CHAPTER 1579. TEXAS SCHOOL EMPLOYEES UNIFORM GROUP HEALTH COVERAGE
INSURANCE CODE
TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES
SUBTITLE H. HEALTH BENEFITS AND OTHER COVERAGES FOR GOVERNMENTAL
EMPLOYEES
CHAPTER 1579. TEXAS SCHOOL EMPLOYEES UNIFORM GROUP HEALTH
COVERAGE
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1579.001. SHORT TITLE. This chapter may be cited as the
Texas School Employees Uniform Group Health Coverage Act.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.002. GENERAL DEFINITIONS. In this chapter:
(1) "Administering firm" means any entity designated by the
trustee to administer any coverages, services, benefits, or
requirements under this chapter and the trustee's rules adopted
under this chapter.
(2) "Trustee" means the Teacher Retirement System of Texas.
(3) "Charter school" means an open-enrollment charter school
established under Subchapter D, Chapter 12, Education Code.
(4) "Health coverage plan" means any group policy or contract,
hospital service agreement, health maintenance organization
agreement, preferred provider arrangement, or any similar group
arrangement or any combination of those policies, contracts,
agreements, or arrangements that provides for, pays for, or
reimburses expenses for health care services.
(5) "Participating entity" means an entity participating in the
uniform group coverage 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
1579.154.
(6) "Program" means the uniform group coverage program
established under this chapter.
(7) "Regional education service center" means a regional
education service center established under Chapter 8, Education
Code.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.003. DEFINITION OF EMPLOYEE. In this chapter,
"employee" means a participating member of the Teacher Retirement
System of Texas who is employed by a participating entity 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.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.004. DEFINITION OF DEPENDENT. In this chapter,
"dependent" means:
(1) a spouse of a full-time employee or part-time employee;
(2) an unmarried child of a full-time or part-time employee if
the child is younger than 25 years of age, including:
(A) an adopted child;
(B) a foster child, stepchild, or other child who is in a
regular parent-child relationship; and
(C) a recognized natural child;
(3) a full-time or part-time employee's recognized 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 is mentally retarded or 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 a full-time or part-time employee specified by rules
adopted by the board of trustees.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.005. CONFIDENTIALITY. (a) Section 825.507,
Government Code, applies to records relating to an employee or
dependent under the program and in the custody of the Teacher
Retirement System of Texas or in the custody of an administrator,
carrier, agent, attorney, consultant, or governmental body acting
in cooperation with or on behalf of the system.
(b) The Teacher Retirement System of Texas may disclose to a
health care provider, benefit provider, or claims administrator
information in the records of an individual that the system
determines is necessary to administer the program.
Added by Acts 2005, 79th Leg., Ch.
1359, Sec. 48, eff. September 1, 2005.
Sec. 1579.006. EXEMPTION FROM PROCESS. (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.
(b) The items listed in Subsection (a) may not be assigned
except for direct payment to benefit providers as authorized by
the trustee by contract, rule, or otherwise.
Added by Acts 2005, 79th Leg., Ch.
1359, Sec. 48, eff. September 1, 2005.
Sec. 1579.007. EXEMPTION FROM STATE TAXES AND FEES. A premium
or contribution on a policy, insurance contract, or agreement
authorized by this chapter is not subject to any state tax,
regulatory fee, or surcharge, including a premium or maintenance
tax or fee.
Added by Acts 2005, 79th Leg., Ch.
1359, Sec. 48, eff. September 1, 2005.
Sec. 1579.008. COVERAGE EXEMPT FROM INSURANCE LAW. A coverage
plan provided under this chapter is exempt from any other
insurance law, including common law, that does not expressly
apply to the plan or this chapter.
Added by Acts 2005, 79th Leg., Ch.
1359, Sec. 48, eff. September 1, 2005.
