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  H.B. No. 966
 
 
 
 
AN ACT
  relating to the creation of an optional consumer-directed health
  plan for certain individuals eligible to participate in the group
  benefits program provided under the Texas Employees Group Benefits
  Act and their qualified dependents.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 1551, Insurance Code, is amended by
  adding Subchapter J to read as follows:
  SUBCHAPTER J. STATE CONSUMER-DIRECTED HEALTH PLAN
         Sec. 1551.451.  DEFINITIONS. In this subchapter:
               (1)  "High deductible health plan" means a health
  benefit plan that complies with Section 223(c), Internal Revenue
  Code of 1986, and other federal law.
               (2)  "Plan enrollee" means an employee or annuitant who
  is enrolled in the plan established under this subchapter.
               (3)  "Qualified medical expense" means an expense paid
  by a plan enrollee for medical care, as defined by Section 213(d),
  Internal Revenue Code of 1986, for the plan enrollee or the
  enrollee's dependents as defined by Section 152, Internal Revenue
  Code of 1986.
         Sec. 1551.452.  ESTABLISHMENT OF STATE CONSUMER-DIRECTED
  HEALTH PLAN. (a) The state consumer-directed health plan is
  established for the benefit of individuals eligible to participate
  in the group benefits program and those individuals' eligible
  dependents.
         (b)  The board of trustees may adopt rules necessary to
  administer this subchapter.  In implementing this subchapter the
  board shall:
               (1)  establish health savings accounts under this
  subchapter and administer or select an administrator in accordance
  with Section 1551.453 for the accounts;
               (2)  finance a self-funded high deductible health plan
  that:
                     (A)  is an integral part of the state
  consumer-directed health plan; and
                     (B)  provides health benefit coverage, including
  preventive health care, to a plan enrollee in the state
  consumer-directed health plan and to the dependents of a plan
  enrollee in accordance with Section 1551.455; and
               (3)  provide to individuals eligible to participate in
  the group benefits program information regarding the operation of
  and option to participate in the state consumer-directed health
  plan established under this subchapter.
         (c)  In adopting rules and administering health savings
  accounts or selecting administrators for health savings accounts
  under this subchapter, the board of trustees shall ensure that the
  health savings accounts are qualified for appropriate federal tax
  exemptions.
         Sec. 1551.453.  ACCOUNT ADMINISTRATOR. (a) The account
  administrator selected to administer a health savings account
  established under this subchapter must be a person:
               (1)  qualified to serve as trustee under Section
  223(d)(1)(B), Internal Revenue Code of 1986, and the rules adopted
  under that section; and
               (2)  experienced in administering health savings
  accounts or other similar trust accounts.
         (b)  An account administrator is the fiduciary of a plan
  enrollee who has a health savings account established under this
  subchapter.
         Sec. 1551.454.  PARTICIPATION IN PROGRAM. (a) Each
  individual eligible to participate in the basic coverage may choose
  instead to participate in the state consumer-directed health plan
  if the plan enrollee is an eligible individual under Section
  223(c)(1), Internal Revenue Code of 1986. The dependents of a plan
  enrollee may participate in the state consumer-directed health plan
  in accordance with Section 1551.455.
         (b)  Participation in the state consumer-directed health
  plan qualifies a plan enrollee to receive a contribution to a health
  savings account under Section 1551.456. An individual who elects
  not to participate in the plan is not eligible to receive a
  contribution under that section.
         (c)  Under this section, the board of trustees has exclusive
  authority to determine an individual's eligibility to participate
  in the state consumer-directed health plan and may adopt rules
  regarding eligibility to participate in the plan.
         Sec. 1551.455.  COVERAGE FOR DEPENDENTS; REQUIRED
  CONTRIBUTIONS. (a) A plan enrollee may obtain for the enrollee's
  dependents coverage in the state consumer-directed health plan in
  the manner determined by the board of trustees.
         (b)  If the plan enrollee elects to obtain dependent coverage
  under Subsection (a), the plan enrollee shall pay any required
  contribution for the dependent coverage in the state
  consumer-directed health plan in the manner prescribed by the board
  of trustees.
         (c)  Amounts contributed by a plan enrollee under this
  section may be:
               (1)  used to pay the cost of coverage in the high
  deductible health plan not paid by the state under Section
  1551.456(b); or
               (2)  allocated by the board of trustees to an enrollee's
  health savings account in the manner described by Section
  1551.456(c).
         Sec. 1551.456.  STATE CONTRIBUTION. (a)  For each plan
  enrollee, from the state contribution that would otherwise be made
  for basic coverage for the enrollee, the state shall contribute
