CRD(LEGAL) - INSURANCE AND ANNUITIES MANAGEMENT: HEALTH AND LIFE INSURANCE
"Participating entity" means an entity participating in the uniform group coverage program established under Insurance Code Chapter 1579.
"Program" means the uniform group coverage program established under Insurance Code Chapter 1579 (TRS-ActiveCare).
Insurance Code 1579.002(5), (6)
A district shall participate in the uniform group coverage program established under Insurance Code Chapter 1579 as provided by Subchapter D of that chapter. Education Code 22.004(a)
Districts with 500 or Fewer Employees
Each district with 500 or fewer employees is required to participate in the program. Insurance Code 1579.151(a)
Notwithstanding the above, a district otherwise subject to the requirement that, on January 1, 2001, was individually self-funded for the provision of health coverage to its employees may elect not to participate in the program. Insurance Code 1579.151(b)
Districts with More Than 500 Employees
A district with more than 500 employees may elect to participate in the program. A district that elects to participate shall apply for participation in the manner prescribed by TRS rule. Insurance Code 1579.152; 34 TAC 41.30
The Teacher Retirement System (TRS) shall implement and administer the uniform group coverage program described by Insurance Code Chapter 1579. TRS shall establish plans of group coverages for employees participating in the program and their dependents. Insurance Code 1579.051, .101
Participation in the program is limited to employees of participating districts who are full-time employees and to part-time employees who are participating members in TRS. Insurance Code 1579.202(a)
A "full-time employee" is a participating member who is currently employed by a district in a position that is eligible for membership in TRS and who is not receiving coverage as an employee or retiree from a uniform group insurance or health benefits program under Insurance Code Chapters 1551 (Texas Employees Group Benefits Act), 1601 (State University Employees Uniform Insurance Benefits Act), or 1575 (Texas Public School Retired Employees Group Benefits Act [TRS-Care]). 34 TAC 41.33(2)
Certain Part-Time Employees
A part-time employee of a district who is not a participating member in TRS is eligible to participate in the program only if the employee pays all of the premiums and other costs associated with the health coverage plan selected by the employee. Insurance Code 1579.204
A "part-time employee" is an individual who:
- Is currently employed by a district for ten hours or more each week;
- Is employed in a position that is not eligible for membership in TRS or is not eligible for membership in TRS because of a service or disability retirement; and
- Is not receiving coverage as an employee or retiree from a uniform group insurance or health benefits program under Insurance Code Chapters 1551, 1601, or 1575 (TRS-Care).
34 TAC 41.33(6)
Alternative Group Health Coverage Prohibited
Notwithstanding any other law, a participating entity may not offer or make available to the entity's employees or their dependents group health coverage not provided under the program. Insurance Code 1579.1045
Election to Discontinue
Effective September 1, 2022, a participating entity may elect to discontinue the entity's participation in the program by providing written notice to TRS not later than December 31 of the year preceding the first day of the plan year in which the election will be effective.
A participating entity that elects to discontinue participation in the program may not elect to:
- Participate in the program until the fifth anniversary of the effective date of the entity's election to discontinue participation; or
- Discontinue the entity's participation after an election described by item 1 until the fifth anniversary of the effective date of that election.
Election to Continue
Effective September 1, 2022, an entity that elects to participate in the program shall provide written notice to TRS not later than December 31 of the year preceding the first day of the plan year in which the election will be effective. The entity may not elect to discontinue the entity's participation until the fifth anniversary of the effective date of the entity's election to participate.
Insurance Code 1579.155
Education Code 22.004 does not preclude a district that is participating in the uniform group coverage program established under Insurance Code Chapter 1579 from entering into contracts to provide optional insurance coverages for district employees. Education Code 22.004(j)
Other Health Coverage Programs
A district that does not participate in the program shall make available to its employees group health coverage provided by a risk pool established by one or more districts under Local Government Code Chapter 172 ("authorized risk pool"), or under a policy of insurance or group contract issued by an insurer, a company subject to Insurance Code Chapter 842, or a health maintenance organization under Insurance Code Chapter 843.
The coverage provided by a district that does not participate in the program must meet the substantive coverage requirements of Insurance Code Chapter 1251, Subchapter A, Chapter 1364, and Chapter 1366, Subchapter A, and any other law applicable to group health insurance policies or contracts issued in this state. The coverage must include major medical treatment but may exclude experimental procedures. "Major medical treatment" means a medical, surgical, or diagnostic procedure for illness or injury. The coverage may include managed care or preventive care and must be comparable to the basic health coverage provided under Insurance Code Chapter 1551 (Texas Employees Group Benefits Act).
