By: Zaffirini S.B. No. 654

A BILL TO BE ENTITLED

AN ACT

relating to continued health coverage for employees of certain political subdivisions.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The heading to Chapter 175, Local Government Code, is amended to read as follows:

CHAPTER 175. RIGHT OF [CERTAIN MUNICIPAL AND COUNTY] EMPLOYEES OF

CERTAIN POLITICAL SUBDIVISIONS TO PURCHASE CONTINUED HEALTH

COVERAGE AT RETIREMENT

SECTION 2. Section 175.001, Local Government Code, is amended to read as follows:

Sec. 175.001. APPLICABILITY. This chapter applies to a person who:

(1) retires from:

(A) county employment in a county with a population of 75,000 or more;

(B) employment by an appraisal district in a county with a population of 75,000 or more; or

(C) municipal employment in a municipality with a population of 25,000 or more; and

(2) is entitled to receive retirement benefits from a county, appraisal district, or municipal retirement plan.

SECTION 3. Subsections (a) and (b), Section 175.002, Local Government Code, are amended to read as follows:

(a) A person to whom this chapter applies is entitled to purchase continued health benefits coverage for the person and the person's dependents as provided by this chapter unless the person is eligible for group health benefits coverage through another employer. The coverage shall be provided under the group health insurance plan or group health coverage plan provided by or through the employing political subdivision [county or municipality] to its employees.

(b) To receive continued coverage under this chapter, the person must inform the employing political subdivision [county or municipality], not later than the day on which the person retires from the political subdivision [county or municipality], that the person elects to continue coverage.

SECTION 4. Sections 175.003 through 175.007, Local Government Code, are amended to read as follows:

Sec. 175.003. LEVEL OF COVERAGE. (a) The person may elect to cover the same persons who were covered under the political subdivision's [county's or municipality's] group health insurance plan or group health coverage plan through the person at the time the person left [county or municipal] employment with the political subdivision, or the person may elect to discontinue coverage for one or more persons. A person who was not covered under the plan at the time the person to whom this chapter applies left [county or municipal] employment with the political subdivision is not eligible for coverage under this chapter.

(b) Except as provided by Subsections (c) and (d), the level of coverage provided under this chapter at any given time is the same level of coverage provided to current employees of the political subdivision [county or municipality] at that time.

(c) A political subdivision [county or municipality] may substitute Medicare supplement health benefits coverage as the coverage provided for a person who receives health benefits coverage under this chapter, including a dependent, after the date that the person becomes eligible for federal Medicare benefits.

(d) The person may elect to continue coverage at a reduced level, if offered by the political subdivision [county or municipality].

Sec. 175.004. PAYMENT FOR COVERAGE. A person who is entitled to continued coverage under this chapter is entitled to make payments for the coverage at the same time and to the same entity that payments for the coverage are made by current employees of the political subdivision [county or municipality].

Sec. 175.005. DUTY TO INFORM RETIREE OF RIGHTS. A political subdivision [county and a municipality] shall provide written notice to a person to whom this chapter may apply of the person's rights under this chapter not later than the date the person retires from the political subdivision [county or municipality]. A political subdivision [county or municipality] may fulfill its requirements under this section by placing the written notice required by this section in a personnel manual or employee handbook that is available to all employees.

Sec. 175.006. CERTAIN MATTERS NOT AFFECTED. This chapter does not:

(1) prohibit a political subdivision [county or municipality] from uniformly changing the group health insurance plan or group health coverage plan provided for its employees and retirees;

(2) affect the definition of a dependent or the eligibility requirements for a dependent under a plan;

(3) prohibit a political subdivision [county or municipality] from agreeing with a person to deduct the cost of coverage provided under this chapter from a pension check;

(4) prohibit a political subdivision [county or municipality] from agreeing with a person to pay for the coverage provided under this chapter provided the person reimburses the political subdivision [county or municipality] for the actual cost of the coverage;

(5) prohibit a political subdivision [county, municipality,] or a pool established under Chapter 172 from increasing the cost of group health coverage to its employees and to persons covered under this chapter to reflect the increased cost, if any, attributable to compliance with this chapter;

(6) affect the right of a political subdivision [county or municipality] to provide coverage under Chapter 172; or

(7) affect the right of a political subdivision [county, municipality,] or a pool established under Chapter 172 to offer the coverage at the same rate that is available to active employees or to offer the coverage at a reasonable or actual rate established for retirees that may be greater than the rate offered to active employees.

Sec. 175.007. EXEMPTIONS. (a) A political subdivision [county or municipality] that does not provide health benefits coverage through a self-insured plan or a plan authorized under Chapter 172 is not required to provide coverage under this chapter if the political subdivision [county or municipality] makes a good faith effort to purchase insurance coverage that includes coverage required by this chapter from an insurance company authorized to do business in this state and from pools established under Chapter 172 but is unable to find a provider for the coverage.

(b) A political subdivision [county or municipality] that is providing coverage substantially similar to or better than the coverage required by this chapter is exempt from this chapter.

SECTION 5. (a) Chapter 175, Local Government Code, as amended by this Act, applies according to its terms to all eligible persons who leave employment with an appraisal district on or after January 1, 2010.

(b) An appraisal district that is required by Chapter 175, Local Government Code, as amended by this Act, to provide continued health benefits coverage but that is not allowed to provide the coverage under the terms of the appraisal district's existing group health plan shall ensure that the required continued health benefits coverage is provided for in any new plan that is adopted by the appraisal district on or after January 1, 2010, unless the appraisal district is exempted under Section 175.007, Local Government Code, as amended by this Act.

SECTION 6. 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.