By: Hughes S.B. No. 1781
A BILL TO BE ENTITLED
AN ACT
relating to health coverage for school district and open-enrollment
charter school employees under interlocal contracts or the uniform
group coverage program for active school employees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 791, Government Code, is amended by
adding Subchapter D to read as follows:
SUBCHAPTER D. INTERLOCAL CONTRACTING BETWEEN LOCAL EDUCATION
AGENCIES TO PROCURE HEALTH INSURANCE COVERAGE
Sec. 791.051. DEFINITIONS. In this subchapter:
(1) "Cooperative" means a cooperative established
under this subchapter by an interlocal contract for group health
coverage.
(2) "Local education agency" means:
(A) a school district; or
(B) an open-enrollment charter school as defined
by Section 5.001, Education Code.
(3) "Participating local education agency" means,
with respect to a cooperative, a local education agency that
participates in the cooperative.
Sec. 791.052. COMPLIANCE WITH SUBCHAPTER REQUIRED. A local
education agency shall comply with this subchapter when procuring
and administering employee group health coverage with another local
education agency.
Sec. 791.053. INTERLOCAL CONTRACT FOR GROUP HEALTH
INSURANCE COVERAGE. (a) The governing body of a local education
agency may by resolution enter into an interlocal contract and
cooperate with one or more other local education agencies to
establish a cooperative for the purposes of procuring group health
insurance coverage under this subchapter.
(b) The governing body of a local education agency may renew
an interlocal contract entered into under Subsection (a).
(c) This subchapter does not affect the ability of local
education agencies to provide group health coverage through a risk
pool established in accordance with Chapter 172, Local Government
Code.
Sec. 791.054. COOPERATIVE. (a) A cooperative is a legal
entity that may procure employee group health insurance coverage
for each participating local education agency.
(b) Participating local education agencies may contract for
the supervision and administration of the cooperative in accordance
with Section 791.013.
(c) Except as provided by this subsection, a cooperative is
governed by a board of directors composed of the chief executive
officers of each participating local education agency or the
officers' designees. If the cooperative is composed of more than
seven local education agencies, the cooperative shall appoint at
least seven directors to serve on the cooperative's board of
directors.
Sec. 791.055. PROCUREMENT. (a) A cooperative must procure
a contract for employee group health coverage under this subchapter
through a request for proposals to potential vendors advertised in
a manner consistent with Section 44.031(g), Education Code, in at
least one county in which a participating local education agency's
central office is located.
(b) The board of directors of a cooperative shall select the
vendor that provides the best value to participating local
education agencies considering the factors described by Section
44.031(b), Education Code.
(c) A cooperative that enters into a contract in accordance
with this section satisfies a competitive bidding requirement
applicable to the procurement of group health coverage under other
law.
Sec. 791.056. OFFER OF COVERAGE; PREMIUM LIABILITY. (a) A
cooperative shall offer one or more group health insurance plans
procured under Section 791.055 to:
(1) employees of participating local education
agencies; and
(2) at the discretion of the cooperative's board of
directors, dependents of employees described by Subdivision (1).
(b) The board of directors of a cooperative may determine a
participating local education agency's payment of all, part, or
none of the premiums for employees or dependents for a plan offered
under Subsection (a).
SECTION 2. Section 1579.155(a) and (c), Insurance Code, are
amended to read as follows:
(a) A [Effective September 1, 2022, a] participating entity
may elect to discontinue the entity's participation in the program
by providing written notice to the trustee not later than May
[December] 31 of the year preceding the first day of the plan year
in which the election will be effective.
(c) An [Effective September 1, 2022, an] entity that elects
to participate in the program shall provide written notice to the
trustee not later than May 31 [December 31] of the year preceding
the first day of the plan year in which the election will be
effective. The entity may not elect to discontinue the entity's
participation until the fifth anniversary of the effective date of
the entity's election to participate.
SECTION 3. Section 1579.155, Insurance Code, as amended by
this Act, applies only to group coverage provided for a plan year
beginning on or after September 1, 2024. A plan year that begins
before September 1, 2024, 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 4. This Act takes effect September 1, 2023.