S.B. No. 654
AN ACT
relating to continued health coverage for employees of certain
political subdivisions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Chapter 175, Local Government
Code, is amended to read as follows:
CHAPTER 175. RIGHT OF [CERTAIN MUNICIPAL AND COUNTY] EMPLOYEES OF
CERTAIN POLITICAL SUBDIVISIONS TO PURCHASE CONTINUED HEALTH
COVERAGE AT RETIREMENT
SECTION 2. Section 175.001, Local Government Code, is
amended to read as follows:
Sec. 175.001. APPLICABILITY. This chapter applies to a
person who:
(1) retires from:
(A) county employment in a county with a
population of 75,000 or more;
(B) employment by an appraisal district in a
county with a population of 75,000 or more; or
(C) municipal employment in a municipality with a
population of 25,000 or more; and
(2) is entitled to receive retirement benefits from a
county, appraisal district, or municipal retirement plan.
SECTION 3. Subsections (a) and (b), Section 175.002, Local
Government Code, are amended to read as follows:
(a) A person to whom this chapter applies is entitled to
purchase continued health benefits coverage for the person and the
person's dependents as provided by this chapter unless the person
is eligible for group health benefits coverage through another
employer. The coverage shall be provided under the group health
insurance plan or group health coverage plan provided by or through
the employing political subdivision [county or municipality] to its
employees.
(b) To receive continued coverage under this chapter, the
person must inform the employing political subdivision [county or
municipality], not later than the day on which the person retires
from the political subdivision [county or municipality], that the
person elects to continue coverage.
SECTION 4. Sections 175.003 through 175.007, Local
Government Code, are amended to read as follows:
Sec. 175.003. LEVEL OF COVERAGE. (a) The person may elect
to cover the same persons who were covered under the political
subdivision's [county's or municipality's] group health insurance
plan or group health coverage plan through the person at the time
the person left [county or municipal] employment with the political
subdivision, or the person may elect to discontinue coverage for
one or more persons. A person who was not covered under the plan at
the time the person to whom this chapter applies left [county or
municipal] employment with the political subdivision is not
eligible for coverage under this chapter.
(b) Except as provided by Subsections (c) and (d), the level
of coverage provided under this chapter at any given time is the
same level of coverage provided to current employees of the
political subdivision [county or municipality] at that time.
(c) A political subdivision [county or municipality] may
substitute Medicare supplement health benefits coverage as the
coverage provided for a person who receives health benefits
coverage under this chapter, including a dependent, after the date
that the person becomes eligible for federal Medicare benefits.
(d) The person may elect to continue coverage at a reduced
level, if offered by the political subdivision [county or
municipality].
Sec. 175.004. PAYMENT FOR COVERAGE. A person who is
entitled to continued coverage under this chapter is entitled to
make payments for the coverage at the same time and to the same
entity that payments for the coverage are made by current employees
of the political subdivision [county or municipality].
Sec. 175.005. DUTY TO INFORM RETIREE OF RIGHTS. A political
subdivision [county and a municipality] shall provide written
notice to a person to whom this chapter may apply of the person's
rights under this chapter not later than the date the person retires
from the political subdivision [county or municipality]. A
political subdivision [county or municipality] may fulfill its
requirements under this section by placing the written notice
required by this section in a personnel manual or employee handbook
that is available to all employees.
Sec. 175.006. CERTAIN MATTERS NOT AFFECTED. This chapter
does not:
(1) prohibit a political subdivision [county or
municipality] from uniformly changing the group health insurance
plan or group health coverage plan provided for its employees and
retirees;
(2) affect the definition of a dependent or the
eligibility requirements for a dependent under a plan;
(3) prohibit a political subdivision [county or
municipality] from agreeing with a person to deduct the cost of
coverage provided under this chapter from a pension check;
(4) prohibit a political subdivision [county or
municipality] from agreeing with a person to pay for the coverage
provided under this chapter provided the person reimburses the
political subdivision [county or municipality] for the actual cost
of the coverage;
(5) prohibit a political subdivision [county,
municipality,] or a pool established under Chapter 172 from
increasing the cost of group health coverage to its employees and to
persons covered under this chapter to reflect the increased cost,
if any, attributable to compliance with this chapter;
(6) affect the right of a political subdivision
[county or municipality] to provide coverage under Chapter 172; or
(7) affect the right of a political subdivision
[county, municipality,] or a pool established under Chapter 172 to
offer the coverage at the same rate that is available to active
employees or to offer the coverage at a reasonable or actual rate
established for retirees that may be greater than the rate offered
to active employees.
Sec. 175.007. EXEMPTIONS. (a) A political subdivision
[county or municipality] that does not provide health benefits
coverage through a self-insured plan or a plan authorized under
Chapter 172 is not required to provide coverage under this chapter
if the political subdivision [county or municipality] makes a good
faith effort to purchase insurance coverage that includes coverage
required by this chapter from an insurance company authorized to do
business in this state and from pools established under Chapter 172
but is unable to find a provider for the coverage.
(b) A political subdivision [county or municipality] that
is providing coverage substantially similar to or better than the
coverage required by this chapter is exempt from this chapter.
SECTION 5. Subdivision (3), Section 172.003, Local
Government Code, is amended to read as follows:
(3) "Political subdivision" means a county,
municipality, special district, school district, junior college
district, housing authority, or other political subdivision of this
[the] state or any other state.
SECTION 6. (a) Chapter 175, Local Government Code, as
amended by this Act, applies according to its terms to all eligible
persons who leave employment with an appraisal district on or after
January 1, 2010.
(b) An appraisal district that is required by Chapter 175,
Local Government Code, as amended by this Act, to provide continued
health benefits coverage but that is not allowed to provide the
coverage under the terms of the appraisal district's existing group
health plan shall ensure that the required continued health
benefits coverage is provided for in any new plan that is adopted by
the appraisal district on or after January 1, 2010, unless the
appraisal district is exempted under Section 175.007, Local
Government Code, as amended by this Act.
SECTION 7. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2009.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 654 passed the Senate on
April 16, 2009, by the following vote: Yeas 31, Nays 0; and that
the Senate concurred in House amendments on May 29, 2009, by the
following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 654 passed the House, with
amendments, on May 26, 2009, by the following vote: Yeas 138,
Nays 7, one present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor