By: King of Hemphill H.B. No. 4076
A BILL TO BE ENTITLED
AN ACT
relating to benefits administered by the Teacher Retirement System
of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. TEACHER RETIREMENT SYSTEM COST-OF-LIVING ADJUSTMENT
SECTION 1.01. Subchapter H, Chapter 824, Government Code,
is amended by adding Section 824.703 to read as follows:
Sec. 824.703. ADDITIONAL COST-OF-LIVING ADJUSTMENT. (a)
Notwithstanding Section 824.702 and subject to Section 821.006, the
retirement system shall make a one-time cost-of-living adjustment
payable to annuitants receiving a monthly death or retirement
benefit annuity, as provided by this section.
(b) Subject to Subsections (c) and (d), to be eligible for
the adjustment, a person must be, on the effective date of the
adjustment and disregarding any forfeiture of benefits under
Section 824.601, an annuitant eligible to receive:
(1) a standard service or disability retirement
annuity payment;
(2) an optional service or disability retirement
annuity payment as either a retiree or beneficiary;
(3) an annuity payment under Section 824.402(a)(3) or
(4);
(4) an annuity payment under Section 824.502; or
(5) an alternate payee annuity payment under Section
804.005.
(c) If the annuitant:
(1) is a retiree or is a beneficiary under an optional
retirement payment plan, to be eligible for the adjustment under
this section:
(A) the annuitant must be living on the effective
date of the adjustment; and
(B) the effective date of the retirement of the
member of the retirement system must have been on or before August
31, 2019;
(2) is a beneficiary under Section 824.402(a)(3) or
(4) or 824.502, to be eligible for the adjustment:
(A) the annuitant must be living on the effective
date of the adjustment; and
(B) the date of death of the member of the
retirement system must have been on or before August 31, 2019; or
(3) is an alternate payee under Section 804.005, the
annuitant is eligible for the adjustment only if the effective date
of the election to receive the annuity payment was on or before
August 31, 2019.
(d) An adjustment made under this section does not apply to
payments under:
(1) Section 824.203(d), relating to retirees who
receive a standard service retirement annuity in an amount fixed by
statute;
(2) Section 824.304(a), relating to disability
retirees with less than 10 years of service credit;
(3) Section 824.304(b)(2), relating to disability
retirees who receive a disability annuity in an amount fixed by
statute;
(4) Section 824.404(a), relating to active member
survivor beneficiaries who receive a survivor annuity in an amount
fixed by statute;
(5) Section 824.501(a), relating to retiree survivor
beneficiaries who receive a survivor annuity in an amount fixed by
statute; or
(6) Section 824.804(b), relating to participants in
the deferred retirement option plan with regard to payments from
their deferred retirement option plan accounts.
(e) An adjustment under this section:
(1) must be made beginning with an annuity payable for
the month of December 2019; and
(2) is limited to an amount equal to 20 percent of the
monthly benefit subject to the increase.
(f) The board of trustees shall determine the eligibility
for and the amount of any adjustment in monthly annuities in
accordance with this section.
ARTICLE 2. TRANSFERRING COVERAGE PROVIDED TO ACTIVE EDUCATION
EMPLOYEES FROM TEXAS SCHOOL EMPLOYEES UNIFORM GROUP HEALTH COVERAGE
ACT TO TEXAS EMPLOYEES GROUP BENEFITS ACT
SECTION 2.01. Section 1551.004(b), Insurance Code, is
amended to read as follows:
(b) In this section, "child" includes:
(1) a natural child, adopted child, stepchild, foster
child, or child in the possession of a participant who is designated
as managing conservator of the child under an irrevocable or
unrevoked affidavit of relinquishment under Chapter 161, Family
Code; or
(2) a child who is related by blood or marriage and was
claimed as a dependent on the federal income tax return of an
individual who is eligible to participate in the group benefits
program under Section 1551.101 or 1551.102 or as an education
employee under Subchapter D-1 for the calendar year preceding the
plan year in which the child is first enrolled as a dependent under
Subchapter D, and for each subsequent year in which the child is
enrolled as a dependent.
SECTION 2.02. Section 1551.151, Insurance Code, is amended
to read as follows:
Sec. 1551.151. ENTITLEMENT TO COVERAGE. An individual who
is eligible to participate in the group benefits program under
Section 1551.101, 1551.102, [or] 1551.1022, or 1551.167 is entitled
to secure for a dependent of the individual any group coverages
provided under this chapter, as determined by the board of trustees
and subject to the exceptions provided by this subchapter.
SECTION 2.03. Chapter 1551, Insurance Code, is amended by
adding Subchapter D-1 to read as follows:
SUBCHAPTER D-1. COVERAGE AND PARTICIPATION OF EDUCATION EMPLOYEES
Sec. 1551.161. DEFINITIONS. In this subchapter:
(1) "Charter school" means an open-enrollment charter
school established under Subchapter D, Chapter 12, Education Code.
(2) "Education employee" means a participating member
of the Teacher Retirement System of Texas who is employed by a
participating education entity and who is not receiving coverage
from a program under Chapter 1575 or 1601. The term does not
include an individual performing personal services as an
independent contractor.
(3) "Full-time education employee" and "part-time
education employee" have the meanings assigned by rules adopted by
the board of trustees.
(4) "Participating education entity" means an entity
that elects or is required to participate under this subchapter in
the group benefits program established under this chapter. The
term includes:
(A) a school district;
(B) another educational district whose employees
are members of the Teacher Retirement System of Texas;
(C) a regional education service center; and
(D) a charter school that meets the requirements
of Section 1551.166.
(5) "Regional education service center" means a
regional education service center established under Chapter 8,
Education Code.
Sec. 1551.162. REFERENCES TO COVERAGE PLAN. A reference in
this code to a "primary care coverage plan" or "health benefit plan"
under former Chapter 1579 means a basic coverage plan provided to
eligible education employees under this subchapter.
SECTION 2.04. Sections 1579.151, 1579.152, 1579.153, and
1579.154, Insurance Code, are transferred to Subchapter D-1,
Insurance Code, as added by this Act, redesignated as Sections
1551.163, 1551.164, 1551.165, and 1551.166, Insurance Code, and
amended to read as follows:
Sec. 1551.163 [1579.151]. REQUIRED PARTICIPATION OF SCHOOL
DISTRICTS WITH 500 OR FEWER EDUCATION EMPLOYEES. (a) Each school
district with 500 or fewer education employees and each regional
education service center is required to participate in the group
benefits program.
(b) Notwithstanding Subsection (a), a school district
otherwise subject to Subsection (a) that, on January 1, 2001, was
individually self-funded for the provision of health coverage to
its education employees may elect not to participate in the group
benefits program.
(c) An educational district described by Section
1551.161(4)(B) [1579.002(5)(B)] that, on January 1, 2001, had 500
or fewer education employees may elect not to participate in the
group benefits program.
Sec. 1551.164 [1579.152]. PARTICIPATION OF OTHER SCHOOL
DISTRICTS. A [Effective September 1, 2005, a] school district with
more than 500 education employees may elect to participate in the
group benefits program. A school district that elects to
participate under this section shall apply for participation in the
manner prescribed by the board of trustees [trustee] by rule.
Sec. 1551.165 [1579.153]. PARTICIPATION BY CERTAIN RISK
POOLS. (a) In determining the number of education employees of a
school district for purposes of Sections 1551.163 [1579.151] and
1551.164 [1579.152], school districts that, on January 1, 2001,
were members of a risk pool established under the authority of
Chapter 172, Local Government Code, as provided by Section 22.004,
Education Code, are [may elect to be] treated as a single unit if an
appropriate election was made[. A school district shall elect
whether to be considered as a member of a risk pool under this
section] by notifying the Teacher Retirement System of Texas
[trustee] not later than September 1, 2001.
(b) A risk pool in existence on January 1, 2001, that, as of
that date, provided group health coverage to 500 or fewer school
district education employees may elect to participate in the group
benefits program.
(c) A school district with 500 or fewer education employees
that is a member of a risk pool described by Subsection (a) that
provides group health coverage to more than 500 school district
education employees is [must elect, not later than September 1,
2001, whether to be] treated as a school district with 500 or fewer
education employees or as part of a unit with more than 500
education employees in accordance with the election made by
notification to[. The school district must notify] the Teacher
Retirement System of Texas [trustee of the election, in the manner
prescribed by the trustee,] not later than September 1, 2001.
(d) For purposes of this section, participation in the group
benefits program by school districts covered by a risk pool is
limited to school districts covered by the risk pool as of January
1, 2001.
Sec. 1551.166 [1579.154]. PARTICIPATION BY CHARTER
SCHOOLS; ELIGIBILITY. (a) A charter school is eligible to
participate in the group benefits program if the school agrees:
(1) that all records of the school relating to
participation in the group benefits program are open to inspection
by the board of trustees [trustee], the administering firm, the
commissioner of education, or a designee of any of those entities;
and
(2) to have the school's accounts relating to
participation in the group benefits program annually audited by a
certified public accountant at the school's expense.
(b) A charter school must notify the board of trustees
[trustee] of the school's intent to participate in the group
benefits program in the manner and within the time required by rules
adopted by the board of trustees [trustee].
SECTION 2.05. Sections 1579.202, 1579.203, 1579.204, and
1579.205, Insurance Code, are transferred to Subchapter D-1,
Insurance Code, as added by this Act, redesignated as Sections
1551.167, 1551.168, 1551.169, and 1551.170, Insurance Code, and
amended to read as follows:
Sec. 1551.167 [1579.202]. ELIGIBLE EDUCATION EMPLOYEES.
(a) Except as provided by Section 1551.169 [1579.204],
participation under this subchapter in the group benefits program
is limited to education employees of participating education
entities who are full-time employees and to part-time employees who
are participating members in the Teacher Retirement System of
Texas.
(b) An education employee described by Subsection (a) who
applies for coverage during an open enrollment period prescribed by
the board of trustees [trustee] is automatically covered by the
basic [catastrophic care] coverage plan for employees unless the
employee:
(1) specifically waives coverage under this chapter;
or
(2) [selects a higher tier coverage plan; or
[(3)] is expelled from the program.
Sec. 1551.168 [1579.203]. SELECTION OF COVERAGE. (a) A
participating education employee may select coverage in any
coverage plan offered by the board of trustees [trustee].
(b) The education employee is not required to continue
participation in the coverage plan initially selected and may
select a different [higher or lower tier] coverage plan than the
plan initially selected by the employee in the manner provided by
rules adopted by the board of trustees [trustee].
(c) If the combined contributions received from the state
and the employing participating education entity under this
subchapter [Subchapter F] exceed the cost of a coverage plan
selected by the education employee, the employee may use the excess
amount of contributions to obtain optional coverages provided
[coverage] under this chapter [a higher tier coverage plan] or to
pay all or part of the cost of coverage for the employee's
dependents.
(d) A married couple, both of whom are eligible for coverage
under this subchapter under the group benefits program, may pool
the amount of contributions to which the couple are entitled under
this subchapter [the program] to obtain coverage for themselves and
dependent coverage.
Sec. 1551.169 [1579.204]. CERTAIN PART-TIME EDUCATION
EMPLOYEES. A part-time education employee of a participating
education entity who is not a participating member in the Teacher
Retirement System of Texas is eligible to participate in the
program only if the employee pays all of the premiums and other
costs associated with the health coverage plan selected by the
employee.
Sec. 1551.170 [1579.205]. PAYMENT BY PARTICIPATING
EDUCATION ENTITY. Notwithstanding Section 1551.169 [1579.204], a
participating education entity may pay any portion of what
otherwise would be the employee share of premiums and other costs
associated with the coverage selected by the education employee.
SECTION 2.06. Sections 1579.251, 1579.252, 1579.253,
1579.254, and 1579.255, Insurance Code, are transferred to
Subchapter D-1, Insurance Code, as added by this Act, redesignated
as Sections 1551.171, 1551.172, 1551.173, 1551.174, and 1551.175,
Insurance Code, and amended to read as follows:
Sec. 1551.171 [1579.251]. STATE ASSISTANCE. (a) The state
shall assist education employees of participating school districts
and charter schools in the purchase of group health coverage under
this chapter by providing for each covered education employee the
amount of $900 each state fiscal year or a greater amount as
provided by the General Appropriations Act. The state contribution
shall be distributed through the school finance formulas under
Chapters 41 and 42, Education Code, and used by school districts and
charter schools as provided by Section 42.260, Education Code.
(b) The state shall assist education employees of
participating regional education service centers and educational
districts described by Section 1551.161(4)(B) [1579.002(5)(B)] in
the purchase of group health coverage under this chapter by
providing to the employing service center or educational district,
for each covered education employee, the amount of $900 each state
fiscal year or a greater amount as provided by the General
Appropriations Act.
Sec. 1551.172 [1579.252]. CONTRIBUTION BY PARTICIPATING
EDUCATION ENTITIES. A participating education entity shall make
contributions for the program as provided by Chapter 1581.
Sec. 1551.173 [1579.253]. CONTRIBUTION BY EDUCATION
EMPLOYEE. (a) An education employee covered by the group benefits
program shall pay that portion of the cost of coverage selected by
the employee that exceeds the amount of the state contribution
under Section 1551.171 [1579.251] and the participating education
entity contribution under Section 1551.172 in the manner required
by the board of trustees [1579.252].
(b) The education employee may pay the employee's
contribution under this subsection from the amount distributed to
the employee under Subchapter D, Chapter 22, Education Code.
(c) Notwithstanding Subsection (a), a participating
education entity may pay any portion of what otherwise would be the
employee share of premiums and other costs associated with the
coverage selected by the education employee.
Sec. 1551.174 [1579.254]. CONTRIBUTIONS HELD IN TRUST FOR
FUND. A participating education entity:
(1) shall hold contributions required by this
subchapter in trust for the Texas school employees uniform group
coverage trust fund and its participants; and
(2) may not divert the contributions for any other
purpose.
Sec. 1551.175 [1579.255]. INTEREST ASSESSED ON LATE
PAYMENT OF CONTRIBUTIONS BY PARTICIPATING EDUCATION ENTITIES. (a)
A participating education entity that does not remit to the board of
trustees [trustee] all contributions required by this subchapter
before the seventh day after the last day of the month shall pay to
the Texas school employees uniform group coverage trust fund:
(1) the contributions; and
(2) interest on the unpaid amounts at the annual rate
of six percent compounded monthly.
(b) On request, the board of trustees [trustee] may grant a
waiver of the deadline imposed by this section based on a
participating education entity's financial or technological
resources.
SECTION 2.07. Section 1579.301, Insurance Code, is
transferred to Subchapter D-1, Insurance Code, as added by this
Act, and redesignated as Section 1551.176, Insurance Code, to read
as follows:
Sec. 1551.176 [1579.301]. FUND; ADMINISTRATION. The Texas
school employees uniform group coverage trust fund is a trust fund
with the comptroller.
SECTION 2.08. Sections 1579.302, 1579.303, and 1579.304,
Insurance Code, are transferred to Subchapter D-1, Insurance Code,
as added by this Act, redesignated as Sections 1551.177, 1551.178,
and 1551.179, Insurance Code, and amended to read as follows:
Sec. 1551.177 [1579.302]. COMPOSITION OF FUND. The Texas
school employees uniform group coverage trust fund is composed of:
(1) all contributions made to the fund under this
subchapter [chapter] from education employees, participating
education entities, and the state;
(2) contributions made by education employees or
participating education entities for optional coverages;
(3) investment income;
(4) any additional amounts appropriated by the
legislature for contingency reserves, administrative expenses, or
other expenses; and
(5) any other money required or authorized to be paid
into the fund.
Sec. 1551.178 [1579.303]. PAYMENTS FROM FUND. The board
of trustees [trustee] may use amounts in the Texas school employees
uniform group coverage trust fund only to provide group coverages
to eligible education employees under the group benefits program
[this chapter] and to pay the expenses of administering the group
benefits program for participating education entities.
Sec. 1551.179 [1579.304]. INVESTMENT OF FUND. The board of
trustees [trustee] may invest assets of the Texas school employees
uniform group coverage trust fund in the manner provided by Section
67(a)(3), Article XVI, Texas Constitution.
SECTION 2.09. Section 1501.009(b), Insurance Code, is
amended to read as follows:
(b) An independent school district that is participating in
the state employees [uniform] group benefits [coverage] program
established under Chapter 1551 [1579] may not participate in the
small employer market under this section for health insurance
coverage [and may not renew a health insurance contract obtained in
accordance with this section after the date on which the program of
coverages provided under Chapter 1579 is implemented]. This
subsection does not affect a contract for the provision of optional
coverages not included in a health benefit plan under this chapter.
SECTION 2.10. Section 1581.001(2), Insurance Code, is
amended to read as follows:
(2) "Participating charter school" means an
open-enrollment charter school established under Subchapter D,
Chapter 12, Education Code, that participates in the [uniform]
group benefits [coverage] program established under Chapter 1551
[1579].
SECTION 2.11. Sections 22.004(a), (c), (i), and (j),
Education Code, are amended to read as follows:
(a) A district shall participate in the state employees
[uniform] group benefits [coverage] program established under
Chapter 1551 [1579], Insurance Code, as provided by Subchapter D-1
[D] of that chapter.
(c) The cost of the coverage provided under the program
described by Subsection (a) shall be paid by the state, the
district, and the employees in the manner provided by Subchapter
D-1 [F], Chapter 1551 [1579], Insurance Code. The cost of coverage
provided under a plan adopted under Subsection (b) shall be shared
by the employees and the district using the contributions by the
state described by Subchapter D-1 [F], Chapter 1551 [1579],
Insurance Code, or Subchapter D.
(i) Notwithstanding any other provision of this section, a
district participating in the state employees [uniform] group
benefits [coverage] program established under Chapter 1551 [1579],
Insurance Code, may not make group health coverage available to its
employees under this section after the date on which the program of
coverages provided under Chapter 1551 [1579], Insurance Code, is
implemented.
(j) This section does not preclude a district that is
participating in the state employees [uniform] group benefits
[coverage] program established under Chapter 1551 [1579],
Insurance Code, from entering into contracts to provide optional
insurance coverages for the employees of the district.
SECTION 2.12. Section 22.101(3), Education Code, is amended
to read as follows:
(3) "Participating charter school" means an
open-enrollment charter school established under Subchapter D,
Chapter 12, that participates in the group benefits program
established under Chapter 1551 [1579], Insurance Code.
SECTION 2.13. Sections 42.260(a) and (c), Education Code,
are amended to read as follows:
(a) In this section, "participating charter school" means
an open-enrollment charter school that participates in the state
employees [uniform] group benefits [coverage] program established
under Chapter 1551 [1579], Insurance Code.
(c) Notwithstanding any other provision of this code, a
school district or participating charter school may use the sum of
the following amounts of funds only to pay contributions under a
group health coverage plan for district or school employees:
(1) the amount determined by multiplying the amount of
$900 or the amount specified in the General Appropriations Act for
that year for purposes of the state contribution under Section
1551.171 [1579.251], Insurance Code, by the number of district or
school employees who participate in a group health coverage plan
provided by or through the district or school; and
(2) the difference between the amount necessary for
the district or school to comply with Section 1581.052, Insurance
Code, for the school year and the amount the district or school is
required to use to provide health coverage under Section 1581.051,
Insurance Code, for that year.
SECTION 2.14. The following provisions of the Insurance
Code are repealed:
(1) Subchapters A, B, and C, Chapter 1579;
(2) the headings to Subchapters D and E, Chapter 1579;
(3) Section 1579.201; and
(4) the headings to Subchapters F and G, Chapter 1579.
SECTION 2.15. (a) In this section, "program" means the
uniform group coverage program under Chapter 1579, Insurance Code,
as it existed before amendment by this Act.
(b) Effective September 1, 2020:
(1) all functions and activities of the Teacher
Retirement System of Texas under Chapter 1579, Insurance Code,
before that date are transferred to the Employees Retirement System
of Texas;
(2) all rules, fees, policies, procedures, decisions,
and forms of the Teacher Retirement System of Texas related to the
program become applicable rules, fees, policies, procedures,
decisions, and forms of the Employees Retirement System of Texas
until changed by the board of trustees of that system;
(3) a complaint, investigation, contested case, or
other proceeding related to the program that is pending on
September 1, 2020, is transferred without change in status to the
Employees Retirement System of Texas;
(4) the management of the Texas school employees
uniform group coverage trust fund and all other money, contracts,
property, and obligations related to the program are transferred to
the Employees Retirement System of Texas; and
(5) the unexpended and unobligated balance of any
money appropriated by the legislature for the program for the
purpose of administering the program is transferred to the
Employees Retirement System of Texas.
(c) The Teacher Retirement System of Texas shall provide to
the Employees Retirement System of Texas the records and other
information necessary for the Employees Retirement System of Texas
to implement its duties under this Act.
SECTION 2.16. The changes in law made by this article apply
only to group coverage provided under Chapter 1551, Insurance Code,
or Chapter 1579, Insurance Code, for a plan year beginning on or
after September 1, 2020. A plan year that begins before that date 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.
ARTICLE 3. TERMINATION OF TEXAS PUBLIC SCHOOL EMPLOYEES GROUP
INSURANCE PROGRAM FOR RETIREES
SECTION 3.01. Chapter 1575, Insurance Code, is amended by
adding Subchapters L and M to read as follows:
SUBCHAPTER L. TERMINATION OF GROUP PROGRAM
Sec. 1575.551. PROGRAM TERMINATION. Subject to Section
1575.552, effective September 1, 2019, the group program is
terminated.
Sec. 1575.552. COVERAGE ELIGIBILITY TERMINATES; PHASE-OUT
PERIOD. (a) An individual who is not a participant in the group
program on August 31, 2019, is not entitled to obtain coverage under
the group program after that date.
(b) An individual who is a participant in the group program
on August 31, 2019, and who is, on September 1, 2019, eligible to
participate in Medicare, is not entitled to continue coverage under
the group program after August 31, 2019.
(c) An individual who is a participant in the group program
on August 31, 2019, but who is not, on September 1, 2019, eligible
to participate in Medicare, may continue coverage under the group
program in accordance with this subchapter until the earlier of:
(1) the date the individual first becomes eligible to
participate in Medicare; or
(2) September 1, 2029.
Sec. 1575.553. AUTHORIZED COVERAGE. Notwithstanding
Section 1575.151, on and after September 1, 2019, the group program
may not offer coverage other than health benefit plan coverage.
Sec. 1575.554. EXCESS GROUP INSURANCE FUND MONEY. (a) Not
later than December 31, 2019, the trustee shall determine the
amount of money required to fund coverage for individuals under
Section 1575.552(c) for the 2019-2020 fiscal year and shall certify
that amount to the comptroller.
(b) As soon as practicable after January 1, 2020, the
trustee shall, notwithstanding Section 1575.206, pay to each
retiree participating in the group program on August 31, 2019, an
equal share of the amount by which the money in the group insurance
fund exceeds the amount of money determined under Subsection (a).
Sec. 1575.555. REDUCTION IN CONTRIBUTIONS. (a) Beginning
not later than June 1, 2020, the trustee shall annually determine
the amount of money required to fund coverage for individuals under
Section 1575.552(c) for the subsequent fiscal year. The trustee
shall certify that amount to the comptroller.
(b) The trustee, in consultation with the comptroller, may
annually adjust the amounts of contributions to be made under
Sections 1575.201, 1575.202, 1575.203, and 1575.204, to the extent
that the trustee determines that money otherwise to be contributed
under those sections for a fiscal year will exceed the amount
determined to be required for that fiscal year under Subsection
(a).
Sec. 1575.556. FINAL RECONCILIATION; TERMINATION OF FUND.
As soon as practicable after August 31, 2029, the trustee, in
consultation with the comptroller, shall determine any
unencumbered amount remaining in the group insurance fund. The
trustee shall pay that amount in equal shares to individuals
participating in the program on August 31, 2029.
Sec. 1575.557. GROUP PROGRAM AND GROUP INSURANCE FUND
ABOLISHED. Effective September 1, 2029, the group program and the
group insurance fund are abolished.
Sec. 1575.558. DUTIES OF THE TRUSTEE. (a) The trustee
shall implement a plan for the orderly termination of the group
program in accordance with this subchapter.
(b) The determinations made by the trustee under Sections
1575.554 and 1575.555 must be actuarially justified.
SUBCHAPTER M. EXPIRATION OF CHAPTER
Sec. 1575.601. EXPIRATION OF CHAPTER. This chapter expires
September 1, 2030.
ARTICLE 4.
EFFECTIVE DATE
SECTION 4.01. This Act takes effect September 1, 2019.