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Statutes > Texas > Insurance-code > Title-8-health-insurance-and-other-health-coverages > Chapter-1601-uniform-insurance-benefits-act-for-employees-of-the-university-of-texas-system-and-the-

INSURANCE CODE

TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES

SUBTITLE H. HEALTH BENEFITS AND OTHER COVERAGES FOR GOVERNMENTAL

EMPLOYEES

CHAPTER 1601. UNIFORM INSURANCE BENEFITS ACT FOR EMPLOYEES OF THE

UNIVERSITY OF TEXAS SYSTEM AND THE TEXAS A&M UNIVERSITY

SYSTEM

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1601.001. SHORT TITLE. This chapter may be cited as the

State University Employees Uniform Insurance Benefits Act.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.002. PURPOSES. The purposes of this chapter are to:

(1) provide uniformity in the basic group life, accident, and

health benefit coverages for all system employees;

(2) enable the systems to attract and retain competent and able

employees by providing employees with basic life, accident, and

health benefit coverages comparable to those commonly provided in

private industry and to employees of a state agency other than a

system, including a public college or university whose employees

are covered under Chapter 1551;

(3) foster, promote, and encourage employment by and service to

the systems as a career profession for individuals of high

standards of competence and ability;

(4) recognize and protect the investment of the systems in each

employee by promoting and preserving economic security and good

health among employees;

(5) foster and develop high standards of employer-employee

relationships between the systems and their employees; and

(6) recognize the long and faithful service and dedication of

employees and encourage them to remain in service until eligible

for retirement by providing health benefits and other group

benefits for them.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.003. GENERAL DEFINITIONS. In this chapter:

(1) "Administering carrier" means a carrier or organization that

is:

(A) qualified to engage in business in this state; and

(B) designated by a system to administer services, benefits,

insurance coverages, or requirements in accordance with this

chapter.

(2) "Basic coverage" means coverage, including health benefit

coverage, that meets the basic coverage standards required under

Section 1601.053(a)(1).

(3) "Cafeteria plan" means a plan defined and authorized by

Section 125, Internal Revenue Code of 1986.

(4) "Group life, accident, or health benefit plan" means a group

agreement, policy, contract, or arrangement provided by an

administering carrier, including:

(A) a group insurance policy or contract;

(B) a life, accident, medical, dental, or hospital service

agreement;

(C) a membership or subscription contract; or

(D) any other similar group arrangement.

(5) "Optional coverage" means group coverage other than the

basic coverage.

(6) "Service" means personal service to a system for which an

employee is credited in accordance with rules adopted by the

system.

(7) "System" means The University of Texas System or The Texas

A&M University System.

(8) "The Texas A&M University System" means the entities

governed under Chapters 85 through 88, Education Code, including

the Texas Veterinary Diagnostic Laboratory.

(9) "The University of Texas System" means the entities listed

or described by Section 65.02, Education Code.

(10) "Uniform program" means an employees uniform insurance

benefits program provided under this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.004. DEFINITION OF DEPENDENT. (a) In this chapter,

"dependent," with respect to an individual eligible to

participate in the uniform program under Section 1601.101 or

1601.102, means the individual's:

(1) spouse;

(2) unmarried child younger than 25 years of age; and

(3) child of any age who lives with or has the child's care

provided by the individual on a regular basis if the child is

mentally retarded or physically incapacitated to the extent that

the child is dependent on the individual for care or support, as

determined by the system.

(b) In this section:

(1) "Child" includes:

(A) an adopted child; and

(B) a stepchild, foster child, or other child who is in a

parent-child relationship with an individual who is eligible to

participate in the uniform program under Section 1601.101 or

1601.102.

(2) "Spouse" has the meaning assigned by the Family Code.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.005. DEFINITION OF CARRIER. In this chapter,

"carrier" means:

(1) an insurance company that is authorized by the department to

provide under this code any of the types of insurance coverages,

benefits, or services provided for in this chapter, and that:

(A) has an adequate surplus;

(B) has a successful operating history; and

(C) has had successful experience, as determined by the

department, in providing and servicing any of the types of group

coverage provided for in this chapter;

(2) a corporation operating under Chapter 842 that provides any

of the types of coverage, benefits, or services provided for in

this chapter and that:

(A) has a successful operating history; and

(B) has had successful experience, as determined by the

department, in providing and servicing any of the types of group

coverage provided for in this chapter; or

(3) any combination of carriers described by Subdivisions (1)

and (2) on terms the system prescribes.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.006. APPLICABILITY OF DEFINITIONS. The definition of

a term defined by this subchapter and the use of the terms

"employee" and "retired employee" as described by Sections

1601.101 and 1601.102 apply to this chapter unless a different

meaning is plainly required by the context in which the term

appears.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.007. SYSTEM MAY DEFINE OTHER WORDS. A system may

define by rule a word or term necessary in the administration of

this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.008. EXEMPTION FROM EXECUTION. All insurance benefits

and other payments and transactions made under this chapter to a

participant under this chapter are exempt from execution,

attachment, garnishment, or any other process.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.009. EXEMPTION FROM TAXATION AND FEES. Premiums on a

policy, an insurance contract, or an agreement established under

this chapter with a health maintenance organization are not

subject to any state tax, regulatory fee, or surcharge, including

a premium or maintenance tax or fee.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.010. CERTAIN COMBINING OF CARRIERS NOT RESTRAINT OF

TRADE. Carriers combining to bid, underwrite, or both bid and

underwrite, a group life, accident, or health benefit plan for

the uniform program are not in violation of Chapter 15, Business

& Commerce Code.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.011. PARTICIPATION OF THE TEXAS A&M UNIVERSITY

SYSTEM. Notwithstanding any other provision of this chapter, if

The Texas A&M University System elects to participate in the

group benefits program under Section 1551.006(c), that system,

including the Texas Veterinary Medical Diagnostic Laboratory,

does not participate in a uniform program established under this

chapter, effective on the date participation in the group

benefits program under Chapter 1551 begins.

Added by Acts 2003, 78th Leg., ch. 366, Sec. 4.01, eff. Sept. 1,

2003.

SUBCHAPTER B. ADMINISTRATION AND IMPLEMENTATION

Sec. 1601.051. ADMINISTRATION AND IMPLEMENTATION. A system

shall:

(1) implement a uniform program for the benefit of its employees

and retired employees; and

(2) determine basic procedural and administrative practices for

insurance coverage provided under this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.052. RULEMAKING AUTHORITY. A system shall adopt rules

consistent with this chapter as it considers necessary to

implement this chapter and its purposes.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.053. GENERAL DUTIES RELATING TO COVERAGE. (a) A

system shall:

(1) determine basic coverage standards that must be comparable

to those commonly provided:

(A) in private industry; and

(B) to employees of another agency or an institution of higher

education in this state under Chapter 1551; and

(2) establish procedures to allow each covered employee and

retired employee to obtain prompt action regarding claims

pertaining to coverages provided under this chapter.

(b) In designing a coverage plan, a system may consider existing

local conditions.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.054. COMPETITIVE BIDDING REQUIRED. A system shall

submit the uniform program, including any agreement under which a

carrier is engaged to administer a self-insured program, for

competitive bidding at least every six years.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.055. IDENTIFICATION OF ADMINISTRATIVE COSTS IN BIDS.

A system shall include in its respective bid documents for the

various coverages a provision calling for each bidder to identify

the system's administrative costs as a distinguishable figure and

to enumerate the services the bidder will render in exchange for

the administrative costs.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.056. INFORMATION ON BIDDERS AND BIDDING CONTRACTS.

(a) The department shall, on request by a system, provide a list

of all carriers:

(1) authorized to engage in business in this state; and

(2) eligible to bid on insurance coverage provided under this

chapter.

(b) The department shall, on request by a system, examine and

evaluate a bidding contract and certify the contract's actuarial

soundness to the system not later than the 15th day after the

date of the request.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.057. SELECTION OF BIDS. (a) A system is not required

to select the lowest bid under Section 1601.054 but shall take

into consideration other relevant criteria, such as ability to

service contracts, past experience, and financial stability.

(b) If a system selects a carrier whose bid differs from that

advertised, the governing board of the system shall fully justify

and record the reasons for the deviation in the minutes of the

next meeting of the governing board.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.058. SELECTION OF HEALTH MAINTENANCE ORGANIZATIONS. A

system shall select and contract for services performed by health

maintenance organizations that are approved by this state to

offer health care services in specific areas of the state to

eligible employees and retired employees.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.059. CERTIFICATE OF COVERAGE. A system shall ensure

that each employee and retired employee participating under this

chapter is issued a certificate of coverage that states:

(1) the benefits to which the participant is entitled;

(2) to whom the benefits are payable;

(3) to whom a claim must be submitted; and

(4) the provisions of the plan document, in summary form, that

principally affect the participant.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.060. ACCOUNTING BY CARRIER PROVIDING PURCHASED

COVERAGE. (a) A carrier providing coverage purchased under this

chapter to a system shall provide an accounting for each line of

coverage to the system not later than the 120th day after the end

of each plan year.

(b) The accounting must be in a form acceptable to the system.

(c) The accounting for each line of coverage must state:

(1) the cumulative amount of contributions remitted to the

carrier under the coverage;

(2) the total of all mortality and other claims, charges,

losses, costs, contingency reserve for pending and unreported

claims, and expenses incurred; and

(3) the amounts of the allowance for a reasonable profit,

contingency reserve, and all other administrative charges.

(d) Information provided under Subsection (c) must be provided:

(1) for the period from the coverage's date of issue to the end

of the plan year; and

(2) for the plan year covered by the report.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.061. SPECIAL RESERVE. (a) A carrier issuing a group

coverage plan under this chapter may hold as a special reserve

for a system an amount that equals the amount by which the total

amount described by Section 1601.060(c)(1) exceeds the sum of the

corresponding amounts described by Sections 1601.060(c)(2) and

(3).

(b) The system may use money in the special reserve at its

discretion, including for:

(1) providing additional coverage for participating employees or

retired employees;

(2) offsetting necessary rate increases; or

(3) reducing contributions to the coverage by participating

employees or retired employees.

(c) A special reserve held by a carrier for a system earns

interest at a rate determined each plan year by the carrier and

approved by the system as consistent with the rate generally used

by the carrier for similar funds held under other group

coverages.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.062. REPORTS AND RECORDS BY ADMINISTERING CARRIER.

Each contract entered into under this chapter between a system

and an administering carrier must:

(1) require the administering carrier to provide reasonable

reports that the system determines are necessary for the system

to perform its functions under this chapter; and

(2) permit the system and representatives of the state auditor

to examine records of the administering carrier as necessary to

accomplish the purposes of this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.063. ASSISTANCE IN REQUESTING MONEY. The Legislative

Budget Board and the Governor's Budget and Planning Office shall:

(1) establish procedures to ensure that each system requests

appropriate money to support its uniform program; and

(2) present appropriate budget recommendations to the

legislature.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.064. PHARMACY BENEFIT MANAGER CONTRACTS. (a) In

awarding a contract to provide pharmacy benefit manager services

under this chapter, a system 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 system 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 system 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 system 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 system, 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 system.

(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 system in accordance

with established auditing standards.

Added by Acts 2009, 81st Leg., R.S., Ch.

1207, Sec. 8, eff. September 1, 2009.

SUBCHAPTER C. COVERAGE AND PARTICIPATION

Sec. 1601.101. PARTICIPATION ELIGIBILITY: EMPLOYEES. (a) An

individual who is employed by the governing board of a system,

who performs service, other than as an independent contractor,

for the system, and who is described by this section is eligible

to participate as an employee in the uniform program on the date

specified by Section 1601.1045.

(b) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if the individual receives

compensation for services performed for the system, is eligible

to be a member of the Teacher Retirement System of Texas, and

either:

(1) is expected to work at least 20 hours per week and to

continue in the employment for a term of at least 4-1/2 months;

or

(2) is appointed for at least 50 percent of a standard full-time

appointment.

(c) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if the individual:

(1) receives compensation for services performed for the system;

(2) is employed at least 20 hours a week only; and

(3) is not permitted to be a member of the Teacher Retirement

System of Texas because the individual is solely employed by the

system in a position that as a condition of employment requires

the individual to be enrolled as a student in the system in

graduate-level courses.

(d) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if the individual is

serving a postdoctoral fellowship with an institution in a

system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 366, Sec. 4.02, eff.

Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1266, Sec. 2.11, eff.

Sept. 1, 2003.

Sec. 1601.102. PARTICIPATION ELIGIBILITY: RETIREES. (a) An

individual who retires in a manner described by this section and

who meets the requirements of Subsection (f) is eligible to

participate, subject to Section 1601.1045, as a retired employee

in the uniform program.

(b) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if:

(1) the individual has at least 10 years of service with a

system for which the individual was eligible to participate in

the uniform program under Section 1601.101;

(2) the individual's last state employment before retirement was

with that system; and

(3) the individual retires under the jurisdiction of:

(A) the Teacher Retirement System of Texas under Subtitle C,

Title 8, Government Code;

(B) the Employees Retirement System of Texas; or

(C) subject to Subsection (c):

(i) the optional retirement program established by Chapter 830,

Government Code; or

(ii) any other federal or state statutory retirement program to

which the system has made employer contributions.

(c) An individual retiring in the manner described by Subsection

(b)(3)(C) is a retired employee only if the individual meets all

applicable requirements for retirement, including service and age

requirements, adopted by the system comparable to the

requirements for retirement under the Teachers Retirement System

of Texas.

(d) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if the individual:

(1) meets the minimum requirements under Subsection (b) except

that the last state employment before retirement is not at the

employing system; and

(2) does not meet the requirements for an annuitant under

Section 1551.102.

(e) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if the individual retired

under Subtitle C, Title 8, Government Code, before September 1,

1991, with at least five and less than 10 years of service.

Text of subsec. (f) as added by Acts 2003, 78th Leg., ch. 366,

Sec. 4.03

(f) Notwithstanding Subsections (b)-(d), an individual is

eligible to participate in the uniform program only if the

individual:

(1) has at least 10 years of service credit and the sum of the

person's age and amount of service credit, including months of

age and credit, equals or exceeds the number 80; or

(2) is at least 65 years old and has at least 10 years of

service credit.

Text of subsec. (f) as added by Acts 2003, 78th Leg., ch. 1266,

Sec. 2.08

(f) Notwithstanding Subsection (b), an individual to whom this

subsection applies is eligible to participate in the uniform

program as provided by Subsection (a) if:

(1) the individual has at least three years of service with a

system for which the individual was eligible to participate in

the uniform program under Section 1601.101;

(2) the individual's last state employment before retirement was

with that system; and

(3) the individual retires under the jurisdiction of:

(A) the Teacher Retirement System of Texas under Subtitle C,

Title 8, Government Code;

(B) the Employees Retirement System of Texas; or

(C) subject to Subsection (c):

(i) the optional retirement program established by Chapter 830,

Government Code; or

(ii) any other federal or state statutory retirement program to

which the system has made employer contributions.

Text of subsec. (g) as added by Acts 2003, 78th Leg., ch. 366,

Sec. 4.03

(g) A person eligible to participate and participating in the

uniform program as an annuitant on September 1, 2003, may

continue to participate in the program as an annuitant if a lapse

in coverage has not occurred.

Text of subsec. (g) as added by Acts 2003, 78th Leg., ch. 1266,

Sec. 2.08

(g) Subsection (f) applies only to a person who, on August 31,

2003:

(1) was eligible to participate in the uniform program as an

employee under Section 1601.101; or

(2) was eligible to participate in the uniform program as a

retired employee under this section as this section existed on

January 1, 2003.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 366, Sec. 4.03, eff.

Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1266, Sec. 2.08, eff.

June 20, 2003.

Sec. 1601.103. RIGHT TO COVERAGE. An individual eligible to

participate in the uniform program under Section 1601.101 or

1601.102 may not be denied enrollment in any coverage provided

under this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.104. AUTOMATIC COVERAGE. (a) A system shall

automatically provide the basic coverage to each full-time

employee unless the employee has:

(1) waived participation in the basic coverage; or

(2) selected an optional coverage plan.

(b) An employee or retired employee who is automatically covered

under this section may subsequently:

(1) retain the basic coverage or waive participation in the

basic coverage; and

(2) apply for any other coverage provided under this chapter

within applicable standards.

(c) Automatic coverage as described under this section begins on

the first date of employment.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.1045. DATE ELIGIBILITY BEGINS; WAITING PERIOD. (a)

Except as provided by Subsection (c) or (d), eligibility under

Section 1601.101 begins on the first day of the calendar month

that begins after the 90th day after the date the employee

performs services for a system.

(b) Except as provided by Subsection (c), eligibility under

Section 1601.102, for an individual who does not retire at the

end of the last month for which the individual is on the payroll

of a system before retirement, begins on the first day of the

calendar month that begins after the 90th day after the date the

individual retires.

(c) The waiting period established by Subsections (a) and (b)

applies only to the determination of initial eligibility to

participate in the group health benefits program and does not

apply to the determination of initial eligibility to participate

in optional coverages under the uniform program.

(d) Notwithstanding Subsection (a), eligibility under Section

1601.101 may not begin earlier than the first day that an

employee performs services for a system if any amount paid for

premium incurred before the date specified under Subsection (a)

for the employee and any dependents of the employee is paid from

money not appropriated from the general revenue fund, in

accordance with policies and procedures established by the

system.

Added by Acts 2003, 78th Leg., ch. 366, Sec. 4.05, eff. Sept. 1,

2003.

Sec. 1601.105. WAIVER. An employee or retired employee may

waive in writing any coverage provided under this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.106. OPTIONAL COVERAGE. A system shall provide

optional coverage in accordance with Section 1601.201.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.107. COVERAGE FOR DEPENDENTS. An individual who is

eligible to participate in the uniform program under Section

1601.101 or 1601.102 is entitled to secure for a dependent of the

individual any group coverages provided under this chapter for

dependents under rules adopted by the applicable system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.108. COVERAGE OPTIONS FOR CERTAIN SURVIVING SPOUSES.

(a) This section applies only to the surviving spouse of:

(1) an individual eligible to participate in the uniform program

under Section 1601.101 who had at least five years of service on

the date of the individual's death, including at least three

years of service as an eligible employee with the employing

system; or

(2) an individual eligible to participate in the uniform program

under Section 1601.102.

(b) A surviving spouse to whom this section applies may elect to

retain any of the following coverages in effect on the date of

the participant's death:

(1) the surviving spouse's authorized coverages; and

(2) authorized coverages for any eligible dependent of the

deceased participant.

(c) The coverage is at the group rate for other participants.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.109. COVERAGE FOR AIDS, HIV, OR SERIOUS MENTAL

ILLNESS. (a) In this section, "serious mental illness" has the

meaning assigned by Section 1355.001.

(b) A system may not contract for or provide for group insurance

or HMO coverage or provide self-insured coverage, that:

(1) excludes or limits coverage or services for acquired immune

deficiency syndrome, as defined by the Centers for Disease

Control and Prevention of the United States Public Health

Service, or human immunodeficiency virus infection; or

(2) provides coverage for serious mental illness that is less

extensive than the coverage provided for any other physical

illness.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2G.020, eff. April 1, 2009.

Sec. 1601.110. 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 governing board of a system identifies populations requiring

disease management.

(b) A health benefit plan provided under this chapter must

provide disease management services or coverage for disease

management services in the manner required by the governing board

of a system, 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 2003, 78th Leg., ch. 589, Sec. 5, eff. June 20,

2003.

SUBCHAPTER D. GROUP COVERAGES

Sec. 1601.151. AUTHORITY TO SELF-INSURE; EXEMPTION FROM OTHER

INSURANCE LAWS. (a) Notwithstanding any other provisions of

this chapter, the governing board of a system may:

(1) self-insure a plan provided under this chapter; and

(2) hire a carrier to administer the system's uniform program.

(b) A plan for which a system provides coverage on a

self-insured basis is exempt from any other insurance law of this

state that does not expressly apply to that plan or this chapter.

(c) Expenses for the administration of a self-insured plan may

come from the contributions of employees and the state after

payments for any coverage provided under this chapter have been

made.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.152. CAFETERIA PLAN. (a) The governing board of a

system may develop, implement, and administer a cafeteria plan.

(b) The governing board may include in the cafeteria plan any

benefit that may be included in a cafeteria plan under federal

law.

(c) The governing board may cooperate and work with and enter

into a necessary contract or agreement with an independent and

qualified agency, person, or entity to:

(1) develop, implement, or administer a cafeteria plan; or

(2) assist in those activities.

(d) The governing board may adopt an order terminating the

cafeteria plan and providing a procedure for the orderly

withdrawal of the system and its employees from the cafeteria

plan if the governing board determines that a cafeteria plan

adopted under this section is no longer advantageous to the

system and its employees.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.153. SYSTEMS MAY JOIN IN PROCURING INSURANCE. The

systems may join together to procure one or more group contracts

with an insurance company authorized to engage in business in

this state to insure the employees and retired employees of each

participating system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.154. LONG-TERM CARE COVERAGE. (a) A system may join

with a board of trustees that administers the uniform program

established under Chapter 1551 or the group program established

under Chapter 1575 to provide long-term care insurance coverage.

(b) Each participating board of trustees and the governing board

of the system must mutually agree to join together for this

purpose, subject to terms that are beneficial to all

participants.

(c) A system may not participate in an agreement under this

section unless any cost or administrative burden associated with

the development or implementation of or communications about the

long-term care coverage plan is incidental.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.155. REINSURANCE. A system may arrange with an

administering carrier issuing a policy under this chapter for the

reinsurance of portions of the total amount of insurance under

the policy with other carriers that elect to participate in the

reinsurance.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

SUBCHAPTER E. PAYMENTS, CONTRIBUTIONS, AND COSTS

Sec. 1601.201. PAYMENT FOR COVERAGE. (a) A system may not

contribute more than the amounts specified by this section for

coverages provided under the uniform program.

(b) For an employee designated by the system as working 40 or

more hours a week, the system may contribute:

(1) the full cost of basic coverage for the employee; and

(2) not more than 50 percent of the cost of dependent coverage.

(c) For an employee designated by the system as working less

than 40 hours a week, including an individual employed by the

system in a position that as a condition of employment requires

the individual to be enrolled as a student in the system in

graduate-level courses, the system, from money appropriated from

the general revenue fund, may contribute:

(1) not more than 50 percent of the cost of basic coverage for

the employee; and

(2) not more than 25 percent of the cost of dependent coverage.

