate as an annuitant in the group benefits
program.
SECTION 2.05. Section 1551.102, Insurance Code, as
effective June 1, 2003, is amended by amending Subsections (b),
(c), (d), (f), and (g) and adding Subsection (h) to read as follows:
(b) An individual is eligible to participate in the group
benefits program as provided by Subsection (a) if [the individual]:
(1) the individual retires under the jurisdiction of
the Employees Retirement System of Texas; and
(2) the individual:
(A) receives or is eligible to receive an annuity
under Section 814.104(a)(2), [Subtitle B, D, or E, Title 8,
Government Code, or Chapter 803,] Government Code, and has [that is
based on] at least 10 years of eligible service credit;
(B) receives or is eligible to receive an annuity
under Chapter 803 or Section 814.104(a)(1), Government Code, has at
least 10 years of eligible service credit, and is at least 65 years
of age; or
(C) receives or is eligible to receive an annuity
that is based on [or] eligibility under Section 814.002, [or]
814.102, 814.104(b), 814.107(a), 834.101, or 839.101, Government
Code.
(c) An individual is eligible to participate in the group
benefits program as provided by Subsection (a) if [the individual]:
(1) the individual retires under the jurisdiction of
the Teacher Retirement System of Texas and has at least 10 years of
eligible service credit, including not more than five years of
military service credited in the Employees Retirement System of
Texas, or has five years of eligible service credit and is the sole
surviving spouse of military personnel who was killed in action;
(2) the individual:
(A) has accumulated eligible service credit in an
amount so that the sum of the person's age and amount of service
credit, including months of age and credit, equals or exceeds the
number 80; or
(B) is at least 65 years of age [receives or is
eligible to receive an annuity under Subtitle C, Title 8,
Government Code, or Chapter 803, Government Code, that is based on
at least 10 years of service credit]; and
(3) the individual was employed, as the last state
employment before retirement, including employment by a public
junior college, by a state agency whose employees are authorized to
participate in the group benefits program.
(d) An individual is eligible to participate in the group
benefits program as provided by Subsection (a) if the individual:
(1) retires under the optional retirement program
established by Chapter 830, Government Code, with at least 10 years
of eligible service credit; and
(2) receives or is eligible to receive an annuity
under that program and the individual:
(A) is at least 65 years of age, or would have
been eligible to retire and receive a service retirement annuity
from the Teacher Retirement System of Texas or the Employees
Retirement System of Texas in an amount such that the sum of the
person's age and amount of service credit, including months of age
and credit, equals or exceeds the number 80 or would have been
eligible to retire and receive a disability retirement annuity from
the Teacher Retirement System of Texas or the Employees Retirement
System of Texas, [based on at least 10 years of service credit] if
the individual had not elected to participate in the optional
retirement program; or
(B) is disabled as determined by the Employees
Retirement System of Texas based on at least 10 years of eligible
service credit.
(f) An individual is eligible to participate in the group
benefits program [as provided by Subsection (a)] if the individual
is certified and qualified as disabled and receives or is eligible
to receive an annuity under Section 814.202, 814.207, 824.302, only
as to higher education, 834.201, or 839.201, Government Code [a
retired officer or employee of a retirement system described by
Section 1551.111].
(g) An individual is eligible to participate in the group
benefits program as provided by Subsection (a) if the individual is
at least 65 years of age and retires under a federal or state
statutory retirement program not described by another provision of
this section, to which an institution of higher education has made
employer contributions, and the individual has met service
requirements, age requirements, and other applicable requirements
comparable to the requirements for retirement under the Teacher
Retirement System of Texas, based on at least 10 years of service
credit.
(h) A person eligible to participate and participating in
the group benefits program as an annuitant on September 1, 2003, may
continue to participate in the program as an annuitant if a lapse in
coverage has not occurred.
SECTION 2.06. Subsection (a), Section 1551.104, Insurance
Code, as effective June 1, 2003, is amended to read as follows:
(a) Subject to Sections 1551.101 and 1551.102, each [Each]
full-time employee is covered automatically by the basic coverage
plan for employees and each annuitant is covered by the basic
coverage plan for annuitants unless:
(1) participation is specifically waived; [or]
(2) the employee or annuitant is expelled from the
program under Section 1551.351; or
(3) eligibility is otherwise limited by this chapter.
SECTION 2.07. Subchapter C, Chapter 1551, Insurance Code,
as effective June 1, 2003, is amended by adding Section 1551.1055 to
read as follows:
Sec. 1551.1055. DATE ELIGIBILITY BEGINS; WAITING PERIOD.
(a) Except as provided by Subsection (c) or (d), eligibility under
Section 1551.101 begins on the first day of the calendar month that
begins after the 90th day after the date the employee performs
services for a state agency or is qualified for and begins to hold
elected or appointed office.
(b) Except as provided by Subsection (c), eligibility under
Section 1551.102, for an individual who does not retire at the end
of the last month for which the individual is on the payroll of a
state agency before retirement, begins on the first day of the
calendar month that begins after the 90th day after the date the
individual retires.
(c) The waiting period established by Subsections (a) and
(b) applies only to the determination of initial eligibility to
participate in the group benefits program and does not apply to the
determination of initial eligibility to participate in optional and
voluntary insurance coverages under the group benefits program.
(d) This subsection applies only to an employee of an
institution of higher education or a dependent of the employee.
Notwithstanding Subsection (a), eligibility under Section 1551.101
may not begin earlier than the first day that an employee performs
services for an institution of higher education if any amount paid
for premium incurred before the date specified under Subsection (a)
for the employee and any dependents of the employee is paid from
money not appropriated from the general revenue fund, in accordance
with policies and procedures established by the governing body of
the institution of higher education.
SECTION 2.08. Subchapter G, Chapter 1551, Insurance Code,
as effective June 1, 2003, is amended by adding Section 1551.3015 to
read as follows:
Sec. 1551.3015. COST ASSESSMENT FOR CERTAIN PARTICIPANTS.
Notwithstanding any other provision of law, the board of trustees
may impose against an employer whose employees are not paid
salaries from amounts appropriated by the General Appropriations
Act and whose participation in the group benefits program begins
after August 31, 2003, as a condition for participation in the
program, a one-time assessment of administrative costs for
participation of the employees and annuitants in the program, which
may include the actuarial costs of including the group in the
program and a participation premium determined by the board. The
board of trustees shall deposit all amounts recovered under this
section in the employees life, accident, and health insurance and
benefits fund.
SECTION 2.09. Subsection (a), Section 1551.109, Insurance
Code, as effective June 1, 2003, is amended to read as follows:
(a) Subject to Section 1551.351, on application to the board
of trustees and arrangement for payment of contributions, an
individual participating in the group benefits program on August
31, 2003, as a current or [a] former member of a governing body with
administrative responsibility over a state agency created under a
statute of this state that has statewide jurisdiction and whose
employees are covered by this chapter or as a current or former
member of the State Board of Education or [described by Section
1551.101(c) or a former member of] the governing body of an
institution of higher education remains eligible for participation
in a health benefit plan offered under this chapter if a lapse in
coverage [after the end of the former member's term] has not
occurred.
SECTION 2.10. Subsection (b), Section 1551.111, Insurance
Code, as effective June 1, 2003, is amended to read as follows:
(b) Participation is limited to:
(1) an officer or employee of either system who has
been an officer or employee of either system following completion
of the waiting period described by Section 1551.1055;
(2) an eligible dependent of an officer or employee of
either system described by Subdivision (1);
(3) an individual who:
(A) was an officer or employee of either system;
(B) has retired from either system, subject to
Section 1551.1055;
(C) receives or is eligible to receive an annuity
from either system or under Chapter 803, Government Code, based on
at least 10 years of service credit and is at least 65 years of age;
and
(D) has at least 10 [three] years of service
credit with a state agency whose employees are authorized to
participate in the group benefits program; and
(4) an eligible dependent of a retired officer or
employee described by Subdivision (3).
SECTION 2.11. Subsection (a), Section 1551.112, Insurance
Code, as effective June 1, 2003, is amended to read as follows:
(a) An individual may participate in the group benefits
program as an annuitant, subject to Section 1551.1055, and may
obtain coverage for the individual's dependents as any other
participating annuitant if the individual:
(1) began employment with, or became an officer of,
the Texas Turnpike Authority within the three-year period preceding
August 31, 1997;
(2) was an officer or employee of the Texas Turnpike
Authority on August 31, 1997;
(3) became an officer or employee of the North Texas
Tollway Authority on September 1, 1997; and
(4) retires or is eligible to retire with at least 10
years of service credit under the proportionate retirement program
established by Chapter 803, Government Code, or under a public
retirement system to which Chapter 803 applies and is at least 65
years of age.
SECTION 2.12. Section 1551.319, Insurance Code, as
effective June 1, 2003, is amended by adding Subsections (c), (d),
and (e) to read as follows:
(c) The superintendent of the Texas School for the Deaf and
the superintendent of the Texas School for the Blind and Visually
Impaired shall determine whether an educational professional
employee under contract with the school under Section 30.024 or
30.055, Education Code, as applicable, is a full-time employee for
purposes of this chapter.
(d) The executive head of the Windham School District shall
determine whether an educational professional employee of the
school is a full-time employee for purposes of this chapter.
