82R3090 KCR-F

By: Laubenberg H.B. No. 1362

A BILL TO BE ENTITLED

AN ACT

relating to the creation of a voluntary consumer-directed health plan for certain individuals eligible to participate in the insurance coverage provided under the Texas Employees Group Benefits Act and their qualified dependents.

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

SECTION 1. Chapter 1551, Insurance Code, is amended by adding Subchapter J to read as follows:

SUBCHAPTER J. STATE CONSUMER-DIRECTED HEALTH PLAN

Sec. 1551.451. DEFINITIONS. In this subchapter:

(1) "High deductible health plan" means a health benefit plan that complies with Section 223(c), Internal Revenue Code of 1986, and other federal law.

(2) "Plan enrollee" means a participant who is enrolled in the plan established under this subchapter.

(3) "Qualified medical expense" means an expense paid by a plan enrollee for medical care, as defined by Section 213(d), Internal Revenue Code of 1986, for the enrollee or the enrollee's dependents as defined by Section 152, Internal Revenue Code of 1986.

Sec. 1551.452. ESTABLISHMENT OF STATE CONSUMER-DIRECTED HEALTH PLAN. (a) The state consumer-directed health plan is established for the benefit of individuals eligible to participate in the group benefits program and those individuals' eligible dependents.

(b) After the board of trustees adopts rules necessary to administer this subchapter, the board shall:

(1) establish health savings accounts under this subchapter and administer or select an administrator for the accounts;

(2) finance or purchase a high deductible health plan that:

(A) is an integral part of the state consumer-directed health plan; and

(B) provides health benefit coverage, including preventive health care, to a plan enrollee in the state consumer-directed health plan and to the dependents of a plan enrollee in accordance with Section 1551.456; and

(3) provide to individuals eligible to participate in the group benefits program information regarding the option to participate in and operation of the state consumer-directed health plan established under this subchapter.

(c) If the board of trustees purchases a high deductible health plan under this subchapter, Sections 1551.215-1551.218 apply to the high deductible health plan.

(d) In adopting rules and administering health savings accounts or selecting administrators for health savings accounts under this subchapter, the board of trustees shall ensure that the health savings accounts are qualified for appropriate federal tax exemptions.

Sec. 1551.453. PARTICIPATION IN STATE CONSUMER-DIRECTED HEALTH PLAN; EFFECT OF PARTICIPATION. (a) The board of trustees shall offer individuals eligible to participate in the basic coverage plan the option of waiving participation in the basic coverage plan and instead electing participation in the state consumer-directed health plan.

(b) For purposes of this chapter, participation in the state consumer-directed health plan is considered participation in the group benefits program, and Sections 1551.301, 1551.303, 1551.305, and 1551.306 apply to participation in the state consumer-directed health plan in the same manner that those sections apply to the basic coverage plan.

Sec. 1551.454. ACCOUNT ADMINISTRATOR. (a) The account administrator selected to administer a health savings account established under this subchapter must be a person:

(1) qualified to serve as trustee under Section 223(d)(1)(B), Internal Revenue Code of 1986, and the rules adopted under that section; and

(2) experienced in administering health savings accounts or other similar trust accounts.

(b) An account administrator is the fiduciary of a plan enrollee who has a health savings account established under this subchapter.

(c) Section 1551.056(b) does not apply to the account administrator.

Sec. 1551.455. PARTICIPATION IN PROGRAM. (a) Each individual eligible to participate in the basic coverage may choose instead to participate in the state consumer-directed health plan if the plan enrollee is an eligible individual under Section 223(c)(1), Internal Revenue Code of 1986. The dependents of a plan enrollee may participate in the state consumer-directed health plan in accordance with Section 1551.456.

(b) A plan enrollee waives basic plan coverage and must be enrolled in a high deductible health plan.

(c) Participation in the state consumer-directed health plan qualifies a plan enrollee to receive a contribution to a health savings account under Section 1551.458. An individual who elects not to participate in the plan is not eligible to receive a contribution under that section.

(d) A plan enrollee is subject to Subchapter H in the same manner as an individual who participates in the basic coverage offered under the group benefits program.

(e) Under this section, the board of trustees has exclusive authority to determine an individual's eligibility to participate in the state consumer-directed health plan and shall adopt rules regarding eligibility to participate in the plan.

Sec. 1551.456. COVERAGE FOR DEPENDENTS; REQUIRED CONTRIBUTIONS. (a) Subject to Subsection (d), a plan enrollee is entitled to obtain for the enrollee's dependents coverage in the state consumer-directed health plan in the manner determined by the board of trustees.

(b) The plan enrollee shall make any required additional contribution payments for the dependent coverage in the manner prescribed by the board of trustees.

(c) Amounts contributed by a plan enrollee under this section may be:

(1) used to pay the cost of coverage in the state consumer-directed health plan not paid by the state under Section 1551.458(b)(1); or

(2) contributed as additional amounts to the health savings account provided to the enrollee.

(d) A covered dependent of a plan enrollee:

(1) is subject to Subchapter H in the same manner as a dependent who is covered by the basic coverage offered under the group benefits program; and

(2) must be a dependent for purposes of:

(A) Section 152, Internal Revenue Code of 1986; and

(B) Section 1551.004.

Sec. 1551.457. IDENTIFICATION CARDS FOR PLAN ENROLLEES. (a) The board of trustees or the account administrator, as applicable, shall issue to each plan enrollee an identification card.

(b) The board of trustees or the account administrator, as applicable, shall issue a duplicate identification card to each plan enrollee's dependent for whom qualified medical expenses may be paid out of a health savings account established under this subchapter.

Sec. 1551.458. STATE CONTRIBUTION. (a) For each plan enrollee, from the state contribution that would otherwise be made for basic coverage for the enrollee, the state shall annually contribute:

(1) to a high deductible health plan provided under this subchapter, the amount that is necessary to pay the cost of coverage under the high deductible health plan and does not exceed the amount the state annually contributes for a full-time or part-time employee, as applicable, who is covered by the basic coverage; and

(2) to the enrollee's health savings account, any remainder of the state contribution after payment of coverage under Subdivision (1).

(b) For each plan enrollee's dependent covered under this subchapter from the state contribution that would otherwise be made for basic coverage for the dependent, the state shall annually contribute:

(1) to a high deductible health plan provided under this subchapter, the same percentage of the cost of coverage under the high deductible health plan as the state annually contributes for dependent coverage in the basic coverage; and

(2) to the enrollee's health savings account, as allowed under federal law, any remainder of the state contribution after payment for coverage under Subdivision (1).

(c) For a calendar year, the amount of state contributions under Subsections (a)(2) and (b)(2), in the aggregate, may not exceed the sum of the monthly limitations imposed by federal law for health savings accounts.

Sec. 1551.459. PLAN ENROLLEE CONTRIBUTIONS. (a) Each plan enrollee, in accordance with Section 1551.305, shall contribute any amount required to cover the selected participation in the state consumer-directed health plan that exceeds the state contribution amount under Section 1551.458.

(b) A plan enrollee may contribute any amount allowed under federal law to the enrollee's health savings account in addition to receiving the state contribution under Section 1551.458.

(c) A plan enrollee shall make contributions under this section in the manner prescribed by the board of trustees.

Sec. 1551.460. COORDINATION WITH CAFETERIA PLAN. (a) The board of trustees has exclusive authority to determine the eligibility of a plan enrollee to participate in any medical flexible savings account that is part of a cafeteria plan offered under this chapter.

(b) The board of trustees shall adopt rules regarding:

(1) the eligibility of a plan enrollee to participate in any medical flexible savings account that is part of a cafeteria plan offered under this chapter; and

(2) the coordination of benefits provided under this subchapter and any medical flexible savings account that is part of a cafeteria plan offered under this chapter.

(c) The rules adopted by the board of trustees under Subsection (b) must prohibit a plan enrollee from participating in any medical flexible savings account that would disqualify the enrollee's health savings account from favorable tax treatment under federal law.

Sec. 1551.461. CONFIDENTIALITY OF RECORDS. To the extent allowed under federal law and subject to Section 1551.063, the board of trustees or the account administrator, as applicable, may disclose to a carrier information in an individual's records that the board of trustees or administrator determines is necessary to administer the state consumer-directed health plan.

Sec. 1551.462. EXEMPTION FROM EXECUTION; UNASSIGNABILITY. A state contribution to a health savings account or a high deductible health plan is exempt from execution and is unassignable in the same manner and to the same extent as is an amount described by Section 1551.011.

Sec. 1551.463. ASSISTANCE. Any state agency that the board of trustees considers appropriate shall assist the board in implementing and administering this subchapter.

SECTION 2. 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 Employees Retirement System of Texas, or of an administering firm, an account administrator, a carrier, or another governmental entity acting on behalf of the retirement system, are confidential and not subject to disclosure, and the retirement system, administering firm, account administrator, carrier, or governmental entity 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 provisions of Chapter 552, Government Code, except as provided by this section.

(c) To accomplish the purposes of this chapter, the board of trustees may release the records to:

(1) an administering firm, account administrator, carrier, agent, or attorney acting on behalf of the board;

(2) another governmental entity having a legitimate need for the information to perform a function of the board of trustees;

(3) an authorized medical provider of the participant; or

(4) a party in response to a subpoena issued under applicable law.

SECTION 3. Sections 1551.354(c) and (d), Insurance Code, are amended to read as follows:

(c) A person may not pursue a counterclaim or other cause of action against the Employees Retirement System of Texas, a trustee, officer, or employee of the retirement system, or a carrier, [or] administering firm, or account administrator for the retirement system in connection with a transaction or occurrence related to the interpleader action.

(d) A person who violates Subsection (c) is liable for the costs and attorney's fees incurred by the Employees Retirement System of Texas, a trustee, officer, or employee of the retirement system, or a carrier, [or] administering firm, or account administrator for the retirement system as a result of the violation.

SECTION 4. Section 1551.356(b), Insurance Code, is amended to read as follows:

(b) A person has no standing to appeal a determination of the executive director under this subchapter or to pursue a private cause of action against the state, the board of trustees, the retirement system, the executive director, an administering firm, an account administrator, or an employee of any of those persons based on a determination or the implementation by the board or executive director of the type or scope of plan design features under the group benefits program.

SECTION 5. The Employees Retirement System of Texas shall develop the state consumer-directed health plan to be implemented under Chapter 1551, Insurance Code, as amended by this Act, including enrollment requirements, during the state fiscal biennium beginning September 1, 2011, with coverage beginning September 1, 2012.

SECTION 6. Not later than July 31, 2012, the Employees Retirement System of Texas shall provide written information to individuals eligible to participate in the state consumer-directed health plan under Chapter 1551, Insurance Code, as amended by this Act, that provides a general description of the requirements for the plan as adopted under Chapter 1551, Insurance Code, as amended by this Act.

SECTION 7. The Employees Retirement System of Texas shall develop and implement the health savings account program under Chapter 1551, Insurance Code, as amended by this Act, in a manner that is as revenue neutral as is possible.

SECTION 8. Except as otherwise provided by this Act, this Act takes effect September 1, 2011.