79R4627 PB-D
By: Averitt S.B. No. 1513
A BILL TO BE ENTITLED
AN ACT
relating to the creation, powers, and duties of the health
insurance division of the Texas Department of Insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. HEALTH INSURANCE DIVISION
SECTION 1.001. Chapter 31, Insurance Code, is amended by
adding Subchapter D to read as follows:
SUBCHAPTER D. HEALTH INSURANCE DIVISION
Sec. 31.101. DEFINITION. In this subchapter, "division"
means the health insurance division of the department.
Sec. 31.102. DIVISION. (a) The commissioner shall
establish and maintain a health insurance division at the
department.
(b) The division is under the direction of a deputy
commissioner appointed by the commissioner.
Sec. 31.103. GENERAL POWERS AND DUTIES OF DIVISION. The
division shall ensure compliance with this code, other insurance
laws, and commissioner rules relating to:
(1) benefits and coverages offered through:
(A) accident and health insurance;
(B) group and blanket health insurance;
(C) managed care entities;
(D) preferred provider benefit plans; and
(E) other health benefit plans, risk pools, or
programs regulated under this code;
(2) the operations of health insurers, managed care
entities, and other persons, organizations, or entities that are
authorized under this code to engage in the business of health
insurance or related businesses in this state; and
(3) insurance requirements adopted under this code
that are applicable to health care practitioners and health care
facilities.
Sec. 31.104. REFERENCE TO DEPARTMENT. To the extent
consistent with Section 31.003, a reference to the department means
the division in:
(1) Subtitle C, Title 6; and
(2) Title 8.
SECTION 1.002. Section 31.007, Insurance Code, is amended
to read as follows:
Sec. 31.007. REFERENCES TO BOARD; DEPARTMENT. (a) A
reference in this code or other law to the State Board of Insurance,
the Board of Insurance Commissioners, or an individual commissioner
means the commissioner or the department as consistent with the
respective duties of the commissioner and the department under this
code and other insurance laws.
(b) To the extent consistent with Section 31.103, a
reference in this code or other law to the State Board of Insurance,
the Board of Insurance Commissioners, an individual commissioner,
the commissioner, or the department in relation to health insurance
or other health coverage or benefits means the commissioner or the
health insurance division of the department as consistent with the
respective duties of the commissioner and the division under this
code and other insurance laws.
ARTICLE 2. DATA COLLECTION ON UNINSURED TEXANS
SECTION 2.001. Subtitle B, Title 5, Insurance Code, is
amended by adding Chapter 524 to read as follows:
Sec. 524.001. DEFINITIONS. In this subchapter:
(1) "Division" means the health insurance division of
the department established under Subchapter D, Chapter 31.
(2) "Health benefit plan" means a group, blanket, or
franchise insurance policy, a certificate issued under a group
policy, a group hospital service contract, or a group subscriber
contract or evidence of coverage issued by a health maintenance
organization that provides benefits for health care services. The
term does not include:
(A) accident-only or disability income insurance
coverage or a combination of accident-only and disability income
insurance coverage;
(B) credit-only insurance coverage;
(C) disability insurance coverage;
(D) coverage for a specified disease or illness;
(E) Medicare services under a federal contract;
(F) Medicare supplement and Medicare Select
benefit plans regulated in accordance with federal law;
(G) long-term care coverage or benefits, nursing
home care coverage or benefits, home health care coverage or
benefits, community-based care coverage or benefits, or any
combination of those coverages or benefits;
(H) coverage that provides limited-scope dental
or vision benefits;
(I) coverage provided by a single service health
maintenance organization;
(J) workers' compensation insurance coverage or
similar insurance coverage;
(K) hospital indemnity or other fixed indemnity
insurance coverage;
(L) reinsurance contracts issued on a stop-loss,
quota-share, or similar basis;
(M) short-term major medical contracts;
(N) liability insurance coverage, including
general liability insurance coverage and automobile liability
insurance coverage, and coverage issued as a supplement to
liability insurance coverage, including automobile medical payment
insurance coverage;
(O) coverage for on-site medical clinics;
(P) coverage that provides other limited
benefits specified by federal regulations; or
(Q) other coverage that:
(i) is similar to the coverage described by
this subdivision under which benefits for medical care are
secondary or incidental to other coverage benefits; and
(ii) is specified by federal regulations.
(3) "Program" means the data collection program
established under this chapter.
(4) "Uninsured individual" means an individual who is
not eligible to receive and does not receive benefits for health
care services through:
(A) a health benefit plan;
(B) a federal health care program other than
Medicaid, including the TRICARE program or the Medicare program; or
(C) a benefit plan established in another
country.
Sec. 524.002. INFORMATION ON UNINSURED TEXANS; DATA
COLLECTION PROGRAM; RULES. (a) The division shall develop and
maintain a program to collect:
(1) information regarding access to health benefit
plan coverage in this state, including information relating to:
(A) the cost of coverage; and
(B) how many residents of this state are covered;
and
(2) statistical data and other information regarding
uninsured individuals in this state.
(b) The program must include appropriate demographic
information regarding uninsured individuals.
(c) The commissioner shall adopt rules as necessary to
implement this chapter, including rules relating to:
(1) any required reporting by employers or health
benefit plan issuers;
(2) reporting schedules;
(3) report forms;
(4) information required to be reported; and
(5) reporting procedures, guidelines, and criteria.
(d) The division may obtain information from employers and
health benefit plan issuers as necessary to implement this chapter.
Sec. 524.003. REPORT. The division shall prepare at least
annually a written report of the information collected under the
program. The division shall:
(1) submit the report to the legislature not later
than December 1 of each year; and
(2) make the report available to the public on the
department's Internet website.
ARTICLE 3. ADMINISTRATION OF CERTAIN STATE
HEALTH BENEFIT PROGRAMS
PART 1. STATE EMPLOYEE PROGRAMS
SECTION 3.001. Section 1551.003, Insurance Code, is amended
by amending Subdivisions (1) and (3) and by adding Subdivision
(5-a) to read as follows:
(1) "Administering firm" means a firm designated by
the division [board of trustees] to administer coverages, services,
benefits, or requirements in accordance with this chapter and the
rules adopted by the commissioner [board of trustees] under this
chapter.
(3) "Basic coverage" means the group coverage plans
determined by the division [board of trustees] in which each
eligible full-time employee and annuitant participates
automatically unless participation is specifically waived.
(5-a) "Division" means the health insurance division
of the department established under Subchapter D, Chapter 31.
SECTION 3.002. Section 1551.009, Insurance Code, is amended
to read as follows:
Sec. 1551.009. [BOARD OF TRUSTEES MAY DEFINE] OTHER
DEFINITIONS [WORDS]. The commissioner [board of trustees] may
define by rule a word in terms necessary in the administration of
this chapter.
SECTION 3.003. Section 1551.010, Insurance Code, is amended
to read as follows:
Sec. 1551.010. [BOARD OF TRUSTEES] APPROVAL FOR PAYROLL
DEDUCTIONS OR REDUCTIONS. A state agency may not establish,
continue, or authorize payroll deductions or reductions for any
benefit or coverage as provided by this chapter without the express
approval of the board of trustees and the commissioner.
SECTION 3.004. Section 1551.051, Insurance Code, is amended
to read as follows:
Sec. 1551.051. ADMINISTRATION [AND IMPLEMENTATION]. The
division shall administer the group benefits program as provided by
[administration and implementation of] this chapter [are vested
solely in the board of trustees].
SECTION 3.005. Section 1551.052, Insurance Code, is amended
to read as follows:
Sec. 1551.052. AUTHORITY FOR RULES, PLANS, PROCEDURES, AND
ORDERS. (a) The board of trustees may adopt rules consistent with
this chapter as it considers necessary to implement the provisions
of this chapter administered by the board [and its purposes],
including rules that provide standards for determining eligibility
for participation in the group benefits program, including
standards for determining disability.
(b) The commissioner [board of trustees] may adopt rules,
plans, procedures, or orders [a plan, procedure, or order]
reasonably necessary to implement the provisions of this chapter
administered by the division [and its purposes].
SECTION 3.006. Section 1551.053, Insurance Code, is amended
to read as follows:
Sec. 1551.053. AUTHORITY TO HIRE EMPLOYEES. (a) The
division [board of trustees] may hire employees as the commissioner
[board] considers necessary to ensure the proper administration of
this chapter and the coverages, services, and benefits provided for
or authorized by this chapter.
(b) The division [board of trustees] shall determine and
assign the compensation and duties of the employees.
SECTION 3.007. Section 1551.055, Insurance Code, is amended
to read as follows:
Sec. 1551.055. GENERAL POWERS OF DIVISION AND BOARD OF
TRUSTEES REGARDING COVERAGE PLANS. (a) The division [board of
trustees] may:
(1) prepare specifications for a coverage provided
under this chapter;
(2) [prescribe the time and conditions under which an
employee, annuitant, or dependent is eligible for a coverage
provided under this chapter;
[(3)] determine the methods and procedures of claims
administration;
(3) [(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 commissioner
[board of trustees] to decide contested cases arising from a
coverage provided under this chapter;
(4) [(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;
(5) [(7)] administer the employees life, accident,
and health insurance and benefits fund;
(6) [(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;
(7) [(10)] provide for optional group coverage plans
in addition to the basic group coverage plans;
(8) [(11)] provide, as the commissioner [board of
trustees] determines is appropriate, either additional statewide
optional coverage plans or individual agency coverage plans;
(9) [(12)] develop health benefit plans that permit
access to high-quality, cost-effective health care;
(10) [(13)] design, implement, and monitor health
benefit plan features intended to discourage excessive
utilization, promote efficiency, and contain costs;
(11) [(14)] develop and refine, on an ongoing basis, a
health benefit strategy consistent with evolving benefit delivery
systems; and
(12) [(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[;
and
[(16) appoint an advisory committee for the group
benefits program under the terms provided by Section 815.509,
Government Code].
(b) The board of trustees may:
(1) prescribe the time and conditions under which an
employee, annuitant, or dependent is eligible for a coverage
provided under this chapter;
(2) determine the amount of payroll deductions and
reductions applicable to employees and annuitants and establish
procedures to implement those deductions and reductions;
(3) provide the beginning and ending dates of
coverages of participants under all benefit plans; and
(4) appoint an advisory committee for the group
benefits program under the terms provided by Section 815.509,
Government Code.
SECTION 3.008. Section 1551.056, Insurance Code, is amended
to read as follows:
Sec. 1551.056. INDEPENDENT ADMINISTRATOR. (a) The
division [board of trustees] may, on a competitive bid basis,
contract with an entity to act for the board as an independent
administrator or manager of the coverages, services, and benefits
authorized under this chapter.
(b) The entity must be a qualified, experienced firm of
group insurance specialists or an administering firm and shall
assist the division [board of trustees] in ensuring the proper
administration of this chapter and the coverages, services, and
benefits provided for or authorized by this chapter.
(c) The department [board of trustees] shall pay an
independent administrator selected under this section.
SECTION 3.009. Section 1551.057, Insurance Code, is amended
to read as follows:
Sec. 1551.057. COMPENSATION OF PERSON EMPLOYED BY DIVISION
[BOARD OF TRUSTEES]. The department [board of trustees] shall pay
the compensation and expenses of a person employed by the division
under this chapter [board] at the rate or in the amount approved by
the commissioner [board]. The rate or amount may not exceed the
rate or amount paid for similar services.
SECTION 3.010. Section 1551.059, Insurance Code, is amended
to read as follows:
Sec. 1551.059. CERTIFICATE OF COVERAGE. The division
[board of trustees] shall provide for issuance to each employee or
annuitant participating in the group benefits program a certificate
of coverage that states:
(1) the benefits to which the participant is entitled;
(2) to whom the benefits are payable;
(3) to whom a claim must be submitted; and
(4) the provisions of the plan document, in summary
form, that principally affect the participant.
SECTION 3.011. Section 1551.060(a), Insurance Code, is
amended to read as follows:
(a) The division [board of trustees] may issue a single
identification card to a participant in a health benefit plan and
separately administered coverage under this chapter that offers
pharmacy benefits.
SECTION 3.012. Section 1551.061, Insurance Code, is amended
to read as follows:
Sec. 1551.061. ANNUAL REPORT. The commissioner [board of
trustees] shall submit a written report not later than January 1 of
each year to the governor, lieutenant governor, speaker of the
house of representatives, and Legislative Budget Board concerning
the coverages provided and the benefits and services being received
by all participants under this chapter. The report must include
information about the effectiveness and efficiency of:
(1) managed care cost containment practices; and
(2) fraud detection and prevention procedures.
SECTION 3.013. Section 1551.062, Insurance Code, is amended
to read as follows:
Sec. 1551.062. INFORMATION ON OPERATION AND ADMINISTRATION
OF CHAPTER. (a) The division [board of trustees] shall:
(1) conduct a continuing study of the operation and
administration of this chapter, including:
(A) conducting surveys and preparing reports on
group coverages and benefits available to participants; and
(B) studying experience relating to group
coverages and benefits available to participants; and
(2) maintain statistics on the number, type, and
disposition of fraudulent claims for benefits under this chapter.
(b) A contract entered into under this chapter must require
a carrier to:
(1) furnish any reasonable report the division [board
of trustees] determines is necessary to enable the division [board]
to perform its functions under this chapter; and
(2) permit the division [board] and a representative
of the state auditor to examine records of the carrier as necessary
to accomplish the purposes of this chapter.
(c) Each state agency shall keep records, make
certifications, and furnish the division [board of trustees] with
information and reports necessary to enable the division [board] to
perform its functions under this chapter.
SECTION 3.014. Sections 1551.063(a) and (c), Insurance
Code, are amended to read as follows:
(a) The records of a participant in the group benefits
program in the custody of the division, the board of trustees, or
[of] an administrator or carrier acting on behalf of the division
[board,] are confidential and not subject to disclosure, and the
division or board is not required to accept or comply with a request
for a record or information about a record or to seek an opinion
from the attorney general, because the records are exempt from the
public access provisions of Chapter 552, Government Code, except as
provided by this section.
(c) The division or board of trustees may release the
records to:
(1) an administrator, carrier, agent, or attorney
acting on behalf of the division or board;
(2) another governmental entity;
(3) a medical provider of the participant to
accomplish the purposes of this chapter; or
(4) a party in response to a subpoena issued under
applicable law.
SECTION 3.015. Sections 1551.064(a) and (b), Insurance
Code, are amended to read as follows:
(a) This section applies only to a group policy or contract
described by Subchapter G, Chapter 1251 [section 3B(a), Article
3.51-6]. A policy or contract executed under this chapter must
provide that:
(1) premium payments must be:
(A) paid directly to the department [Employees
Retirement System of Texas]; and
(B) postmarked or received not later than the
10th day of the month for which the premium is due;
(2) the premium for group continuation coverage under
Subchapter G, Chapter 1251 [Section 3B, Article 3.51-6], may not
exceed the level established for other surviving dependents of
deceased employees and annuitants;
(3) at the time the group policy or contract is
delivered, issued for delivery, renewed, amended, or extended, the
department [Employees Retirement System of Texas] shall give notice
of the continuation option to each state agency covered by the group
benefits program; and
(4) each state agency shall give written notice of the
continuation option to each employee and dependent of an employee
who is covered by the group benefits program.
(b) A group policy or contract executed under this chapter
must provide that, not later than the 15th day after the date of any
severance of the family relationship that might activate the
continuation option under Subchapter G, Chapter 1251 [Section 3B,
Article 3.51-6], the group member shall give written notice of the
severance to the employing state agency.
SECTION 3.016. Section 1551.065, Insurance Code, is amended
to read as follows:
Sec. 1551.065. DISCLOSURE OF SOCIAL SECURITY NUMBER. The
division [board of trustees] may require an individual to disclose
the individual's social security number as the division [board]
considers necessary to properly administer this chapter and any
coverage, service, or benefit authorized by this chapter or as
otherwise required by state or federal law.
SECTION 3.017. Section 1551.066(a), Insurance Code, is
amended to read as follows:
(a) This section applies to:
(1) the Texas Department of Insurance [Employees
Retirement System of Texas];
(2) a carrier or other insurance company or health
maintenance organization;
(3) an administering firm or other insurance support
organization that provides information or services to the group
benefits program or the Texas Department of Insurance under this
chapter [Employees Retirement System of Texas];
(4) an agent or third-party administrator authorized
under this chapter or licensed under this code;
(5) a regulatory authority or department; and
(6) a board member, executive director, employee,
auditor, or actuary of an entity described by this section.
SECTION 3.018. Section 1551.106, Insurance Code, is amended
to read as follows:
Sec. 1551.106. GROUP COVERAGE PLAN PURCHASED TO PROVIDE FOR
AUTOMATIC COVERAGE. A group coverage plan purchased by the
division [board of trustees] must provide for the automatic
coverage described by this subchapter.
SECTION 3.019. Section 1551.108, Insurance Code, is amended
to read as follows:
Sec. 1551.108. CONTINUING ELIGIBILITY OF CERTAIN PERSONS
WITH LEGISLATIVE SERVICE OR EMPLOYMENT. Subject to Section
1551.351, on application to the division [board of trustees] and on
arrangement for payment of contributions and postage:
(1) an individual who has at least eight years of
service credit in the Employees Retirement System of Texas for
service as a member of the legislature, on ending the individual's
service in the legislature, remains eligible for participation in
the group benefits program; and
(2) an individual who has at least 10 years of service
credit in the Employees Retirement System of Texas as an employee of
the legislature, on ending the individual's service for the
legislature, remains eligible for participation in the group
benefits program.
