Bill Text: TX HB3897 | 2015-2016 | 84th Legislature | Comm Sub

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Bill Title: Relating to contributions to, benefits from, membership in, and the administration of systems and programs administered by the Teacher Retirement System of Texas.

Sponsorship: Partisan Bill (Republican 1)

Status: (Introduced - Dead) 2015-05-11 - Postponed [HB3897 Detail]

Download: Texas-2015-HB3897-Comm_Sub.html

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84R22452 KFF-D
By: Kuempel H.B. No. 3897
Substitute the following for H.B. No. 3897:
By: Alonzo C.S.H.B. No. 3897

A BILL TO BE ENTITLED
AN ACT
relating to contributions to, benefits from, membership in, and the
administration of systems and programs administered by the Teacher
Retirement System of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 22.004(b) and (d), Education Code, are
amended to read as follows:
(b) A district that does not participate in the program
described by Subsection (a) shall make available to its employees,
including employees whose coverage under the group program
established under Chapter 1575, Insurance Code, has been suspended,
group health coverage provided by a risk pool established by one or
more school districts under Chapter 172, Local Government Code, or
under a policy of insurance or group contract issued by an insurer,
a company subject to Chapter 842, Insurance Code, or a health
maintenance organization under Chapter 843, Insurance Code. The
coverage must meet the substantive coverage requirements of Chapter
1251, Subchapter A, Chapter 1364, and Subchapter A, Chapter 1366,
Insurance Code, and any other law applicable to group health
insurance policies or contracts issued in this state. The coverage
must include major medical treatment but may exclude experimental
procedures. In this subsection, "major medical treatment" means a
medical, surgical, or diagnostic procedure for illness or
injury. The coverage may include managed care or preventive care
and must be comparable to the basic health coverage provided under
Chapter 1551, Insurance Code. The [board of trustees of the Teacher
Retirement System of Texas shall adopt rules to determine whether a
school district's group health coverage is comparable to the basic
health coverage specified by this subsection. The rules must
provide for consideration of the] following factors shall be
considered [concerning the district's coverage] in determining
whether a school [the] district's coverage is comparable to the
basic health coverage specified by this subsection:
(1) the deductible amount for service provided inside
and outside of the network;
(2) the coinsurance percentages for service provided
inside and outside of the network;
(3) the maximum amount of coinsurance payments a
covered person is required to pay;
(4) the amount of the copayment for an office visit;
(5) the schedule of benefits and the scope of
coverage;
(6) the lifetime maximum benefit amount; and
(7) verification that the coverage is issued by a
provider licensed to do business in this state by the Texas
Department of Insurance or is provided by a risk pool authorized
under Chapter 172, Local Government Code, or that a district is
capable of covering the assumed liabilities in the case of coverage
provided through district self-insurance.
(d) Each district [shall report the district's compliance
with this section to the executive director of the Teacher
Retirement System of Texas not later than March 1 of each
even-numbered year in the manner required by the board of trustees
of the Teacher Retirement System of Texas. For a district] that
does not participate in the program described by Subsection (a)
shall prepare a report addressing the district's compliance with
this section. The [, the] report must be available for review,
together with the policy or contract for the group health coverage
plan, at the central administrative office of each campus in the
district and be posted on the district's Internet website if the
district maintains a website, must be based on the district group
health coverage plan in effect during the current plan year, and
must include:
(1) appropriate documentation of:
(A) the district's contract for group health
coverage with a provider licensed to do business in this state by
the Texas Department of Insurance or a risk pool authorized under
Chapter 172, Local Government Code; or
(B) a resolution of the board of trustees of the
district authorizing a self-insurance plan for district employees
and of the district's review of district ability to cover the
liability assumed;
(2) the schedule of benefits;
(3) the premium rate sheet, including the amount paid
by the district and employee;
(4) the number of employees covered by the health
coverage plan offered by the district; and
(5) information concerning the ease of completing the
report[, as required by the executive director of the Teacher
Retirement System of Texas; and
[(6) any other information considered appropriate by
the executive director of the Teacher Retirement System of Texas].
SECTION 2. Section 22.101(2), Education Code, is amended to
read as follows:
(2) "Employee" means an individual who:
(A) is employed by one of the following employers
in a position eligible for membership in [active, contributing
member of] the Teacher Retirement System of Texas based solely on
that employment [who]:
(i) [(A) is employed by] a school district;
[,]
(ii) another [other] educational district
whose employees are members of the Teacher Retirement System of
Texas; [,]
(iii) a participating charter school; [,]
or
(iv) a regional education service center;
(B) [is not a retiree eligible for coverage under
the program established under Chapter 1575, Insurance Code;
[(C)] is not eligible for coverage authorized [by
a group insurance program] under Chapter 1551, 1575, or 1601,
Insurance Code; and
(C) [(D)] is not [an individual] performing
[personal services] for the employer [a district, other educational
district that is a member of the Teacher Retirement System of Texas,
participating charter school, or regional education service
center] as an independent contractor services that are used to
establish eligibility for health care supplementation under this
subchapter.
SECTION 3. Section 42.260(c), Education Code, is amended to
read as follows:
(c) Notwithstanding any other provision of this code, a
school district or participating charter school may use the
following amount of funds only to pay contributions under a group
health coverage plan for district or school employees:
(1) an amount equal to 75 percent of the amount
certified for the district or school under Subsection (b); or
(2) if the following amount is less than the amount
specified by Subdivision (1), the sum of:
(A) 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 1579.251 [9, Article 3.50-7], 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
(B) the difference between the amount necessary
for the district or school to comply with Section 1581.052 [Section
3, Article 3.50-9], 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, [2 of that
article] for that year.
SECTION 4. Sections 821.001(4) and (6), Government Code,
are amended to read as follows:
(4) "Annual compensation" means the compensation to a
member of the retirement system for service during a 12-month
period determined by the retirement system [school year] that is
reportable and subject to contributions as provided by Section
822.201.
(6) "Employee" means a person who is employed, as
determined by the retirement system, on other than a temporary
basis by a single [an] employer for at least one-half time at a
regular rate of pay comparable to that of other persons employed in
similar positions.
SECTION 5. Section 822.001, Government Code, is amended by
adding Subsection (c) to read as follows:
(c) Membership in the retirement system may only be
established through employment with a single employer on at least a
half-time basis.
SECTION 6. Section 822.003(c), Government Code, is amended
to read as follows:
(c) A person does not terminate membership under Subsection
(a)(4) if the person:
(1) is performing military service creditable in the
retirement system;
(2) is on leave of absence from employment in a public
school; [or]
(3) is earning service credit in another retirement
system covered by Chapter 803 or 805; or
(4) is employed by an employer covered by the
retirement system and is not eligible for membership in the
retirement system because the person is employed on less than a
half-time basis.
SECTION 7. Section 822.005(c), Government Code, is amended
to read as follows:
(c) A person is not entitled to withdraw contributions if
the person [who] is employed, has applied for employment, or has
received a promise of employment with an employer [, in a position]
covered by the retirement system.
SECTION 8. Section 822.201(b), Government Code, is amended
to read as follows:
(b) "Salary and wages" as used in Subsection (a) means:
(1) normal periodic payments of money for service the
right to which accrues on a regular basis in proportion to the
service performed;
(2) amounts by which the member's salary is reduced
under a salary reduction agreement authorized by Chapter 610;
(3) amounts that would otherwise qualify as salary and
wages under Subdivision (1) but are not received directly by the
member pursuant to a good faith, voluntary written salary reduction
agreement in order to finance payments to a deferred compensation
or tax sheltered annuity program specifically authorized by state
law or to finance benefit options under a cafeteria plan qualifying
under Section 125 of the Internal Revenue Code of 1986, if:
(A) the program or benefit options are made
available to all employees of the employer; and
(B) the benefit options in the cafeteria plan are
limited to one or more options that provide deferred compensation,
group health and disability insurance, group term life insurance,
dependent care assistance programs, or group legal services plans;
(4) performance pay awarded to an employee by a school
district as part of a total compensation plan approved by the board
of trustees of the district and meeting the requirements of
Subsection (e);
(5) the benefit replacement pay a person earns under
Subchapter H, Chapter 659, except as provided by Subsection (c);
(6) stipends paid to teachers in accordance with
Section 21.410, 21.411, 21.412, or 21.413, Education Code;
(7) amounts by which the member's salary is reduced or
that are deducted from the member's salary as authorized by
Subchapter J, Chapter 659;
(8) a merit salary increase made under Section 51.962,
Education Code;
(9) amounts received under the relevant parts of the
educator excellence awards program under Subchapter O, Chapter 21,
Education Code, or a mentoring program under Section 21.458,
Education Code, that authorize compensation for service;
(10) salary amounts designated as health care
supplementation by an employee under Subchapter D, Chapter 22,
Education Code; and
(11) to the extent required by Sections 3401(h) and
414(u)(12) [414(u)(2)], Internal Revenue Code of 1986,
differential wage payments received by an individual from an
employer on or after January 1, 2009, while the individual is
performing qualified military service as defined by Section 414(u),
Internal Revenue Code of 1986.
SECTION 9. Section 823.006, Government Code, is amended to
read as follows:
Sec. 823.006. LIMITS ON ANNUAL CONTRIBUTIONS FOR PURCHASE
OF SERVICE CREDIT. Notwithstanding any other provision of this
subtitle, the retirement system shall [may] limit the purchase of
service credit to the extent required by applicable limits on the
amount of annual contributions a participant may make to a
qualified plan under Sections 401(a) and 415(c), Internal Revenue
Code of 1986.
SECTION 10. Section 823.401, Government Code, is amended by
amending Subsection (f) and adding Subsection (f-1) to read as
follows:
(f) Except as provided by Subsection (f-1), the [The] amount
of service credit a member may establish under this section may not
exceed the lesser of the number of years of membership service
credit the member has in the retirement system for actual service in
public schools or 15 years.
(f-1) A member may not purchase more than five years of
service credit under this section for service credit considered
nonqualified service credit under Section 415(n)(3), Internal
Revenue Code of 1986.
SECTION 11. Sections 824.007(a) and (b), Government Code,
are amended to read as follows:
(a) In this section, "program administrator" means the
person who administers:
(1) the uniform program under Section 1601.102,
Insurance Code; or
(2) the group program under Chapter 1575, Insurance
Code.
(b) An individual eligible to participate in the uniform
program under Section 1601.102, Insurance Code, or the group
program under Chapter 1575, Insurance Code, may authorize the
retirement system to deduct the amount of the contribution and any
other qualified health insurance premium from the individual's
regular monthly service or disability retirement annuity payment if
the individual is:
(1) eligible to receive a monthly annuity from the
retirement system greater than the amount of the authorized
deduction; and
(2) eligible under Section 402(l), Internal Revenue
Code of 1986, or a similar law, to elect to exclude from annual
gross income up to $3,000 of distributions from an eligible
retirement plan used for qualified health insurance premiums.
SECTION 12. Section 824.1012(a), Government Code, is
amended to read as follows:
(a) As an exception to Section 824.101(c), a retiree who
selected an optional service retirement annuity under Section
824.204(c)(1), (c)(2), or (c)(5) or an optional disability
retirement annuity under Section 824.308(c)(1), (c)(2), or (c)(5)
and who has received at least one payment under the plan selected
may change the optional annuity selection made by the retiree to a
standard service or disability retirement annuity as provided for
in this section. If the beneficiary of the optional annuity was
[is] the spouse [or former spouse] of the retiree when the retiree
designated the spouse as beneficiary of the optional annuity, to
change from the optional annuity to a standard retirement annuity
under this subsection, the spouse or former spouse, as applicable,
who was designated [,] the beneficiary of the optional annuity must
sign a notarized consent to the change[,] or a court with
jurisdiction over the marriage of [in a divorce proceeding
involving] the retiree and beneficiary must approve or order the
change [in the divorce decree or acceptance of a property
settlement]. The change in plan selection takes effect when the
retirement system receives the request to change the plan, provided
the signed consent form or court order, as applicable, is
subsequently received by the retirement system [it].
SECTION 13. Sections 824.1013(b) and (c-1), Government
Code, are amended to read as follows:
(b) If the beneficiary designated at the time of the
retiree's retirement is the spouse of the retiree at the time of the
designation:
(1) the spouse must give written, notarized consent to
the change;
(2) if the parties divorce after the designation, the
former spouse who was designated beneficiary must give written,
notarized consent to the change; or
(3) a court with jurisdiction over the marriage must
approve or order [have ordered] the change.
(c-1) Notwithstanding Subsection (c), a beneficiary
designated under this section is entitled on the retiree's death to
receive monthly payments of the survivor's portion of the retiree's
optional retirement annuity for the remainder of the beneficiary's
life if the beneficiary designated at the time of the retiree's
retirement is a trust and the beneficiary designated under this
section is:
(1) the sole beneficiary of that trust; or
(2) an individual who at the time of the retiree's
death is the sole beneficiary of that trust.
SECTION 14. Section 825.103, Government Code, is amended by
adding Subsection (h) to read as follows:
(h) The board of trustees may accept on behalf of the
retirement system gifts of money, services, or other property from
any public or private source.
SECTION 15. Section 825.115, Government Code, is amended by
adding Subsection (f) to read as follows:
(f) Notwithstanding any other law, Chapter 551 does not
apply to an assembly of the board of trustees or one of the board's
committees while attending a summit, conference, convention,
workshop, or other event held for educational purposes if the
assembly or committee does not deliberate, vote, or take action on a
specific matter of public business or public policy over which the
board of trustees or a committee of the board has supervision or
control. This subsection does not apply to a regular, special, or
emergency meeting of the board of trustees scheduled or called
under the board's bylaws.
SECTION 16. Section 825.208(b), Government Code, is amended
to read as follows:
(b) The retirement system is exempt from Sections 651.002
and 651.004, Chapter 660, [and] Subchapter K, Chapter 659, and
Subchapter A, Chapter 661, to the extent the board of trustees
determines an exemption is necessary for the performance of
fiduciary duties.
SECTION 17. Section 825.212, Government Code, is amended by
adding Subsection (d) to read as follows:
(d) Notwithstanding any other law, all personal financial
disclosures made by employees of the retirement system under this
section, including a rule or policy adopted under this section, are
confidential and excepted from the requirements of Section 552.021.
SECTION 18. Section 825.3011(b), Government Code, is
amended to read as follows:
(b) Chapter 551 does not require the board of trustees to
confer with one or more employees, consultants, or legal counsel of
the retirement system or with a third party, including
representatives of an issuer of restricted securities or a private
investment fund, in an open meeting if the only purpose of the
conference is to receive information from or question the
employees, consultants, or legal counsel of the retirement system
or the third party relating to:
(1) [an] investment transactions or [a] potential
investment transactions if, before conducting the closed meeting, a
majority of [by] the board of trustees in an open meeting vote that
deliberating or conferring in an open meeting would have a
detrimental effect on the position of the retirement system in
negotiations with third parties or put the retirement system at a
competitive disadvantage in the market [in a private investment
fund]; or
(2) the purchase, holding, or disposal of restricted
securities or a private investment fund's investment in restricted
securities if, under Section 552.143, the information discussed
would be confidential and excepted from the requirements of Section
552.021 if the information was included in the records of a
governmental body.
SECTION 19. Section 825.306, Government Code, is amended to
read as follows:
Sec. 825.306. CREDITING SYSTEM ASSETS. (a) The assets of
the retirement system shall be maintained and reported in a manner
that reflects the source of the assets or the purpose for which the
assets are held, using appropriate ledgers and subledgers, in
accordance with generally accepted accounting principles
prescribed by the Governmental Accounting Standards Board or its
successor. In addition, the maintenance and reporting of the
assets must be in compliance with applicable tax law and consistent
with any fiduciary duty owed with respect to the trust. In the
alternative, the assets may be credited, according to the purpose
for which they are held, to one of the following accounts:
(1) member savings account;
(2) state contribution account;
(3) retired reserve account;
(4) interest account;
(5) expense account; or
(6) deferred retirement option account.
(b) Notwithstanding any other law, a requirement to deposit
in or transfer assets from one of the accounts described under
Subsection (a) is satisfied by maintaining and reporting the assets
in accordance with that subsection.
SECTION 20. Section 825.312(a), Government Code, is amended
to read as follows:
(a) The retirement system shall deposit in the expense
account:
(1) money transferred from the interest account under
Section 825.313(d); and
(2) money received from the Texas Public School
Retired Employees Group Benefits [Insurance] Program for service
performed for the program by the retirement system.
SECTION 21. Section 825.403, Government Code, is amended by
amending Subsections (h) and (j) and adding Subsections (h-1),
(h-2), (h-3), and (h-4) to read as follows:
(h) Subject to Subsections (h-1), (h-2), (h-3), and (h-4),
if [If] deductions were previously required but not paid, the
retirement system may not provide benefits based on the service or
compensation unless the deposits required by this section have been
fully paid.
(h-1) If, due to an error, an employer does not report to the
retirement system all service rendered or compensation paid as
required by this section and the error relates to service rendered
or compensation paid in:
(1) the current school year, the error may be
corrected by submitting to the retirement system in the manner
prescribed by the retirement system:
(A) a corrected report; and
(B) contributions on the unreported service or
compensation, plus interest at the rate provided under Section
825.408, computed from the report month the service or compensation
should have been reported to the retirement system to the date the
contributions related to that service or compensation are submitted
to the retirement system; or
(2) the preceding school year, the error may be
corrected if the following requirements are met:
(A) the person for whom contributions are due is
employed by the employer and the employer owes the person
compensation payable in the current year;
(B) the employer requests from the retirement
system a waiver of the documentation requirements under Section
825.408(a) and the request is granted by the retirement system;
(C) the employer, in the manner prescribed by the
retirement system:
(i) submits to the retirement system member
contributions on the unreported service or compensation in the
manner provided by Section 825.409 by making the corresponding
reduction in the compensation owed to the person;
(ii) submits to the retirement system any
employer contributions due on the compensation;
(iii) pays the interest on the
contributions described by Subparagraphs (i) and (ii) at the rate
provided by Section 825.408; and
(iv) corrects the records relating to the
report months in which the service or compensation are at issue; and
(D) the error is corrected in accordance with
this subsection not later than the final day of the school year
following the school year in which the service or compensation at
issue was rendered or paid, as applicable.
(h-2) On receipt of the member and employer contributions
and the corrected reports under Subsection (h-1), the retirement
system shall credit the service or compensation, as applicable, to
the person.
(h-3) The retirement system may not credit service or
compensation to a person in the manner provided by Subsections
(h-1) and (h-2) for service rendered or compensation received by
the person in any school year before the preceding school year. If
service is rendered or compensation paid by a person in a school
year before the preceding school year, the [The] person's employer
at the time the unreported service was rendered or compensation was
paid must verify the service or compensation as required by
Subsection (j) and the person must submit the verification to the
retirement system not later than five years after the end of the
school year in which the service was rendered or compensation was
paid. To establish the service or compensation credit, the person
must deposit with the retirement system the actuarial present
value, at the time of deposit, of the additional standard
retirement annuity benefits that would be attributable to the
purchase of service or compensation credit under this section,
based on rates and tables recommended by the retirement system's
actuary and adopted by the board of trustees.
(h-4) The board of trustees shall:
(1) prescribe terms for payments under Subsections
(h-1), (h-2), and (h-3) [this subsection]; and
(2) credit the person for prior service and
compensation to which the person is entitled under this subtitle.
(j) Except as otherwise provided by this section, if [If]
deductions were previously required but not paid, proof of service
satisfactory to the retirement system must be made before service
credit is granted or payment for the credit is required. Proof of
service is sufficient if the person's employer documents that the
employer has records made at or near the time of service that
establish the amount of time worked and salary earned. An
affidavit based on memory without written records made at or near
the time of service is not sufficient documentation for the
establishment of service credit. The retirement system may audit
records used for documentation under this subsection. A person who
does not obtain proof of service as required by this section may not
establish the service or compensation credit.
SECTION 22. Section 825.408(a), Government Code, is amended
to read as follows:
(a) An employer that fails to remit, before the seventh day
after the last day of a month, all member and employer deposits and
documentation of the deposits required by this subchapter to be
remitted by the employer for the month shall pay to the retirement
system, in addition to the deposits, interest on the unpaid [or
undocumented] amounts at an annual rate prescribed by this
subsection and a late fee in an amount determined by the retirement
system, which may include an amount for each day the documentation
is submitted after the deadline imposed by this subsection
[compounded monthly]. The rate of interest is the rate established
under Section 825.313(b)(1), plus two percent. Interest required
under this subsection [section] is creditable to the interest
account. The [On request, the] retirement system may grant a waiver
of the deadline imposed by this subsection based on an employer's
financial or technological resources.
SECTION 23. Section 825.4092(c), Government Code, is
amended to read as follows:
(c) Except as provided by Subsection (e), each payroll
period, for each retiree who is enrolled in the Texas Public School
Employees Group Insurance Program under Chapter 1575, Insurance
Code, the employer who reports the employment of a retiree shall
contribute to the trust fund established under that chapter an
amount established by the retirement system. In determining the
amount to be contributed by the employer under this subsection, the
retirement system shall consider [any difference between] the
amount a [the] retiree is required to pay for the retiree and any
enrolled dependents to participate in the group program and the
[full] cost of the retiree's and enrolled dependents' participation
in the group program[, as determined by the retirement system]. If
more than one employer reports the retiree to the retirement system
during a month, the amount of the required payment shall be prorated
among the employers.
SECTION 24. Section 825.410(a), Government Code, is amended
to read as follows:
(a) Payments to establish special service credit as
authorized under this subtitle, other than service credit that may
only be determined and paid for at the time of retirement such as
unused leave as authorized by Section 823.403, may be made in a lump
sum by a monthly payroll deduction in an amount not less than
one-twelfth of the contribution required to establish at least one
year of service credit, or in equal monthly installments over a
period not to exceed the lesser of the number of years of credit to
be purchased or 60 months. Installment and payroll deduction
payments are due on the first day of each calendar month in the
payment period. If an installment or payroll deduction payment is
not made in full within 60 days after the due date, the retirement
system may refund all installment or payroll deduction payments
less fees paid on the lump sum due when installment or payroll
deduction payments began. Partial payment of an installment or
payroll deduction payment may be treated as nonpayment. A check
returned for insufficient funds or a closed account shall be
treated as nonpayment. When two or more consecutive monthly
payments have a returned check, a refund may be made. [If the
retirement system refunds payments pursuant to this subsection, the
member is not permitted to use the installment method of payment or
the payroll deduction method, as applicable, for the same service
for three years after the date of the refund. A member who requests
and receives a refund of installment or payroll deduction payments
also is not permitted to use the same method of payment for the same
service for three years after the date of the refund.]
SECTION 25. Section 825.504, Government Code, is amended by
amending Subsection (c) and adding Subsection (d) to read as
follows:
(c) Each reporting district shall cooperate with the
retirement system in ascertaining:
(1) a member's eligibility for membership in the
retirement system;
(2) a member's annual earnings, employment status, and
hours and days worked during any year; and
(3) any other information the retirement system
requires from the employer to administer the retirement system's
benefit plan.
(d) The board of trustees by rule may prescribe the form of
and procedures for filing certifications required by this section.
SECTION 26. Section 825.505, Government Code, is amended to
read as follows:
Sec. 825.505. AUDITS. For the purpose of determining the
propriety of employer reports, including demographic data, and
contributions or credits, the records of an employer concerning the
employment and compensation of all its personnel are subject to
audit and examination, in the offices of the employer during
regular working hours, by representatives of the retirement system
designated to conduct the audit and examination.
SECTION 27. Section 825.508(b), Government Code, is amended
to read as follows:
(b) The system must honor a power of attorney executed in
accordance with Chapter 752, Estates [Chapter XII, Section 490,
Texas Probate] Code.
SECTION 28. Section 825.509(b-1), Government Code, is
amended to read as follows:
(b-1) Notwithstanding Subsection (b)(3), with respect to a
distribution made on or after January 1, 2002, an otherwise
eligible portion of a rollover distribution that consists of
after-tax employee contributions not includable in gross income is
an eligible rollover distribution for purposes of this section. The
eligible portion may be transferred only:
(1) to an individual retirement account or annuity
described by Section 408(a) or (b), Internal Revenue Code of 1986;
(2) to a qualified plan described by Section 403(a),
Internal Revenue Code of 1986;
(3) for distributions occurring on or after January 1,
2007, to a qualified plan described by Section 401(a), Internal
Revenue Code of 1986, if the plan separately accounts for:
(A) the amounts transferred and the earnings on
amounts transferred; and
(B) the portion of the distribution that is
includable in gross income and the portion of the distribution that
is not includable in gross income; or
(4) to an annuity contract described by Section
403(b), Internal Revenue Code of 1986, that agrees to separately
account for amounts transferred and earnings on amounts
transferred, including for the portion of the distribution that is
includable in gross income and the portion of the distribution that
is not includable in gross income.
SECTION 29. Section 825.515(a), Government Code, is amended
to read as follows:
(a) At least annually, the retirement system shall acquire
and maintain records identifying members and specifying the types
of positions they hold as members. Employers shall provide to the
retirement system information specifying the type of position held
by each member as Administrative/Professional, Teacher/Full-Time
Librarian, Support, Bus Driver, Food Service Worker, or Peace
Officer. Employers shall also provide to the retirement system the
work e-mail address for each member. For each member identified as
a Peace Officer, the records must specify whether the member is an
employee of an institution of higher education or of a public school
that is not an institution of higher education. An employer shall
provide the information required by this section in the form and
manner specified by the retirement system.
SECTION 30. Section 830.201(h), Government Code, is amended
to read as follows:
(h) Before November 2 of each even-numbered year, the Texas
Higher Education Coordinating Board [board of trustees], in
coordination with the Legislative Budget Board, shall certify to
the comptroller for review and adoption an estimate of the amount
necessary to pay the state's contributions to the retirement system
for the following biennium. For qualifying employees under
Subsection (g)(1), the Texas Higher Education Coordinating Board
[board of trustees] shall include only the amount payable by the
state under Subsection (g)(1) in determining the amount to be
certified.
SECTION 31. The heading to Chapter 1575, Insurance Code, is
amended to read as follows:
CHAPTER 1575. TEXAS PUBLIC SCHOOL RETIRED EMPLOYEES GROUP BENEFITS
PROGRAM
SECTION 32. Section 1575.002(4), Insurance Code, is amended
to read as follows:
(4) "Group program" means the Texas Public School
Retired Employees Group Benefits [Insurance] Program authorized by
this chapter.
SECTION 33. Section 1575.004(a), Insurance Code, is amended
to read as follows:
(a) In this chapter, "retiree" means:
(1) an individual not eligible, at the time of the
individual's retirement, for coverage under a plan provided under
Chapter 1551 or 1601 who:
(A) has taken a service retirement under the
Teacher Retirement System of Texas after September 1, 2005, with at
least 10 years of service credit in the system, which may include up
to five years of military service credit, but which may not include
any other service credit purchased for equivalent or special
service credit, and either:
(i) the sum of the retiree's age and years
of service credit in the retirement system equals or exceeds 80 at
the time of retirement, regardless of whether the retiree had a
reduction in the retirement annuity for early age; or
(ii) the retiree has 30 or more years of
service credit in the retirement system at the time of retirement;
(B) has taken a service retirement under the
Teacher Retirement System of Texas after September 1, 2004, but on
or before August 31, 2005, and on September 1, 2005, either:
(i) meets the requirements for eligibility
for the group program for coverage as a retiree as those
requirements existed on August 31, 2004;
(ii) meets the requirements of Paragraph
(A); or
(iii) is enrolled in the group program and
was enrolled in the group program on August 31, 2005; or
(C) has taken a service retirement under the
Teacher Retirement System of Texas on or before August 31, 2004, and
who is enrolled in the group program on August 31, 2005;
(2) an individual who:
(A) has taken a disability retirement under the
Teacher Retirement System of Texas; and
(B) is entitled to receive monthly benefits from
the Teacher Retirement System of Texas; or
(3) an individual who:
(A) has taken a disability retirement under the
Teacher Retirement System of Texas;
(B) has at least 10 years of service credit in the
Teacher Retirement System of Texas on the date of disability
retirement, as determined under Section 824.304, Government Code;
and
(C) is not entitled to receive monthly benefits
from the Teacher Retirement System of Texas because those benefits
have been suspended in accordance with Section 824.310, Government
Code.
SECTION 34. Section 1575.153, Insurance Code, is amended to
read as follows:
Sec. 1575.153. BASIC COVERAGE. A retiree who applies for
coverage during an enrollment period may not be denied coverage in a
basic plan provided under this chapter unless:
(1) the retiree's coverage is suspended under Section
1575.165; or
(2) the trustee finds under Subchapter K that the
retiree defrauded or attempted to defraud the group program.
SECTION 35. Section 1575.155(a), Insurance Code, is amended
to read as follows:
(a) Subject to Section 1575.165, 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, as determined by the trustee.
SECTION 36. Section 1575.158(a), Insurance Code, is amended
to read as follows:
(a) Subject to Sections [Section] 1575.1581 and 1575.165,
the trustee may, in addition to providing a basic plan, contract for
and make available an optional group health benefit plan for
retirees, dependents, surviving spouses, or surviving dependent
children.
SECTION 37. Subchapter D, Chapter 1575, Insurance Code, is
amended by adding Section 1575.165 to read as follows:
Sec. 1575.165. SUSPENSION AND REACTIVATION OF COVERAGE
UNDER THE GROUP PROGRAM. (a) Coverage under the group program for a
retiree and the retiree's dependents shall be suspended during any
period the retiree is:
(1) eligible for and elects health benefit coverage
under a plan provided under Chapter 1551 or 1601; or
(2) employed by a public school and is, as a result of
that employment, eligible for health benefit coverage offered by
the public school.
(b) During the period a retiree's coverage under the group
program is suspended under this section, the retiree and the
retiree's dependents shall remain enrolled in the group program.
(c) A retiree and the retiree's eligible dependents whose
coverage under the group program is suspended under this section
shall be reactivated at the time the retiree:
(1) ceases to be covered under a plan provided under
Chapter 1551 or 1601, if the retiree is subject to Subsection
(a)(1); or
(2) terminates employment with or ceases to be
eligible for health benefit coverage offered by a public school, if
the retiree is subject to Subsection (a)(2).
(d) The trustee shall adopt rules necessary to implement
this section.
SECTION 38. Section 1575.204(b), Insurance Code, is amended
to read as follows:
(b) Each state fiscal year, each employer who reports to the
retirement system under Section 824.6022, Government Code, the
employment of a retiree who is enrolled in and receiving coverage
under the group program shall contribute to the fund an amount
established by the trustee. In determining the amount to be
contributed by the employer under this subsection, the trustee
shall consider the [difference, if any, between the contribution]
amount a [that the reported] retiree is required to pay for the
retiree and any enrolled dependents to participate in the group
program and the [full] cost of all retirees' [the retiree's] and
enrolled dependents' participation in the group program [, as
determined by the trustee]. If more than one employer reports the
retiree to the retirement system during a month, the amount of the
contribution required by this subsection shall be prorated among
the employers. The amounts required to be paid under this
subsection are not required to be paid by a reporting employer for a
retiree who retired from the retirement system before September 1,
2005.
SECTION 39. Section 1575.207, Insurance Code, is amended to
read as follows:
Sec. 1575.207. INTEREST ASSESSED ON LATE PAYMENT OF
DEPOSITS BY EMPLOYING PUBLIC SCHOOLS. (a) An employing public
school that does not remit to the trustee all contributions
required by this subchapter before the seventh day after the last
day of the month shall pay to the fund:
(1) the contributions; and
(2) interest on the unpaid amounts at the annual rate
of six percent [compounded monthly].
(b) The [On request, the] trustee may grant a waiver of the
deadline imposed by this section [based on an employing public
school's financial or technological resources].
SECTION 40. Section 1579.003, Insurance Code, is amended to
read as follows:
Sec. 1579.003. DEFINITION OF EMPLOYEE. In this chapter,
"employee" means an individual [a participating member of the
Teacher Retirement System of Texas] who is regularly employed by a
participating entity for an average of at least 10 hours per week
and who is not receiving coverage from a program under Chapter 1551,
1575, or 1601. The term does not include an individual performing
personal services as an independent contractor.
