HBA-MPM C.S.H.B. 1076 77(R) BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1076 By: Haggerty Pensions & Investments 4/19/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, a community supervision and corrections department (department) must contract with a county or a county in their jurisdiction in order to provide health coverage and other benefits to department employees. They are therefore subject to that county's choice of insurance provider, and in some cases may pay higher premiums, as in the case of a small insurance pool. Allowing departments to participate in the Employees Retirement System of Texas (ERS) as though their employees were state employees may provide the employees with access to a better benefits package. C.S.H.B. 1076 extends basic life, accident, and health benefits coverage under ERS to active department employees and their dependents and spouses and retired employees. 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 3.03 of this bill. ANALYSIS C.S.H.B. 1076 amends the Insurance Code to extend life, accident, and health benefit coverage under the Texas Employees Uniform Group Insurance Benefits Act to employees of a community supervision and corrections department (department) and their dependents as is provided to state employees (Sec. 2, Art. 3.50-2). The bill authorizes a department to participate in the uniform group insurance program (program) administered by the board of trustees of the Employees Retirement System of Texas (trustee), and limits participation to active employees, their dependents, and retired employees who have been employed by a department for at least a total of 10 years of creditable service and who meet all of the requirements for retirement benefits prescribed by the Texas County and District Retirement System and their spouses and their eligible dependent children. The bill provides that each full-time employee is automatically covered by basic coverage unless the employee waives participation or is expelled from the program. Each active part-time employee is eligible to participate in the program on application in the manner provided by the trustee unless the employee is expelled from the program. The bill requires a participating department to notify each part-time employee of the employee's eligibility for participation. The bill specifies that active employees are not eligible to receive a state contribution for premiums. The employing department is responsible for payment of the contributions that the state would make if the department's active employees were state employees. The bill requires a department to contribute 100 percent of the cost of the basic coverage for full-time active employees and 50 percent of the total cost of health coverage for spouses and dependent children for active employees who enroll in coverage categories which includes a spouse and/or dependent children. The bill requires employees to pay for any additional coverage selected by an employee. The bill specifies that each retired employee of a department who retires after September 1, 2002 and who has been employed by the department for at least 10 years of creditable service is eligible to participate in the uniform group health insurance program on application to the trustee. The bill specifies that a retired employee is automatically covered by the basic coverage unless the retiree specifically waives coverage or is expelled from the program. The bill provides that a retired employee who meets the eligibility criteria is eligible to enroll in group insurance coverage categories that include a spouse and/or their dependent if the employee pays 50 percent of the total premium cost and meet all of the other requirements and limitations of the trustee for such spouse and/or dependent coverage. The bill requires the retired employee to pay contributions as prescribed by the trustee. A participating department is required to notify each retired employee of their eligibility and the costs associated with such participation. The bill requires all contributions from the department and active and retired employees for basic, optional, and voluntary coverages to be paid into the employees life, accident, and health insurance and benefits fund to provide coverage under the program. The bill provides that a department that elects to participate in the program must notify the trustee no later than December 31, 2001. The bill requires a department to only be responsible and obligated to pay for the percentage or portion of the contributions for health insurance for active and retired employees including eligible dependents that is equal to the state's percentage or portion as specified in the rider to the applicable General Appropriations Act for health insurance as to active and retired state employees (Sec. 3D, Art. 3.50-2). C.S.H.B. 1076 amends the Government Code to specify that department employees are state employees for purposes of workers' compensation coverage provided by the state and state liability for conduct of public servants. The bill provides that a department employee is eligible to participate in the program established under the Texas Employees Uniform Group Insurance Act (Sec. 76.006). The bill requires the Employees Retirement System (ERS) to develop a plan during the 2001-2002 fiscal year for the extension of benefits under the program to eligible employees of the departments and authorizes ERS to employ persons to implement the plan. The bill requires coverage to begin with the 2002-2003 state fiscal year, but no later than September 1, 2002 (SECTION 3.01). The bill requires ERS to adopt rules as necessary to implement a plan for the extension of benefits under the program to eligible persons no later than December 31, 2001 (SECTION 3.03). EFFECTIVE DATE September 1, 2001. Provisions regarding modifications to the Government Code take effect September 1, 2002. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 1076 differs from the original bill by including retired employees of a community supervision and corrections department (department) who have at least 10 years creditable service, who meet eligibility criteria, and who retire after September 1, 2002 among those individuals who are eligible to receive health benefit coverage under the Texas Employees Uniform Group Insurance Benefits Act. The substitute specifies that a retired employee is automatically covered by basic coverage unless the retiree specifically waives coverage or is expelled from the program and makes provisions for the coverage of a retired employee's spouse or dependent child, provided the retired employee pays 50 percent of the total cost of the premiums. The substitute requires the retired employee to pay contributions in the manner prescribed by the trustee. The substitute requires a participating department to notify each retired employee of their eligibility and costs associated with participation. The substitute also requires the department to contribute 50 percent of the total cost of health coverage for spouse and dependent children of active employees who enroll in coverage that includes spouse and/or dependent children (Sec. 2, Art. 3.50-2 and Sec. 3D, Art. 3.50-2). The substitute requires a department to pay only the percentage or portion of the contributions for health insurance for active and retired employees including eligible dependents that is equal to the state's percentage or portion as specified in the applicable rider to the General Appropriations Act (Sec. 3D, Art. 3.50-2).