81R6242 KCR-D
By: Crownover, Zerwas, Berman, Hancock, H.B. No. 1176
Patrick, et al.
A BILL TO BE ENTITLED
AN ACT
relating to the creation of a voluntary consumer-directed health
plan for certain individuals eligible to participate in the
insurance coverage provided under the Texas Employees Group
Benefits Act and their qualified dependents.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 1551, Insurance Code, is amended by
adding Subchapter J to read as follows:
SUBCHAPTER J. STATE CONSUMER-DIRECTED HEALTH PLAN
Sec. 1551.451. DEFINITIONS. In this subchapter:
(1) "High deductible health plan" means a health
benefit plan that complies with Section 223(c), Internal Revenue
Code of 1986, and other federal law.
(2) "Participant" means an individual who is:
(A) eligible to participate in the group benefits
program; and
(B) enrolled in the plan established under this
subchapter.
(3) "Qualified medical expense" means an expense paid
by a participant for medical care, as defined by Section 213(d),
Internal Revenue Code of 1986, for the participant or the
participant's dependents as defined by Section 152, Internal
Revenue Code of 1986.
Sec. 1551.452. ESTABLISHMENT OF STATE CONSUMER-DIRECTED
HEALTH PLAN. (a) The state consumer-directed health plan is
established for the benefit of individuals eligible to participate
in the group benefits program and those individuals' eligible
dependents.
(b) After the board of trustees adopts rules necessary to
administer this subchapter, the board shall:
(1) establish health savings accounts under this
subchapter and administer or select an administrator for the
accounts;
(2) finance or purchase a high deductible health plan
that:
(A) is an integral part of the state
consumer-directed health plan; and
(B) provides health benefit coverage, including
preventative health care, to a participant enrolled in the state
consumer-directed health plan and to the dependents of an enrolled
participant in accordance with Section 1551.456; and
(3) provide to individuals eligible to participate in
the group benefits program information regarding the option to
participate in and operation of the state consumer-directed health
plan established under this subchapter.
(c) If the board of trustees purchases a high deductible
health plan under this subchapter, Sections 1551.215-1551.218
apply to the high deductible health plan.
(d) In adopting rules and administering health savings
accounts or selecting administrators for health savings accounts
under this subchapter, the board of trustees shall ensure that the
health savings accounts are qualified for appropriate federal tax
exemptions.
Sec. 1551.453. PARTICIPATION IN STATE CONSUMER-DIRECTED
HEALTH PLAN; EFFECT OF PARTICIPATION. (a) The board of trustees
shall give individuals eligible to participate in the basic
coverage plan the option of waiving participation in the basic
coverage plan and participating in the state consumer-directed
health plan instead.
(b) For purposes of this chapter, participation in the state
consumer-directed health plan is considered participation in the
group benefits program, and Sections 1551.301, 1551.303, 1551.305,
and 1551.306 apply to participation in the state consumer-directed
health plan in the same manner that those sections apply to the
basic coverage plan.
Sec. 1551.454. ACCOUNT ADMINISTRATOR. (a) The account
administrator selected to administer a health savings account
established under this subchapter must be a person:
(1) qualified to serve as trustee under Section
223(d)(1)(B), Internal Revenue Code of 1986, and the rules adopted
under that section; and
(2) experienced in administering health savings
accounts or other similar trust accounts.
(b) An account administrator is the fiduciary of a
participant who has a health savings account established under this
subchapter.
(c) Section 1551.056(b) does not apply to the account
administrator.
Sec. 1551.455. PARTICIPATION IN PROGRAM. (a) Each
individual eligible to participate in the basic coverage may choose
instead to participate in the state consumer-directed health plan
if the participant is an eligible individual under Section
223(c)(1), Internal Revenue Code of 1986. The dependents of a
participant may participate in the state consumer-directed health
plan in accordance with Section 1551.456.
(b) A participant waives basic plan coverage and must be
enrolled in a high deductible health plan.
(c) Participation in the state consumer-directed health
plan qualifies a participant to receive a contribution to a health
savings account under Section 1551.458. An individual who elects
not to participate in the plan is not eligible to receive a
contribution under that section.
(d) A participant is subject to Subchapter H in the same
manner as an individual who participates in the basic coverage
offered under the group benefits program.
(e) Under this section, the board of trustees has exclusive
authority to determine an individual's eligibility to participate
in the state consumer-directed health plan and shall adopt rules
regarding eligibility to participate in the plan.
Sec. 1551.456. COVERAGE FOR DEPENDENTS; REQUIRED
CONTRIBUTIONS. (a) Subject to Subsection (d), a participant is
entitled to obtain for the participant's dependents coverage in the
state consumer-directed health plan in the manner determined by the
board of trustees.
(b) The participant shall make any required additional
contribution payments for the dependent coverage in the manner
prescribed by the board of trustees.
(c) Amounts contributed by a participant under this section
may be:
(1) used to pay the cost of coverage in the state
consumer-directed health plan not paid by the state under Section
1551.458(b)(1); or
(2) contributed as additional amounts to the health
savings account provided to the participant.
(d) A covered dependent of a participant:
(1) is subject to Subchapter H in the same manner as a
dependent who is covered by the basic coverage offered under the
group benefits program; and
(2) must be a dependent for purposes of:
(A) Section 152, Internal Revenue Code of 1986;
and
(B) Section 1551.004.
Sec. 1551.457. IDENTIFICATION CARDS FOR PARTICIPANTS. (a)
The board of trustees or the account administrator, as applicable,
shall issue to each participant an identification card.
(b) The board of trustees or the account administrator, as
applicable, shall issue a duplicate identification card to each
participant's dependent for whom qualified medical expenses may be
paid out of a health savings account established under this
subchapter.
Sec. 1551.458. STATE CONTRIBUTION. (a) For each
participant, from the state contribution that would otherwise be
made for basic coverage for the participant, the state shall
annually contribute:
(1) to a high deductible health plan provided under
this subchapter, the amount that is necessary to pay the cost of
coverage under the high deductible health plan and does not exceed
the amount the state annually contributes for a full-time or
part-time employee, as applicable, who is covered by the basic
coverage; and
(2) to the participant's health savings account, any
remainder of the state contribution after payment of coverage under
Subdivision (1).
(b) For each participant's dependent covered under this
subchapter from the state contribution that would otherwise be made
for basic coverage for the dependent, the state shall annually
contribute:
(1) to a high deductible health plan provided under
this subchapter, the same percentage of the cost of coverage under
the high deductible health plan as the state annually contributes
for dependent coverage in the basic coverage; and
(2) to the participant's health savings account, as
allowed under federal law, any remainder of the state contribution
after payment for coverage under Subdivision (1).
(c) For a calendar year, the amount of state contributions
under Subsections (a)(2) and (b)(2), in the aggregate, may not
exceed the sum of the monthly limitations imposed by federal law for
health savings accounts.
Sec. 1551.459. PARTICIPANT CONTRIBUTIONS. (a) Each
participant, in accordance with Section 1551.305, shall contribute
any amount required to cover the selected participation in the
state consumer-directed health plan that exceeds the state
contribution amount under Section 1551.458.
(b) A participant may contribute any amount allowed under
federal law to the participant's health savings account in addition
to receiving the state contribution under Section 1551.458.
(c) A participant shall make contributions under this
section in the manner prescribed by the board of trustees.
Sec. 1551.460. COORDINATION WITH CAFETERIA PLAN. (a) The
board of trustees has exclusive authority to determine the
eligibility of a participant to participate in any medical flexible
savings account that is part of a cafeteria plan offered under this
chapter.
(b) The board of trustees shall adopt rules regarding:
(1) the eligibility of a participant to participate in
any medical flexible savings account that is part of a cafeteria
plan offered under this chapter; and
(2) the coordination of benefits provided under this
subchapter and any medical flexible savings account that is part of
a cafeteria plan offered under this chapter.
(c) The rules adopted by the board of trustees under
Subsection (b) must prohibit a participant from participating in
any medical flexible savings account that would disqualify the
participant's health savings account from favorable tax treatment
under federal law.
Sec. 1551.461. CONFIDENTIALITY OF RECORDS. To the extent
allowed under federal law and subject to Section 1551.063, the
board of trustees or the account administrator, as applicable, may
disclose to a carrier information in an individual's records that
the board of trustees or administrator determines is necessary to
administer the state consumer-directed health plan.
Sec. 1551.462. EXEMPTION FROM EXECUTION; UNASSIGNABILITY.
A state contribution to a health savings account or a high
deductible health plan is exempt from execution and is unassignable
in the same manner and to the same extent as is an amount described
by Section 1551.011.
Sec. 1551.463. ASSISTANCE. Any state agency that the board
of trustees considers appropriate shall assist the board in
implementing and administering this subchapter.
SECTION 2. The Employees Retirement System of Texas shall
develop the state consumer-directed health plan to be implemented
under Chapter 1551, Insurance Code, as amended by this Act,
including enrollment requirements, during the state fiscal
biennium beginning September 1, 2009, with coverage beginning
September 1, 2010.
SECTION 3. Not later than July 31, 2010, the Employees
Retirement System of Texas shall provide written information to
individuals eligible to participate in the state consumer-directed
health plan under Chapter 1551, Insurance Code, as amended by this
Act, that provides a general description of the requirements for
the plan as adopted under Chapter 1551, Insurance Code, as amended
by this Act.
SECTION 4. The Employees Retirement System of Texas shall
develop and implement the health savings account program under
Chapter 1551, Insurance Code, as amended by this Act, in a manner
that is as revenue neutral as is possible.
SECTION 5. Except as otherwise provided by this Act, this
Act takes effect September 1, 2009.