Part 3.
TEACHER RETIREMENT SYSTEM OF TEXAS
Chapter 41.
HEALTH CARE AND INSURANCE PROGRAMS
Subchapter A. RETIREE HEALTH CARE BENEFITS (TRS-CARE)
34 TAC §§41.1, 41.2, 41.10
The Teacher Retirement System of Texas (TRS) proposes amendments
to §41.1 relating to enrollment periods for the Texas Public School Retired
Employees Group Insurance Program (TRS-Care) and §41.10 relating to eligibility
for coverage under the Texas Public School Retired Employees Group Insurance
Program, and a new §41.2 relating to an additional enrollment opportunity
in TRS-Care. The proposed amendments and the new section implement Senate
Bill 1369 and House Bill 3459, 78th Legislature, Regular Session, 2003, and
House Bill 7, 78th Legislature, 3rd Called Session, 2003. The proposed amendments
to §41.1 and §41.10 implement changes to TRS-Care eligibility required
by House Bill 7 for those TRS members taking a service retirement after September
1, 2004. They also address when TRS-Care coverage begins for those retirees.
The proposed amendments set out the new eligibility criteria that TRS service
retirees must meet to enroll in TRS-Care, as well as the effective date of
their TRS-Care coverage. The proposed amendments implement House Bill 7's
requirement that those TRS service retirees who are eligible to enroll in
TRS-Care only under a grandfathering provision pay the total cost of their
and their dependents' participation in the program. The proposed amendments
also give those TRS retirees paying their cost of participation in TRS-Care
a second initial enrollment opportunity when they meet one of the other TRS-Care
eligibility criteria. The proposed new §41.2 addresses an additional
enrollment opportunity for all TRS-Care participants to upgrade their level
of coverage and/or add dependents in the same coverage level.
Tony C. Galaviz, Chief Financial Officer, has determined that for each
year of the first five-year period that the proposed amendments and the new
section are in effect, there will be no fiscal implications to state or local
governments as a result of enforcing or administering the amendments or the
new section. There is no foreseeable effect on local employment or local economies
as a result of the proposed amendments or new section.
Mr. Galaviz has also determined that for each year of the first five years
that the proposed amendments and new section are in effect, the public benefit
anticipated as a result of the amendments will be that TRS rules will comply
with the statutory changes and that those TRS members taking a retirement
after September 1, 2004 will have notice of the new requirements to enroll
in TRS-Care and notice of when their coverage will be effective. Another public
benefit anticipated will be permitting those TRS-Care retirees who must pay
the total cost of their participation in TRS-Care a second opportunity to
enroll in TRS-Care when they meet another TRS-Care eligibility requirement
that does not require payment of the total cost of participation. Mr. Galaviz
has determined that for each year of the first five years that the proposed
new section is in effect, the public benefit anticipated as a result of the
sections will be compliance with the new law and that all retirees will have
an opportunity to change their level of TRS-Care coverage when they become
65. There is no anticipated adverse economic effect on small businesses or
micro-businesses as a result of compliance with the proposed amendments or
new section. Mr. Galaviz has determined that the potential economic costs
to persons required to comply with the proposed amendments are an increase
in the TRS-Care premium for those who are eligible to participate in TRS-Care
under only the grandfathering provision that requires full payment. Mr. Galaviz
has determined that the potential economic costs to persons required to comply
with the proposed new section for each year of the first five years the proposal
will be in effect may be the difference in the amount of premium paid for
the tier of coverage selected as provided by this section and the premium
for the coverage tier in which the retiree was previously enrolled.
Written comments on the proposal may be submitted to Ronnie Jung, Interim
Executive Director, 1000 Red River, Austin, Texas 78701. Comments must be
received within 30 days following the publication in this issue of the
These sections are proposed under Insurance Code §1575.052,
which gives TRS the authority to adopt rules as necessary to administer and
operate the TRS-Care program. The sections are also proposed under Government
Code, Chapter 825, §825.102, which authorizes the Board of Trustees of
the Teacher Retirement System to adopt rules for eligibility for membership;
the administration of the funds of the retirement system; and the transaction
of business of the Board.
There are no other codes affected.
§41.1.Enrollment Periods for the Texas Public School Retired Employees Group Insurance Program (TRS-Care).