  annually to a high deductible health plan under this subchapter the
  amount that is necessary to pay the cost of coverage under the high
  deductible health plan and does not exceed the amount the state
  annually contributes for a full-time or part-time employee, as
  applicable, who is covered by the basic coverage.
         (b)  For each plan enrollee's dependent covered under this
  subchapter, from the state contribution that would otherwise be
  made for basic coverage for the dependent, the state shall
  contribute annually to the high deductible health plan under this
  subchapter the same percentage of the cost of coverage under the
  high deductible health plan as the state annually contributes for
  dependent coverage in the basic coverage.
         (c)  Before each plan year, the board of trustees may
  determine the amount of allocation of the state's contribution, if
  any, to an enrollee's health savings account that would otherwise
  be made for basic coverage for the enrollee and that remains after
  payment for coverage under Subsection (a) or (b).
         (d)  For a calendar year, the amount of any allocations made
  under Subsection (c) and Section 1551.455(c)(2), in the aggregate,
  may not exceed the sum of the monthly limitations imposed by federal
  law for health savings accounts.
         Sec. 1551.457.  PLAN ENROLLEE CONTRIBUTIONS. (a) Each plan
  enrollee, in accordance with Section 1551.305, shall contribute any
  amount required to cover the selected participation in the high
  deductible health plan that exceeds the state contribution amount
  under Section 1551.456.
         (b)  A plan enrollee may contribute any amount allowed under
  federal law to the enrollee's health savings account in addition to
  the state contribution under Section 1551.456.
         (c)  A plan enrollee shall make contributions under this
  section in the manner prescribed by the board of trustees.
         Sec. 1551.458.  COORDINATION WITH CAFETERIA PLAN.  (a)  The
  board of trustees has exclusive authority to determine the
  eligibility of a plan enrollee to participate in any flexible
  spending account that is part of a cafeteria plan offered under this
  chapter.
         (b)  The board of trustees may adopt rules regarding the
  eligibility of a plan enrollee to participate in any flexible
  spending account that is part of a cafeteria plan offered under this
  chapter.
         (c)  A plan enrollee may not participate in any flexible
  spending account that would disqualify the enrollee's health
  savings account from favorable tax treatment under federal law.
         Sec. 1551.459.  EXEMPTION FROM EXECUTION; UNASSIGNABILITY.
  A state contribution to a health savings account or a high
  deductible health plan is exempt from execution and is unassignable
  in the same manner and to the same extent as an amount described by
  Section 1551.011.
         Sec. 1551.460.  SINGLE UNDIVIDED RISK POOL. In implementing
  and administering the state consumer-directed health plan
  established under this subchapter, the board of trustees may not
  divide the self-funded risk pool of the group benefits program
  provided under this chapter or create a separate self-funded risk
  pool for that program.
         SECTION 2.  The Employees Retirement System of Texas shall
  develop the state consumer-directed health plan to be implemented
  under Chapter 1551, Insurance Code, as amended by this Act,
  including enrollment requirements, during the state fiscal
  biennium beginning September 1, 2015, with coverage beginning
  September 1, 2016.
         SECTION 3.  Not later than July 31, 2016, the Employees
  Retirement System of Texas shall provide written information to
  individuals eligible to participate in the state consumer-directed
  health plan under Chapter 1551, Insurance Code, as amended by this
  Act, that provides a general description of the requirements for
  the plan as adopted under Chapter 1551, Insurance Code, as amended
  by this Act.
         SECTION 4.  The Employees Retirement System of Texas shall
  develop and implement the health savings account program under
  Chapter 1551, Insurance Code, as amended by this Act, in a manner
  that is as revenue neutral as possible.
         
         SECTION 5.  The Employees Retirement System of Texas shall
  conduct a study on the implementation of the consumer-directed
  health plan administered by the system to determine actuarial
  impact, premium cost fluctuations, health care utilization rates,
  the status of the risk pool, and the ages of those who opt into the
  system. Not later than January 1, 2020, the Employees Retirement
  System of Texas shall submit a report to the governor, the
  lieutenant governor, the speaker of the house of representatives,
  and members of the legislature containing the results of the study.
         SECTION 6.  This Act takes effect September 1, 2015.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 966 was passed by the House on May 5,
  2015, by the following vote:  Yeas 93, Nays 50, 1 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 966 on May 27, 2015, by the following vote:  Yeas 138, Nays 0, 2
  present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 966 was passed by the Senate, with
  amendments, on May 25, 2015, by the following vote:  Yeas 20, Nays
  11.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor