By: Duncan S.B. No. 1370
(In the Senate - Filed March 13, 2003; March 19, 2003, read
first time and referred to Committee on State Affairs;
April 28, 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. 1370 By: Duncan
A BILL TO BE ENTITLED
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. Article 3.50-7, Insurance Code, is amended by
adding Section 7A to read as follows:
Sec. 7A. REQUIRED WAITING PERIOD. Notwithstanding Section
7(b) of this article, an employee is not eligible for coverage under
the program until the 90th day after the date the employee is
employed by a participating entity.
SECTION 1.02. Section 2, Article 3.50-8, Insurance Code, is
amended by amending Subsection (a) and by adding Subsections (e),
(f), and (g) to read as follows:
(a) 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, other than in
the capacity of professional support staff, multiplied by $500
[$1,000] or a greater amount as provided by the General
Appropriations Act for purposes of this article.
(e) A member of the professional staff of a district,
charter school, or service center described by Subsection (a) of
this section is not eligible to receive state funds under
Subsection (a) of this section.
(f) For purposes of this section, a member of the
professional staff of a district, charter school, or service center
described by Subsection (a) of this section has the meaning defined
by rule by the trustee.
(g) An employee is not eligible to receive a state
contribution under this article until the 90th day after the date
the employee is employed by an entity described by Section 1(2)(A)
of this article.
SECTION 1.03. Notwithstanding Article 3.50-8, Insurance
Code, the state shall pay the state contribution for active
employee health coverage or supplemental compensation authorized
under Section 2, Article 3.50-8, Insurance Code, for the last month
of state fiscal year 2005 not earlier than the first day of the
first month of state fiscal year 2006.
SECTION 1.04. 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 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. 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 2.03. 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 a number of [three] years
of service credit, as determined by the board of trustees in
accordance with this section, 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 2.04. 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;
(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 and would have
been eligible to retire and receive a service or 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, 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 2.05. 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 2.06. 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), 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.
SECTION 2.07. 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 2.08. 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 2.09. 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 2.10. Section 1551.319, Insurance Code, as
effective June 1, 2003, is amended by adding Subsection (c) 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 section.
SECTION 2.11. Section 27, Chapter 1231, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 2.12. 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. 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 3.02. Section 1575.204, Insurance Code, as
effective June 1, 2003, is amended to read as follows:
Sec. 1575.204. EMPLOYING SCHOOL DISTRICT CONTRIBUTION
[RATIO OF STATE AND ACTIVE EMPLOYEE CONTRIBUTIONS]. Each state
fiscal year, each employing school district 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 school district [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].
ARTICLE 4. UNIFORM INSURANCE BENEFITS ACT FOR EMPLOYEES OF
THE UNIVERSITY OF TEXAS SYSTEM AND
THE TEXAS A&M UNIVERSITY SYSTEM
SECTION 4.01. 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 4.02. 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 4.03. 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), 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.
SECTION 4.04. 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 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 [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.]
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.
* * * * *