Bill Text: TX HB3496 | 2011-2012 | 82nd Legislature | Introduced

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Bill Title: Relating to a health reimbursement arrangement program for certain eligible retirees covered by the Employees Retirement System, the Teacher Retirement System, and the University of Texas and Texas A&M Uniform Benefits.

Sponsorship: Partisan Bill (Republican 1)

Status: (Introduced - Dead) 2011-03-22 - Referred to Pensions, Investments & Financial Services [HB3496 Detail]

Download: Texas-2011-HB3496-Introduced.html

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By: Darby H.B. No. 3496

A BILL TO BE ENTITLED
AN ACT
relating to a health reimbursement arrangement program for certain
eligible retirees covered by the Employees Retirement System, the
Teacher Retirement System, and the University of Texas and Texas
A&M Uniform Benefits.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1551.003, Insurance Code, is amended by
adding Subsection (5-a) to read as follows:
(5-a). "Health reimbursement arrangement" means an
arrangement that:
(A) is funded solely by the board of trustees;
(B) is not provided under a salary reduction election or
otherwise pursuant to a cafeteria plan;
(C) reimburses an annuitant, dependent, surviving spouse,
or surviving dependent in the group benefits program for medical
care as defined in Section 213(d) of the Internal Revenue Code (26
U.S.C. Section 213(d)), including reimbursements for insurance
premiums for health coverage covering such medical care;
(D) provides reimbursements up to a maximum dollar amount
for a coverage period; and
(E) provides that any unused portion of the maximum dollar
amount at the end of a coverage period is carried forward to
increase the maximum reimbursement amount in subsequent coverage
periods.
SECTION 2. Subchapter E, Chapter 1551, Insurance Code, is
amended by adding Section 1551.226 to read as follows:
Sec 1551.226. HEALTH REIMBURSEMENT ARRANGEMENTS. The board
of trustees may self-fund a plan under this chapter which provides
health reimbursement arrangements to annuitants, dependents,
surviving spouses, and surviving dependents who are covered by
Medicare. The board of trustees shall have the authority to
determine the terms and conditions of the health reimbursement
arrangements. Funds allocated to the health reimbursement
arrangements for annuitants, dependents, surviving spouses, and
surviving dependents who are covered by Medicare may be used to pay
for or to make reimbursements for individual health insurance
policy premiums. The annuitants (or dependents, surviving spouses,
or surviving dependents, as applicable) may select any individual
health insurance policy, including a Medigap or Medicare supplement
policy, Medicare Advantage policy or a Medicare prescription drug
policy, as applicable, to the extent provided by the terms and
conditions of the health reimbursement arrangement. Pursuant to
Section 1551.212 of this chapter, the board of trustees may
contract with an administering firm to administer the health
reimbursement arrangements.
SECTION 3. Section 1575.002, Insurance Code, is amended by
adding Subsection (5-a) to read as follows:
(5-a). "Health reimbursement arrangement" means an
arrangement that:
(A) is funded solely by the Teacher Retirement System of
Texas;
(B) is not provided under a salary reduction election or
otherwise pursuant to a cafeteria plan;
(C) reimburses a participant, dependent, surviving spouse,
or surviving dependent child in the group program for medical care
as defined in Section 213(d) of the Internal Revenue Code (26 U.S.C.
Section 213(d)), including reimbursements for insurance premiums
for health coverage covering such medical care;
(D) provides reimbursements up to a maximum dollar amount
for a coverage period; and
(E) provides that any unused portion of the maximum dollar
amount at the end of a coverage period is carried forward to
increase the maximum reimbursement amount in subsequent coverage
periods.
SECTION 4. Section 1575.103, Texas Code, is amended to read
as follows:
Sec. 1575.103. PLANS MAY VARY ACCORDING TO MEDICARE
COVERAGE. For retirees, dependents, [and] surviving spouses, and
surviving dependent children who are not covered by Medicare, the
trustee may provide one or more plans that are different from the
plans provided for retirees, dependents, [and] surviving spouses,
and surviving dependent children who are [not] covered by Medicare
using funds from health reimbursement arrangements.
SECTION 5. Subchapter C, Chapter 1575, Insurance Code, is
amended by adding Section 1575.011 to read as follows:
Sec 1575.011. HEALTH REIMBURSEMENT ARRANGEMENTS. The trustee
may self-fund a plan under this chapter which provides health
reimbursement arrangements to retirees, dependents, surviving
spouses, and surviving dependent children who are covered by
Medicare. The trustee has the authority to determine the terms and
conditions of the health reimbursement arrangements. Funds
allocated to the health reimbursement arrangements for retirees,
dependents, surviving spouses and surviving dependent children who
are covered by Medicare may be used to pay for or to make
reimbursements for individual health insurance policy premiums.
The retirees (or dependents, surviving spouses, or dependent
children, as applicable) may select any individual health insurance
policy, including a Medigap or Medicare supplement policy, Medicare
Advantage policy or a Medicare prescription drug policy, as
applicable, to the extent provided by the terms and conditions of
the health reimbursement arrangement. Pursuant to Sections
1575.106 and 1575.107 of this chapter, the trustee may contract
with a third-party to administer the health reimbursement
arrangements.
SECTION 6. Section 1601.003, Insurance Code, is amended by
amending Subsection (1) and (4) to read as follows:
(1) "Administering firm [carrier]" means an [a carrier or]
organization that is:
(A) qualified to engage in business in this state; and
(B) designated by a system to administer services,
benefits, insurance coverages, or requirements in accordance with
this chapter.
(4) "Group life, accident, or health benefit plan" means a
group agreement, policy, contract, or arrangement provided by a [an
administering] carrier, including:
(A) a group insurance policy or contract;
(B) a life, accident, medical, dental, or hospital service
agreement;
(C) a membership or subscription contract; [or]
(D) any other similar group arrangement; or
(E) a health reimbursement arrangement.
SECTION 7. Section 1601.003, Insurance Code, is amended by
adding Subsection (4-a) to read as follows:
(4-a) "Health reimbursement arrangement" means an
arrangement that:
(A) is funded solely by the governing board of a system;
(B) is not provided under a salary reduction election or
otherwise through a cafeteria plan;
(C) reimburses a retired employee, dependent, surviving
spouse, or surviving dependent in the uniform program for medical
care as defined in Section 213(d) of the Internal Revenue Code (26
U.S.C. Section 213(d)), including reimbursements for insurance
premiums for health coverage covering such medical care;
(D) provides reimbursements up to a maximum dollar amount
for a coverage period; and
(E) provides that any unused portion of the maximum dollar
amount at the end of a coverage period is carried forward to
increase the maximum reimbursement amount in subsequent coverage
periods.
SECTION 8. Chapter 1601.054, Insurance Code, is amended to
read as follows:
Sec. 1601.054. COMPETITIVE BIDDING REQUIRED. A system shall
submit the uniform program, including any agreement under which an
administering firm [a carrier] is engaged to administer a
self-insured program, for competitive bidding at least every six
years.
SECTION 9. Chapter 1601.057, Insurance Code, is amended to
read as follows:
Sec. 1601.057. SELECTION OF BIDS. (a) A system is not
required to select the lowest bid under Section 1601.054 but shall
take into consideration other relevant criteria, such as ability to
service contracts, past experience, and financial stability.
(b) If a system selects a carrier or administering firm
whose bid differs from that advertised, the governing board of the
system shall fully justify and record the reasons for the deviation
in the minutes of the next meeting of the governing board.
SECTION 10. Chapter 1601.062, Insurance Code, is amended to
read as follows:
Sec. 1601.062. REPORTS AND RECORDS BY ADMINISTERING FIRM OR
CARRIER. Each contract entered into under this chapter between a
system and an administering firm or carrier must:
(1) require the administering firm or carrier to provide
reasonable reports that the system determines are necessary for the
system to perform its functions under this chapter; and
(2) permit the system and representatives of the state
auditor to examine records of the administering firm or carrier as
necessary to accomplish the purposes of this chapter.
SECTION 11. Chapter 1601.151, Insurance Code, is amended to
read as follows:
Sec. 1601.151. AUTHORITY TO SELF-INSURE; EXEMPTION FROM
OTHER INSURANCE LAWS. (a) Notwithstanding any other provisions of
this chapter, the governing board of a system may:
(1) self-insure a plan provided under this chapter; and
(2) hire a [an carrier] administering firm to administer the
system's uniform program.
(b) A plan for which a system provides coverage on a self-
insured basis is exempt from any other insurance law of this state
that does not expressly apply to that plan or this chapter.
(c) Expenses for the administration of a self-insured plan
may come from the contributions of employees and the state after
payments for any coverage provided under this chapter have been
made.
SECTION 12. Chapter 1601.155, Insurance Code, is amended to
read as follows:
Sec. 1601.155. REINSURANCE. A system may arrange with [an
administering] a carrier issuing a policy under this chapter for
the reinsurance of portions of the total amount of insurance under
the policy with other carriers that elect to participate in the
reinsurance.
SECTION 13. Subchapter D, Chapter 1601, Insurance Code, is
amended by adding Section 1601.156 to read as follows:
Sec. 1601.156. HEALTH REIMBURSEMENT ARRANGEMENTS. The
governing board of a system may self-insure a plan under this
chapter which provides health reimbursement arrangements to
retired employees, dependents, surviving spouses, and surviving
dependents who are covered by Medicare. The board has the authority
to determine the terms and conditions of the health reimbursement
arrangements. Funds allocated to the health reimbursement
arrangements for retired employees, dependents, surviving spouses,
and surviving dependents who are covered by Medicare may be used to
pay for or to make reimbursements for individual health insurance
policy premiums. The retired employees (or dependents, surviving
spouses, or surviving dependents, as applicable) may select any
individual health insurance policy, including a Medigap or Medicare
supplement policy, Medicare Advantage policy or a Medicare
prescription drug policy, as applicable, to the extent provided by
the terms and conditions of the health reimbursement arrangement.
Pursuant to Sections 1601.054 through 1601.057 of this chapter, the
system may contract with an administering firm to administer the
health reimbursement arrangements.
SECTION 14. EFFECTIVE DATE. 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, 2011.