SUBCHAPTER B. ADMINISTRATION
Sec. 1579.051. ADMINISTRATION OF GROUP PROGRAM. The Teacher
Retirement System of Texas, as trustee, shall implement and
administer the uniform group coverage program described by this
chapter.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.052. AUTHORITY TO ADOPT RULES; OTHER AUTHORITY. (a)
The trustee may adopt rules relating to the program as considered
necessary by the trustee.
(b) The trustee may adopt rules to administer the program,
including rules relating to adjudication of claims and expelling
participants from the program for cause.
(c) The trustee may contract with independent and experienced
group insurance consultants and actuaries for advice and counsel
in implementing and administering the program.
(d) The trustee may enter into interagency contracts with any
agency of the state, including the Employees Retirement System of
Texas and the department, for the purpose of assistance in
implementing the program.
(e) The trustee shall take the actions it considers necessary to
devise, implement, and administer the program.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch.
1359, Sec. 49, eff. September 1, 2005.
Sec. 1579.053. PERSONNEL. The trustee may hire and compensate
employees as necessary to implement the program.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.054. COMPETITIVE BIDDING REQUIREMENTS; RULES. A
contract to provide group health coverage under this chapter may
be awarded only through competitive bidding under rules adopted
by the trustee.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.055. CONTRACT AWARD; CONSIDERATIONS. (a) In awarding
a contract to provide group benefits under this chapter, the
trustee is not required to select the lowest bid and may consider
also any relevant criteria, including the bidder's:
(1) ability to service contracts;
(2) past experiences; and
(3) financial stability.
(b) If the trustee awards a contract to a bidder whose bid
deviates from that advertised, the trustee shall record the
deviation and fully justify the reason for the deviation in the
minutes of the next board meeting.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.057. PHARMACY BENEFIT MANAGER CONTRACTS. (a) In
awarding a contract to provide pharmacy benefit manager services
under this chapter, the trustee is not required to select the
lowest bid but must select a contract that meets the criteria
established by this section.
(b) The contract must state that:
(1) the trustee is entitled to audit the pharmacy benefit
manager to verify costs and discounts associated with drug
claims, pharmacy benefit manager compliance with contract
requirements, and services provided by subcontractors;
(2) the audit must be conducted by an independent auditor in
accordance with established auditing standards; and
(3) to conduct the audit, the trustee and the independent
auditor are entitled access to information related to the
services and the costs associated with the services performed
under the contract, including access to the pharmacy benefit
manager's facilities, records, contracts, medical records, and
agreements with subcontractors.
(c) The contract must define the information that the pharmacy
benefit manager is required to provide to the trustee concerning
the audit of the retail, independent, and mail order pharmacies
performing services under the contract and describe how the
results of these audits must be reported to the trustee,
including how often the results must be reported. The contract
must state whether the pharmacy benefit manager is required to
return recovered overpayments to the trustee.
(d) The contract must state that any audit of a mail order
pharmacy owned by the pharmacy benefit manager must be conducted
by an independent auditor selected by the trustee in accordance
with established auditing standards.
Added by Acts 2009, 81st Leg., R.S., Ch.
1207, Sec. 7, eff. September 1, 2009.
SUBCHAPTER C. COVERAGES
Sec. 1579.101. PLANS OF GROUP COVERAGES. (a) The trustee by
rule shall establish plans of group coverages for employees
participating in the program and their dependents.
(b) The plans must include at least two tiers of group coverage,
with coverage at different levels in each tier, ranging from the
catastrophic care coverage plan to the primary care coverage
plan. Each tier must contain a health coverage plan.
(c) The trustee by rule shall define the requirements of each
coverage plan and tier of coverage.
(d) Comparable coverage plans of each tier of coverage
established must be offered to employees of all participating
entities.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.102. CATASTROPHIC CARE COVERAGE PLAN. The coverage
provided under the catastrophic care coverage plan shall be
prescribed by the trustee by rule and must provide coverage at
least as extensive as the coverage provided under the TRS-Care 1
plan operated under Chapter 1575.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch.
1359, Sec. 50, eff. September 1, 2005.
Sec. 1579.103. PRIMARY CARE COVERAGE PLAN. The coverage
provided under the primary care coverage plan must be comparable
in scope and, to the greatest extent possible, in cost to the
coverage provided under Chapter 1551.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.104. OPTIONAL COVERAGES. The trustee may not offer
optional coverages, other than optional permanent life insurance,
optional long-term care insurance, and optional disability
insurance, to employees participating in the program. This
section does not affect the right of a participating entity to
offer optional coverages to its employees under terms and
conditions established by the participating entity.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Reenacted by Acts 2005, 79th Leg., Ch.
1359, Sec. 51(a), eff. September 1, 2005.
Sec. 1579.105. PREEXISTING CONDITION LIMITATION. During the
initial period of eligibility, coverage provided under the
program may not be made subject to a preexisting condition
limitation.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.106. PRIOR AUTHORIZATION FOR CERTAIN DRUGS. (a) In
this section, "drug formulary" means a list of drugs preferred
for use and eligible for coverage by a health coverage plan.
(b) A health coverage plan provided under this chapter 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 drug; and
(5) an antidepressant drug.
(c) Every six months the trustee shall submit to the comptroller
and the Legislative Budget Board a report regarding any cost
savings achieved in the program through implementation of the
prior authorization requirement of this section. The report must
cover the previous six-month period.
Added by Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 1G.003, eff. April 1, 2009.
Sec. 1579.107. DISEASE MANAGEMENT SERVICES. (a) In this
section, "disease management services" means services to assist
an individual manage a disease or other chronic health condition,
such as heart disease, diabetes, respiratory illness, end-stage
renal disease, HIV infection, or AIDS, and with respect to which
the trustee identifies populations requiring disease management.
(b) A health coverage plan provided under this chapter must
provide disease management services or coverage for disease
management services in the manner required by the trustee,
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.
Added by Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 1G.003, eff. April 1, 2009.
Sec. 1579.108. LIMITATIONS. The trustee may not contract for or
provide a health coverage plan that excludes from participation
in the network a general hospital that:
(1) is located in the geographical service area or areas of the
health coverage plan that includes a county that:
(A) has a population of at least 100,000 and not more than
175,000; and
(B) is located in the Texas-Louisiana border region, as that
term is defined in Section 2056.002(e), Government Code; and
(2) agrees to provide medical and health care services under the
plan subject to the same terms as other hospital providers under
the plan.
Added by Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 1G.003, eff. April 1, 2009.
SUBCHAPTER D. PARTICIPATING ENTITIES
Sec. 1579.151. REQUIRED PARTICIPATION OF SCHOOL DISTRICTS WITH
500 OR FEWER EMPLOYEES. (a) Each school district with 500 or
fewer employees and each regional education service center is
required to participate in the 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 employees may elect not to participate in the program.
(c) An educational district described by Section 1579.002(5)(B)
that, on January 1, 2001, had 500 or fewer employees may elect
not to participate in the program.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.152. PARTICIPATION OF OTHER SCHOOL DISTRICTS.
Effective September 1, 2005, a school district with more than 500
employees may elect to participate in the program. A school
district that elects to participate under this section shall
apply for participation in the manner prescribed by the trustee
by rule.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.153. PARTICIPATION BY CERTAIN RISK POOLS. (a) In
determining the number of employees of a school district for
purposes of Sections 1579.151 and 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, may elect to be
treated as a single unit. A school district shall elect whether
to be considered as a member of a risk pool under this section by
notifying the 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 employees may elect to participate in the program.
(c) A school district with 500 or fewer employees that is a
member of a risk pool described by Subsection (a) that provides
group health coverage to more than 500 school district employees
must elect, not later than September 1, 2001, whether to be
treated as a school district with 500 or fewer employees or as
part of a unit with more than 500 employees. The school district
must notify the 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 program
by school districts covered by a risk pool is limited to school
districts covered by the risk pool as of January 1, 2001.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.154. PARTICIPATION BY CHARTER SCHOOLS; ELIGIBILITY.
(a) A charter school is eligible to participate in the program
if the school agrees:
(1) that all records of the school relating to participation in
the program are open to inspection by the 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 program annually audited by a certified public accountant at
the school's expense.
(b) A charter school must notify the trustee of the school's
intent to participate in the program in the manner and within the
time required by rules adopted by the trustee.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
SUBCHAPTER E. PARTICIPATION BY EMPLOYEE
Sec. 1579.201. DEFINITION. In this subchapter, "full-time
employee" and "part-time employee" have the meanings assigned by
rules adopted by the trustee.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
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 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
(3) is expelled from the program.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.203. SELECTION OF COVERAGE. (a) A participating
employee may select coverage in any coverage plan offered by the
trustee.
(b) The employee is not required to continue participation in
the coverage plan initially selected and may select a higher or
lower tier coverage plan than the plan initially selected by the
employee in the manner provided by rules adopted by the trustee.
(c) If the combined contributions received from the state and
the employing participating entity under Subchapter F exceed the
cost of a coverage plan selected by the employee, the employee
may use the excess amount of contributions to obtain coverage
under 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 the program, may pool the amount of contributions to which
the couple are entitled under the program to obtain coverage for
themselves and dependent coverage.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.204. CERTAIN PART-TIME EMPLOYEES. 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 by the employee.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.205. PAYMENT BY PARTICIPATING ENTITY. Notwithstanding
Section 1579.204, a participating 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 employee.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
SUBCHAPTER F. CONTRIBUTIONS
Sec. 1579.251. STATE ASSISTANCE. (a) The state shall assist
employees of participating school districts and charter schools
in the purchase of group health coverage under this chapter by
providing for each covered 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 employees of participating regional
education service centers and educational districts described by
Section 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 employee, the amount of
$900 each state fiscal year or a greater amount as provided by
the General Appropriations Act.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1328, Sec. 83, eff. September 1, 2009.
Sec. 1579.252. CONTRIBUTION BY PARTICIPATING ENTITIES. A
participating entity shall make contributions for the program as
provided by Chapter 1581.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.253. CONTRIBUTION BY EMPLOYEE. (a) An employee
covered by the program shall pay that portion of the cost of
coverage selected by the employee that exceeds the amount of the
state contribution under Section 1579.251 and the participating
entity contribution under Section 1579.252.
(b) The 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 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 employee.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch.
899, Sec. 18.04, eff. September 1, 2005.
Acts 2005, 79th Leg., Ch.
1359, Sec. 52, eff. September 1, 2005.
Sec. 1579.254. CONTRIBUTIONS HELD IN TRUST FOR FUND. A
participating 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.
Added by Acts 2005, 79th Leg., Ch.
1359, Sec. 53, eff. September 1, 2005.
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 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 trustee may grant a waiver of the deadline
imposed by this section based on a participating entity's
financial or technological resources.
Added by Acts 2005, 79th Leg., Ch.
1359, Sec. 53, eff. September 1, 2005.
SUBCHAPTER G. TEXAS SCHOOL EMPLOYEES UNIFORM GROUP COVERAGE TRUST
FUND
Sec. 1579.301. FUND; ADMINISTRATION. The Texas school employees
uniform group coverage trust fund is a trust fund with the
comptroller.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.302. COMPOSITION OF FUND. The fund is composed of:
(1) all contributions made to the fund under this chapter from
employees, participating entities, and the state;
(2) contributions made by employees or participating 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.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.303. PAYMENTS FROM FUND. The trustee may use amounts
in the fund only to provide group coverages under this chapter
and to pay the expenses of administering the program.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.
Sec. 1579.304. INVESTMENT OF FUND. The trustee may invest
assets of the fund in the manner provided by Section 67(a)(3),
Article XVI, Texas Constitution.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.471(a), eff.
Sept. 1, 2003.