81R8358 PB-D
 
  By: Leibowitz H.B. No. 1416
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to a health coverage or compensation supplementation
  program for active school employees.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle H, Title 8, Insurance Code, is amended
  by adding Chapter 1580 to read as follows:
  CHAPTER 1580. ACTIVE EMPLOYEE HEALTH COVERAGE
  OR COMPENSATION SUPPLEMENTATION
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 1580.001.  DEFINITIONS. In this chapter:
               (1)  "Cafeteria plan" means a plan as defined and
  authorized by Section 125, Internal Revenue Code of 1986.
               (2)  "Employee" means a participating member of the
  Teacher Retirement System of Texas who:
                     (A)  is employed by a school district, other
  educational district whose employees are members of the Teacher
  Retirement System of Texas, participating charter school, or
  regional education service center; and
                     (B)  is not a retiree covered under the program
  established under Chapter 1575.
               (3)  "Participating charter school" means an
  open-enrollment charter school established under Subchapter D,
  Chapter 12, Education Code, that participates in the program
  established under Chapter 1579.
               (4)  "Regional education service center" means a
  regional education service center established under Chapter 8,
  Education Code.
               (5)  "Trustee" means the Teacher Retirement System of
  Texas.
         Sec. 1580.002.  AUTHORITY TO ADOPT RULES; OTHER AUTHORITY.
  (a) The trustee may adopt rules to implement this chapter.
         (b)  The trustee may enter into interagency contracts with
  any agency of this state for the purpose of assistance in
  implementing this chapter.
  [Sections 1580.003-1580.050 reserved for expansion]
  SUBCHAPTER B. DISTRIBUTION OF STATE FUNDS BY TRUSTEE
         Sec. 1580.051.  DISTRIBUTION BY TRUSTEE. Each year, the
  trustee shall deliver to each school district, including a school
  district that is ineligible for state aid under Chapter 42,
  Education Code, each other educational district that is a member of
  the Teacher Retirement System of Texas, each participating charter
  school, and each regional education service center state funds in
  an amount, as determined by the trustee, equal to the product of the
  number of active employees employed by the district, school, or
  service center multiplied by $1,000 or a greater amount as provided
  by the General Appropriations Act for purposes of this chapter.
         Sec. 1580.052.  EQUAL INSTALLMENTS. The trustee shall
  distribute funds under this chapter in equal monthly installments.
         Sec. 1580.053.  FUNDS HELD IN TRUST. All funds received by a
  school district, other educational district, participating charter
  school, or regional education service center under this chapter are
  held in trust for the benefit of the active employees on whose
  behalf the district, school, or service center received the funds.
         Sec. 1580.054.  RECOVERY OF DISTRIBUTIONS. The trustee is
  entitled to recover from a school district, other educational
  district, participating charter school, or regional education
  service center any amount distributed under this chapter to which
  the district, school, or service center was not entitled.
         Sec. 1580.055.  DETERMINATION OF TRUSTEE FINAL. A
  determination by the trustee under this subchapter is final and may
  not be appealed.
  [Sections 1580.056-1580.100 reserved for expansion]
  SUBCHAPTER C. EMPLOYEE ELECTION
         Sec. 1580.101.  EMPLOYEE COVERED BY CAFETERIA PLAN. (a) If
  an active employee is covered by a cafeteria plan of a school
  district, other educational district, participating charter
  school, or regional education service center, the state
  contribution under this chapter shall be deposited in the cafeteria
  plan, and the employee may elect among the options provided by the
  cafeteria plan.
         (b)  A cafeteria plan receiving state contributions under
  this chapter may include a medical savings account option and must
  include, at a minimum, the following options:
               (1)  a health care reimbursement account;
               (2)  a benefit or coverage other than that provided
  under Chapter 1579, or any employee coverage or dependent coverage
  available under Chapter 1579 but not otherwise fully funded by the
  state or the employer contributions, any of which must be a
  "qualified benefit" under Section 125, Internal Revenue Code of
  1986;
               (3)  an option for the employee to receive the state
  contribution as supplemental compensation; or
               (4)  an option to divide the state contribution among
  two or more of the other options provided under this subsection.
         Sec. 1580.102.  EMPLOYEE NOT COVERED BY CAFETERIA PLAN. If
  an active employee is not covered by a cafeteria plan of a school
  district, other educational district, participating charter
  school, or regional education service center, the state
  contribution under this chapter shall be paid to the active
  employee as supplemental compensation.
         Sec. 1580.103.  SUPPLEMENTAL COMPENSATION. Supplemental
  compensation under this subchapter must be in addition to the rate
  of compensation that:
               (1)  the school district, other educational district,
  participating charter school, or regional education service center
  paid the employee in the preceding school year; or
               (2)  the district, school, or service center would have
  paid the employee in the preceding school year if the employee had
  been employed by the district, school, or service center in the same
  capacity in the preceding school year.
         Sec. 1580.104.  TIME FOR ELECTION. For each state fiscal
  year, an election under this subchapter must be made before the
  later of:
               (1)  August 1 of the preceding state fiscal year; or
               (2)  the 31st day after the date the employee is hired.
         Sec. 1580.105.  WRITTEN EXPLANATION; ELECTION FORM. (a)
  The trustee shall prescribe and distribute to each school district,
  other educational district, participating charter school, and
  regional education service center:
               (1)  a model explanation written in English and Spanish
  of the options active employees may elect under this section and the
  effect of electing each option; and
               (2)  an election form to be completed by active
  employees.
         (b)  Each state fiscal year, a school district, other
  educational district, participating charter school, or regional
  education service center shall prepare and distribute to each
  active employee a written explanation in English and Spanish, as
  appropriate, of the options the employee may elect under this
  section. The explanation must be based on the model explanation
  prepared by the trustee under Subsection (a) and must reflect all
  available health coverage options available to the employee. The
  explanation must be distributed to an employee before the later of:
               (1)  July 1 of the preceding state fiscal year; or
               (2)  the fifth day after the date the employee is hired.
         (c)  The written explanation under Subsection (b) must be
  accompanied by a copy of the election form prescribed under
  Subsection (a)(2).
         Sec. 1580.106.  RETURN OF UNENCUMBERED FUNDS. Any
  unencumbered funds that are returned to the school district from
  accounts established under Section 1580.101 may be used only to
  provide employee compensation, benefits, or both.
  [Sections 1580.107-1580.150 reserved for expansion]
  SUBCHAPTER D. MEDICAL SAVINGS ACCOUNT
         Sec. 1580.151.  DEFINITION. In this subchapter, "qualified
  health care expense" means an expense paid by an employee for
  medical care, as defined by Section 213(d), Internal Revenue Code
  of 1986, for the employee or the employee's dependents, as defined
  by Section 152, Internal Revenue Code of 1986.
         Sec. 1580.152.  RULES. The trustee, by rule, shall specify
  the requirements for a medical savings account established under
  this chapter.
         Sec. 1580.153.  QUALIFICATION OF ACCOUNT. (a) The trustee
  shall request in writing a ruling or opinion from the Internal
  Revenue Service as to whether the medical savings accounts
  established under this chapter and the state rules governing those
  accounts qualify the accounts for appropriate federal tax
  exemptions.
         (b)  Based on the response of the Internal Revenue Service
  under Subsection (a), the trustee shall:
               (1)  modify the rules, plans, and procedures adopted
  under this subchapter as necessary to ensure the qualification of
  those accounts for appropriate federal tax exemptions; and
               (2)  certify the information regarding federal tax
  qualifications to the comptroller.
         Sec. 1580.154.  EMPLOYEE ELECTION. An employee who elects
  under Section 1580.101 to have state funds distributed under this
  chapter placed in a medical savings account may use the money in
  that account only for a qualified health care expense.
         SECTION 2.  Subchapter D, Chapter 22, Education Code, is
  repealed.
         SECTION 3.  The functions and duties of the Texas Education
  Agency with respect to the compensation supplementation program
  established under Subchapter D, Chapter 22, Education Code, as that
  subchapter existed before repeal under this Act, and any
  appropriation relating to that program, are transferred to the
  Teacher Retirement System of Texas. A reference in law to the Texas
  Education Agency with respect to the compensation supplementation
  program means the Teacher Retirement System of Texas.
         SECTION 4.  The changes in law made by this Act apply
  beginning with the 2009-2010 school year.
         SECTION 5.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2009.