HBA-SEP, MPM H.B. 1189 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1189
By: Telford
Teacher Health Insurance, Select
2/12/2001
Introduced



BACKGROUND AND PURPOSE 

Because of the rising cost of health care, ensuring health insurance
benefits for public school employees is an important issue for the state,
school districts, and employees.   House Bill 1189 creates a base statewide
insurance plan for active school district employees fully funded by the
state, and allows districts to choose more expensive plans by covering the
difference in cost.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Texas Active School Employees Group
Benefits Board in SECTION 1.01 (Articles 3A.054, 3A.101, 3A.102, and
3A.103, Insurance Code) and SECTION 3.05 of this bill. 

ANALYSIS

House Bill 1189, amends the Insurance and Education codes to create the
Texas Active School Employees Group Health Benefits Act, and establishes
the Texas Active School Employees Group Benefits Program (program) to
provide group health benefits for active employees of Texas school
districts.  The bill amends the Insurance Code to establish the Texas
Active School Employees Group Benefits Board (board), and sets forth
appointment, administration, operation, and reporting procedures and
requirements of the board (Arts. 3A.051-3A.055).  The bill requires the
board to implement and administer a program of group health benefits
coverage for active employees of school districts.  The board is authorized
to contract with an independent administrator for the program.  The board
is required to adopt rules necessary to administer a program that is
applicable to all school districts of this state (Art. 34.054). 

The bill authorizes a public school district, beginning August 1, 2002, to
elect to participate in the program unless the district is participating in
the group insurance program under the Texas Employees Uniform Group
Insurance Benefits Act administered by Employees Retirement System (ERS).
The bill prohibits a participating district from providing a competing
group health benefits program for employees.  The bill requires a district
that elects to participate in the program to do so for a minimum of two
years.   The board is authorized to establish, by rule, a biennial deadline
for notification of the board of a district's election to participate in
the program (Art. 3A.101). 

H.B. 1189 amends the Insurance and Education codes to authorize a district
to discontinue participation only by notifying the board and obtaining the
board's determination that the district is committed to offering an
alternative basic plan of group health benefits under existing provisions
with no contribution from the state and at no cost to participating
employees.  The bill provides that the beginning and ending of a district's
participation must coincide with the beginning of an odd-numbered
year.(Arts. 3A.101 and 3A.106, Insurance Code; Section 22.004, Education
Code and SECTION 3.02). 

The bill amends the Insurance Code to provide that each full-time employee,
as defined by board rule, of a participating district is automatically
covered by the basic plan selected by the district, unless the employee
specifically waives coverage or is expelled from the program. The bill
provides that part-time employees are eligible to participate in the
program only as provided by board rule, and requires a  participating
district to notify part-time employees of their eligibility (Art. 3A.102). 

The bill requires the board to adopt plans of group benefits which must
include one or more basic group health insurance plans for district
employees and their dependents.  The bill requires at least one of the
basic plans to be comparable in scope, and to the extent possible, in cost
to the health benefit plan coverage, provided to state employees under the
Texas Employees Uniform Group Insurance Benefits Act.  The bill provides
that a district must select the same basic plan for all employees.  The
bill authorizes the plans of group benefits to include other coverages and
benefits, and provides that comparable plans of each type of benefit
adopted must be offered to employees of all school districts (Art. 3A.103). 

The bill authorizes the board, by rule, to define optional coverage which
may be selected by a district employee, which must include coverage for
dependents.  The bill authorizes the board to determine that plans of group
benefits shall be provided directly from the Texas active school employees
uniform group benefits trust fund, rather than through the purchase of
coverage.  The bill exempts any self-funded plan of group benefits from any
other provision of the Insurance Code, unless the law specifically applies
to the plan or this bill (Art. 3A.103). 

H.B. 1189 requires the state to pay100 percent of the cost for
employee-only coverage under the least expensive basic plan of group health
benefits for each active employee participating in the program.  The bill
requires a district that selects a more expensive plan to pay the
employee-only costs that exceed the amount the state pays for the least
expensive plan (Article 3A.104).  The bill requires a participating
employee to pay all of the cost of optional coverage, including dependent
coverage (Art. 3A.105). 

The bill provides that any contributions collected from the state, the
district, and the employee, as well as any amounts appropriated by the
legislature for contingency reserves or administrative expenses, shall be
deposited in the Texas active school employees uniform benefits trust fund
(fund), which is a trust fund with the comptroller of public accounts (Art.
3A.151).  The bill authorizes the board to use amounts in the fund only to
provide group benefits through the program, and to pay administrative
expenses of the program. The bill authorizes the board to invest assets of
the fund in the manner provided by the Texas Constitution (Art. 3A.152). 

The bill requires the board to develop the program to be implemented and
administered during the 20012002 school year (SECTION 3.02).  The bill
requires the board to adopt necessary rules for the development of the
program no later than December 31, 2001 (SECTION 3.05).  The bill provides
that coverage under the program begins with the 2002-2003 school year, but
no later than September 1, 2002 (SECTION 3.02). 

The bill repeals provisions authorizing the participation of active
employees in the Texas Public School Employees Group Insurance Program and
removes references to active employees from the Texas Public School
Employees Group Insurance Act, effective September 1, 2002 (SECTION 3.01
and Art. 3.50-4, Insurance Code).  The bill requires TRS to transfer from
the Texas Public School Employees Group Insurance Program, to the board,
all assets and liabilities provided under the program for active employees,
as well as records relating to employee coverage, for the program
established by this bill no later than September 1, 2002.  The bill also
requires the comptroller of public accounts, no later than September 1,
2002, to transfer from the school employees group insurance program fund
all assets and liabilities of that fund relating to coverage for active
employees to the fund established in this bill (SECTION 3.03). 

EFFECTIVE DATE

September 1, 2001.  Provisions removing active employees from the
provisions of the Texas Public School Employees Group Insurance Program
take effect September 1, 2002.