SECTION 3.020. Section 1551.109(a), Insurance Code, is
amended to read as follows:
(a) Subject to Section 1551.351, on application to the
division [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 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 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 has not occurred.
SECTION 3.021. Section 1551.110(a), Insurance Code, is
amended to read as follows:
(a) Except as provided by Subsections (c) and (d), an
employee of a public junior college who is employed to perform
services outside this state is not eligible to participate in the
group benefits program unless the college elects, under procedures
adopted by the commissioner [board of trustees], to permit the
employee to participate in the group benefits program.
SECTION 3.022. Sections 1551.114(d), (f), and (g),
Insurance Code, are amended to read as follows:
(d) Each full-time active employee of a community
supervision and corrections department is automatically covered by
the basic coverage for employees unless the employee specifically
waives coverage or unless the employee is expelled from the
program. Each part-time active employee of a community supervision
and corrections department is eligible to participate in the group
benefits program on application in the manner provided by the
division [board of trustees], unless the employee has been expelled
from the program. Each community supervision and corrections
department shall notify each of its part-time employees of the
employee's eligibility for participation.
(f) A retired employee is eligible to participate in the
group benefits program on application to the division [board of
trustees]. On application, a retired employee is automatically
covered by the basic coverage for annuitants unless the retired
employee specifically waives coverage or unless the retired
employee is expelled from the program. A retired employee is not
eligible to receive a state contribution under Subchapter G for
premiums. The community justice assistance division of the Texas
Department of Criminal Justice is responsible for payment of the
contributions for each of a department's retired employees and the
retired employees' participating dependents that the state would
make under Subchapter G if the retired employees were retired state
employees. Each participating retired employee shall pay that
portion of the cost of group coverage selected by the retired
employee that exceeds the amount of division contributions. The
retired employee shall pay contributions required from the retired
employee in the manner prescribed by the commissioner [board of
trustees]. Each community supervision and corrections department
shall notify each of its retired employees of the eligibility for
participation and the costs associated with participation.
(g) All contributions received under this section from the
community justice assistance division of the Texas Department of
Criminal Justice, active employees of community supervision and
corrections departments, and retired employees of community
supervision and corrections departments for basic, optional, and
voluntary coverages under the group benefits program shall be paid
into the employees life, accident, and health insurance and
benefits fund and shall be used by the division [board of trustees]
to provide those coverages as provided by this chapter.
SECTION 3.023. Section 1551.151, Insurance Code, is amended
to read as follows:
Sec. 1551.151. ENTITLEMENT TO COVERAGE. An individual who
is eligible to participate in the group benefits program under
Section 1551.101 or 1551.102 is entitled to secure for a dependent
of the individual any group coverages provided under this chapter,
as determined by the division [board of trustees] and subject to the
exceptions provided by this subchapter.
SECTION 3.024. Section 1551.157, Insurance Code, is amended
to read as follows:
Sec. 1551.157. COVERAGE OPTIONS AFTER EXPIRATION OF ANNUITY
OPTION. The surviving spouse or dependent of an employee or
annuitant may retain authorized coverages after expiration of a
time-certain annuity option selected by the employee or annuitant.
To retain the coverages, the surviving spouse or dependent must
make advance payment of contributions to the division [Employees
Retirement System of Texas] under rules adopted by the commissioner
[board of trustees].
SECTION 3.025. Sections 1551.159(a)-(f), Insurance Code,
are amended to read as follows:
(a) Subject to any applicable limit in the General
Appropriations Act, the division [board of trustees] shall use
money appropriated for 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 state child
health plan established under Chapter 62, Health and Safety Code;
and
(3) is not eligible for the state Medicaid program.
(b) The division [board of trustees] shall notify employees
that:
(1) they may be eligible for dependent child coverage
under Subsection (a); and
(2) an employee may apply for the coverage as provided
by Subsection (c).
(c) To obtain dependent child coverage under Subsection
(a), the employee must apply to the Health and Human Services
Commission [Texas Department of Human Services] or other agency
designated by the Health and Human Services Commission to perform
eligibility screening under this section. The eligibility
screening shall be coordinated with eligibility screening for the
state Medicaid program. The agency that performs the eligibility
screening shall certify to the division [board of trustees] in
writing whether a child is eligible for dependent child coverage
under Subsection (a).
(d) If an employee does not obtain dependent child coverage
under this section at the time the individual begins service to the
state, the employee may apply for the coverage during the annual
open enrollment period applicable to the employee's coverage under
this chapter. The division [board of trustees] may:
(1) continue the coverage until the next annual open
enrollment period applicable to the employee's coverage, without
regard to any change in status of the child; or
(2) adopt rules requiring an employee, during the
period the coverage is in effect, to report a change in status that
would make the dependent child ineligible for coverage and may
terminate the coverage on receipt of the report of a change in
status.
(e) The division [board of trustees] may require an employee
to reapply for dependent child coverage under this section during
each annual open enrollment period applicable to the employee's
coverage. The division [board of trustees] and the Health and Human
Services Commission [Texas Department of Human Services] or other
agency designated by the Health and Human Services Commission to
perform eligibility screening under this section shall cooperate to
develop a cost-effective method for annual reevaluation of
eligibility determinations for dependent child coverage under this
section.
(f) The division [board of trustees] may pay a higher
percentage of the cost of basic coverage for a child described by
Subsection (a) than the percentage required by Subsection (a) if
money becomes available for that purpose.
SECTION 3.026. Section 1551.201, Insurance Code, is amended
to read as follows:
Sec. 1551.201. ESTABLISHMENT. (a) The commissioner [board
of trustees] by rule shall establish group coverage plans for
individuals eligible to participate in the group benefits program.
(b) The group coverage plans may, in the commissioner's
[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
(5) any other group coverage that the commissioner
[board of trustees], in consultation with the advisory committee,
considers advisable.
(c) The group coverage plans for annuitants may, at the
discretion of the commissioner [board of trustees], be separate or
a part of the group coverage plans for employees. If the division
[trustee] establishes separate group coverage plans for
annuitants, the separate group coverage plans must include both
full benefits and supplemental coverage options.
SECTION 3.027. Sections 1551.202(a) and (b), Insurance
Code, are amended to read as follows:
(a) The commissioner [board of trustees] may define the
basic coverage applicable to each individual for whom coverage is
automatic unless participation is specifically waived.
(b) The commissioner [board of trustees] may define
different basic coverage plans for individuals eligible to
participate in the uniform program under Section 1551.101 and for
individuals eligible to participate in the group benefits program
under Section 1551.102.
SECTION 3.028. Section 1551.203, Insurance Code, is amended
to read as follows:
Sec. 1551.203. AUTHORITY TO DEFINE OPTIONAL COVERAGES. The
commissioner [board of trustees] may define optional coverages for
which the board of trustees may make available employer
contributions under Section 1551.303.
SECTION 3.029. Section 1551.205, Insurance Code, is amended
to read as follows:
Sec. 1551.205. LIMITATIONS. The division [board of
trustees] may not contract for or provide a coverage plan that:
(1) excludes or limits coverage or services for
acquired immune deficiency syndrome, as defined by the Centers for
Disease Control and Prevention of the United States Public Health
Service, or human immunodeficiency virus infection;
(2) provides coverage for serious mental illness that
is less extensive than the coverage provided for any physical
illness; or
(3) may provide coverage for prescription drugs to
assist in stopping smoking at a lower benefit level than is provided
for other prescription drugs.
SECTION 3.030. Section 1551.206, Insurance Code, is amended
to read as follows:
Sec. 1551.206. CAFETERIA PLAN. (a) The division [board of
trustees] may develop, implement, and administer a cafeteria plan
if the commissioner [board] determines that establishment of the
plan:
(1) is feasible;
(2) would be beneficial to the state and to employees
who would be eligible to participate in the plan; and
(3) would not adversely affect the coverage plans
provided under the group benefits program.
(b) The division [board of trustees] may include in the
cafeteria plan any benefit that may be included in a cafeteria plan
under federal law.
(c) The division [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 a cafeteria
plan; or
(2) assist in those activities.
(d) The commissioner [board of trustees] may adopt an order
terminating the cafeteria plan and providing a procedure for the
orderly withdrawal of the state and its employees from the plan if
the commissioner [board] determines that a cafeteria plan
established under this section is no longer advantageous to the
state or its employees.
(e) The commissioner [board of trustees] may adopt rules for
the use of a debit card or other similar technology for claims
administration under this section.
SECTION 3.031. Section 1551.208, Insurance Code, is amended
to read as follows:
Sec. 1551.208. DETERMINATION TO SELF-FUND. (a) The
commissioner [board of trustees], in the commissioner's [board's]
sole discretion, shall determine those coverage plans that the
division [board] does not intend to purchase but intends to provide
directly from the employees life, accident, and health insurance
and benefits fund.
(b) The commissioner [board of trustees], in the
commissioner's [board's] sole discretion and under conditions the
commissioner [board] approves, may reinsure any coverage the
division [board] determines will be provided directly from the
employees life, accident, and health insurance and benefits fund
under Subsection (a).
SECTION 3.032. Section 1551.210, Insurance Code, is amended
to read as follows:
Sec. 1551.210. ACTUARIAL ADVICE FOR SELF-FUNDED COVERAGE.
A qualified actuary selected by the division [board of trustees]
shall advise the division [board] regarding an actuarially sound
level of contributions required to provide coverage directly from
the employees life, accident, and health insurance and benefits
fund.
SECTION 3.033. Sections 1551.211(a)-(d), Insurance Code,
are amended to read as follows:
(a) Before the first day of each state fiscal biennium, the
division [board of trustees] shall estimate for an average 60-day
period during the biennium the expenditures from the employees
life, accident, and health insurance and benefits fund anticipated
for self-funded coverage plans, considering projected claims and
administrative expenses for those plans.
(b) The division [board of trustees] shall place the
estimated amount in a contingency reserve fund to provide for
adverse fluctuations in claims or administrative expenses.
(c) The department [board of trustees] shall include in each
request for legislative appropriations to the group benefits
program the amount the commissioner [board] determines to be
necessary to maintain the contingency reserve fund at the level
required by this section.
(d) The division [board of trustees] may invest and reinvest
any portion of the contingency reserve fund under the standard of
care provided by Section 815.307, Government Code, considering the
functional need to provide for adverse fluctuations in claims or
administrative expenses.
SECTION 3.034. Section 1551.212, Insurance Code, is amended
to read as follows:
Sec. 1551.212. FIRMS TO ADMINISTER SELF-FUNDED COVERAGE.
(a) For those coverage plans that the division [board of trustees]
funds from the employees life, accident, and health insurance and
benefits fund, the division [board] may contract with one or more
qualified and experienced administering firms to administer the
plans in the best interest of the participants in the group benefits
program.
(b) The contract may be awarded only after a competitive bid
process. The division [board of trustees] is not required to select
the lowest bid but shall take into consideration other relevant
criteria, including ability to service large group programs and
past experience.
(c) If the division [board of trustees] selects a firm whose
bid was not the lowest or whose bid differs from that specified, the
division [board] shall fully justify and explain to the
commissioner and the board of trustees the reasons for the action
[in the minutes of the next meeting of the board].
SECTION 3.035. Section 1551.213, Insurance Code, is amended
to read as follows:
Sec. 1551.213. BIDS FOR PURCHASED COVERAGE. (a) For those
coverage plans for which the division [board of trustees]
determines to purchase coverage, the division [board] shall notify
eligible carriers:
(1) that competitive bidding will be conducted; and
(2) of the date by which an eligible carrier must
submit a bid on the contract to the division [board].
(b) The division [board of trustees] shall submit the group
coverages provided by the group benefits program for competitive
bidding at least every six years.
SECTION 3.036. Section 1551.214, Insurance Code, is amended
to read as follows:
Sec. 1551.214. SELECTION OF BIDS FOR PURCHASED COVERAGE.
(a) An actuary selected by the division [board of trustees] shall
advise the division [board] as to the actuarial soundness of the
bids received under Section 1551.213.
(b) The division [board of trustees]:
(1) shall select carriers to provide services that
will be in the best interest of participants; and
(2) is not required to select the lowest bid but shall
take into consideration other relevant criteria, including ability
to service contracts, past experience, and financial ability.
(c) If the division [board of trustees] selects a carrier
whose bid differs from that advertised, the division [board] shall
record the deviation and shall fully justify and explain the
reasons for the deviation [in the minutes of the next meeting of the
board].
(d) The division [board of trustees] shall notify the
carriers that submitted bids of the results of the bidding.
SECTION 3.037. Sections 1551.215(a) and (b), Insurance
Code, are amended to read as follows:
(a) A carrier providing a coverage purchased under this
chapter shall provide an accounting to the division [board of
trustees] not later than the 90th day after the end of each plan
year.
(b) The accounting must be in a form approved by the
division [board of trustees].
SECTION 3.038. Sections 1551.216(c) and (d), Insurance
Code, are amended to read as follows:
(c) The special contingency reserve earns interest at a rate
determined before each plan year by the carrier and approved by the
division [board of trustees] as consistent with the rates generally
used by the carrier for similar funds held under other group
coverage plans.
(d) On a determination by the division [board of trustees]
that the special contingency reserve has attained an amount
estimated by the division [board] to make satisfactory provision
for adverse fluctuations in future charges, claims, or expenses
under the plan, any further excess shall be deposited to the credit
of the employees life, accident, and health insurance and benefits
fund.
SECTION 3.039. Section 1551.218(c), Insurance Code, is
amended to read as follows:
(c) Every six months the division [board of trustees] shall
submit to the comptroller and Legislative Budget Board a report
regarding any cost savings achieved in the group benefits program
through implementation of the prior authorization requirement of
this section. A report must cover the previous six-month period.
SECTION 3.040. Section 1551.219, Insurance Code, as added
by Chapter 213, Acts of the 78th Legislature, Regular Session,
2003, is amended to read as follows:
Sec. 1551.219. MAIL ORDER REQUIREMENT FOR PRESCRIPTION DRUG
COVERAGE PROHIBITED. The division [board of trustees] or a health
benefit plan under this chapter that provides benefits for
prescription drugs may not require a participant in the group
benefits program to purchase a prescription drug through a mail
order program. The division [board] or health benefit plan shall
require that a participant who chooses to obtain a prescription
drug through a retail pharmacy or other method other than by mail
order pay a deductible, copayment, coinsurance, or other
cost-sharing obligation to cover the additional cost of obtaining a
prescription drug through that method rather than by mail order.
SECTION 3.041. Section 1551.219, Insurance Code, as added
by Chapter 589, Acts of the 78th Legislature, Regular Session,
2003, is renumbered as Section 1551.220, Insurance Code, and
amended to read as follows:
Sec. 1551.220 [1551.219]. DISEASE MANAGEMENT SERVICES.
(a) In this section, "disease management services" means services
to assist an individual manage a disease or other chronic health
condition, such as heart disease, diabetes, respiratory illness,
end-stage renal disease, HIV infection, or AIDS, and with respect
to which the division [board of trustees] identifies populations
requiring disease management.
(b) A group health benefit plan offered under the group
benefits program must provide disease management services or
coverage for disease management services in the manner required by
the division [board of trustees], including:
(1) patient self-management education;
(2) provider education;
(3) evidence-based models and minimum standards of
care;
(4) standardized protocols and participation
criteria; and
(5) physician-directed or physician-supervised care.
SECTION 3.042. Section 1551.301, Insurance Code, is amended
to read as follows:
Sec. 1551.301. FUNDING OF BASIC COVERAGE. The division
[board of trustees] shall use the amount appropriated for employer
contributions in the manner provided by this subchapter to fund the
basic coverage.
SECTION 3.043. Section 1551.3015, Insurance Code, is
amended to read as follows:
Sec. 1551.3015. COST ASSESSMENT FOR CERTAIN PARTICIPANTS.
Notwithstanding any other provision of law, the division [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 division [board]. The division [board of
trustees] shall deposit all amounts recovered under this section in
the employees life, accident, and health insurance and benefits
fund.
SECTION 3.044. Sections 1551.302(a) and (b), Insurance
Code, are amended to read as follows:
(a) The division [board of trustees] may equitably allocate
to each health benefit plan the employer contributions that would
be required to fund basic health coverage for participants in the
plans to the extent funds are available.
(b) In allocating the employer contributions among plans,
the division [board of trustees] shall consider the relevant risk
characteristics of each plan's enrollment, including:
(1) demographic variations in the use and cost of
health care; and
(2) prevailing cost patterns in the area in which the
plan operates.
SECTION 3.045. Section 1551.306(b), Insurance Code, is
amended to read as follows:
(b) Except as provided by Section 1551.309, if a participant
applies for basic and optional coverages for which the cost exceeds
the employer contributions for those coverages under this chapter,
the participant shall authorize in a form and manner satisfactory
to the division and the board of trustees a deduction from the
participant's monthly compensation or monthly annuity equal to the
difference between:
(1) the cost of basic and optional coverages for which
the participant applies; and
(2) the employer contributions for basic and optional
coverages.