(a)
The initial enrollment period in the Texas Public School
Retired Employees Group Insurance Program (TRS-Care) for eligible Teacher
Retirement System of Texas (TRS) retirees
who take a service retirement
before September 1, 2004 expires at the end of the later of
[
[
(1)
[
(2)
[
[
[
(b)
The initial enrollment period in TRS-Care for TRS
retirees who take a service retirement after September 1, 2004 and who are
eligible to enroll in TRS-Care at the time of retirement expires at the end
of the later of:
[
(1)
the 31st day after their effective
retirement date; or
(2)
the 31st day following the
last day of the month in which their election to retire is received by TRS.
(c)
The initial enrollment period in TRS-Care for eligible
TRS disability retirees expires at the end of the 31st day after the date
that the disability retirement is approved by the TRS Medical Board.
[
[
[
[
[
(d)
The initial enrollment period in TRS-Care for a surviving
spouse and a surviving dependent child of an eligible retiree expires at the
end of the later of:
[
(1)
the 31st day after the end
of the month in which the eligible retiree died; or
(2)
the 31st day after the date
of the notice of eligibility that is sent to the surviving spouse or the surviving
dependent child at the individual's last known address, as shown in the TRS-Care
records.
(e)
The initial enrollment period
for a surviving spouse of a deceased active member and for a surviving dependent
child, as both are defined by §1575.003, Insurance Code, expires at the
end of the later of:
(1)
the 31st day after the end of the month in which
the active member died; or
(2)
the 31st day following the date of the notice
of opportunity to enroll that is sent to the surviving spouse or the surviving
dependent child at the individual's last known address, as shown in the TRS-Care
records.
(f)
TRS retirees who take a service
retirement after September 1, 2004 and who are eligible to enroll in TRS-Care
at the time of retirement under only subsection (c)(4) of §41.10 of this
chapter (relating to Eligibility to Enroll in under the Texas Public School
Retired Employees Group Insurance Program) ("Grandfathered Retirees") will
have a second initial enrollment period when they first meet the requirements
to enroll in TRS-Care under either subsection (c)(1), (c)(2), or (c)(3) of §41.10
of this chapter.
(1)
This second initial enrollment period is also
available to Grandfathered Retirees who waive or drop their TRS-Care coverage
during or after their initial enrollment period. The second initial enrollment
period is available when the Grandfathered Retirees first meet the requirements
to enroll in TRS-Care under either subsection (c)(1), (c)(2), or (c)(3) of §41.10
of this chapter.
(2)
The second initial enrollment period expires
at the end of the later of:
(A)
the 31st day following the last day of the month
in which the Grandfathered Retiree first becomes or would have become eligible
to enroll in TRS-Care under subsection (c)(1), (c)(2), or (c)(3) of §41.10
of this chapter; or
(B)
the 31st day after the date of the notice of
opportunity to enroll that is sent to the Grandfathered Retiree at the retiree's
last known address, as shown in the TRS-Care records.
(3)
A Grandfathered Retiree can choose any tier
of TRS-Care coverage during the second enrollment period.
(g)
Notwithstanding the other provisions
of this section:
(1)
A retiree may enroll a new spouse within 31
days of the date on which the retiree marries;
(2)
A retiree or surviving spouse may enroll a child
who becomes a dependent as defined by §1575.003, Insurance Code, within
31 days after the date on which the child becomes a dependent eligible for
coverage under TRS-Care; and
(3)
A participant shall be entitled to all applicable
COBRA rights under the Federal Public Health Service Act.
(h)
If a retiree or surviving spouse
fails to enroll a newly eligible spouse or dependent child within the time
periods set out in subsection (g) of this section, the retiree or surviving
spouse will not be able to enroll the spouse or dependent child in TRS-Care
until a subsequent enrollment period.
§41.2.Additional Enrollment Opportunity.
(a)
The following individuals have an additional enrollment
opportunity in TRS-Care as described in this section when they become 65 years
old:
(1)
all TRS service retirees who are enrolled in TRS-Care;
(2)
dependents, as defined in Insurance Code, §1575.003,
who are enrolled in TRS-Care and who are eligible to enroll in TRS-Care in
their own right as a TRS service or disability retiree; and
(3)
surviving spouses, as defined in Insurance Code, §1575.003
who are enrolled in TRS-Care.
(b)
The individuals defined in subsection (a) of this section
are referred to as "eligible participants" in this section.
(c)
Those eligible participants who are enrolled in TRS-Care
on August 31, 2004, and who are 65 years old or older on that date have an
additional enrollment opportunity on September 1, 2004.
(d)
Those eligible participants who are enrolled in TRS-Care
on August 31, 2004, and who become 65 years old after that date have an additional
enrollment opportunity on the date that they become 65 years old.
