HBA-JEK, MPM H.B. 1248 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1248 By: Tillery Teacher Health Insurance, Select 2/11/2001 Introduced BACKGROUND AND PURPOSE Although school districts have been required to provide health insurance coverage to their employees since 1991, coverage, including prescription drug coverage, varies greatly from school district to school district. House Bill 1248 creates a statewide prescription drug benefit plan for active and retired employees of public school districts and their dependents. 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 and the Teacher Retirement System of Texas in SECTION 1.01 (Section 3, Article 3.50-4B, Insurance Code) of this bill. ANALYSIS House Bill 1248 amends the Insurance Code to require the Employees Retirement System of Texas (ERS) and the Teacher Retirement System of Texas (TRS) to jointly administer a public school prescription drug benefit plan (plan). The bill gives primary responsibility to ERS for developing, contracting, and managing the operations of the plan. The bill assigns primary responsibility to TRS for providing plan-related services to plan participants (Sec. 2, Art. 3.50-4B). The bill provides that the plan must provide benefits at least equivalent to the comparable benefits offered to state employees through ERS, and that the plan's copayment, coinsurance, or deductible provisions be as favorable to plan participants as are comparable provisions applicable to benefits provided to state employees (Sec. 5, Art. 3.50-4B and SECTION 3.01). The bill provides that the respective boards of trustees of ERS and TRS have joint power regarding the plan that is equivalent to the power that the ERS board of trustees has in administering benefits for state employees under the Texas Employees Uniform Group Insurance Benefits Act, including the authority to adopt rules to administer the plan (Sec. 3, Art. 3.50-4B). The bill requires the boards of trustees of ERS and TRS to enter into a memorandum of understanding governing each system's powers and duties (Sec. 4, Art. 3.50-4B). The bill requires ERS to develop and implement the plan during the 2001-2002 school year to provide prescription drug benefits for active and retired employees and their dependents beginning with the 20022003 school year, but no later than September 1, 2002 (Sec. 5, Art. 3.50-4B and SECTION 3.01). The bill provides that each full-time active and retiree employee participate in the program unless participation is specifically waived or the participant is expelled. A retiree, dependent, or part-time active employee is authorized to enroll in the program in accordance with rules adopted to administer the plan (Sec. 5, Art. 3.50-4B). H.B. 1248 creates the public school prescription drug benefit plan fund (fund) as a trust fund with the state comptroller of public accounts. The bill requires the board of trustees of ERS to administer the fund and requires contributions made by the state, school districts, and plan participants to be credited to the fund. The bill restricts the use of the fund to payment for coverage or benefits provided under the plan and administration expenses (Sec. 6, Art. 3.50-4B). The bill requires the state to contribute the full cost of the plan for each full-time active employee or retiree, and one-half of the cost of plan coverage for each part-time active employee or dependent. The bill requires ERS, no later than November 1 preceding each regular legislative session, to certify to the Legislative Budget Board and the budget division of the governor's office the amount needed to pay the state's contribution to the fund for the following biennium. The bill requires the governor to include this amount in the budget the governor submits to the legislature (Sec. 7, Art. 3.50-4B). The bill authorizes a school district to contribute all or part of the cost of the plan that exceeds the amount of state contributions (Sec. 8, Art. 3.50-4B). The bill requires a plan participant to contribute the cost of the plan that exceeds the total amount of state and school district contributions (Sec. 9, Art. 3.50-4B). H.B. 1248 amends the Education and Insurance codes to prohibit group health coverage provided by a school district or TRS under existing law from including prescription drug benefits (Art. 26.036 and Sec. 8, Art. 3.50-4, Insurance Code and Secs. 22.004 and 22.005, Education Code). EFFECTIVE DATE September 1, 2001. Provisions prohibiting the inclusion of a drug benefits plan in health benefits coverage offered by a district take effect September 1, 2002.