(e) This section does not prohibit an institution of higher
education from contributing, from money not appropriated from the
general revenue fund, amounts in excess of the state contribution
for a part-time employee described by Section 1551.101(e)(2).
SECTION 2.13. Section 27, Chapter 1231, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 2.14. Subsections (c) and (d), Section 1551.101,
Insurance Code, as effective June 1, 2003, are repealed.
ARTICLE 3. TEXAS RETIRED SCHOOL EMPLOYEES GROUP BENEFITS ACT
SECTION 3.01. Section 1575.002, Insurance Code, as
effective June 1, 2003, 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 section
was derived, and further amended to read as follows:
Sec. 1575.002. GENERAL DEFINITIONS. In this chapter:
(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.
(2) ["Board of trustees" means the board of trustees
of the Teacher Retirement System of Texas.
[(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.
(3) [(4)] "Fund" means the retired [Texas public]
school employees group insurance fund.
(4) [(5)] "Group program" means the Texas Public
School Employees Group Insurance Program authorized by this
chapter.
(5) [(6)] "Health benefit plan" means a group
insurance policy, contract, or certificate, medical or hospital
service agreement, membership or subscription contract, salary
continuation plan, or similar group arrangement to provide health
care services or to pay or reimburse expenses of health care
services.
(6) "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 3.02. 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.
ARTICLE 4. UNIFORM INSURANCE BENEFITS ACT FOR EMPLOYEES OF
THE UNIVERSITY OF TEXAS SYSTEM AND
THE TEXAS A&M UNIVERSITY SYSTEM
SECTION 4.01. Subchapter A, Chapter 1601, Insurance Code,
as effective June 1, 2003, is amended by adding Section 1601.011 to
read as follows:
Sec. 1601.011. PARTICIPATION OF THE TEXAS A&M UNIVERSITY
SYSTEM. Notwithstanding any other provision of this chapter, if
The Texas A&M University System elects to participate in the group
benefits program under Section 1551.006(c), that system, including
the Texas Veterinary Medical Diagnostic Laboratory, does not
participate in a uniform program established under this chapter,
effective on the date participation in the group benefits program
under Chapter 1551 begins.
SECTION 4.02. Subsection (a), Section 1601.101, Insurance
Code, as effective June 1, 2003, is amended to read as follows:
(a) An individual who is employed by the governing board of
a system, who performs service, other than as an independent
contractor, for the system, and who is described by this section is
eligible to participate as an employee in the uniform program on the
date specified by Section 1601.1045.
SECTION 4.03. Section 1601.102, Insurance Code, as
effective June 1, 2003, is amended by amending Subsection (a) and
adding Subsections (f) and (g) to read as follows:
(a) An individual who retires in a manner described by this
section and who meets the requirements of Subsection (f) is
eligible to participate, subject to Section 1601.1045, as a retired
employee in the uniform program.
(f) Notwithstanding Subsections (b)-(d), an individual is
eligible to participate in the uniform program only if the
individual:
(1) has at least 10 years of service credit and the sum
of the person's age and amount of service credit, including months
of age and credit, equals or exceeds the number 80; or
(2) is at least 65 years old and has at least 10 years
of service credit.
(g) A person eligible to participate and participating in
the uniform program as an annuitant on September 1, 2003, may
continue to participate in the program as an annuitant if a lapse in
coverage has not occurred.
SECTION 4.04. Subchapter C, Chapter 1551, Insurance Code,
as effective June 1, 2003, is amended by adding Section 1551.1021 to
read as follows:
Sec. 1551.1021. PARTICIPATION ELIGIBILITY: CERTAIN
FACULTY OF INSTITUTIONS OF HIGHER EDUCATION. (a) An adjunct
faculty member at a public institution of higher education is
eligible to participate in the group benefits program as an
employee if the faculty member:
(1) receives compensation for services rendered to a
public institution of higher education as an adjunct faculty
member;
(2) has been employed as a faculty member by the same
public institution of higher education and has taught at least one
course in each regular fall and spring semester at the public
institution of higher education in each of the preceding three
academic years; and
(3) is under contract or is scheduled to teach at least
12 semester credit hours in the academic year of coverage or, if the
person is also employed by the public institution of higher
education to perform nonteaching duties, is under contract or is
scheduled to teach at least six semester credit hours in the
academic year of coverage and has been approved by the public
institution of higher education to participate in the group
benefits program.
(b) From money appropriated from a fund other than the
general revenue fund or from money available from local sources, a
public institution of higher education may, for an adjunct faculty
member eligible to receive benefits under this section, contribute:
(1) not more than 50 percent of the cost of basic
coverage for the employee; and
(2) not more than 25 percent of the cost of dependent
coverage.
