CHAPTER 1579. TEXAS SCHOOL EMPLOYEES UNIFORM GROUP HEALTH COVERAGE

State Codes and Statutes

Statutes > Texas > Insurance-code > Title-8-health-insurance-and-other-health-coverages > 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;

(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

(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.

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.

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.

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.

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.

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.

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.

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.

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.

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