SECTION 3.046. Section 1551.308, Insurance Code, is amended
to read as follows:
Sec. 1551.308. NO CONTRIBUTION ON REFUSAL OF COVERAGE. The
state and a state agency may not make any contribution to the cost
of any coverages or benefits provided under this chapter for an
individual who refuses the coverages or benefits in a form and
manner satisfactory to the division and the board of trustees.
SECTION 3.047. Sections 1551.309(a) and (c), Insurance
Code, are amended to read as follows:
(a) If an employee elects to participate in the cafeteria
plan, the employee must execute a salary reduction agreement under
which the employee's monthly compensation will be reduced in an
amount equal to the difference between:
(1) the employer contributions for basic and optional
coverages; and
(2) the cost of the cafeteria plan coverages the
division and the board of trustees identify [identifies] as
comparable to the basic and optional coverages for which the
employee is eligible.
(c) An employee who executes a salary reduction agreement
for a group coverage plan included in the cafeteria plan elects to
participate in the cafeteria plan and agrees to a salary reduction
for the coverages for subsequent plan years unless the employee,
during an annual enrollment period specified by the commissioner
[board of trustees], elects in a form and manner satisfactory to the
division and the board of trustees not to participate for the next
plan year in the coverages.
SECTION 3.048. Section 1552.001, Insurance Code, is amended
to read as follows:
Sec. 1552.001. DEFINITIONS. In this chapter, "annuitant,"
"board of trustees," "division," and "employee" have the meanings
assigned by Section 1551.003.
SECTION 3.049. Section 1552.002, Insurance Code, is amended
to read as follows:
Sec. 1552.002. ESTABLISHMENT OF PROGRAM. (a) The
division [board of trustees] may establish a group long-term care
insurance program to provide long-term care insurance coverage for:
(1) an individual eligible to participate in the
program provided by Chapter 1551 as an employee or annuitant;
(2) the spouse, parent, or grandparent of an employee
or annuitant; and
(3) a parent of a spouse described by Subdivision (2).
(b) The division [board of trustees] may not implement a
group long-term care insurance program unless any cost or
administrative burden associated with the development of,
implementation of, or communications about the program is
incidental.
SECTION 3.050. Section 1552.003, Insurance Code, is amended
to read as follows:
Sec. 1552.003. ADMINISTERING FIRM. The division [board of
trustees] may select an administering firm to administer the group
long-term care insurance program under contract with the division
[board].
SECTION 3.051. Section 1552.006, Insurance Code, is amended
to read as follows:
Sec. 1552.006. RULES. The commissioner [board of
trustees] may adopt rules as necessary to implement the provisions
of this chapter administered by the division, including rules
specifying the coverage to be offered under the group long-term
care insurance program.
PART 2. PUBLIC SCHOOL RETIRED EMPLOYEES PROGRAM
SECTION 3.101. Section 1575.002, Insurance Code, is amended
by adding Subdivision (2-a) to read as follows:
(2-a) "Division" means the health insurance division
of the department established under Subchapter D, Chapter 31.
SECTION 3.102. Section 1575.005, Insurance Code, is amended
to read as follows:
Sec. 1575.005. ISSUANCE OF CERTIFICATE OF COVERAGE. At the
time and in the circumstances specified by the division [trustee],
a carrier shall issue to each retiree, surviving spouse, or
surviving dependent child 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.
SECTION 3.103. Section 1575.006(b), Insurance Code, is
amended to read as follows:
(b) The items listed in Subsection (a) may not be assigned
except for direct payment to benefit providers as authorized by the
division [trustee] by contract, rule, or otherwise.
SECTION 3.104. Section 1575.051, Insurance Code, is amended
to read as follows:
Sec. 1575.051. ADMINISTRATION OF GROUP PROGRAM. The
division and the trustee shall take the actions the division and the
trustee consider [it considers] necessary to devise, implement, and
administer the provisions of this chapter relating to the
respective duties of those entities regarding the group program.
SECTION 3.105. Section 1575.052, Insurance Code, is amended
to read as follows:
Sec. 1575.052. AUTHORITY TO ADOPT RULES AND PROCEDURES;
OTHER AUTHORITY. (a) The commissioner and the trustee, as
appropriate, shall [may] adopt rules, plans, procedures, and orders
as 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;
(2) basic and optional group coverage for retirees,
dependents, surviving spouses, and surviving dependent children;
(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 division [trustee] 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.
SECTION 3.106. Section 1575.053, Insurance Code, is amended
to read as follows:
Sec. 1575.053. PERSONNEL. (a) The division [trustee] may
employ persons to assist the division [trustee] in implementing
this chapter.
(b) The division [trustee] shall prescribe the duties and
compensation of each employee.
SECTION 3.107. Section 1575.054, Insurance Code, is amended
to read as follows:
Sec. 1575.054. BUDGET. Expenses incurred in developing and
administering the group program shall be paid as provided by a
budget adopted by the commissioner for the division [trustee].
SECTION 3.108. Section 1575.055, Insurance Code, is amended
to read as follows:
Sec. 1575.055. TRUSTEE [DEPARTMENT] ASSISTANCE. The
trustee [department] shall, as requested by the division [trustee],
assist the division [trustee] in implementing and administering
this chapter.
SECTION 3.109. Section 1575.102, Insurance Code, is amended
to read as follows:
Sec. 1575.102. SELF-INSURED PLANS. The division [trustee]
may self-insure any plan established under this chapter.
SECTION 3.110. Section 1575.103, Insurance Code, is amended
to read as follows:
Sec. 1575.103. PLANS MAY VARY ACCORDING TO MEDICARE
COVERAGE. For retirees and surviving spouses who are covered by
Medicare, the division [trustee] may provide one or more plans that
are different from the plans provided for retirees and surviving
spouses who are not covered by Medicare.
SECTION 3.111. Section 1575.104, Insurance Code, is amended
to read as follows:
Sec. 1575.104. TERMS OF CONTRACT. A contract for group
coverage awarded by the division [trustee] must meet the minimum
benefit and financial standards adopted by the commissioner
[trustee].
SECTION 3.112. Section 1575.106, Insurance Code, is amended
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
commissioner [trustee].
(b) The division [trustee] shall submit for competitive
bidding at least every six years each contract for coverage under
this chapter.
SECTION 3.113. Section 1575.107, Insurance Code, is amended
to read as follows:
Sec. 1575.107. CONTRACT AWARD; CONSIDERATIONS. (a) In
awarding a contract to provide group benefits under this chapter,
the division [trustee] is not required to select the lowest bid and
may consider any relevant criteria, including the bidder's:
(1) ability to service contracts;
(2) past experiences; and
(3) financial stability.
(b) If the division [trustee] awards a contract to a bidder
whose bid deviates from that advertised, the division [trustee]
shall record the deviation [and fully justify the reason for the
deviation in the minutes of the next meeting of the trustee].
SECTION 3.114. Section 1575.108, Insurance Code, is amended
to read as follows:
Sec. 1575.108. USE OF PRIVATE ENTITIES. The division
[trustee] may engage a private entity to collect contributions from
or to settle claims in connection with a plan established by the
division [trustee] under this chapter.
SECTION 3.115. Section 1575.109, Insurance Code, is amended
to read as follows:
Sec. 1575.109. USE OF HEALTH CARE PROVIDER. To provide
benefits to participants in the group program, the division
[trustee] may contract directly with a health care provider,
including a health maintenance organization, a preferred provider
organization, a carrier, an administrator, and any other qualified
vendor.
SECTION 3.116. Section 1575.151, Insurance Code, is amended
to read as follows:
Sec. 1575.151. TYPES OF COVERAGES. (a) The division
[trustee] may include in a health benefit plan any coverage it
considers advisable, including:
(1) [life insurance;
[(2) accidental death and dismemberment coverage;
[(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
(2) [(I)] supplemental benefits, supplies, and
services in accordance with this chapter[; and
[(4) protection against loss of salary].
(b) In addition to the health benefit plan described by
Subsection (a), the trustee may include in a plan for coverage other
than health coverage any coverage it considers advisable,
including:
(1) life insurance;
(2) accidental death and dismemberment coverage; and
(3) protection against loss of salary.
SECTION 3.117. Section 1575.153, Insurance Code, is amended
to read as follows:
Sec. 1575.153. BASIC COVERAGE. A retiree who applies for
coverage during an enrollment period may not be denied coverage in a
basic plan provided under this chapter unless the division
[trustee] finds under Subchapter K that the retiree defrauded or
attempted to defraud the group program.
SECTION 3.118. Section 1575.155(a), Insurance Code, is
amended to read as follows:
(a) A retiree participating in the group program is entitled
to secure for the retiree's dependents group coverage provided for
the retiree under this chapter, as determined by the division
[trustee].
SECTION 3.119. Section 1575.158(a), Insurance Code, is
amended to read as follows:
(a) The division [trustee] may, in addition to providing a
basic plan, contract for and make available an optional group
health benefit plan for retirees, dependents, surviving spouses, or
surviving dependent children.
SECTION 3.120. Section 1575.163, Insurance Code, is amended
to read as follows:
Sec. 1575.163. LIMITATIONS. The division [Teacher
Retirement System of Texas, as trustee,] may not contract for or
provide a health benefit plan that excludes from participation in
the network a general hospital that:
(1) is located in within the geographical service area
or areas of the health coverage plan that includes a county that:
(A) has a population of at least 100,000 and not
more than 175,000; and
(B) is located in the Texas-Louisiana border
region, as that term is defined in Section 2056.002(e), Government
Code; and
(2) agrees to provide medical and health care services
under the plan subject to the same terms and conditions as other
hospital providers under the plan.
SECTION 3.121. Section 1575.170(c), Insurance Code, is
amended to read as follows:
(c) Every six months the division [board of trustees] shall
submit to the comptroller and Legislative Budget Board a report
regarding any cost savings achieved in the group program through
implementation of the prior authorization requirement of this
section. A report must cover the previous six-month period.
SECTION 3.122. Section 1575.303(a), Insurance Code, is
amended to read as follows:
(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;
(2) claims for benefits under the group coverage; and
(3) money spent by the trustee or the division to
administer the group program.
SECTION 3.123. Sections 1575.351(1) and (3), Insurance
Code, are amended to read as follows:
(1) "Credentialing committee" means a credentialing
committee created by the division [trustee] under Section 1575.354.
(3) "Network" means the coordinated care network
implemented and administered by the division [trustee] under this
subchapter.
SECTION 3.124. Section 1575.352, Insurance Code, is amended
to read as follows:
Sec. 1575.352. IMPLEMENTATION AND ADMINISTRATION. The
division [trustee] may implement and administer a coordinated care
network for the group program.
SECTION 3.125. Section 1575.353, Insurance Code, is amended
to read as follows:
Sec. 1575.353. CONTRACTS WITH HEALTH CARE PROVIDERS AND
OTHERS. As the division [trustee] determines is necessary to
implement and administer the network, the division [trustee] may
contract with a health care provider or other individuals or
entities.
SECTION 3.126. Section 1575.354, Insurance Code, is amended
to read as follows:
Sec. 1575.354. CREDENTIALING COMMITTEES. The division
[trustee] may establish credentialing committees to evaluate the
qualifications of health care providers to participate in the
network.
SECTION 3.127. Section 1575.355(a), Insurance Code, is
amended to read as follows:
(a) The following are not liable for damages arising from an
act or omission of a health care provider participating in the
network:
(1) the commissioner;
(2) the division [trustee] and its [officers and]
employees[, including the board of trustees of the trustee];
(3) [(2)] the group program;
(4) [(3)] the fund; and
(5) [(4)] a member of an advisory committee to the
division [trustee].
SECTION 3.128. Section 1575.356, Insurance Code, is amended
to read as follows:
Sec. 1575.356. IMMUNITY FROM LIABILITY ARISING FROM
EVALUATION OF QUALIFICATIONS OR CARE. The following are not liable
for damages arising from an act, including a statement,
determination, report of an act, or recommendation, committed
without malice in the course of the evaluation of the
qualifications of a health care provider or of the patient care
provided by a health care provider participating in the network:
(1) the commissioner;
(2) the division [trustee] and its [officers and]
employees[, including the board of trustees];
(3) [(2)] the group program;
(4) [(3)] the fund;
(5) [(4)] a member of an advisory committee to the
division [trustee]; and
(6) [(5)] a member of a credentialing committee.
SECTION 3.129. Section 1575.363(a), Insurance Code, is
amended to read as follows:
(a) Any of the following persons named as a defendant in any
civil action filed as a result of participation in the
credentialing process may use, including in the person's own
defense, otherwise confidential information obtained for
legitimate internal business and professional purposes:
(1) the commissioner;
(2) the division [trustee] and its [officers and]
employees[, including the board of trustees];
(3) [(2)] a credentialing committee;
(4) [(3)] a person participating in a credentialing
review;
(5) [(4)] a health care provider;
(6) [(5)] the group program; and
(7) [(6)] a member of an advisory committee.
SECTION 3.130. Section 1575.406, Insurance Code, is amended
to read as follows:
Sec. 1575.406. DUTIES. The committee shall:
(1) hold public hearings on group coverage;
(2) recommend to the division [trustee] minimum
standards and features of a plan under the group program that the
committee considers appropriate; and
(3) recommend to the division [trustee] desirable
changes in rules and legislation affecting the group program.
SECTION 3.131. Sections 1575.451(b), (c), and (d),
Insurance Code, are amended to read as follows:
(b) Group health coverage purchased under this chapter must
provide for an accounting to the division [trustee] by each carrier
providing the coverage. Group coverage other than health coverage
purchased under this chapter must provide for an accounting to the
trustee 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 division or the trustee,
as applicable.
(d) Each carrier shall prepare any other report that the
division or the trustee considers necessary.
SECTION 3.132. Section 1575.452, Insurance Code, is 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 division and the
trustee shall submit a written report to the commissioner
[department] concerning the group coverages provided to and the
benefits and services being received by individuals covered under
this chapter.
SECTION 3.133. Section 1575.453, Insurance Code, is amended
to read as follows:
Sec. 1575.453. STUDY AND REPORT [BY TRUSTEE]. (a) The
trustee and the division 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 and the division shall submit a joint report
to the legislature at each regular session on the operation and
administration of this chapter.
SECTION 3.134. Section 1575.454, Insurance Code, is amended
to read as follows:
Sec. 1575.454. REPORTS BY AND EXAMINATION OF CARRIER. Each
contract entered into under this chapter between the trustee or the
division and a carrier must require the carrier to:
(1) furnish to the trustee or the division, as
appropriate, in a timely manner reasonable reports that the trustee
or the division determines are necessary to implement this chapter;
and
(2) permit the trustee or the division and the state
auditor to examine records of the carrier as necessary to implement
this chapter.
SECTION 3.135. Section 1575.056, Insurance Code, is
repealed.
SECTION 3.136. Section 1576.001, Insurance Code, is amended
by adding Subdivision (1-a) to read as follows:
(1-a) "Division" has the meaning assigned by Section
1575.002.
SECTION 3.137. Section 1576.002, Insurance Code, is amended
to read as follows:
Sec. 1576.002. ESTABLISHMENT OF PROGRAM. (a) The division
[trustee] may establish a group long-term care insurance program to
provide long-term care insurance coverage for:
(1) an active employee or retiree;
(2) the spouse of an active employee or retiree,
including a surviving spouse;
(3) a parent or grandparent of an active employee or
retiree; and
(4) a parent of the spouse of an employee or retiree,
including a parent of a surviving spouse.
(b) The division [trustee] may not implement a group
long-term care insurance program unless any cost or administrative
burden associated with the development of, implementation of, or
communications about the program is incidental.
SECTION 3.138. Section 1576.003, Insurance Code, is amended
to read as follows:
Sec. 1576.003. ADMINISTERING FIRM. The division [trustee]
may select an administering firm to administer the group long-term
care insurance program under contract with the division [trustee].
SECTION 3.139. Section 1576.006, Insurance Code, is amended
to read as follows:
Sec. 1576.006. RULES. The commissioner and the trustee, as
appropriate, may adopt rules as necessary to implement this
chapter, including rules specifying the coverage to be offered
under the group long-term care insurance program.
PART 3. ACTIVE SCHOOL EMPLOYEES PROGRAMS
SECTION 3.201. Section 1579.002, Insurance Code, is amended
by amending Subdivision (1) and adding Subdivision (3-a) to read as
follows:
(1) "Administering firm" means any entity designated
by:
(A) the division [trustee] to administer any
health coverages, services, benefits, or requirements under this
chapter and the commissioner's [trustee's] rules adopted under this
chapter; or
(B) the trustee to administer any other
coverages, services, benefits, or requirements under this chapter
and the trustee's rules adopted under this chapter.
(3-a) "Division" means the health insurance division
of the department established under Subchapter D, Chapter 31.
SECTION 3.202. Section 1579.051, Insurance Code, is amended
to read as follows:
Sec. 1579.051. ADMINISTRATION OF GROUP PROGRAM. (a)
Except as provided by Subsection (b), the [The] Teacher Retirement
System of Texas, as trustee, shall implement and administer the
uniform group coverage program described by this chapter.