(c) Subsection (b) does not prohibit a public institution of
higher education from contributing, from money other than money
appropriated from the general revenue fund, amounts that exceed the
amount specified in Subsection (b) to provide coverage for a person
employed by a public institution of higher education who meets the
criteria for eligibility under Subsection (a).
SECTION 4.05. Subchapter C, Chapter 1601, Insurance Code,
as effective June 1, 2003, is amended by adding Section 1601.1045 to
read as follows:
Sec. 1601.1045. DATE ELIGIBILITY BEGINS; WAITING PERIOD.
(a) Except as provided by Subsection (c) or (d), eligibility under
Section 1601.101 begins on the first day of the calendar month that
begins after the 90th day after the date the employee performs
services for a system.
(b) Except as provided by Subsection (c), eligibility under
Section 1601.102, for an individual who does not retire at the end
of the last month for which the individual is on the payroll of a
system before retirement, begins on the first day of the calendar
month that begins after the 90th day after the date the individual
retires.
(c) The waiting period established by Subsections (a) and
(b) applies only to the determination of initial eligibility to
participate in the group health benefits program and does not apply
to the determination of initial eligibility to participate in
optional coverages under the uniform program.
(d) Notwithstanding Subsection (a), eligibility under
Section 1601.101 may not begin earlier than the first day that an
employee performs services for a system if any amount paid for
premium incurred before the date specified under Subsection (a) for
the employee and any dependents of the employee is paid from money
not appropriated from the general revenue fund, in accordance with
policies and procedures established by the system.
SECTION 4.06. Section 1601.201, Insurance Code, as
effective June 1, 2003, is amended to read as follows:
Sec. 1601.201. PAYMENT FOR [OPTIONAL OR BASIC] COVERAGE.
(a) A system may not contribute more than the amounts specified by
this section for coverages provided under the uniform program.
(b) For an employee designated by the system as working 40
or more hours a week, the system may contribute:
(1) the full cost of basic coverage for the employee;
and
(2) not more than 50 percent of the cost of dependent
coverage.
(c) For an employee designated by the system as working less
than 40 hours a week, including an individual employed by the system
in a position that as a condition of employment requires the
individual to be enrolled as a student in the system in
graduate-level courses, the system, from money appropriated from
the general revenue fund, may contribute:
(1) not more than 50 percent of the cost of basic
coverage for the employee; and
(2) not more than 25 percent of the cost of dependent
coverage.
(d) Subsection (c) does not prohibit a system from
contributing, from money not appropriated from the general revenue
fund, amounts in excess of the amount specified by that subsection
for an individual employed by the system in a position that as a
condition of employment requires the individual to be enrolled as a
student in the system in graduate level courses [shall provide
optional coverage at no cost to an employee or retired employee if
the cost of the employee's or retired employee's basic coverage
exceeds the amount appropriated by the legislature for an employee
or retired employee. For a participant who chooses the basic
coverage rather than optional coverages, a system may:
[(1) for an individual eligible to participate in the
uniform program under Section 1601.101, deduct from or reduce the
monthly compensation of the participant; or
[(2) for an individual eligible to participate in the
uniform program under Section 1601.102, require appropriate
payment].
[(b) The deduction or reduction under Subsection (a) may not
exceed one-half of the amount that exceeds the state's
contribution, and the system shall pay any difference.]
SECTION 4.07. The board of trustees of the Employees
Retirement System of Texas shall include coverage under Section
1551.1021, Insurance Code, as added by this article, in an
insurance policy or contract or in an evidence of coverage
delivered, issued for delivery, or renewed on or after January 1,
2004. The board of trustees may include coverage under Section
1551.1021, Insurance Code, as added by this article, in an
insurance policy or contract or in an evidence of coverage
delivered, issued for delivery, or renewed before January 1, 2004,
if the board of trustees determines that coverage may be reasonably
included.
ARTICLE 5. EFFECTIVE DATE; GENERAL TRANSITION
SECTION 5.01. To the extent of any conflict, this Act
prevails over another Act of the 78th Legislature, Regular Session,
2003, relating to nonsubstantive codifications of law or
nonsubstantive additions to and corrections in enacted codes.
SECTION 5.02. This Act takes effect September 1, 2003.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1370 passed the Senate on
May 15, 2003, by a viva-voce vote; May 30, 2003, Senate refused to
concur in House amendments and requested appointment of Conference
Committee; May 31, 2003, House granted request of the Senate;
June 1, 2003, Senate adopted Conference Committee Report by a
viva-voce vote.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1370 passed the House, with
amendments, on May 28, 2003, by the following vote: Yeas 92,
Nays 42, two present not voting; May 31, 2003, House granted
request of the Senate for appointment of Conference Committee;
June 2, 2003, House adopted Conference Committee Report by the
following vote: Yeas 93, Nays 51, one present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor