HBA-SEB C.S.H.B. 3089 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 3089 By: Woolley Pensions and Investments 4/15/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, neither the Employees Retirement System of Texas nor the Teacher Retirement System of Texas offers a group long-term care insurance program. C.S.H.B. 3089 authorizes the two systems to establish such a program and to hire an administrative firm to administer the programs. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the board of trustees of the Employees Retirement System of Texas in SECTION 1 (Article 3.502A, Insurance Code) and to the Teacher Retirement System of Texas in SECTION 2 (Article 3.504A, Insurance Code) 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. TEXAS EMPLOYEES GROUP LONG-TERM CARE INSURANCE PROGRAM. (a) Defines "administering firm," "employee," and "trustee." (b) Authorizes the board of trustees of the Employees Retirement System of Texas (board), as trustee, to establish a group long-term care insurance program for an employee or a retired employee, a spouse of an employee or a retired employee, a parent or grandparent of an employee or retired employee, and a parent-in-law of an employee or retired employee. (c) Authorizes the board to select an administering firm to administer the program under contract. Requires the administering firm to bill each program participant directly for premiums and any other program cost for which the participant is responsible. Prohibits the premiums and program cost from being deducted from an employee's monthly compensation or a retired employee's annuity. (d) Provides that the program is not part of the group coverages offered under the Texas Employees Uniform Group Insurance Benefits Act. Prohibits the state from contributing any part of the premiums for coverage under this article. Prohibits the board from implementing the 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. (e) Authorizes the board to adopt rules as necessary to implement this article, including rules specifying the coverage to be offered under the program. SECTION 2. Amends Subchapter E, Chapter 3, Insurance Code, by adding Article 3.50-4A, as follows: Art. 3.50-4A. TEXAS PUBLIC SCHOOL EMPLOYEES GROUP LONG-TERM CARE INSURANCE PROGRAM. Makes conforming changes with respect to the establishment of a group long-term care insurance program for Texas public school employees. Authorizes the Teacher Retirement System of Texas (TRS), as trustee, to adopt rules as necessary to implement this article, including rules specifying the coverage to be offered under the program. SECTION 3. Amends Section 4, Article 3.50-3, Insurance Code (Texas State College and University Employees Uniform Insurance Benefits Act), by adding Subsection (g), to authorize an institution to join with the board or TRS to provide long-term care insurance coverage. Provides that each participating trustee and the governing board of the institution must mutually agree to join together for this purpose, subject to terms that are beneficial to all participants. Prohibits an institution from participating in an agreement unless any cost or administrative burden associated with the development of, implementation of, or communications about the long-term care coverage program is incidental. SECTION 4.Emergency clause. Effective date: upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies the original in SECTION 1 by changing proposed Article 3.50-2A, Insurance Code, as follows: Modifies proposed Article 3.50-2A(b) to authorize, rather than require, the board of trustees of the Employees Retirement System of Texas (board), as trustee, to establish a group longterm care insurance program for an employee or a retired employee, a spouse of an employee or a retired employee, a parent or grandparent of an employee or retired employee, and a parent-in-law of an employee or retired employee. Modifies proposed Article 3.50-2A(c) to authorize, rather than require, the board to select an administering firm to administer the program under contract. Modifies proposed Article 3.50-2A(d) to add a provision that prohibits the board from implementing the 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. The substitute modifies the original in SECTION 2 by changing proposed Article 3.50-4A, Insurance Code, to make conforming changes with respect to the establishment of a group long-term care insurance program by the Teacher Retirement System of Texas (TRS), as trustee, for use by public school employees. The substitute deletes the text of SECTION 3 of the original, which would have required the board and TRS to implement the long-term care group insurance programs by January 1, 2000. The deleted text would have also authorized the board and TRS to consult with Texas A&M University with respect to development and implementation of the program. The substitute adds new text for SECTION 3 of the substitute by amending Section 4, Article 3.50-3, Insurance Code (Texas State College and University Employees Uniform Insurance Benefits Act), to add Subsection (g), which authorizes an institution to join with the board or TRS to provide longterm care insurance coverage. The substitute provides that each participating trustee and the governing board of the institution must mutually agree to join together for this purpose, subject to terms that are beneficial to all participants. The substitute also prohibits an institution from participating in an agreement unless any cost or administrative burden associated with the development of, implementation of, or communications about the long-term care coverage program is incidental.