(b) The division shall implement and administer each health
coverage plan described by this chapter.
SECTION 3.203. Section 1579.052, Insurance Code, is amended
by amending Subsection (a) and adding Subsection (e) to read as
follows:
(a) Except as provided by Subsection (e), the [The] trustee
may adopt rules relating to the program as considered necessary by
the trustee.
(e) Notwithstanding Subsections (a)-(d), the commissioner
shall adopt rules relating to health coverage plans offered under
the program and administered by the division.
SECTION 3.204. Section 1579.053, Insurance Code, is amended
to read as follows:
Sec. 1579.053. PERSONNEL. The trustee and the division may
hire and compensate employees as necessary to implement the
program.
SECTION 3.205. Section 1579.054, Insurance Code, is amended
to read as follows:
Sec. 1579.054. COMPETITIVE BIDDING REQUIREMENTS; RULES. A
contract to provide group health coverage under this chapter may be
awarded only through competitive bidding under rules adopted by the
commissioner [trustee].
SECTION 3.206. Section 1579.055, Insurance Code, is amended
to read as follows:
Sec. 1579.055. CONTRACT AWARD; CONSIDERATIONS. (a) In
awarding a contract to provide group benefits under this chapter,
the trustee or the division is not required to select the lowest bid
and may consider also any relevant criteria, including the
bidder's:
(1) ability to service contracts;
(2) past experiences; and
(3) financial stability.
(b) If the trustee awards a contract to a bidder whose bid
deviates from that advertised, the trustee shall record the
deviation and fully justify the reason for the deviation in the
minutes of the next board meeting. If the division awards a
contract to a bidder whose bid deviates from that advertised, the
division shall record the deviation and fully justify the reason
for the deviation.
SECTION 3.207. Section 1579.101, Insurance Code, is amended
to read as follows:
Sec. 1579.101. PLANS OF GROUP HEALTH COVERAGES. (a) The
commissioner [trustee] by rule shall establish plans of group
health coverages for employees participating in the program and
their dependents.
(b) The plans must include at least two tiers of group
health coverage, with coverage at different levels in each tier,
ranging from the catastrophic care coverage plan to the primary
care coverage plan. [Each tier must contain a health coverage
plan.]
(c) The commissioner [trustee] by rule shall define the
requirements of each coverage plan and tier of coverage.
(d) Comparable coverage plans of each tier of health
coverage established must be offered to employees of all
participating entities.
SECTION 3.208. Section 1579.102, Insurance Code, is amended
to read as follows:
Sec. 1579.102. CATASTROPHIC CARE COVERAGE PLAN. The health
coverage provided under the catastrophic care coverage plan shall
be prescribed by the commissioner [trustee] by rule and must
provide coverage at least as extensive as the coverage provided
under the TRS-Care 2 plan operated by the division under Chapter
1575.
SECTION 3.209. Section 1579.103, Insurance Code, is amended
to read as follows:
Sec. 1579.103. PRIMARY CARE COVERAGE PLAN. The health
coverage provided under the primary care coverage plan must be
comparable in scope and, to the greatest extent possible, in cost to
the health coverage provided under Chapter 1551.
SECTION 3.210. Section 1579.154, Insurance Code, is amended
to read as follows:
Sec. 1579.154. 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 commissioner, 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 and the
division of the school's intent to participate in the program in the
manner and within the time required by rules adopted by the trustee
and the commissioner, as appropriate.
SECTION 3.211. Section 1579.202(b), Insurance Code, is
amended to read as follows:
(b) An employee described by Subsection (a) who applies for
coverage during an open enrollment period prescribed by the trustee
is automatically covered by the catastrophic care coverage plan
unless the employee:
(1) specifically waives health coverage under this
chapter in the manner prescribed by the division;
(2) selects a higher tier coverage plan; or
(3) is expelled from the program.
SECTION 3.212. Sections 1579.203(a) and (b), Insurance
Code, are amended to read as follows:
(a) A participating employee may select coverage in any
coverage plan offered under this chapter [by the trustee].
(b) The employee is not required to continue participation
in the health coverage plan initially selected and may select a
higher or lower tier coverage plan than the plan initially selected
by the employee in the manner provided by rules adopted by the
commissioner [trustee].
SECTION 3.213. Section 1579.303, Insurance Code, is amended
to read as follows:
Sec. 1579.303. PAYMENTS FROM FUND. The trustee and the
division may use amounts in the fund only to provide group coverages
under this chapter and to pay the expenses of administering the
program.
PART 4. PROGRAMS FOR CERTAIN HIGHER EDUCATION EMPLOYEES
SECTION 3.301. Section 1601.003, Insurance Code, is amended
by amending Subdivision (1) and adding Subdivision (3-a) to read as
follows:
(1) "Administering carrier" means a carrier or
organization that is:
(A) qualified to engage in business in this
state; and
(B) designated by a system or by the division to
administer services, benefits, insurance coverages, or
requirements in accordance with this chapter.
(3-a) "Division" means the health insurance division
of the department established under Subchapter D, Chapter 31.
SECTION 3.302. Section 1601.051, Insurance Code, is amended
to read as follows:
Sec. 1601.051. ADMINISTRATION AND IMPLEMENTATION. (a) A
system shall:
(1) implement a uniform program for the benefit of its
employees and retired employees; and
(2) determine basic procedural and administrative
practices for insurance coverage provided under this chapter.
(b) Notwithstanding Subsection (a), the division shall
administer a health benefit plan offered under the uniform program.
SECTION 3.303. Section 1601.052, Insurance Code, is amended
to read as follows:
Sec. 1601.052. RULEMAKING AUTHORITY. A system shall adopt
rules consistent with this chapter as it considers necessary to
implement this chapter and its purposes. The commissioner shall
adopt rules as necessary to implement a health benefit plan
administered by the division under this chapter.
SECTION 3.304. Section 1601.053, Insurance Code, is amended
to read as follows:
Sec. 1601.053. GENERAL DUTIES RELATING TO COVERAGE. (a) A
system and the division shall jointly:
(1) determine basic coverage standards that must be
comparable to those commonly provided:
(A) in private industry; and
(B) to employees of another agency or an
institution of higher education in this state under Chapter 1551;
and
(2) establish procedures to allow each covered
employee and retired employee to obtain prompt action regarding
claims pertaining to coverages provided under this chapter.
(b) In designing a coverage plan, a system and the division
may consider existing local conditions.
SECTION 3.305. Section 1601.054, Insurance Code, is amended
to read as follows:
Sec. 1601.054. COMPETITIVE BIDDING REQUIRED. A system and
the division shall ensure that [submit] the uniform program,
including any agreement under which a carrier is engaged to
administer a self-insured program, is submitted for competitive
bidding at least every six years.
SECTION 3.306. Section 1601.055, Insurance Code, is amended
to read as follows:
Sec. 1601.055. IDENTIFICATION OF ADMINISTRATIVE COSTS IN
BIDS. A system and the division shall include in its respective bid
documents for the various coverages a provision calling for each
bidder to identify [the system's] administrative costs as a
distinguishable figure and to enumerate the services the bidder
will render in exchange for the administrative costs.
SECTION 3.307. Section 1601.057, Insurance Code, is amended
to read as follows:
Sec. 1601.057. SELECTION OF BIDS. (a) A system or the
division is not required to select the lowest bid under Section
1601.054 but shall take into consideration other relevant criteria,
such as ability to service contracts, past experience, and
financial stability.
(b) If a system selects a carrier whose bid differs from
that advertised, the governing board of the system shall fully
justify and record the reasons for the deviation in the minutes of
the next meeting of the governing board. If the division or the
system selects a carrier whose bid differs from that advertised,
the division shall fully justify and record the reasons for the
deviation.
SECTION 3.308. Section 1601.058, Insurance Code, is amended
to read as follows:
Sec. 1601.058. SELECTION OF HEALTH MAINTENANCE
ORGANIZATIONS. The division [A system] shall select and contract
for services performed by health maintenance organizations that are
approved by this state to offer health care services in specific
areas of the state to eligible employees and retired employees.
SECTION 3.309. Section 1601.059, Insurance Code, is amended
to read as follows:
Sec. 1601.059. CERTIFICATE OF COVERAGE. A system or the
division, as appropriate, shall ensure that each employee and
retired employee participating under this chapter is issued a
certificate of coverage that states:
(1) the benefits to which the participant is entitled;
(2) to whom the benefits are payable;
(3) to whom a claim must be submitted; and
(4) the provisions of the plan document, in summary
form, that principally affect the participant.
SECTION 3.310. Sections 1601.060(a) and (b), Insurance
Code, are amended to read as follows:
(a) A carrier providing coverage purchased under this
chapter to a system shall provide an accounting for each line of
coverage to the system and the division, as appropriate, not later
than the 120th day after the end of each plan year.