(e)
Those eligible participants who enroll in TRS-Care after
August 31, 2004, and who become 65 years old after that date have an additional
enrollment opportunity on the date that they become 65 years old.
(f)
The additional enrollment opportunity for those eligible
participants who enroll in TRS-Care after August 31, 2004, and who are 65
years old or older when they enroll in TRS-Care runs concurrently with the
initial enrollment period as set out in §41.1 of this chapter relating
to Enrollment Periods for the Texas Public School Retired Employees Group
Insurance Program (TRS-Care).
(g)
An eligible participant who is not enrolled in Medicare
Part A at the time of his or her additional enrollment opportunity can enroll
in the next-higher TRS-Care coverage tier, as determined by TRS-Care, and
add dependent coverage in that same coverage tier
(h)
An eligible participant who is enrolled in Medicare Part
A at the time of his or her additional enrollment opportunity can enroll in
any TRS-Care coverage tier and add dependent coverage in that same coverage
tier.
(i)
An eligible participant can choose to remain in the same
TRS-Care coverage tier and add dependent coverage in that coverage tier.
(j)
If an eligible participant waives coverage for a dependent
during the additional enrollment opportunity described in this section, the
eligible participant will be able to enroll that dependent only as a result
of a special enrollment event under the Health Insurance Portability and Accountability
Act of 1996 (HIPAA) or during a subsequent enrollment period set by TRS. To
enroll a dependent in TRS-Care as a result of a special enrollment event,
the eligible participant must submit a TRS-Care application to TRS within
31 days of the date that the person becomes an eligible dependent.
(k)
The additional enrollment period for eligible participants
described in subsection (c) of this section ends on September 30, 2004.
(l)
The additional enrollment period for eligible participants
described in subsection (d) or (e) of this section expires at the end of the
later of:
(1)
the 31st day following the last day of the month in which
the eligible participant becomes 65 years old; or
(2)
the 31st day after the date printed on the notice of the
additional enrollment opportunity sent to the eligible participant at the
eligible participant's last-known address, as shown in the TRS-Care records.
(m)
This section does not affect the right of a TRS service
retiree or surviving spouse enrolled in a TRS-Care coverage tier to drop coverage,
select a lower level of coverage, or drop dependents at any time.
§41.10.Eligibility to Enroll in [
(a)
If they meet the applicable requirements set out in
this section, the
[
(1)
service retirees of the Teacher Retirement System of Texas
(TRS) who are not eligible to
enroll
[
(2)
disability retirees of TRS who are not eligible to
enroll
[
(3)
surviving spouses of deceased service or disability retirees
of TRS
or of certain deceased active TRS members
; and
(4)
surviving dependent children of [
(b)
To be eligible
to enroll in
[
(1)
service credit for actual service
in Texas public schools;
(2)
service credit transferred
to TRS from the Employees Retirement System of Texas (ERS);
(3)
withdrawn service credit that
the member has purchased and that has been credited to the member's account;
(4)
service credit for unreported
service that the member has purchased and that has been credited to the member's
account;
(5)
service credit for substitute
service that the member has purchased and that has been credited to the member's
account; and
(6)
up to five years of out-of-state
service credit that the member has purchased and that has been credited to
the member's account.
(c)
To be eligible to enroll in
TRS-Care under this section, a service retiree of TRS who retires after September
1, 2004 must meet the requirements of at least one of the following paragraphs:
(1)
at the time of retirement, a member:
(A)
is at least 65 years old; and
(B)
has at least 10 years of service credit in the
system, which can include only the following types of service credit:
(i)
service credit for actual service in Texas public
schools;
(ii)
service credit transferred to TRS from ERS;
(iii)
withdrawn service credit that the member has
purchased and that has been credited to the member's account;
(iv)
service credit for unreported service that
the member has purchased and that has been credited to the member's account;
(v)
service credit for substitute service that the
member has purchased and that has been credited to the member's account;
(vi)
up to five years of military service credit
or re-employed veteran's (USERRA) service credit that the member has purchased
and that has been credited to the member's account; and
(vii)
any years of service credit that the member
would have received but for the member's participation in the Deferred Retirement
Option Program (DROP); or
(2)
at the time of retirement, a member:
(A)
meets the requirements of paragraph (1)(B) of
this subsection; and
(B)
meets the TRS-Care Rule of 80, which is determined
by having the sum of the individual's age and the amount of service credit
described in paragraph (1)(B) of this subsection equal or exceed 80; or
(3)
a member:
(A)
purchased any of the following types of service
credit:
(i)
out-of-state service credit;
(ii)
military service credit;
(iii)
re-employed veteran's (USERRA) service credit;
(iv)
developmental leave service credit;
(v)
sick leave service credit;
(vi)
service credit purchase; or
(vii)
service credit for work experience by a certified
career or technology teacher;
(B)
had the service described in paragraph (3)(A)
of this subsection credited by August 31, 2003;
(C)
except as provided by subsection (f) of this
section, at the time of retirement, has the sum of the following equal or
exceed 80 (the "Grandfathered TRS-Care Rule of 80"):
(i)
age;
(ii)
the service credit described in paragraph (3)(A)
of this subsection;
(iii)
service credit for actual service in Texas
public schools;
(iv)
service credit transferred to TRS from ERS;
(v)
withdrawn service credit that the member has
purchased and that has been credited to the member's account;
(vi)
service credit for unreported service that
the member has purchased and that has been credited to the member's account;
and
(vii)
service credit for substitute service that
the member has purchased and that has been credited to the member's account;
(D)
at the time of retirement, has at least 10 years
of service credit in the system, which can include only the following types
of service credit:
(i)
service credit for actual service in Texas public
schools;
(ii)
service credit transferred to TRS from ERS;
(iii)
withdrawn service credit that the member has
purchased and that has been credited to the member's account;
(iv)
service credit for unreported service that
the member has purchased and that has been credited to the member's account;
(v)
service credit for substitute service that the
member has purchased and that has been credited to the member's account; and
(vi)
up to five years of out-of-state service credit
limited to that out-of-state service credit that was credited by August 31,
2003; and
(E)
takes a normal age service retirement as determined
under Government Code, Chapter 824, Subchapter C by August 31, 2009;
(4)
a member:
(A)
was employed in actual service in a Texas public
school during or before the 2003-2004 school year; and
(B)
at the time of retirement, has at least 10 years
of service credit in TRS, which can include only the following types of service
credit:
(i)
service credit for actual service in Texas public
schools;
(ii)
service credit transferred to TRS from ERS;
(iii)
withdrawn service credit that the member has
purchased and that has been credited to the member's account;
(iv)
service credit for unreported service that
the member has purchased and that has been credited to the member's account;
and
(v)
service credit for substitute service that the
member has purchased and that has been credited to the member's account;
(vi)
up to five years of out-of-state service credit
that the member has purchased and that has been credited to the member's account.
(d)
For purposes of this section, "public
school" an educational institution or organization in this state that is entitled
to be supported in whole or in part by state, county, school district, or
other municipal corporation funds.
(e)
Service retirees who are eligible to enroll
in TRS-Care under only subsection (c)(4) of this section are required to pay
the total cost of their participation in TRS-Care until the date that they
first qualify for TRS-Care under subsection (c)(1), (c)(2), or (c)(3) of this
section.
(f)
Service retirees who meet all of the requirements
of subsection (c)(3) of this section except the Grandfathered TRS-Care Rule
of 80 in subsection (c)(3)(E) of this section at the time of retirement can
become eligible to enroll in TRS-Care under subsection (c)(3) of this section
after retirement only if they meet the Grandfathered TRS-Care Rule of 80 by
August 31, 2009.
(g)
[
(h)
[
(i)
[
(1)
died on or after September 1, 1986;
(2)
had 10 or more years of actual service credit in TRS; and
(3)
made contributions to TRS-Care at the member's last place
of employment in public education in Texas.
(j)
[
(1)
the child must be a natural or adopted child of the deceased
retiree or member or must be a foster child, stepchild, or other child who
lived in a parent-child relationship with the retiree or member; and
(2)
the child must be unmarried and under age 25 or must be
age 25 or older but still unmarried and fully disabled to such an extent as
to have been dependent upon the deceased retiree or
active
member
for support at the time of the retiree's or
active
member's death,
as determined by TRS as trustee and as described by Insurance Code,
§1575.003
[
[
[
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on April 12, 2004.
TRD-200402460
Ronnie G. Jung
Interim Executive Director
Teacher Retirement System of Texas
Proposed date of adoption: June 17, 2004
For further information, please call: (512) 542-6115
,
or surviving spouses of eligible retirees, will end
]:
(1)
for eligible service retirees
at the later of:]
(A)
]
the 31st day
[
31 days
] after their effective retirement date; or
(B)
] the 31st day following the
last day of the month in which their election to retire is received by TRS.