The following factors shall be considered in determining whether the district's coverage is comparable to the basic health coverage specified above:
- The deductible amount for service provided inside and outside of the network;
- The coinsurance percentages for service provided inside and outside of the network;
- The maximum amount of coinsurance payments a covered person is required to pay;
- The amount of the copayment for an office visit;
- The schedule of benefits and the scope of coverage;
- The lifetime maximum benefit amount; and
- Verification that the coverage is issued by a provider licensed to do business in this state by the Texas Department of Insurance (TDI) or is provided by an authorized risk pool or that a district is capable of covering the assumed liabilities in the case of coverage provided through district self-insurance.
Education Code 22.004(b)
A district that does not participate in the program may not contract with an insurer, a company subject to Insurance Code Chapter 842, or a health maintenance organization to issue a policy or contract under Education Code 22.004, or with any person to assist the district in obtaining or managing the policy or contract unless, before the contract is entered, the insurer, company, organization, or person provides the district with an audited financial statement showing the financial condition of the insurer, company, organization, or person. Education Code 22.004(f)
Small Employer Market Election
A district may elect to participate as a small employer without regard to the number of employees in the district. A district that makes this election is treated as a small employer under Insurance Code Chapter 1501 for all purposes.
A district that is participating in the uniform group coverage program established under Insurance Code Chapter 1579 may not participate in the small employer market under this provision and may not renew a health insurance contract obtained in accordance with this provision after the date on which the program of coverages provided under Chapter 1579 is implemented. This provision does not affect a contract for the provision of optional coverages not included in a health benefit plan under Insurance Code Chapter 1501.
Insurance Code 1501.009
Employee Election — Spouses
A district employee who is eligible for coverage under a large or small employer health benefit plan providing coverage to the district's employees and who is the spouse of another district employee covered under the plan may elect whether to be treated under the plan as an employee or as the dependent of the other employee. Insurance Code 1501.0095
Self-Funded Health-Care Plan
The board may establish a health-care plan for district employees and their dependents. In implementing the plan, the board shall establish a fund to pay, as authorized under the plan, all or part of the actual costs for hospital, surgical, medical, dental, or related health care incurred by employees or any dependent whose participation in the program is being supported by deductions from an employee's salary. Under the plan, the fund also may be used to pay the costs of administering the fund. The fund consists of money contributed by the district and money deducted from salaries of employees for dependent or employee coverage. Money for the fund may not be deducted from an employee's salary unless the employee authorizes the deduction in writing. The plan shall attempt to protect the district against unanticipated catastrophic individual loss, or unexpectedly large aggregate loss, by securing individual stop-loss coverage, or aggregate stop-loss coverage, or both, from a commercial insurer.
The board may amend or cancel the district's health-care plan at any regular or special board meeting. If the plan is canceled, any valid claim against the fund for payment of health-care costs resulting from illness or injury occurring during the time the plan was in effect shall be paid out of the fund. If the fund is insufficient to pay the claim, the costs shall be paid out of other available district funds.
Education Code 22.005
Each district that does not participate in the program shall prepare a report addressing its compliance with Education Code 22.004. The report must be available for review, together with the policy or contract for the group health coverage plan, at the central administrative office of each campus in the district and be posted on the district's internet website if the district maintains a website, must be based on the district group health coverage plan in effect during the current plan year, and must include:
- Appropriate documentation of:
- The district's contract for group health coverage with a provider licensed to do business in this state by TDI or an authorized risk pool; or
- A resolution of the board authorizing a self-insurance plan for district employees and of the district's review of district ability to cover the liability assumed;
- The schedule of benefits;
- The premium rate sheet, including the amount paid by the district and employee;
- The number of employees covered by the health coverage plan offered by the district; and
- Information concerning the ease of completing the report.
Education Code 22.004(d)
Cost of Coverage
The cost of coverage under the program shall be paid by the state, the district, and the employees in the manner provided by Insurance Code, Chapter 1579, Subchapter F, below. Education Code 22.004(c)
The state shall provide for each covered employee the amount of $900 each state fiscal year or a greater amount as provided by the General Appropriations Act. The state contribution shall be distributed through the school finance formulas under Education Code Chapters 48 and 49 and used by districts as provided by Education Code 48.275. Insurance Code 1579.251(a)
An employee covered by the program shall pay that portion of the cost of coverage selected by the employee that exceeds the amount of the state contribution and a district's contribution.
A district may pay any portion of what otherwise would be the employee share of premiums and other costs associated with the coverage selected by the employee.
