By: Huffman S.B. No. 788
(In the Senate - Filed February 9, 2017; February 22, 2017,
read first time and referred to Committee on State Affairs;
April 6, 2017, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 8, Nays 1; April 6, 2017,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 788 By: Huffman
A BILL TO BE ENTITLED
AN ACT
relating to the administration of and benefits payable under the
Texas Public School Retired Employees Group Benefits Act.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1575.002, Insurance Code, is amended by
amending Subdivision (5) and adding Subdivisions (5-a) and (5-b) to
read as follows:
(5) "Health benefit plan" means any [a group insurance
policy, contract, or certificate, medical or hospital service
agreement, membership or subscription contract, salary
continuation plan, or similar] group arrangement to provide health
care benefits [services] or to pay or reimburse expenses for [of]
health care services.
(5-a) "Medicare Advantage plan" means a health benefit
plan operated under Part C of the Medicare program.
(5-b) "Medicare prescription drug plan" means a health
benefit plan operated under Part D of the Medicare program.
SECTION 2. Subchapter A, Chapter 1575, Insurance Code, is
amended by adding Section 1575.0025 to read as follows:
Sec. 1575.0025. REFERENCES TO BASIC PLAN. A reference in
this code to a "basic plan" under this chapter means a health
benefit plan provided under this chapter other than a Medicare
Advantage plan or a Medicare prescription drug plan.
SECTION 3. Section 1575.006(a), Insurance Code, is amended
to read as follows:
(a) The following are exempt from execution, attachment,
garnishment, or any other process:
(1) benefit payments, [including optional benefits
payments,] active employee and state contributions, and retiree,
surviving spouse, and surviving dependent child contributions;
(2) any rights, benefits, or payments accruing to any
person under this chapter; and
(3) any money in the fund.
SECTION 4. Section 1575.052(a), Insurance Code, is amended
to read as follows:
(a) The trustee may adopt rules, plans, procedures, and
orders reasonably necessary to implement this chapter, including:
(1) minimum benefit and financing standards for group
coverage for retirees, dependents, surviving spouses, and
surviving dependent children;
(2) [basic and optional] group coverage for retirees,
dependents, surviving spouses, and surviving dependent children;
(3) procedures for contributions and deductions;
(4) periods for enrollment and selection of [optional]
coverage and procedures for enrolling and exercising options under
the group program;
(5) procedures for claims administration;
(6) procedures to administer the fund; and
(7) a timetable for:
(A) developing minimum benefit and financial
standards for group coverage;
(B) establishing health benefit plans offered
under the group program [plans]; and
(C) taking bids and awarding contracts for health
benefit plans offered under the group program [plans].
SECTION 5. Section 1575.152, Insurance Code, is amended to
read as follows:
Sec. 1575.152. HEALTH BENEFIT [BASIC] PLAN MUST COVER
PREEXISTING CONDITIONS. A health benefit [basic] plan offered
under the group program, other than a Medicare Advantage plan or a
Medicare prescription drug plan, must cover preexisting
conditions.
SECTION 6. Section 1575.153, Insurance Code, is amended to
read as follows:
Sec. 1575.153. HEALTH BENEFIT PLAN [BASIC] COVERAGE FOR
RETIREES. (a) A retiree who applies for coverage during an
enrollment period may not be denied coverage in a health benefit
[basic] plan provided under this chapter for which the retiree is
eligible unless the trustee finds under Subchapter K that the
retiree defrauded or attempted to defraud the group program.
(b) A retiree who has coverage under a health benefit plan
offered under the group program shall pay a monthly contribution,
as determined by the trustee.
(c) As a condition of electing coverage under a health
benefit plan, the retiree must, in writing, authorize the trustee
to deduct the amount of the contribution from the retiree's monthly
annuity payment. The trustee shall deduct the contribution in the
manner and form determined by the trustee.
(d) Notwithstanding Subsection (b), a retiree is not
required to pay a monthly contribution under this section until the
2022 plan year if the retiree:
(1) has taken a disability retirement under the
Teacher Retirement System of Texas on or before January 1, 2017;
(2) is receiving disability retirement benefits from
the Teacher Retirement System of Texas; and
(3) is not eligible to enroll in Medicare.
(e) This subsection and Subsection (d) expire at the end of
the 2021 plan year on December 31, 2021.
SECTION 7. Section 1575.155(a), Insurance Code, is amended
to read as follows:
(a) A retiree participating in the group program is entitled
to secure for the retiree's dependents group coverage [provided for
the retiree] under this chapter for which the dependents are
eligible under this chapter or any other law, including
requirements established[, as determined] by the trustee.
SECTION 8. Section 1575.156, Insurance Code, is amended by
amending Subsection (a) and adding Subsections (c) and (d) to read
as follows:
(a) A surviving spouse who is entitled to group coverage
under this chapter may elect to retain or obtain coverage for which
the surviving spouse or dependents of the surviving spouse are
eligible [at the applicable rate for the deceased participant].
(c) A surviving spouse who elects under this section to
retain or obtain coverage under a health benefit plan offered under
the group program for the surviving spouse or dependents of the
surviving spouse shall pay a monthly contribution, as determined by
the trustee.
(d) As a condition of electing coverage under a health
benefit plan, the surviving spouse must, in writing, authorize the
trustee to deduct the amount of the contribution from the surviving
spouse's monthly annuity payment. The trustee shall deduct the
contribution in the manner and form determined by the trustee.
SECTION 9. Section 1575.157, Insurance Code, is amended to
read as follows:
Sec. 1575.157. COVERAGE FOR SURVIVING DEPENDENT CHILD.
(a) A surviving dependent child, the guardian of the child's
estate, or the person having custody of the child may elect to
retain or obtain group coverage for which the surviving dependent
child is eligible at the applicable rate for a dependent.
(b) A surviving dependent child who has coverage under a
health benefit plan offered under the group program shall pay a
monthly contribution, as determined by the trustee. The applicable
contributions must be provided by the surviving dependent child in
the manner established [by Section 1575.205 and] by the trustee.
SECTION 10. The heading to Section 1575.158, Insurance
Code, is amended to read as follows:
Sec. 1575.158. [OPTIONAL] GROUP HEALTH BENEFIT PLANS
[PLAN].
SECTION 11. Section 1575.158, Insurance Code, is amended by
amending Subsection (a) and adding Subsections (c) and (d) to read
as follows:
(a) The [Subject to Section 1575.1581, the] trustee shall
establish or [may, in addition to providing a basic plan,] contract
for and make available under the group program a high deductible [an
optional group] health [benefit] plan for retirees, dependents,
surviving spouses, or surviving dependent children who are eligible
under Section 1575.1582.
(c) The trustee shall establish or contract for and make
available under the group program a Medicare Advantage plan and a
Medicare prescription drug plan for retirees, dependents,
surviving spouses, and surviving dependent children who are
eligible under Section 1575.1582.
(d) Notwithstanding Subsection (c), if the trustee
determines that a Medicare Advantage plan or a Medicare
prescription drug plan is no longer appropriate for the group
program, the trustee may establish or contract for and make
available under the group program other health benefit plans to
provide medical or pharmacy benefits.
SECTION 12. Subchapter D, Chapter 1575, Insurance Code, is
amended by adding Section 1575.1582 to read as follows:
Sec. 1575.1582. ELIGIBILITY FOR GROUP HEALTH BENEFIT PLANS.
(a) A retiree, dependent, surviving spouse, or surviving
dependent child who is not eligible to enroll in Medicare is
eligible to enroll in a high deductible health plan offered under
the group program, subject to any other applicable eligibility
requirements, including requirements established by the trustee,
but is not eligible to enroll in another health benefit plan offered
under the group program.
(b) A retiree, dependent, surviving spouse, or surviving
dependent child who is eligible to enroll in Medicare is eligible to
enroll in a Medicare Advantage plan or a Medicare prescription drug
plan offered under the group program, subject to any other
applicable eligibility requirements, including requirements
established by the trustee, but is not eligible to enroll in another
health benefit plan offered under the group program unless
authorized by Subsection (c).
(c) If the trustee makes another health benefit plan
available under Section 1575.158(d), any individual otherwise
eligible under this section to enroll in a Medicare Advantage plan
or Medicare prescription drug plan is eligible to enroll in that
health benefit plan.
SECTION 13. Section 1575.159, Insurance Code, is amended to
read as follows:
Sec. 1575.159. COVERAGE FOR PROSTATE-SPECIFIC ANTIGEN
TEST. A health benefit plan offered under the group program, other
than a Medicare Advantage plan or a Medicare prescription drug
plan, must provide coverage for a medically accepted
prostate-specific antigen test used for the detection of prostate
cancer for each male enrolled in the health benefit plan who:
(1) is at least 50 years of age; or
(2) is at least 40 years of age and:
(A) has a family history of prostate cancer; or
(B) exhibits another cancer risk factor.
SECTION 14. The heading to Section 1575.161, Insurance
Code, is amended to read as follows:
Sec. 1575.161. [OPEN ENROLLMENT; ADDITIONAL] ENROLLMENT
PERIODS.
SECTION 15. Section 1575.161, Insurance Code, is amended by
amending Subsection (a) and adding Subsection (f) to read as
follows:
(a) A retiree, surviving spouse, or surviving dependent
child eligible for coverage under the group program may select for
that individual and the individual's eligible dependents any
coverage provided under this chapter for which each of those
individuals [the person] is otherwise eligible:
(1) on any date that is on or after the date the
retiree [person] retires and on or before the 90th day after that
date; and
(2) during any other open enrollment periods for
retirees set by the trustee by rule.
(f) An individual enrolled in a health benefit plan offered
under the group program may remain enrolled in that health benefit
plan as long as the individual remains eligible for that health
benefit plan. If an individual becomes ineligible for a health
benefit plan in which the individual is enrolled, the trustee shall
enroll the individual in a health benefit plan for which the
individual is eligible, if any, in accordance with procedures
established by the trustee.
SECTION 16. Section 1575.164(b), Insurance Code, is amended
to read as follows:
(b) A health benefit plan provided under this chapter, other
than a Medicare Advantage plan or a Medicare prescription drug
plan, must provide disease management services or coverage for
disease management services in the manner required by the Teacher
Retirement System of Texas, including:
(1) patient self-management education;
(2) provider education;
(3) evidence-based models and minimum standards of
care;
(4) standardized protocols and participation
criteria; and
(5) physician-directed or physician-supervised care.
SECTION 17. Section 1575.170(b), Insurance Code, is amended
to read as follows:
(b) A health benefit plan provided under this chapter, other
than a Medicare Advantage plan or a Medicare prescription drug
plan, that uses a drug formulary in providing a prescription drug
benefit must require prior authorization for coverage of the
following categories of prescribed drugs if the specific drug
prescribed is not included in the formulary:
(1) a gastrointestinal drug;
(2) a cholesterol-lowering drug;
(3) an anti-inflammatory drug;
(4) an antihistamine; and
(5) an antidepressant drug.
SECTION 18. Section 1575.201, Insurance Code, is amended by
amending Subsection (a) and adding Subsection (c) to read as
follows:
(a) The state through the trustee shall contribute from
money in the fund an[:
[(1) the total cost of the basic plan covering each
participating retiree; and
[(2) for each participating dependent, surviving
spouse, and surviving dependent child, the] amount prescribed by
the General Appropriations Act to cover all or part of the cost for
each retiree [of the basic plan covering the dependent], surviving
spouse, and surviving dependent child enrolled in a health benefit
plan offered under the group program.
(c) The trustee may spend a part of the money received for
the group program to offset a part of the costs for dependent
coverage if the group program is projected to remain financially
solvent during the currently funded biennium.
SECTION 19. Section 1575.202(a), Insurance Code, is amended
to read as follows:
(a) Each state fiscal year, the state shall contribute to
the fund an amount equal to 1.25 [one] percent of the salary of each
active employee.
SECTION 20. Section 1575.211(a), Insurance Code, is amended
to read as follows:
(a) The total costs for the operation of the group program
shall be shared among the state, the public schools, the active
employees, [and] the retirees, the surviving spouses, and the
surviving dependent children in the manner prescribed by the
General Appropriations Act.
SECTION 21. Section 1575.212, Insurance Code, is amended by
adding Subsection (a-1) and amending Subsection (b) to read as
follows:
(a-1) The trustee shall establish and collect payments for
the share of total costs allocated under Section 1575.211 to
retirees, surviving spouses, and surviving dependent children.
(b) In establishing the payments under Subsection (a-1)
[ranges for payment of the share of total costs allocated under
Section 1575.211 to retirees], the trustee may consider various
factors, including an enrollee's Medicare status, health benefit
plan election, and dependent coverage [the years of service credit
accrued by a retiree and may reward those retirees with more years
of service credit].
SECTION 22. Section 1575.302, Insurance Code, is amended to
read as follows:
Sec. 1575.302. PAYMENTS INTO FUND. The following shall be
paid into the fund:
(1) contributions from active employees and the
state[, including contributions for optional coverages];
(2) investment income;
(3) appropriations for implementation of the group
program; and
(4) other money required or authorized to be paid into
the fund.
SECTION 23. The following provisions of the Insurance Code
are repealed:
(1) Section 1575.103;
(2) Section 1575.156(b);
(3) Section 1575.158(b);
(4) Section 1575.1581;
(5) Sections 1575.161(b), (c), (d), and (e);
(6) Section 1575.201(b);
(7) Section 1575.205;
(8) Section 1575.211(b); and
(9) Section 1575.212(a).
SECTION 24. The changes in law made by this Act apply only
to health benefits provided under Chapter 1575, Insurance Code, as
amended by this Act, beginning with the 2018 plan year. A plan year
before the 2018 plan year is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 25. This Act takes effect September 1, 2017.
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