(2)
for surviving spouses, 31
days after the end of the month in which the eligible retiree died or 31 days
following the date of notice of eligibility sent by TRS-Care to the survivor,
whichever is later.]
(3)
for eligible disability retirees,
31 days after the date that the disability retirement is approved by the TRS
Medical Board.]
The enrollment period for a surviving spouse
of a deceased active member, as defined by Insurance Code, Article 3.50-4, §2,
Subdivision 11, and for a surviving dependent child, as defined by Insurance
Code, Article 3.50-4, §2, Subdivision 13, will end 31 days after the
end of the month in which the eligible member or retiree died or 31 days following
the date of notice of eligibility sent by TRS-Care to the survivor, whichever
is later.
]
Notwithstanding the provisions of subsections (a) and (b) of this section:
]
(1)
a participant in TRS-Care
1 will have coverage increased to TRS-Care 2 upon becoming eligible for Medicare;]
(2)
A retiree may elect coverage
for a spouse within 31 days of the date on which the retiree is married;]
(3)
A retiree or surviving spouse
may add coverage for children within 31 days after the date on which the retiree
or surviving spouse first acquires a child eligible for coverage under TRS-Care;]
(4)
a participant shall be entitled
to all applicable rights under the Federal Public Health Service Act (COBRA),
Title XXII.]
A participant's dependent coverage, if elected,
will continue until the end of the month of the participant's death.
]
for Coverage under ] the Texas Public School Retired Employees Group Insurance Program.
The
] following persons are eligible to
enroll
[
be enrolled
] in the Texas Public School Retired Employees
Group Insurance Program (TRS-Care):
be enrolled
] as
an employee or retiree
in
[
by
] a plan provided under
the Texas Employees [
Uniform
] Group [
Insurance
] Benefits
Act (Insurance Code,
Chapter 1551
[
Article 3.50-2
]),
or under the [
Texas
] State [
College and
] University
Employees
Uniform Insurance Benefits Act (Insurance Code,
Chapter
1601
[
Article 3.50-3
]);
be enrolled
] as an employee or retiree
in
[
by
] a plan provided under the Texas Employees [
Uniform
] Group
[
Insurance
] Benefits Act (Insurance Code,
Chapter 1551
[
Article 3.50-2
]) or under the [
Texas
] State [
College
and
] University
Employees
Uniform Insurance Benefits Act
(Insurance Code,
Chapter 1601
[
Article 3.50-3
]);
a
] deceased
service or disability
retirees of TRS
[
retiree
] or of
certain
[
a
] deceased active TRS
members
[
member
].
for coverage
under
] TRS-Care under this section, a service retiree of TRS
who
retires before September 1, 2004
must have 10 years of service credit
for actual service in the public schools of Texas
,which can include only
the following types of service credit:
(c)
] A disability retiree with
less than 10 years of service credit will not be eligible for coverage under
TRS-Care when disability retirement benefits terminate.
(d)
] A surviving spouse of a deceased
TRS service or disability retiree is eligible to enroll in TRS-Care if the
deceased TRS service or disability retiree was
enrolled,
eligible
to enroll
,
or would have been eligible to enroll in TRS-Care at
the time of the retiree's death.
(e)
] A surviving spouse of a deceased
active TRS member is eligible to enroll in TRS-Care if the deceased active
member:
(f)
] A surviving dependent child
of a deceased TRS retiree or deceased active TRS member is eligible to enroll
in TRS-Care if the deceased retiree met the conditions of subsection
(h)
[
(d)
] of this section or the deceased active member met
the conditions of subsection
(i)
[
(e)
] of this section.
A surviving dependent child must also meet the following conditions:
Article 3.50-4, §3, subdivision (3)
].
(g)
If a service or disability
retiree has a legal spouse or if a retiree or surviving spouse has an eligible
child or children when the retiree or surviving spouse becomes eligible but
does not elect to cover that spouse or that child or children within 31 days,
TRS-Care coverage may not be obtained for the spouse or the child until a
subsequent enrollment period.]
(h)
If a service or disability
retiree has no spouse or if a retiree or surviving spouse has no eligible
child or children when he or she first becomes eligible, but acquires a spouse
or child or children at a later date, the retiree can obtain spouse or child
or children coverage if he or she makes application within 31 days of the
date the spouse or first eligible child is acquired.]
Subchapter E. ACTIVE EMPLOYEES HEALTH REIMBURSEMENT ARRANGEMENTS