(b) The accounting must be in a form acceptable to the
system and the division.
SECTION 3.311. Section 1601.061(b), Insurance Code, is
amended to read as follows:
(b) The system or the division, as appropriate, may use
money in the special reserve at its discretion, including for:
(1) providing additional coverage for participating
employees or retired employees;
(2) offsetting necessary rate increases; or
(3) reducing contributions to the coverage by
participating employees or retired employees.
SECTION 3.312. Section 1601.062, Insurance Code, is amended
to read as follows:
Sec. 1601.062. REPORTS AND RECORDS BY ADMINISTERING
CARRIER. Each contract entered into under this chapter between a
system or the division and an administering carrier must:
(1) require the administering carrier to provide
reasonable reports that the system or the division determines are
necessary for the system to perform its functions under this
chapter; and
(2) permit the system, the division, and
representatives of the state auditor to examine records of the
administering carrier as necessary to accomplish the purposes of
this chapter.
SECTION 3.313. Section 1601.104(a), Insurance Code, is
amended to read as follows:
(a) The division [A system] shall automatically provide the
basic coverage to each full-time employee unless the employee has:
(1) waived participation in the basic coverage; or
(2) selected an optional coverage plan.
SECTION 3.314. Section 1601.107, Insurance Code, is amended
to read as follows:
Sec. 1601.107. COVERAGE FOR DEPENDENTS. An individual who
is eligible to participate in the uniform program under Section
1601.101 or 1601.102 is entitled to secure for a dependent of the
individual any group coverages provided under this chapter for
dependents under rules adopted by the applicable system and the
commissioner, as appropriate.
SECTION 3.315. Section 1601.109(b), Insurance Code, is
amended to read as follows:
(b) The division [A system] may not contract for or provide
for group insurance or HMO coverage or provide self-insured
coverage, that:
(1) excludes or limits coverage or services for
acquired immune deficiency syndrome, as defined by the Centers for
Disease Control and Prevention of the United States Public Health
Service, or human immunodeficiency virus infection; or
(2) provides coverage for serious mental illness that
is less extensive than the coverage provided for any other physical
illness.
SECTION 3.316. Sections 1601.110(a) and (b), Insurance
Code, are amended to read as follows:
(a) In this section, "disease management services" means
services to assist an individual manage a disease or other chronic
health condition, such as heart disease, diabetes, respiratory
illness, end-stage renal disease, HIV infection, or AIDS, and with
respect to which the division [governing board of a system]
identifies populations requiring disease management.
(b) A health benefit plan provided under this chapter must
provide disease management services or coverage for disease
management services in the manner required by the division
[governing board of a system], including:
(1) patient self-management education;
(2) provider education;
(3) evidence-based models and minimum standards of
care;
(4) standardized protocols and participation
criteria; and
(5) physician-directed or physician-supervised care.
SECTION 3.317. Section 1601.151(a), Insurance Code, is
amended to read as follows:
(a) Notwithstanding any other provisions of this chapter,
the governing board of a system may:
(1) self-insure a plan provided under this chapter
other than a health benefit plan; and
(2) hire a carrier to administer the system's
self-insured plans [uniform program].
SECTION 3.318. Section 1601.152, Insurance Code, is amended
to read as follows:
Sec. 1601.152. CAFETERIA PLAN. (a) The division, in
conjunction with the governing board of a system, may develop,
implement, and administer a cafeteria plan.
(b) The division [governing board] may include in the
cafeteria plan any benefit that may be included in a cafeteria plan
under federal law.
(c) The division [governing board] may cooperate and work
with and enter into a necessary contract or agreement with an
independent and qualified agency, person, or entity to:
(1) develop, implement, or administer a cafeteria
plan; or
(2) assist in those activities.
(d) The commissioner [governing board] may adopt an order
terminating the cafeteria plan and providing a procedure for the
orderly withdrawal of the system and its employees from the
cafeteria plan if the commissioner and the governing board
determine [determines] that a cafeteria plan adopted under this
section is no longer advantageous to the system and its employees.
SECTION 3.319. Section 1601.153, Insurance Code, is amended
to read as follows:
Sec. 1601.153. GROUP CONTRACTS [SYSTEMS MAY JOIN IN
PROCURING INSURANCE]. The division [systems] may [join together
to] procure one or more group contracts with an insurance company
authorized to engage in business in this state to insure the
employees and retired employees of each participating system.
SECTION 3.320. Section 1601.154(a), Insurance Code, is
amended to read as follows:
(a) A system may join with a board of trustees that
administers optional or voluntary coverages under the uniform
program established under Chapter 1551 or optional or voluntary
coverages under the group program established under Chapter 1575 to
provide long-term care insurance coverage.
SECTION 3.321. Section 1601.155, Insurance Code, is amended
to read as follows:
Sec. 1601.155. REINSURANCE. (a) The division may arrange
with an administering carrier issuing a health insurance policy
under this chapter for the reinsurance of portions of the total
amount of insurance under the policy with other carriers that elect
to participate in the reinsurance.
(b) A system may arrange with an administering carrier
issuing a policy under this chapter other than a health insurance
policy for the reinsurance of portions of the total amount of
insurance under the policy with other carriers that elect to
participate in the reinsurance.
SECTION 3.322. Section 1601.204(b), Insurance Code, is
amended to read as follows:
(b) The authorization must be:
(1) in writing or performed electronically; and
(2) in a form satisfactory to the system and the
division.
SECTION 3.323. Section 1601.210, Insurance Code, is amended
to read as follows:
Sec. 1601.210. PROVISION OF NECESSARY INFORMATION. The
Teacher Retirement System of Texas, Optional Retirement Program
carriers, [and] Employees Retirement System of Texas, and the
division shall provide to each system information the system
considers necessary to provide retired employees with the coverages
and system contributions provided under this chapter.
SECTION 3.324. Sections 1601.307(a) and (b), Insurance
Code, are amended to read as follows:
(a) The advisory committee of a system shall cooperate and
work with the governing board of the system and the division in
coordinating and correlating the administration of the uniform
program among the various components, units, and agencies of the
system.
(b) Members of the advisory committee shall cooperate and
work with the governing board of the system and the division as
advisors in the development, implementation, coordination, and
administration of the uniform program among the various components,
units, and agencies of the system.
SECTION 3.325. Section 1625.003, Insurance Code, is amended
to read as follows:
Sec. 1625.003. RULES. The board of trustees, [and] the
governing boards of institutions of higher education, and the
commissioner, as appropriate, shall [may] adopt rules as necessary
to implement this chapter.
SECTION 3.326. Section 1625.004, Insurance Code, is amended
to read as follows:
Sec. 1625.004. MEMORANDUM OF UNDERSTANDING. The board of
trustees, [and] the governing boards of institutions of higher
education, and the commissioner may enter into memoranda of
understanding with one another to implement this chapter.
SECTION 3.327. Section 1625.005, Insurance Code, is amended
to read as follows:
Sec. 1625.005. UNIFORM PROCEDURES. The governing board of
an institution of higher education, [and] the board of trustees,
and the commissioner may:
(1) adopt uniform procedures to implement a transfer
under this chapter; and
(2) impose conditions necessary to ensure the
efficient operation of the programs over which they have [each has]
jurisdiction.
ARTICLE 4. TRANSITION
SECTION 4.001. The commissioner of insurance shall adopt
rules and issue orders as necessary to establish the health
insurance division of the Texas Department of Insurance not later
than November 1, 2005.
SECTION 4.002. (a) Not later than January 1, 2006, the
commissioner of insurance, in consultation with the board of
trustees of the Employees Retirement System of Texas, shall adopt
rules as necessary to administer Chapters 1551 and 1552, Insurance
Code, as amended by this Act.
(b) Not later than January 1, 2006, the commissioner of
insurance, in consultation with the board of trustees of the
Teachers Retirement System of Texas, shall adopt rules as necessary
to administer Chapters 1575, 1576, and 1579, Insurance Code, as
amended by this Act.
(c) Not later than January 1, 2006, the commissioner of
insurance, in consultation with the board of regents of The
University of Texas System and the board of regents of The Texas A&M
University System, shall adopt rules as necessary to administer
Chapters 1601 and 1625, Insurance Code, as amended by this Act.
SECTION 4.003. Effective September 1, 2006, the changes in
law made by this Act apply to coverage offered under Chapter 1551,
1552, 1575, 1576, 1579, 1601, or 1625.
SECTION 4.004. To the extent of any conflict, this Act
prevails over another Act of the 79th Legislature, Regular Session,
2005, relating to nonsubstantive additions to and corrections in
enacted codes (the General Code Update bill).
SECTION 4.005. This Act takes effect September 1, 2005.