SECTION 41. Section 1579.004, Insurance Code, is amended to
read as follows:
Sec. 1579.004. DEFINITION OF DEPENDENT. In this chapter,
"dependent" means:
(1) a spouse of an [a full-time employee or part-time]
employee;
(2) a child of an [a full-time or part-time] employee
if the child is younger than 26 years of age, including:
(A) an adopted child or child who is lawfully
placed for adoption;
(B) a foster child, stepchild, or other child who
is in a regular parent-child relationship; and
(C) a natural child;
(3) an [a full-time or part-time] employee's natural
child, adopted child, foster child, stepchild, or other child who
is in a regular parent-child relationship and who lives with or has
his or her care provided by the employee or the surviving spouse on
a regular basis, regardless of the child's age, if the child has a
mental disability or is physically incapacitated to an extent that
the child is dependent on the employee or surviving spouse for care
or support, as determined by the board of trustees; and
(4) notwithstanding any other provision of this code,
any other dependent of an [a full-time or part-time] employee
specified by rules adopted by the board of trustees.
SECTION 42. Section 1579.006(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 benefit
payments;
(2) contributions of [active] employees, the state,
and a participating entity, and any other contributions;
(3) any rights, benefits, or payments accruing to any
person under this chapter; and
(4) any money in the Texas school employees uniform
group coverage trust fund.
SECTION 43. Section 1579.202, Insurance Code, is amended to
read as follows:
Sec. 1579.202. ELIGIBLE EMPLOYEES. (a) Except as provided
by Section 1579.204, participation in the program is limited to
employees of participating entities who are full-time or [employees
and to] part-time employees [who are participating members in the
Teacher Retirement System of Texas].
(b) An employee described by Subsection (a) who applies for
coverage during an open enrollment period prescribed by the trustee
is automatically covered by the catastrophic care coverage plan
unless the employee:
(1) [specifically waives coverage under this chapter;
[(2)] selects a higher tier coverage plan; or
(2) [(3)] is expelled from the program.
SECTION 44. Section 1579.204, Insurance Code, is amended to
read as follows:
Sec. 1579.204. [CERTAIN] PART-TIME EMPLOYEES.
Notwithstanding any other provision of this chapter, a [A]
part-time employee of a participating 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 for [by] the employee and the employee's dependents.
SECTION 45. Section 1579.255, Insurance Code, is amended to
read as follows:
Sec. 1579.255. INTEREST ASSESSED ON LATE PAYMENT OF
CONTRIBUTIONS BY PARTICIPATING ENTITIES. (a) A participating
entity that does not remit to the trustee all contributions
required by this subchapter before the 16th [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) The [On request, the] trustee may grant a waiver of the
deadline imposed by this section [based on a participating entity's
financial or technological resources].
SECTION 46. Section 1581.001(1), Insurance Code, is amended
to read as follows:
(1) "Participating employee" means an employee of a
school district, other educational district whose employees are
members of the Teacher Retirement System of Texas, participating
charter school, or regional education service center who
participates in a group health coverage plan provided by or through
the district, school, or service center, including an employee
whose coverage under the group program established under Chapter
1575 has been suspended.
SECTION 47. Subchapter B, Chapter 1581, Insurance Code, is
amended by adding Section 1581.055 to read as follows:
Sec. 1581.055. REPORTING REQUIREMENT. Each school district
and other educational district whose employees are members of the
Teacher Retirement System of Texas, participating charter school,
and regional education service center shall annually report to the
Teacher Retirement System of Texas, under rules adopted by the
retirement system, the monthly amount each contributes toward the
payment of health coverage under this chapter.
SECTION 48. The following provisions are repealed:
(1) Section 825.404(b-1), Government Code; and
(2) Section 1579.106(c), Insurance Code.
SECTION 49. Section 821.001(4), Government Code, as amended
by this Act, applies only to a member of the Teacher Retirement
System of Texas who retires or dies on or after the effective date
of this Act.
SECTION 50. Section 825.4092(c), Government Code, as
amended by this Act, applies to a retiree of the Teacher Retirement
System of Texas regardless of whether the person retired from
employment before, on, or after the effective date of this Act.
SECTION 51. The changes in law made by this Act apply only
to health benefit plans provided under Chapters 1575, 1579, and
1581, Insurance Code, beginning with the first plan year that
begins on or after September 1, 2015. A plan year that begins before
September 1, 2015, is governed by the law as it existed immediately
before that date and that law is continued in effect for that
purpose.
SECTION 52. This Act takes effect September 1, 2015.