Insurance Code 1579.253
A district shall make contributions for the program as provided by Insurance Code Chapter 1581. Insurance Code 1579.252 [See District Required Minimum Effort, below]
Other Health Coverage Programs
The cost of coverage under a plan adopted by a district that does not participate in the program shall be shared by the employees and the district, using the contributions by the state described by Insurance Code Chapter 1579, Subchapter F. [See State Contribution, above] Education Code 22.004(c)
District Required Minimum Effort
A district shall, for each fiscal year, use to provide health coverage an amount equal to the number of participating employees of the district multiplied by $1,800. Insurance Code 1581.052(a)
Designation of Compensation for Benefits
An employee who is covered by a cafeteria plan or who is eligible to pay health-care premiums through a premium conversion plan may elect to designate a portion of the employee's compensation to be used as health-care supplementation. [See DEA] Education Code 22.103(a), (c)
An employee may use compensation designated for health-care supplementation for any employee benefit, including depositing the designated amount into a cafeteria plan in which the employee is enrolled or using the designated amount for health-care premiums through a premium conversion plan. Education Code 22.106
Each year, an active employee must elect in writing whether to designate a portion of the employee's compensation to be used as health-care supplementation. An election must be made at the same time that the employee elects to participate in a cafeteria plan, if applicable. Education Code 22.105
Notwithstanding any other law, an employee whose resignation is effective after the last day of an instructional year is entitled to participate or be enrolled in the uniform group coverage plan or the district's group health coverage through the earlier of:
- The first anniversary of the date participation in or coverage under the uniform group coverage plan or the group health coverage was first made available to district employees for the last instructional year in which the employee was employed by the district; or
- The last calendar day before the first day of the instructional year immediately following the last instructional year in which the employee was employed by the district.
If an employee's resignation is effective after the last day of an instructional year, the district may not diminish or eliminate the amount of a contribution available to the employee under Insurance Code Chapter 1581 [see District Required Minimum Effort, above] before the last date on which the employee is entitled to participation or enrollment.
Education Code 22.004(k), (l); 34 TAC 41.38
During Military Leave
An employee who is absent from a position of employment by reason of service in the uniformed services may elect to continue coverage under a health plan. The maximum period of coverage of such a person and the person's dependents shall be the lesser of:
- The 24-month period beginning on the date on which the person's absence begins; or
- The day after the date on which the person fails to apply for or return to a position of employment. [See DECB]
38 U.S.C. 4317(a)
During FMLA Leave
During any period of leave under the Family and Medical Leave Act (FMLA), a district shall maintain coverage under any group health plan for the duration of the leave at the level and under the conditions coverage would have been provided if the employee had continued in employment continuously for the duration of the leave. 29 U.S.C. 2614(c); 29 C.F.R. 825.209, .210, .213 [See also DECA]
Upon Termination or Other Qualifying Event (COBRA)
In accordance with regulations that the Secretary of Health and Human Services shall prescribe, each group health plan that is maintained by any state that receives funds under 42 U.S.C. Chapter 6A, by any political subdivision of such a state, or by any agency or instrumentality of such a state or political subdivision, shall provide, in accordance with 42 U.S.C. Chapter 6A, Subchapter XX, that each qualified beneficiary who would lose coverage under the plan as a result of a qualifying event is entitled, under the plan, to elect, within the election period, continuation coverage under the plan. 42 U.S.C. 300bb-1(a)
[For more information on the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA), see 42 U.S.C. 300bb-1 through 300bb-8.]
Note: See DEB for continuation benefits that are available to survivors of district peace officers under certain conditions.
Coverage of Preexisting Conditions
Notwithstanding any other law, group health benefit coverage provided by or offered through a district to its employees under any law other than the uniform group coverage program is subject to the requirements of Insurance Code Sections 1501.102–.105, which limit exclusion for preexisting conditions. This provision applies to all group health benefit coverage provided by or offered through a district to its employees, including a standard health benefit plan issued under Insurance Code Chapter 1507 and health and accident coverage provided through a risk pool established under Local Government Code Chapter 172. Education Code 22.004(m)
Coverage provided under the uniform group coverage program may not be made subject to a preexisting condition limitation during the initial period of eligibility. Insurance Code 1579.105
A group health plan and a health insurance issuer offering group or individual health insurance coverage may not impose any preexisting condition exclusion with respect to such plan or coverage. 42 U.S.C. 300gg-3(a)
Privacy of Health Information
To the extent a district is a covered entity under the Administrative Simplification provisions of HIPAA (42 U.S.C. Chapter 7, Subchapter XI, Part C; 45 C.F.R. Parts 160, 162, 164), the district must maintain the privacy of protected health information in accordance with the Privacy Rule, 45 C.F.R. Part 164, Subpart E.
"Covered entity" means:
- A health plan;
- A health-care clearinghouse; or
- A health-care provider who transmits any health information in electronic form in connection with a transaction covered by 45 C.F.R. Subtitle A, Subchapter C.
45 C.F.R. 160.103
Protected Health Information
"Protected health information" means individually identifiable health information that is transmitted by electronic media, maintained in electronic media, or transmitted or maintained in any form or medium. "Protected health information" excludes individually identifiable health information:
- In education records covered by the Family Educational Rights and Privacy Act (FERPA), 20 U.S.C. 1232g. [See FL]
- In records described at 20 U.S.C. 1232g(a)(4)(B)(iv) (medical treatment records on a student who is at least 18 years of age).
- In employment records held by a covered entity in its role as employer.
45 C.F.R. 160.103