HBA-SEB H.B. 2828 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2828
By: Isett
Pensions and Investments
3/25/1999
Introduced

BACKGROUND AND PURPOSE 

A medical savings account (MSA) is an untaxed savings account that grows
over time while providing health insurance with a high deductible.   MSA is
used to cover smaller expenses or to pay the deductible of major expenses.
In MSA, the employee chooses the type of health care to receive, which
gives the employee control over the cost and type of care.  Upon retirement
or at the end of employment, the employee receives the unspent balance of
MSA. Recently, the United States Congress extended the MSA option to the
self-employed.  Private corporations have used MSAs to bring down health
care costs and to provide employees with more health care options.  H.B.
2828 establishes an MSA pilot program within the Employees Retirement
System of Texas.   

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Employees Retirement System of
Texas in SECTION 1 (Article 3.50-2A, Insurance Code) and SECTION 2 of this
bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter E, Chapter 3, Insurance Code, by adding
Article 3.50-2A, as follows: 

Art. 3.50-2A.  MEDICAL SAVINGS ACCOUNT PILOT PROGRAM FOR STATE EMPLOYEES.
(a)  Requires the Employees Retirement System of Texas (ERS), by rule, to
adopt a medical savings account pilot program (pilot program) for health
care coverage. Provides that the program is to be offered as a health
benefits option for state employees in lieu of the health benefits program
provided by the Texas Employees Uniform Group Insurance Benefits Act.  

(b)  Provides that participation in the pilot program is limited to not
more than five percent of the number of full-time state employees as of
March 1, 2000.  Requires ERS, by rule, to set guidelines for participation
in the pilot program. 

(c)  Requires ERS to solicit at least three bids for the development and
establishment of the program.   Provides that the program adopted by ERS
must provide comparable health benefits to those provided to state
employees under the Texas Employees Uniform Group Insurance Benefits Act.
Specifies that the program must also establish annual deductibles for
participating employees between $1,500 and $3,000 with no copayment
required after meeting the annual deductible. 

(d)  Provides that this article expires on August 31, 2005.

SECTION 2.  (a)  Effective date: September 1, 1999.

(b)  Requires ERS to adopt rules as necessary to implement Article 3.50-2A,
Insurance Code, as added by this Act, not later than March 1, 2000.
Requires ERS to make the program available for employee participation not
later than September 1, 2000. 

SECTION 3.  Emergency clause.