(d) Subsection (c) does not prohibit a system from contributing,

from money not appropriated from the general revenue fund,

amounts in excess of the amount specified by that subsection for

an individual employed by the system in a position that as a

condition of employment requires the individual to be enrolled as

a student in the system in graduate level courses.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 366, Sec. 4.06, eff.

Sept. 1, 2003.

Sec. 1601.202. FEES FOR CAFETERIA PLAN. (a) The governing

board of a system may establish a monthly fee in an amount set by

the board to be paid by each employee who elects to participate

in a cafeteria plan for the purpose of paying the expenses of

administering the cafeteria plan.

(b) If the governing board establishes a monthly fee, each

employee who participates in the cafeteria plan must authorize

payment of the fee by executing a separate payroll deduction

agreement or as part of a salary reduction agreement, as

determined by the governing board.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.203. PAYMENT FOR COVERAGE FOR DEPENDENTS.

Contributions for coverages for a dependent of an individual

eligible to participate in the uniform program under Section

1601.101 or 1601.102 required of the participant that exceed the

amount of system contributions shall be paid:

(1) by a deduction from the monthly compensation of the

participant;

(2) by a reduction of the monthly compensation of the

participant in the appropriate amount; or

(3) in the form and manner the system determines.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.204. AUTHORIZATION OF EMPLOYEE DEDUCTION. (a) Except

for a participant who participates in a cafeteria plan, each

individual eligible to participate in the uniform program under

Section 1601.101 must authorize a deduction from the

participant's monthly compensation in an amount equal to the

difference between:

(1) the total cost for coverages for which the participant

applies; and

(2) the amount contributed by the system.

(b) The authorization must be:

(1) in writing or performed electronically; and

(2) in a form satisfactory to the system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.205. EMPLOYEE PAYMENTS FOR PARTICIPATION IN CAFETERIA

PLAN. (a) If an employee elects to participate in a cafeteria

plan, the employee must execute a salary reduction agreement

under which the employee's monthly compensation will be reduced

in an amount equal to the difference between:

(1) the amount appropriated for that purpose in the General

Appropriations Act or the system's budget; and

(2) the cost of the employee's selected coverages for which the

employee is eligible to pay under the cafeteria plan.

(b) The employee must execute a salary reduction agreement for

any portion of the cost that is not covered by state or system

appropriations and cafeteria plan contributions.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.206. PAYMENT BY RETIRED EMPLOYEE. An individual

eligible to participate in the uniform program under Section

1601.102 must execute an agreement and make appropriate

contributions in a manner analogous to the requirements adopted

under Sections 1601.204 and 1601.205 for an individual eligible

to participate in the uniform program under Section 1601.101.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.207. SYSTEM CONTRIBUTIONS. A system shall contribute

monthly to the cost of each participant's coverage provided under

this chapter an amount:

(1) if the participants are compensated from amounts

appropriated in the General Appropriations Act, equal to or

greater than the amount appropriated for that purpose in the Act;

or

(2) if the participants are compensated from amounts

appropriated by the governing board of the system in its official

operating budget, an amount equal to the amount appropriated for

a participant under the General Appropriations Act.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.208. AMOUNT OF SYSTEM CONTRIBUTION. Not later than

November 1 preceding each regular session of the legislature,

each system shall certify to the Legislative Budget Board and the

budget division of the Governor's Budget and Planning Office the

amount necessary to pay the contributions of the system for the

coverages provided under this chapter to each employee and

retired employee of the system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.209. ORDER OF PRECEDENCE OF PAYMENT TO SURVIVORS. (a)

The amount of group life coverages and group accidental death

and dismemberment coverages in force for a participant on the

date the participant dies shall be paid, on the establishment of

a valid claim, to a person surviving the death in the following

order of precedence:

(1) to the beneficiary designated by the participant in a signed

and witnessed writing received before death by the appropriate

office of the applicable system; or

(2) if a beneficiary is not designated under Subdivision (1), in

accordance with the death benefit provisions of Subtitle C, Title

8, Government Code.

(b) For purposes of Subsection (a)(1), a designation, change, or

cancellation of a beneficiary in a document, including a will,

that is not executed and filed in the manner described by that

subsection is not valid.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.210. PROVISION OF NECESSARY INFORMATION. The Teacher

Retirement System of Texas, Optional Retirement Program carriers,

and Employees Retirement System of Texas shall provide to each

system information the system considers necessary to provide

retired employees with the coverages and system contributions

provided under this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

SUBCHAPTER F. CAFETERIA PLAN FUND

Sec. 1601.251. SYSTEM CAFETERIA PLAN FUND. (a) The governing

board of each system may establish and administer a cafeteria

plan fund.

(b) The following shall be credited to the cafeteria plan fund

of a system:

(1) salary reduction payments for benefits included in a

cafeteria plan adopted under this chapter, other than group

coverage plans under the uniform program;

(2) appropriations by the state for the administration of a

cafeteria plan; and

(3) a monthly fee established under Section 1601.202.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.252. USE OF FUND. The cafeteria plan fund of a system

is available without fiscal year limitation:

(1) for all payments for any benefits included in a cafeteria

plan adopted by the system under this chapter other than group

coverage plans under the uniform program; and

(2) for payment of expenses of administering the cafeteria plan.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.253. INVESTMENT OF MONEY IN FUND. (a) The governing

board of a system may invest the money in the system's cafeteria

plan fund.

(b) The earnings, including interest, and the proceeds from the

sale of the investments become a part of the fund.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

SUBCHAPTER G. ADVISORY COMMITTEE

Sec. 1601.301. ADVISORY COMMITTEE. An advisory committee for

each system shall be selected, serve, and perform duties as

provided by this subchapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.302. ELECTION OF MEMBERS. One member of the advisory

committee shall be elected from each of the components, units, or

agencies of the system:

(1) at times designated by the system; and

(2) in accordance with general guidelines for the election

provided by the system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.303. QUALIFICATIONS OF MEMBERS. (a) A member of a

system's advisory committee must be an employee of the system.

(b) A member must:

(1) demonstrate mature judgment, special abilities, and sincere

interest in employee coverage plans; and

(2) be able to represent the needs of all employees of the

component, unit, or agency the member represents with respect to

an action of the advisory committee.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.304. TERMS. A member of the advisory committee is

elected for a two-year term, subject to reelection.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.305. OFFICERS. Annually, the members of a system's

advisory committee shall elect a presiding officer and other

necessary officers.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.306. VACANCY. The chief executive officer of a

component, unit, or agency of a system shall appoint to the

system's advisory committee an employee of the component, unit,

or agency to fill the remainder of a vacated term of a member who

is an employee of the component, unit, or agency.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.307. DUTIES OF COMMITTEE. (a) The advisory committee

of a system shall cooperate and work with the governing board of

the system in coordinating and correlating the administration of

the uniform program among the various components, units, and

agencies of the system.

(b) Members of the advisory committee shall cooperate and work

with the governing board of the system as advisors in the

development, implementation, coordination, and administration of

the uniform program among the various components, units, and

agencies of the system.

(c) The advisory committee shall provide a channel for open

communication of ideas and suggestions regarding coverages,

eligibility, claims, procedures, bidding, administration, and any

other aspect of employee plan benefits.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.308. EXPENSES. (a) A member's service on the

advisory committee of a system is in addition to the duties of

the member's state office or employment.

(b) An expense incurred by an advisory committee member in

performing a duty as a member of the committee shall be paid from

money made available for that purpose to the system of which the

member is an employee or officer.

(c) Employees may not be required to pay from the amount of

employer contributions due the employees or from the amount of

additional contributions due for selected coverages under this

chapter the expenses of an advisory committee established under

this subchapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

87, Sec. 14.017(a), eff. September 1, 2009.

State Codes and Statutes

Statutes > Texas > Insurance-code > Title-8-health-insurance-and-other-health-coverages > Chapter-1601-uniform-insurance-benefits-act-for-employees-of-the-university-of-texas-system-and-the-

INSURANCE CODE

TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES

SUBTITLE H. HEALTH BENEFITS AND OTHER COVERAGES FOR GOVERNMENTAL

EMPLOYEES

CHAPTER 1601. UNIFORM INSURANCE BENEFITS ACT FOR EMPLOYEES OF THE

UNIVERSITY OF TEXAS SYSTEM AND THE TEXAS A&M UNIVERSITY

SYSTEM

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1601.001. SHORT TITLE. This chapter may be cited as the

State University Employees Uniform Insurance Benefits Act.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.002. PURPOSES. The purposes of this chapter are to:

(1) provide uniformity in the basic group life, accident, and

health benefit coverages for all system employees;

(2) enable the systems to attract and retain competent and able

employees by providing employees with basic life, accident, and

health benefit coverages comparable to those commonly provided in

private industry and to employees of a state agency other than a

system, including a public college or university whose employees

are covered under Chapter 1551;

(3) foster, promote, and encourage employment by and service to

the systems as a career profession for individuals of high

standards of competence and ability;

(4) recognize and protect the investment of the systems in each

employee by promoting and preserving economic security and good

health among employees;

(5) foster and develop high standards of employer-employee

relationships between the systems and their employees; and

(6) recognize the long and faithful service and dedication of

employees and encourage them to remain in service until eligible

for retirement by providing health benefits and other group

benefits for them.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.003. GENERAL DEFINITIONS. In this chapter:

(1) "Administering carrier" means a carrier or organization that

is:

(A) qualified to engage in business in this state; and

(B) designated by a system to administer services, benefits,

insurance coverages, or requirements in accordance with this

chapter.

(2) "Basic coverage" means coverage, including health benefit

coverage, that meets the basic coverage standards required under

Section 1601.053(a)(1).

(3) "Cafeteria plan" means a plan defined and authorized by

Section 125, Internal Revenue Code of 1986.

(4) "Group life, accident, or health benefit plan" means a group

agreement, policy, contract, or arrangement provided by an

administering carrier, including:

(A) a group insurance policy or contract;

(B) a life, accident, medical, dental, or hospital service

agreement;

(C) a membership or subscription contract; or

(D) any other similar group arrangement.

(5) "Optional coverage" means group coverage other than the

basic coverage.

(6) "Service" means personal service to a system for which an

employee is credited in accordance with rules adopted by the

system.

(7) "System" means The University of Texas System or The Texas

A&M University System.

(8) "The Texas A&M University System" means the entities

governed under Chapters 85 through 88, Education Code, including

the Texas Veterinary Diagnostic Laboratory.

(9) "The University of Texas System" means the entities listed

or described by Section 65.02, Education Code.

(10) "Uniform program" means an employees uniform insurance

benefits program provided under this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.004. DEFINITION OF DEPENDENT. (a) In this chapter,

"dependent," with respect to an individual eligible to

participate in the uniform program under Section 1601.101 or

1601.102, means the individual's:

(1) spouse;

(2) unmarried child younger than 25 years of age; and

(3) child of any age who lives with or has the child's care

provided by the individual on a regular basis if the child is

mentally retarded or physically incapacitated to the extent that

the child is dependent on the individual for care or support, as

determined by the system.

(b) In this section:

(1) "Child" includes:

(A) an adopted child; and

(B) a stepchild, foster child, or other child who is in a

parent-child relationship with an individual who is eligible to

participate in the uniform program under Section 1601.101 or

1601.102.

(2) "Spouse" has the meaning assigned by the Family Code.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.005. DEFINITION OF CARRIER. In this chapter,

"carrier" means:

(1) an insurance company that is authorized by the department to

provide under this code any of the types of insurance coverages,

benefits, or services provided for in this chapter, and that:

(A) has an adequate surplus;

(B) has a successful operating history; and

(C) has had successful experience, as determined by the

department, in providing and servicing any of the types of group

coverage provided for in this chapter;

(2) a corporation operating under Chapter 842 that provides any

of the types of coverage, benefits, or services provided for in

this chapter and that:

(A) has a successful operating history; and

(B) has had successful experience, as determined by the

department, in providing and servicing any of the types of group

coverage provided for in this chapter; or

(3) any combination of carriers described by Subdivisions (1)

and (2) on terms the system prescribes.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.006. APPLICABILITY OF DEFINITIONS. The definition of

a term defined by this subchapter and the use of the terms

"employee" and "retired employee" as described by Sections

1601.101 and 1601.102 apply to this chapter unless a different

meaning is plainly required by the context in which the term

appears.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.007. SYSTEM MAY DEFINE OTHER WORDS. A system may

define by rule a word or term necessary in the administration of

this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.008. EXEMPTION FROM EXECUTION. All insurance benefits

and other payments and transactions made under this chapter to a

participant under this chapter are exempt from execution,

attachment, garnishment, or any other process.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.009. EXEMPTION FROM TAXATION AND FEES. Premiums on a

policy, an insurance contract, or an agreement established under

this chapter with a health maintenance organization are not

subject to any state tax, regulatory fee, or surcharge, including

a premium or maintenance tax or fee.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.010. CERTAIN COMBINING OF CARRIERS NOT RESTRAINT OF

TRADE. Carriers combining to bid, underwrite, or both bid and

underwrite, a group life, accident, or health benefit plan for

the uniform program are not in violation of Chapter 15, Business

& Commerce Code.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.011. PARTICIPATION OF THE TEXAS A&M UNIVERSITY

SYSTEM. Notwithstanding any other provision of this chapter, if

The Texas A&M University System elects to participate in the

group benefits program under Section 1551.006(c), that system,

including the Texas Veterinary Medical Diagnostic Laboratory,

does not participate in a uniform program established under this

chapter, effective on the date participation in the group

benefits program under Chapter 1551 begins.

Added by Acts 2003, 78th Leg., ch. 366, Sec. 4.01, eff. Sept. 1,

2003.

SUBCHAPTER B. ADMINISTRATION AND IMPLEMENTATION

Sec. 1601.051. ADMINISTRATION AND IMPLEMENTATION. A system

shall:

(1) implement a uniform program for the benefit of its employees

and retired employees; and

(2) determine basic procedural and administrative practices for

insurance coverage provided under this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.052. RULEMAKING AUTHORITY. A system shall adopt rules

consistent with this chapter as it considers necessary to

implement this chapter and its purposes.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.053. GENERAL DUTIES RELATING TO COVERAGE. (a) A

system shall:

(1) determine basic coverage standards that must be comparable

to those commonly provided:

(A) in private industry; and

(B) to employees of another agency or an institution of higher

education in this state under Chapter 1551; and

(2) establish procedures to allow each covered employee and

retired employee to obtain prompt action regarding claims

pertaining to coverages provided under this chapter.

(b) In designing a coverage plan, a system may consider existing

local conditions.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.054. COMPETITIVE BIDDING REQUIRED. A system shall

submit the uniform program, including any agreement under which a

carrier is engaged to administer a self-insured program, for

competitive bidding at least every six years.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.055. IDENTIFICATION OF ADMINISTRATIVE COSTS IN BIDS.

A system shall include in its respective bid documents for the

various coverages a provision calling for each bidder to identify

the system's administrative costs as a distinguishable figure and

to enumerate the services the bidder will render in exchange for

the administrative costs.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.056. INFORMATION ON BIDDERS AND BIDDING CONTRACTS.

(a) The department shall, on request by a system, provide a list

of all carriers:

(1) authorized to engage in business in this state; and

(2) eligible to bid on insurance coverage provided under this

chapter.

(b) The department shall, on request by a system, examine and

evaluate a bidding contract and certify the contract's actuarial

soundness to the system not later than the 15th day after the

date of the request.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.057. SELECTION OF BIDS. (a) A system is not required

to select the lowest bid under Section 1601.054 but shall take

into consideration other relevant criteria, such as ability to

service contracts, past experience, and financial stability.

(b) If a system selects a carrier whose bid differs from that

advertised, the governing board of the system shall fully justify

and record the reasons for the deviation in the minutes of the

next meeting of the governing board.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.058. SELECTION OF HEALTH MAINTENANCE ORGANIZATIONS. A

system shall select and contract for services performed by health

maintenance organizations that are approved by this state to

offer health care services in specific areas of the state to

eligible employees and retired employees.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.059. CERTIFICATE OF COVERAGE. A system shall ensure

that each employee and retired employee participating under this

chapter is issued a certificate of coverage that states:

(1) the benefits to which the participant is entitled;

(2) to whom the benefits are payable;

(3) to whom a claim must be submitted; and

(4) the provisions of the plan document, in summary form, that

principally affect the participant.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.060. ACCOUNTING BY CARRIER PROVIDING PURCHASED

COVERAGE. (a) A carrier providing coverage purchased under this

chapter to a system shall provide an accounting for each line of

coverage to the system not later than the 120th day after the end

of each plan year.

(b) The accounting must be in a form acceptable to the system.

(c) The accounting for each line of coverage must state:

(1) the cumulative amount of contributions remitted to the

carrier under the coverage;

(2) the total of all mortality and other claims, charges,

losses, costs, contingency reserve for pending and unreported

claims, and expenses incurred; and

(3) the amounts of the allowance for a reasonable profit,

contingency reserve, and all other administrative charges.

(d) Information provided under Subsection (c) must be provided:

(1) for the period from the coverage's date of issue to the end

of the plan year; and

(2) for the plan year covered by the report.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.061. SPECIAL RESERVE. (a) A carrier issuing a group

coverage plan under this chapter may hold as a special reserve

for a system an amount that equals the amount by which the total

amount described by Section 1601.060(c)(1) exceeds the sum of the

corresponding amounts described by Sections 1601.060(c)(2) and

(3).

(b) The system may use money in the special reserve at its

discretion, including for:

(1) providing additional coverage for participating employees or

retired employees;

(2) offsetting necessary rate increases; or

(3) reducing contributions to the coverage by participating

employees or retired employees.

(c) A special reserve held by a carrier for a system earns

interest at a rate determined each plan year by the carrier and

approved by the system as consistent with the rate generally used

by the carrier for similar funds held under other group

coverages.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.062. REPORTS AND RECORDS BY ADMINISTERING CARRIER.

Each contract entered into under this chapter between a system

and an administering carrier must:

(1) require the administering carrier to provide reasonable

reports that the system determines are necessary for the system

to perform its functions under this chapter; and

(2) permit the system and representatives of the state auditor

to examine records of the administering carrier as necessary to

accomplish the purposes of this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.063. ASSISTANCE IN REQUESTING MONEY. The Legislative

Budget Board and the Governor's Budget and Planning Office shall:

(1) establish procedures to ensure that each system requests

appropriate money to support its uniform program; and

(2) present appropriate budget recommendations to the

legislature.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.064. PHARMACY BENEFIT MANAGER CONTRACTS. (a) In

awarding a contract to provide pharmacy benefit manager services

under this chapter, a system 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 system 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 system 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 system 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 system, 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 system.

(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 system in accordance

with established auditing standards.

Added by Acts 2009, 81st Leg., R.S., Ch.

1207, Sec. 8, eff. September 1, 2009.

SUBCHAPTER C. COVERAGE AND PARTICIPATION

Sec. 1601.101. PARTICIPATION ELIGIBILITY: EMPLOYEES. (a) An

individual who is employed by the governing board of a system,

who performs service, other than as an independent contractor,

for the system, and who is described by this section is eligible

to participate as an employee in the uniform program on the date

specified by Section 1601.1045.

(b) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if the individual receives

compensation for services performed for the system, is eligible

to be a member of the Teacher Retirement System of Texas, and

either:

(1) is expected to work at least 20 hours per week and to

continue in the employment for a term of at least 4-1/2 months;

or

(2) is appointed for at least 50 percent of a standard full-time

appointment.

(c) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if the individual:

(1) receives compensation for services performed for the system;

(2) is employed at least 20 hours a week only; and

(3) is not permitted to be a member of the Teacher Retirement

System of Texas because the individual is solely employed by the

system in a position that as a condition of employment requires

the individual to be enrolled as a student in the system in

graduate-level courses.

(d) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if the individual is

serving a postdoctoral fellowship with an institution in a

system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 366, Sec. 4.02, eff.

Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1266, Sec. 2.11, eff.

Sept. 1, 2003.

Sec. 1601.102. PARTICIPATION ELIGIBILITY: RETIREES. (a) An

individual who retires in a manner described by this section and

who meets the requirements of Subsection (f) is eligible to

participate, subject to Section 1601.1045, as a retired employee

in the uniform program.

(b) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if:

(1) the individual has at least 10 years of service with a

system for which the individual was eligible to participate in

the uniform program under Section 1601.101;

(2) the individual's last state employment before retirement was

with that system; and

(3) the individual retires under the jurisdiction of:

(A) the Teacher Retirement System of Texas under Subtitle C,

Title 8, Government Code;

(B) the Employees Retirement System of Texas; or

(C) subject to Subsection (c):

(i) the optional retirement program established by Chapter 830,

Government Code; or

(ii) any other federal or state statutory retirement program to

which the system has made employer contributions.

(c) An individual retiring in the manner described by Subsection

(b)(3)(C) is a retired employee only if the individual meets all

applicable requirements for retirement, including service and age

requirements, adopted by the system comparable to the

requirements for retirement under the Teachers Retirement System

of Texas.

(d) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if the individual:

(1) meets the minimum requirements under Subsection (b) except

that the last state employment before retirement is not at the

employing system; and

(2) does not meet the requirements for an annuitant under

Section 1551.102.

(e) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if the individual retired

under Subtitle C, Title 8, Government Code, before September 1,

1991, with at least five and less than 10 years of service.

Text of subsec. (f) as added by Acts 2003, 78th Leg., ch. 366,

Sec. 4.03

(f) Notwithstanding Subsections (b)-(d), an individual is

eligible to participate in the uniform program only if the

individual:

(1) has at least 10 years of service credit and the sum of the

person's age and amount of service credit, including months of

age and credit, equals or exceeds the number 80; or

(2) is at least 65 years old and has at least 10 years of

service credit.

Text of subsec. (f) as added by Acts 2003, 78th Leg., ch. 1266,

Sec. 2.08

(f) Notwithstanding Subsection (b), an individual to whom this

subsection applies is eligible to participate in the uniform

program as provided by Subsection (a) if:

(1) the individual has at least three years of service with a

system for which the individual was eligible to participate in

the uniform program under Section 1601.101;

(2) the individual's last state employment before retirement was

with that system; and

(3) the individual retires under the jurisdiction of:

(A) the Teacher Retirement System of Texas under Subtitle C,

Title 8, Government Code;

(B) the Employees Retirement System of Texas; or

(C) subject to Subsection (c):

(i) the optional retirement program established by Chapter 830,

Government Code; or

(ii) any other federal or state statutory retirement program to

which the system has made employer contributions.

Text of subsec. (g) as added by Acts 2003, 78th Leg., ch. 366,

Sec. 4.03

(g) A person eligible to participate and participating in the

uniform program as an annuitant on September 1, 2003, may

continue to participate in the program as an annuitant if a lapse

in coverage has not occurred.

Text of subsec. (g) as added by Acts 2003, 78th Leg., ch. 1266,

Sec. 2.08

(g) Subsection (f) applies only to a person who, on August 31,

2003:

(1) was eligible to participate in the uniform program as an

employee under Section 1601.101; or

(2) was eligible to participate in the uniform program as a

retired employee under this section as this section existed on

January 1, 2003.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 366, Sec. 4.03, eff.

Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1266, Sec. 2.08, eff.

June 20, 2003.

Sec. 1601.103. RIGHT TO COVERAGE. An individual eligible to

participate in the uniform program under Section 1601.101 or

1601.102 may not be denied enrollment in any coverage provided

under this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.104. AUTOMATIC COVERAGE. (a) A system shall

automatically provide the basic coverage to each full-time

employee unless the employee has:

(1) waived participation in the basic coverage; or

(2) selected an optional coverage plan.

(b) An employee or retired employee who is automatically covered

under this section may subsequently:

(1) retain the basic coverage or waive participation in the

basic coverage; and

(2) apply for any other coverage provided under this chapter

within applicable standards.

(c) Automatic coverage as described under this section begins on

the first date of employment.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.1045. DATE ELIGIBILITY BEGINS; WAITING PERIOD. (a)

Except as provided by Subsection (c) or (d), eligibility under

Section 1601.101 begins on the first day of the calendar month

that begins after the 90th day after the date the employee

performs services for a system.

(b) Except as provided by Subsection (c), eligibility under

Section 1601.102, for an individual who does not retire at the

end of the last month for which the individual is on the payroll

of a system before retirement, begins on the first day of the

calendar month that begins after the 90th day after the date the

individual retires.

(c) The waiting period established by Subsections (a) and (b)

applies only to the determination of initial eligibility to

participate in the group health benefits program and does not

apply to the determination of initial eligibility to participate

in optional coverages under the uniform program.

(d) Notwithstanding Subsection (a), eligibility under Section

1601.101 may not begin earlier than the first day that an

employee performs services for a system if any amount paid for

premium incurred before the date specified under Subsection (a)

for the employee and any dependents of the employee is paid from

money not appropriated from the general revenue fund, in

accordance with policies and procedures established by the

system.

Added by Acts 2003, 78th Leg., ch. 366, Sec. 4.05, eff. Sept. 1,

2003.

Sec. 1601.105. WAIVER. An employee or retired employee may

waive in writing any coverage provided under this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.106. OPTIONAL COVERAGE. A system shall provide

optional coverage in accordance with Section 1601.201.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.107. COVERAGE FOR DEPENDENTS. An individual who is

eligible to participate in the uniform program under Section

1601.101 or 1601.102 is entitled to secure for a dependent of the

individual any group coverages provided under this chapter for

dependents under rules adopted by the applicable system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.108. COVERAGE OPTIONS FOR CERTAIN SURVIVING SPOUSES.

(a) This section applies only to the surviving spouse of:

(1) an individual eligible to participate in the uniform program

under Section 1601.101 who had at least five years of service on

the date of the individual's death, including at least three

years of service as an eligible employee with the employing

system; or

(2) an individual eligible to participate in the uniform program

under Section 1601.102.

(b) A surviving spouse to whom this section applies may elect to

retain any of the following coverages in effect on the date of

the participant's death:

(1) the surviving spouse's authorized coverages; and

(2) authorized coverages for any eligible dependent of the

deceased participant.

(c) The coverage is at the group rate for other participants.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.109. COVERAGE FOR AIDS, HIV, OR SERIOUS MENTAL

ILLNESS. (a) In this section, "serious mental illness" has the

meaning assigned by Section 1355.001.

(b) A system may not contract for or provide for group insurance

or HMO coverage or provide self-insured coverage, that:

(1) excludes or limits coverage or services for acquired immune

deficiency syndrome, as defined by the Centers for Disease

Control and Prevention of the United States Public Health

Service, or human immunodeficiency virus infection; or

(2) provides coverage for serious mental illness that is less

extensive than the coverage provided for any other physical

illness.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2G.020, eff. April 1, 2009.

Sec. 1601.110. 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 governing board of a system identifies populations requiring

disease management.

(b) A health benefit plan provided under this chapter must

provide disease management services or coverage for disease

management services in the manner required by the governing board

of a system, 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 2003, 78th Leg., ch. 589, Sec. 5, eff. June 20,

2003.

SUBCHAPTER D. GROUP COVERAGES

Sec. 1601.151. AUTHORITY TO SELF-INSURE; EXEMPTION FROM OTHER

INSURANCE LAWS. (a) Notwithstanding any other provisions of

this chapter, the governing board of a system may:

(1) self-insure a plan provided under this chapter; and

(2) hire a carrier to administer the system's uniform program.

(b) A plan for which a system provides coverage on a

self-insured basis is exempt from any other insurance law of this

state that does not expressly apply to that plan or this chapter.

(c) Expenses for the administration of a self-insured plan may

come from the contributions of employees and the state after

payments for any coverage provided under this chapter have been

made.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.152. CAFETERIA PLAN. (a) The governing board of a

system may develop, implement, and administer a cafeteria plan.

(b) The governing board may include in the cafeteria plan any

benefit that may be included in a cafeteria plan under federal

law.

(c) The governing board may cooperate and work with and enter

into a necessary contract or agreement with an independent and

qualified agency, person, or entity to:

(1) develop, implement, or administer a cafeteria plan; or

(2) assist in those activities.

(d) The governing board may adopt an order terminating the

cafeteria plan and providing a procedure for the orderly

withdrawal of the system and its employees from the cafeteria

plan if the governing board determines that a cafeteria plan

adopted under this section is no longer advantageous to the

system and its employees.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.153. SYSTEMS MAY JOIN IN PROCURING INSURANCE. The

systems may join together to procure one or more group contracts

with an insurance company authorized to engage in business in

this state to insure the employees and retired employees of each

participating system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.154. LONG-TERM CARE COVERAGE. (a) A system may join

with a board of trustees that administers the uniform program

established under Chapter 1551 or the group program established

under Chapter 1575 to provide long-term care insurance coverage.

(b) Each participating board of trustees and the governing board

of the system must mutually agree to join together for this

purpose, subject to terms that are beneficial to all

participants.

(c) A system may not participate in an agreement under this

section unless any cost or administrative burden associated with

the development or implementation of or communications about the

long-term care coverage plan is incidental.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.155. REINSURANCE. A system may arrange with an

administering carrier issuing a policy under this chapter for the

reinsurance of portions of the total amount of insurance under

the policy with other carriers that elect to participate in the

reinsurance.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

SUBCHAPTER E. PAYMENTS, CONTRIBUTIONS, AND COSTS

Sec. 1601.201. PAYMENT FOR COVERAGE. (a) A system may not

contribute more than the amounts specified by this section for

coverages provided under the uniform program.

(b) For an employee designated by the system as working 40 or

more hours a week, the system may contribute:

(1) the full cost of basic coverage for the employee; and

(2) not more than 50 percent of the cost of dependent coverage.

(c) For an employee designated by the system as working less

than 40 hours a week, including an individual employed by the

system in a position that as a condition of employment requires

the individual to be enrolled as a student in the system in

graduate-level courses, the system, from money appropriated from

the general revenue fund, may contribute:

(1) not more than 50 percent of the cost of basic coverage for

the employee; and

(2) not more than 25 percent of the cost of dependent coverage.

(d) Subsection (c) does not prohibit a system from contributing,

from money not appropriated from the general revenue fund,

amounts in excess of the amount specified by that subsection for

an individual employed by the system in a position that as a

condition of employment requires the individual to be enrolled as

a student in the system in graduate level courses.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 366, Sec. 4.06, eff.

Sept. 1, 2003.

Sec. 1601.202. FEES FOR CAFETERIA PLAN. (a) The governing

board of a system may establish a monthly fee in an amount set by

the board to be paid by each employee who elects to participate

in a cafeteria plan for the purpose of paying the expenses of

administering the cafeteria plan.

(b) If the governing board establishes a monthly fee, each

employee who participates in the cafeteria plan must authorize

payment of the fee by executing a separate payroll deduction

agreement or as part of a salary reduction agreement, as

determined by the governing board.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.203. PAYMENT FOR COVERAGE FOR DEPENDENTS.

Contributions for coverages for a dependent of an individual

eligible to participate in the uniform program under Section

1601.101 or 1601.102 required of the participant that exceed the

amount of system contributions shall be paid:

(1) by a deduction from the monthly compensation of the

participant;

(2) by a reduction of the monthly compensation of the

participant in the appropriate amount; or

(3) in the form and manner the system determines.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.204. AUTHORIZATION OF EMPLOYEE DEDUCTION. (a) Except

for a participant who participates in a cafeteria plan, each

individual eligible to participate in the uniform program under

Section 1601.101 must authorize a deduction from the

participant's monthly compensation in an amount equal to the

difference between:

(1) the total cost for coverages for which the participant

applies; and

(2) the amount contributed by the system.

(b) The authorization must be:

(1) in writing or performed electronically; and

(2) in a form satisfactory to the system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.205. EMPLOYEE PAYMENTS FOR PARTICIPATION IN CAFETERIA

PLAN. (a) If an employee elects to participate in a cafeteria

plan, the employee must execute a salary reduction agreement

under which the employee's monthly compensation will be reduced

in an amount equal to the difference between:

(1) the amount appropriated for that purpose in the General

Appropriations Act or the system's budget; and

(2) the cost of the employee's selected coverages for which the

employee is eligible to pay under the cafeteria plan.

(b) The employee must execute a salary reduction agreement for

any portion of the cost that is not covered by state or system

appropriations and cafeteria plan contributions.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.206. PAYMENT BY RETIRED EMPLOYEE. An individual

eligible to participate in the uniform program under Section

1601.102 must execute an agreement and make appropriate

contributions in a manner analogous to the requirements adopted

under Sections 1601.204 and 1601.205 for an individual eligible

to participate in the uniform program under Section 1601.101.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.207. SYSTEM CONTRIBUTIONS. A system shall contribute

monthly to the cost of each participant's coverage provided under

this chapter an amount:

(1) if the participants are compensated from amounts

appropriated in the General Appropriations Act, equal to or

greater than the amount appropriated for that purpose in the Act;

or

(2) if the participants are compensated from amounts

appropriated by the governing board of the system in its official

operating budget, an amount equal to the amount appropriated for

a participant under the General Appropriations Act.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.208. AMOUNT OF SYSTEM CONTRIBUTION. Not later than

November 1 preceding each regular session of the legislature,

each system shall certify to the Legislative Budget Board and the

budget division of the Governor's Budget and Planning Office the

amount necessary to pay the contributions of the system for the

coverages provided under this chapter to each employee and

retired employee of the system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.209. ORDER OF PRECEDENCE OF PAYMENT TO SURVIVORS. (a)

The amount of group life coverages and group accidental death

and dismemberment coverages in force for a participant on the

date the participant dies shall be paid, on the establishment of

a valid claim, to a person surviving the death in the following

order of precedence:

(1) to the beneficiary designated by the participant in a signed

and witnessed writing received before death by the appropriate

office of the applicable system; or

(2) if a beneficiary is not designated under Subdivision (1), in

accordance with the death benefit provisions of Subtitle C, Title

8, Government Code.

(b) For purposes of Subsection (a)(1), a designation, change, or

cancellation of a beneficiary in a document, including a will,

that is not executed and filed in the manner described by that

subsection is not valid.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.210. PROVISION OF NECESSARY INFORMATION. The Teacher

Retirement System of Texas, Optional Retirement Program carriers,

and Employees Retirement System of Texas shall provide to each

system information the system considers necessary to provide

retired employees with the coverages and system contributions

provided under this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

SUBCHAPTER F. CAFETERIA PLAN FUND

Sec. 1601.251. SYSTEM CAFETERIA PLAN FUND. (a) The governing

board of each system may establish and administer a cafeteria

plan fund.

(b) The following shall be credited to the cafeteria plan fund

of a system:

(1) salary reduction payments for benefits included in a

cafeteria plan adopted under this chapter, other than group

coverage plans under the uniform program;

(2) appropriations by the state for the administration of a

cafeteria plan; and

(3) a monthly fee established under Section 1601.202.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.252. USE OF FUND. The cafeteria plan fund of a system

is available without fiscal year limitation:

(1) for all payments for any benefits included in a cafeteria

plan adopted by the system under this chapter other than group

coverage plans under the uniform program; and

(2) for payment of expenses of administering the cafeteria plan.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.253. INVESTMENT OF MONEY IN FUND. (a) The governing

board of a system may invest the money in the system's cafeteria

plan fund.

(b) The earnings, including interest, and the proceeds from the

sale of the investments become a part of the fund.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

SUBCHAPTER G. ADVISORY COMMITTEE

Sec. 1601.301. ADVISORY COMMITTEE. An advisory committee for

each system shall be selected, serve, and perform duties as

provided by this subchapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.302. ELECTION OF MEMBERS. One member of the advisory

committee shall be elected from each of the components, units, or

agencies of the system:

(1) at times designated by the system; and

(2) in accordance with general guidelines for the election

provided by the system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.303. QUALIFICATIONS OF MEMBERS. (a) A member of a

system's advisory committee must be an employee of the system.

(b) A member must:

(1) demonstrate mature judgment, special abilities, and sincere

interest in employee coverage plans; and

(2) be able to represent the needs of all employees of the

component, unit, or agency the member represents with respect to

an action of the advisory committee.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.304. TERMS. A member of the advisory committee is

elected for a two-year term, subject to reelection.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.305. OFFICERS. Annually, the members of a system's

advisory committee shall elect a presiding officer and other

necessary officers.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.306. VACANCY. The chief executive officer of a

component, unit, or agency of a system shall appoint to the

system's advisory committee an employee of the component, unit,

or agency to fill the remainder of a vacated term of a member who

is an employee of the component, unit, or agency.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.307. DUTIES OF COMMITTEE. (a) The advisory committee

of a system shall cooperate and work with the governing board of

the system in coordinating and correlating the administration of

the uniform program among the various components, units, and

agencies of the system.

(b) Members of the advisory committee shall cooperate and work

with the governing board of the system as advisors in the

development, implementation, coordination, and administration of

the uniform program among the various components, units, and

agencies of the system.

(c) The advisory committee shall provide a channel for open

communication of ideas and suggestions regarding coverages,

eligibility, claims, procedures, bidding, administration, and any

other aspect of employee plan benefits.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.308. EXPENSES. (a) A member's service on the

advisory committee of a system is in addition to the duties of

the member's state office or employment.

(b) An expense incurred by an advisory committee member in

performing a duty as a member of the committee shall be paid from

money made available for that purpose to the system of which the

member is an employee or officer.

(c) Employees may not be required to pay from the amount of

employer contributions due the employees or from the amount of

additional contributions due for selected coverages under this

chapter the expenses of an advisory committee established under

this subchapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

87, Sec. 14.017(a), eff. September 1, 2009.


State Codes and Statutes

State Codes and Statutes

Statutes > Texas > Insurance-code > Title-8-health-insurance-and-other-health-coverages > Chapter-1601-uniform-insurance-benefits-act-for-employees-of-the-university-of-texas-system-and-the-

INSURANCE CODE

TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES

SUBTITLE H. HEALTH BENEFITS AND OTHER COVERAGES FOR GOVERNMENTAL

EMPLOYEES

CHAPTER 1601. UNIFORM INSURANCE BENEFITS ACT FOR EMPLOYEES OF THE

UNIVERSITY OF TEXAS SYSTEM AND THE TEXAS A&M UNIVERSITY

SYSTEM

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1601.001. SHORT TITLE. This chapter may be cited as the

State University Employees Uniform Insurance Benefits Act.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.002. PURPOSES. The purposes of this chapter are to:

(1) provide uniformity in the basic group life, accident, and

health benefit coverages for all system employees;

(2) enable the systems to attract and retain competent and able

employees by providing employees with basic life, accident, and

health benefit coverages comparable to those commonly provided in

private industry and to employees of a state agency other than a

system, including a public college or university whose employees

are covered under Chapter 1551;

(3) foster, promote, and encourage employment by and service to

the systems as a career profession for individuals of high

standards of competence and ability;

(4) recognize and protect the investment of the systems in each

employee by promoting and preserving economic security and good

health among employees;

(5) foster and develop high standards of employer-employee

relationships between the systems and their employees; and

(6) recognize the long and faithful service and dedication of

employees and encourage them to remain in service until eligible

for retirement by providing health benefits and other group

benefits for them.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.003. GENERAL DEFINITIONS. In this chapter:

(1) "Administering carrier" means a carrier or organization that

is:

(A) qualified to engage in business in this state; and

(B) designated by a system to administer services, benefits,

insurance coverages, or requirements in accordance with this

chapter.

(2) "Basic coverage" means coverage, including health benefit

coverage, that meets the basic coverage standards required under

Section 1601.053(a)(1).

(3) "Cafeteria plan" means a plan defined and authorized by

Section 125, Internal Revenue Code of 1986.

(4) "Group life, accident, or health benefit plan" means a group

agreement, policy, contract, or arrangement provided by an

administering carrier, including:

(A) a group insurance policy or contract;

(B) a life, accident, medical, dental, or hospital service

agreement;

(C) a membership or subscription contract; or

(D) any other similar group arrangement.

(5) "Optional coverage" means group coverage other than the

basic coverage.

(6) "Service" means personal service to a system for which an

employee is credited in accordance with rules adopted by the

system.

(7) "System" means The University of Texas System or The Texas

A&M University System.

(8) "The Texas A&M University System" means the entities

governed under Chapters 85 through 88, Education Code, including

the Texas Veterinary Diagnostic Laboratory.

(9) "The University of Texas System" means the entities listed

or described by Section 65.02, Education Code.

(10) "Uniform program" means an employees uniform insurance

benefits program provided under this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.004. DEFINITION OF DEPENDENT. (a) In this chapter,

"dependent," with respect to an individual eligible to

participate in the uniform program under Section 1601.101 or

1601.102, means the individual's:

(1) spouse;

(2) unmarried child younger than 25 years of age; and

(3) child of any age who lives with or has the child's care

provided by the individual on a regular basis if the child is

mentally retarded or physically incapacitated to the extent that

the child is dependent on the individual for care or support, as

determined by the system.

(b) In this section:

(1) "Child" includes:

(A) an adopted child; and

(B) a stepchild, foster child, or other child who is in a

parent-child relationship with an individual who is eligible to

participate in the uniform program under Section 1601.101 or

1601.102.

(2) "Spouse" has the meaning assigned by the Family Code.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.005. DEFINITION OF CARRIER. In this chapter,

"carrier" means:

(1) an insurance company that is authorized by the department to

provide under this code any of the types of insurance coverages,

benefits, or services provided for in this chapter, and that:

(A) has an adequate surplus;

(B) has a successful operating history; and

(C) has had successful experience, as determined by the

department, in providing and servicing any of the types of group

coverage provided for in this chapter;

(2) a corporation operating under Chapter 842 that provides any

of the types of coverage, benefits, or services provided for in

this chapter and that:

(A) has a successful operating history; and

(B) has had successful experience, as determined by the

department, in providing and servicing any of the types of group

coverage provided for in this chapter; or

(3) any combination of carriers described by Subdivisions (1)

and (2) on terms the system prescribes.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.006. APPLICABILITY OF DEFINITIONS. The definition of

a term defined by this subchapter and the use of the terms

"employee" and "retired employee" as described by Sections

1601.101 and 1601.102 apply to this chapter unless a different

meaning is plainly required by the context in which the term

appears.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.007. SYSTEM MAY DEFINE OTHER WORDS. A system may

define by rule a word or term necessary in the administration of

this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.008. EXEMPTION FROM EXECUTION. All insurance benefits

and other payments and transactions made under this chapter to a

participant under this chapter are exempt from execution,

attachment, garnishment, or any other process.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.009. EXEMPTION FROM TAXATION AND FEES. Premiums on a

policy, an insurance contract, or an agreement established under

this chapter with a health maintenance organization are not

subject to any state tax, regulatory fee, or surcharge, including

a premium or maintenance tax or fee.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.010. CERTAIN COMBINING OF CARRIERS NOT RESTRAINT OF

TRADE. Carriers combining to bid, underwrite, or both bid and

underwrite, a group life, accident, or health benefit plan for

the uniform program are not in violation of Chapter 15, Business

& Commerce Code.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.011. PARTICIPATION OF THE TEXAS A&M UNIVERSITY

SYSTEM. Notwithstanding any other provision of this chapter, if

The Texas A&M University System elects to participate in the

group benefits program under Section 1551.006(c), that system,

including the Texas Veterinary Medical Diagnostic Laboratory,

does not participate in a uniform program established under this

chapter, effective on the date participation in the group

benefits program under Chapter 1551 begins.

Added by Acts 2003, 78th Leg., ch. 366, Sec. 4.01, eff. Sept. 1,

2003.

SUBCHAPTER B. ADMINISTRATION AND IMPLEMENTATION

Sec. 1601.051. ADMINISTRATION AND IMPLEMENTATION. A system

shall:

(1) implement a uniform program for the benefit of its employees

and retired employees; and

(2) determine basic procedural and administrative practices for

insurance coverage provided under this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.052. RULEMAKING AUTHORITY. A system shall adopt rules

consistent with this chapter as it considers necessary to

implement this chapter and its purposes.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.053. GENERAL DUTIES RELATING TO COVERAGE. (a) A

system shall:

(1) determine basic coverage standards that must be comparable

to those commonly provided:

(A) in private industry; and

(B) to employees of another agency or an institution of higher

education in this state under Chapter 1551; and

(2) establish procedures to allow each covered employee and

retired employee to obtain prompt action regarding claims

pertaining to coverages provided under this chapter.

(b) In designing a coverage plan, a system may consider existing

local conditions.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.054. COMPETITIVE BIDDING REQUIRED. A system shall

submit the uniform program, including any agreement under which a

carrier is engaged to administer a self-insured program, for

competitive bidding at least every six years.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.055. IDENTIFICATION OF ADMINISTRATIVE COSTS IN BIDS.

A system shall include in its respective bid documents for the

various coverages a provision calling for each bidder to identify

the system's administrative costs as a distinguishable figure and

to enumerate the services the bidder will render in exchange for

the administrative costs.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.056. INFORMATION ON BIDDERS AND BIDDING CONTRACTS.

(a) The department shall, on request by a system, provide a list

of all carriers:

(1) authorized to engage in business in this state; and

(2) eligible to bid on insurance coverage provided under this

chapter.

(b) The department shall, on request by a system, examine and

evaluate a bidding contract and certify the contract's actuarial

soundness to the system not later than the 15th day after the

date of the request.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.057. SELECTION OF BIDS. (a) A system is not required

to select the lowest bid under Section 1601.054 but shall take

into consideration other relevant criteria, such as ability to

service contracts, past experience, and financial stability.

(b) If a system selects a carrier whose bid differs from that

advertised, the governing board of the system shall fully justify

and record the reasons for the deviation in the minutes of the

next meeting of the governing board.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.058. SELECTION OF HEALTH MAINTENANCE ORGANIZATIONS. A

system shall select and contract for services performed by health

maintenance organizations that are approved by this state to

offer health care services in specific areas of the state to

eligible employees and retired employees.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.059. CERTIFICATE OF COVERAGE. A system shall ensure

that each employee and retired employee participating under this

chapter is issued a certificate of coverage that states:

(1) the benefits to which the participant is entitled;

(2) to whom the benefits are payable;

(3) to whom a claim must be submitted; and

(4) the provisions of the plan document, in summary form, that

principally affect the participant.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.060. ACCOUNTING BY CARRIER PROVIDING PURCHASED

COVERAGE. (a) A carrier providing coverage purchased under this

chapter to a system shall provide an accounting for each line of

coverage to the system not later than the 120th day after the end

of each plan year.

(b) The accounting must be in a form acceptable to the system.

(c) The accounting for each line of coverage must state:

(1) the cumulative amount of contributions remitted to the

carrier under the coverage;

(2) the total of all mortality and other claims, charges,

losses, costs, contingency reserve for pending and unreported

claims, and expenses incurred; and

(3) the amounts of the allowance for a reasonable profit,

contingency reserve, and all other administrative charges.

(d) Information provided under Subsection (c) must be provided:

(1) for the period from the coverage's date of issue to the end

of the plan year; and

(2) for the plan year covered by the report.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.061. SPECIAL RESERVE. (a) A carrier issuing a group

coverage plan under this chapter may hold as a special reserve

for a system an amount that equals the amount by which the total

amount described by Section 1601.060(c)(1) exceeds the sum of the

corresponding amounts described by Sections 1601.060(c)(2) and

(3).

(b) The system may use money in the special reserve at its

discretion, including for:

(1) providing additional coverage for participating employees or

retired employees;

(2) offsetting necessary rate increases; or

(3) reducing contributions to the coverage by participating

employees or retired employees.

(c) A special reserve held by a carrier for a system earns

interest at a rate determined each plan year by the carrier and

approved by the system as consistent with the rate generally used

by the carrier for similar funds held under other group

coverages.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.062. REPORTS AND RECORDS BY ADMINISTERING CARRIER.

Each contract entered into under this chapter between a system

and an administering carrier must:

(1) require the administering carrier to provide reasonable

reports that the system determines are necessary for the system

to perform its functions under this chapter; and

(2) permit the system and representatives of the state auditor

to examine records of the administering carrier as necessary to

accomplish the purposes of this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.063. ASSISTANCE IN REQUESTING MONEY. The Legislative

Budget Board and the Governor's Budget and Planning Office shall:

(1) establish procedures to ensure that each system requests

appropriate money to support its uniform program; and

(2) present appropriate budget recommendations to the

legislature.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.064. PHARMACY BENEFIT MANAGER CONTRACTS. (a) In

awarding a contract to provide pharmacy benefit manager services

under this chapter, a system 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 system 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 system 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 system 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 system, 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 system.

(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 system in accordance

with established auditing standards.

Added by Acts 2009, 81st Leg., R.S., Ch.

1207, Sec. 8, eff. September 1, 2009.

SUBCHAPTER C. COVERAGE AND PARTICIPATION

Sec. 1601.101. PARTICIPATION ELIGIBILITY: EMPLOYEES. (a) An

individual who is employed by the governing board of a system,

who performs service, other than as an independent contractor,

for the system, and who is described by this section is eligible

to participate as an employee in the uniform program on the date

specified by Section 1601.1045.

(b) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if the individual receives

compensation for services performed for the system, is eligible

to be a member of the Teacher Retirement System of Texas, and

either:

(1) is expected to work at least 20 hours per week and to

continue in the employment for a term of at least 4-1/2 months;

or

(2) is appointed for at least 50 percent of a standard full-time

appointment.

(c) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if the individual:

(1) receives compensation for services performed for the system;

(2) is employed at least 20 hours a week only; and

(3) is not permitted to be a member of the Teacher Retirement

System of Texas because the individual is solely employed by the

system in a position that as a condition of employment requires

the individual to be enrolled as a student in the system in

graduate-level courses.

(d) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if the individual is

serving a postdoctoral fellowship with an institution in a

system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 366, Sec. 4.02, eff.

Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1266, Sec. 2.11, eff.

Sept. 1, 2003.

Sec. 1601.102. PARTICIPATION ELIGIBILITY: RETIREES. (a) An

individual who retires in a manner described by this section and

who meets the requirements of Subsection (f) is eligible to

participate, subject to Section 1601.1045, as a retired employee

in the uniform program.

(b) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if:

(1) the individual has at least 10 years of service with a

system for which the individual was eligible to participate in

the uniform program under Section 1601.101;

(2) the individual's last state employment before retirement was

with that system; and

(3) the individual retires under the jurisdiction of:

(A) the Teacher Retirement System of Texas under Subtitle C,

Title 8, Government Code;

(B) the Employees Retirement System of Texas; or

(C) subject to Subsection (c):

(i) the optional retirement program established by Chapter 830,

Government Code; or

(ii) any other federal or state statutory retirement program to

which the system has made employer contributions.

(c) An individual retiring in the manner described by Subsection

(b)(3)(C) is a retired employee only if the individual meets all

applicable requirements for retirement, including service and age

requirements, adopted by the system comparable to the

requirements for retirement under the Teachers Retirement System

of Texas.

(d) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if the individual:

(1) meets the minimum requirements under Subsection (b) except

that the last state employment before retirement is not at the

employing system; and

(2) does not meet the requirements for an annuitant under

Section 1551.102.

(e) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if the individual retired

under Subtitle C, Title 8, Government Code, before September 1,

1991, with at least five and less than 10 years of service.

Text of subsec. (f) as added by Acts 2003, 78th Leg., ch. 366,

Sec. 4.03

(f) Notwithstanding Subsections (b)-(d), an individual is

eligible to participate in the uniform program only if the

individual:

(1) has at least 10 years of service credit and the sum of the

person's age and amount of service credit, including months of

age and credit, equals or exceeds the number 80; or

(2) is at least 65 years old and has at least 10 years of

service credit.

Text of subsec. (f) as added by Acts 2003, 78th Leg., ch. 1266,

Sec. 2.08

(f) Notwithstanding Subsection (b), an individual to whom this

subsection applies is eligible to participate in the uniform

program as provided by Subsection (a) if:

(1) the individual has at least three years of service with a

system for which the individual was eligible to participate in

the uniform program under Section 1601.101;

(2) the individual's last state employment before retirement was

with that system; and

(3) the individual retires under the jurisdiction of:

(A) the Teacher Retirement System of Texas under Subtitle C,

Title 8, Government Code;

(B) the Employees Retirement System of Texas; or

(C) subject to Subsection (c):

(i) the optional retirement program established by Chapter 830,

Government Code; or

(ii) any other federal or state statutory retirement program to

which the system has made employer contributions.

Text of subsec. (g) as added by Acts 2003, 78th Leg., ch. 366,

Sec. 4.03

(g) A person eligible to participate and participating in the

uniform program as an annuitant on September 1, 2003, may

continue to participate in the program as an annuitant if a lapse

in coverage has not occurred.

Text of subsec. (g) as added by Acts 2003, 78th Leg., ch. 1266,

Sec. 2.08

(g) Subsection (f) applies only to a person who, on August 31,

2003:

(1) was eligible to participate in the uniform program as an

employee under Section 1601.101; or

(2) was eligible to participate in the uniform program as a

retired employee under this section as this section existed on

January 1, 2003.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 366, Sec. 4.03, eff.

Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1266, Sec. 2.08, eff.

June 20, 2003.

Sec. 1601.103. RIGHT TO COVERAGE. An individual eligible to

participate in the uniform program under Section 1601.101 or

1601.102 may not be denied enrollment in any coverage provided

under this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.104. AUTOMATIC COVERAGE. (a) A system shall

automatically provide the basic coverage to each full-time

employee unless the employee has:

(1) waived participation in the basic coverage; or

(2) selected an optional coverage plan.

(b) An employee or retired employee who is automatically covered

under this section may subsequently:

(1) retain the basic coverage or waive participation in the

basic coverage; and

(2) apply for any other coverage provided under this chapter

within applicable standards.

(c) Automatic coverage as described under this section begins on

the first date of employment.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.1045. DATE ELIGIBILITY BEGINS; WAITING PERIOD. (a)

Except as provided by Subsection (c) or (d), eligibility under

Section 1601.101 begins on the first day of the calendar month

that begins after the 90th day after the date the employee

performs services for a system.

(b) Except as provided by Subsection (c), eligibility under

Section 1601.102, for an individual who does not retire at the

end of the last month for which the individual is on the payroll

of a system before retirement, begins on the first day of the

calendar month that begins after the 90th day after the date the

individual retires.

(c) The waiting period established by Subsections (a) and (b)

applies only to the determination of initial eligibility to

participate in the group health benefits program and does not

apply to the determination of initial eligibility to participate

in optional coverages under the uniform program.

(d) Notwithstanding Subsection (a), eligibility under Section

1601.101 may not begin earlier than the first day that an

employee performs services for a system if any amount paid for

premium incurred before the date specified under Subsection (a)

for the employee and any dependents of the employee is paid from

money not appropriated from the general revenue fund, in

accordance with policies and procedures established by the

system.

Added by Acts 2003, 78th Leg., ch. 366, Sec. 4.05, eff. Sept. 1,

2003.

Sec. 1601.105. WAIVER. An employee or retired employee may

waive in writing any coverage provided under this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.106. OPTIONAL COVERAGE. A system shall provide

optional coverage in accordance with Section 1601.201.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.107. COVERAGE FOR DEPENDENTS. An individual who is

eligible to participate in the uniform program under Section

1601.101 or 1601.102 is entitled to secure for a dependent of the

individual any group coverages provided under this chapter for

dependents under rules adopted by the applicable system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.108. COVERAGE OPTIONS FOR CERTAIN SURVIVING SPOUSES.

(a) This section applies only to the surviving spouse of:

(1) an individual eligible to participate in the uniform program

under Section 1601.101 who had at least five years of service on

the date of the individual's death, including at least three

years of service as an eligible employee with the employing

system; or

(2) an individual eligible to participate in the uniform program

under Section 1601.102.

(b) A surviving spouse to whom this section applies may elect to

retain any of the following coverages in effect on the date of

the participant's death:

(1) the surviving spouse's authorized coverages; and

(2) authorized coverages for any eligible dependent of the

deceased participant.

(c) The coverage is at the group rate for other participants.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.109. COVERAGE FOR AIDS, HIV, OR SERIOUS MENTAL

ILLNESS. (a) In this section, "serious mental illness" has the

meaning assigned by Section 1355.001.

(b) A system may not contract for or provide for group insurance

or HMO coverage or provide self-insured coverage, that:

(1) excludes or limits coverage or services for acquired immune

deficiency syndrome, as defined by the Centers for Disease

Control and Prevention of the United States Public Health

Service, or human immunodeficiency virus infection; or

(2) provides coverage for serious mental illness that is less

extensive than the coverage provided for any other physical

illness.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2G.020, eff. April 1, 2009.

Sec. 1601.110. 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 governing board of a system identifies populations requiring

disease management.

(b) A health benefit plan provided under this chapter must

provide disease management services or coverage for disease

management services in the manner required by the governing board

of a system, 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 2003, 78th Leg., ch. 589, Sec. 5, eff. June 20,

2003.

SUBCHAPTER D. GROUP COVERAGES

Sec. 1601.151. AUTHORITY TO SELF-INSURE; EXEMPTION FROM OTHER

INSURANCE LAWS. (a) Notwithstanding any other provisions of

this chapter, the governing board of a system may:

(1) self-insure a plan provided under this chapter; and

(2) hire a carrier to administer the system's uniform program.

(b) A plan for which a system provides coverage on a

self-insured basis is exempt from any other insurance law of this

state that does not expressly apply to that plan or this chapter.

(c) Expenses for the administration of a self-insured plan may

come from the contributions of employees and the state after

payments for any coverage provided under this chapter have been

made.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.152. CAFETERIA PLAN. (a) The governing board of a

system may develop, implement, and administer a cafeteria plan.

(b) The governing board may include in the cafeteria plan any

benefit that may be included in a cafeteria plan under federal

law.

(c) The governing board may cooperate and work with and enter

into a necessary contract or agreement with an independent and

qualified agency, person, or entity to:

(1) develop, implement, or administer a cafeteria plan; or

(2) assist in those activities.

(d) The governing board may adopt an order terminating the

cafeteria plan and providing a procedure for the orderly

withdrawal of the system and its employees from the cafeteria

plan if the governing board determines that a cafeteria plan

adopted under this section is no longer advantageous to the

system and its employees.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.153. SYSTEMS MAY JOIN IN PROCURING INSURANCE. The

systems may join together to procure one or more group contracts

with an insurance company authorized to engage in business in

this state to insure the employees and retired employees of each

participating system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.154. LONG-TERM CARE COVERAGE. (a) A system may join

with a board of trustees that administers the uniform program

established under Chapter 1551 or the group program established

under Chapter 1575 to provide long-term care insurance coverage.

(b) Each participating board of trustees and the governing board

of the system must mutually agree to join together for this

purpose, subject to terms that are beneficial to all

participants.

(c) A system may not participate in an agreement under this

section unless any cost or administrative burden associated with

the development or implementation of or communications about the

long-term care coverage plan is incidental.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.155. REINSURANCE. A system may arrange with an

administering carrier issuing a policy under this chapter for the

reinsurance of portions of the total amount of insurance under

the policy with other carriers that elect to participate in the

reinsurance.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

SUBCHAPTER E. PAYMENTS, CONTRIBUTIONS, AND COSTS

Sec. 1601.201. PAYMENT FOR COVERAGE. (a) A system may not

contribute more than the amounts specified by this section for

coverages provided under the uniform program.

(b) For an employee designated by the system as working 40 or

more hours a week, the system may contribute:

(1) the full cost of basic coverage for the employee; and

(2) not more than 50 percent of the cost of dependent coverage.

(c) For an employee designated by the system as working less

than 40 hours a week, including an individual employed by the

system in a position that as a condition of employment requires

the individual to be enrolled as a student in the system in

graduate-level courses, the system, from money appropriated from

the general revenue fund, may contribute:

(1) not more than 50 percent of the cost of basic coverage for

the employee; and

(2) not more than 25 percent of the cost of dependent coverage.

(d) Subsection (c) does not prohibit a system from contributing,

from money not appropriated from the general revenue fund,

amounts in excess of the amount specified by that subsection for

an individual employed by the system in a position that as a

condition of employment requires the individual to be enrolled as

a student in the system in graduate level courses.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 366, Sec. 4.06, eff.

Sept. 1, 2003.

Sec. 1601.202. FEES FOR CAFETERIA PLAN. (a) The governing

board of a system may establish a monthly fee in an amount set by

the board to be paid by each employee who elects to participate

in a cafeteria plan for the purpose of paying the expenses of

administering the cafeteria plan.

(b) If the governing board establishes a monthly fee, each

employee who participates in the cafeteria plan must authorize

payment of the fee by executing a separate payroll deduction

agreement or as part of a salary reduction agreement, as

determined by the governing board.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.203. PAYMENT FOR COVERAGE FOR DEPENDENTS.

Contributions for coverages for a dependent of an individual

eligible to participate in the uniform program under Section

1601.101 or 1601.102 required of the participant that exceed the

amount of system contributions shall be paid:

(1) by a deduction from the monthly compensation of the

participant;

(2) by a reduction of the monthly compensation of the

participant in the appropriate amount; or

(3) in the form and manner the system determines.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.204. AUTHORIZATION OF EMPLOYEE DEDUCTION. (a) Except

for a participant who participates in a cafeteria plan, each

individual eligible to participate in the uniform program under

Section 1601.101 must authorize a deduction from the

participant's monthly compensation in an amount equal to the

difference between:

(1) the total cost for coverages for which the participant

applies; and

(2) the amount contributed by the system.

(b) The authorization must be:

(1) in writing or performed electronically; and

(2) in a form satisfactory to the system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.205. EMPLOYEE PAYMENTS FOR PARTICIPATION IN CAFETERIA

PLAN. (a) If an employee elects to participate in a cafeteria

plan, the employee must execute a salary reduction agreement

under which the employee's monthly compensation will be reduced

in an amount equal to the difference between:

(1) the amount appropriated for that purpose in the General

Appropriations Act or the system's budget; and

(2) the cost of the employee's selected coverages for which the

employee is eligible to pay under the cafeteria plan.

(b) The employee must execute a salary reduction agreement for

any portion of the cost that is not covered by state or system

appropriations and cafeteria plan contributions.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.206. PAYMENT BY RETIRED EMPLOYEE. An individual

eligible to participate in the uniform program under Section

1601.102 must execute an agreement and make appropriate

contributions in a manner analogous to the requirements adopted

under Sections 1601.204 and 1601.205 for an individual eligible

to participate in the uniform program under Section 1601.101.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.207. SYSTEM CONTRIBUTIONS. A system shall contribute

monthly to the cost of each participant's coverage provided under

this chapter an amount:

(1) if the participants are compensated from amounts

appropriated in the General Appropriations Act, equal to or

greater than the amount appropriated for that purpose in the Act;

or

(2) if the participants are compensated from amounts

appropriated by the governing board of the system in its official

operating budget, an amount equal to the amount appropriated for

a participant under the General Appropriations Act.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.208. AMOUNT OF SYSTEM CONTRIBUTION. Not later than

November 1 preceding each regular session of the legislature,

each system shall certify to the Legislative Budget Board and the

budget division of the Governor's Budget and Planning Office the

amount necessary to pay the contributions of the system for the

coverages provided under this chapter to each employee and

retired employee of the system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.209. ORDER OF PRECEDENCE OF PAYMENT TO SURVIVORS. (a)

The amount of group life coverages and group accidental death

and dismemberment coverages in force for a participant on the

date the participant dies shall be paid, on the establishment of

a valid claim, to a person surviving the death in the following

order of precedence:

(1) to the beneficiary designated by the participant in a signed

and witnessed writing received before death by the appropriate

office of the applicable system; or

(2) if a beneficiary is not designated under Subdivision (1), in

accordance with the death benefit provisions of Subtitle C, Title

8, Government Code.

(b) For purposes of Subsection (a)(1), a designation, change, or

cancellation of a beneficiary in a document, including a will,

that is not executed and filed in the manner described by that

subsection is not valid.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.210. PROVISION OF NECESSARY INFORMATION. The Teacher

Retirement System of Texas, Optional Retirement Program carriers,

and Employees Retirement System of Texas shall provide to each

system information the system considers necessary to provide

retired employees with the coverages and system contributions

provided under this chapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

SUBCHAPTER F. CAFETERIA PLAN FUND

Sec. 1601.251. SYSTEM CAFETERIA PLAN FUND. (a) The governing

board of each system may establish and administer a cafeteria

plan fund.

(b) The following shall be credited to the cafeteria plan fund

of a system:

(1) salary reduction payments for benefits included in a

cafeteria plan adopted under this chapter, other than group

coverage plans under the uniform program;

(2) appropriations by the state for the administration of a

cafeteria plan; and

(3) a monthly fee established under Section 1601.202.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.252. USE OF FUND. The cafeteria plan fund of a system

is available without fiscal year limitation:

(1) for all payments for any benefits included in a cafeteria

plan adopted by the system under this chapter other than group

coverage plans under the uniform program; and

(2) for payment of expenses of administering the cafeteria plan.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.253. INVESTMENT OF MONEY IN FUND. (a) The governing

board of a system may invest the money in the system's cafeteria

plan fund.

(b) The earnings, including interest, and the proceeds from the

sale of the investments become a part of the fund.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

SUBCHAPTER G. ADVISORY COMMITTEE

Sec. 1601.301. ADVISORY COMMITTEE. An advisory committee for

each system shall be selected, serve, and perform duties as

provided by this subchapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.302. ELECTION OF MEMBERS. One member of the advisory

committee shall be elected from each of the components, units, or

agencies of the system:

(1) at times designated by the system; and

(2) in accordance with general guidelines for the election

provided by the system.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.303. QUALIFICATIONS OF MEMBERS. (a) A member of a

system's advisory committee must be an employee of the system.

(b) A member must:

(1) demonstrate mature judgment, special abilities, and sincere

interest in employee coverage plans; and

(2) be able to represent the needs of all employees of the

component, unit, or agency the member represents with respect to

an action of the advisory committee.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.304. TERMS. A member of the advisory committee is

elected for a two-year term, subject to reelection.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.305. OFFICERS. Annually, the members of a system's

advisory committee shall elect a presiding officer and other

necessary officers.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.306. VACANCY. The chief executive officer of a

component, unit, or agency of a system shall appoint to the

system's advisory committee an employee of the component, unit,

or agency to fill the remainder of a vacated term of a member who

is an employee of the component, unit, or agency.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.307. DUTIES OF COMMITTEE. (a) The advisory committee

of a system shall cooperate and work with the governing board of

the system in coordinating and correlating the administration of

the uniform program among the various components, units, and

agencies of the system.

(b) Members of the advisory committee shall cooperate and work

with the governing board of the system as advisors in the

development, implementation, coordination, and administration of

the uniform program among the various components, units, and

agencies of the system.

(c) The advisory committee shall provide a channel for open

communication of ideas and suggestions regarding coverages,

eligibility, claims, procedures, bidding, administration, and any

other aspect of employee plan benefits.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Sec. 1601.308. EXPENSES. (a) A member's service on the

advisory committee of a system is in addition to the duties of

the member's state office or employment.

(b) An expense incurred by an advisory committee member in

performing a duty as a member of the committee shall be paid from

money made available for that purpose to the system of which the

member is an employee or officer.

(c) Employees may not be required to pay from the amount of

employer contributions due the employees or from the amount of

additional contributions due for selected coverages under this

chapter the expenses of an advisory committee established under

this subchapter.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 3, eff. June 1,

2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

87, Sec. 14.017(a), eff. September 1, 2009.