1. (a) The Executive Director of TRS shall determine the comparability of a school district's group health coverage to the coverage provided under the Texas Employees Uniform Group Insurance Benefits Act (Texas Insurance Code, Article 3.50-2). As required by the Education Code, §22.004 each district shall make available to its employees group health coverage provided by a risk pool established by one or more school districts under the Local Government Code, Chapter 172 or under a policy of insurance or group contract issued by an insurer, a company subject to the Insurance Code, Chapter 20, or a health maintenance organization under the Texas Health Maintenance Organization Act (Insurance Code, Chapter 20A). The coverage must meet the substantive coverage requirements of Insurance Code, Article 3.51-6 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 diagnostic procedures. In this subsection, "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 the Texas Employees Uniform Group Insurance Benefits Act (Insurance Code, Article 3.50-2). In addition to these requirements, the following factors shall be considered in determining comparability:

   1. (1) the deductible amount for service provided inside and outside of the network;
   2. (2) the coinsurance percentages for service provided inside and outside of the network;
   3. (3) the maximum amount of coinsurance payments a covered person is required to pay;
   4. (4) the amount of the copayment for an office visit;
   5. (5) the schedule of benefits and the scope of coverage;
   6. (6) the lifetime maximum benefit amount; and
   7. (7) verification that the coverage is issued by a provider licensed to do business in this state by the Texas Department of Insurance or is provided by a risk pool authorized under Chapter 172, Local Government Code, or that a district is capable of covering the assumed liabilities in the case of coverage provided through district self-insurance.
2. (b) For the purposes of this decision, comparable means similar, but not identical.

3. (c) TRS staff, under the direction of the executive director, will develop a methodology and criteria for comparison determination. This methodology will include an evaluation of relevant variables with respect to applicable factors stated in subsection (a) of this section, including the following related to the scope of coverage:

   1. (1) types of plans available in each area;
   2. (2) access to providers, including specialists; and

   3. (3) provider network availability and utilization.

      1. (A) To provide for the reasonable and accurate consideration of these variables, a determination of each plan's benefit replacement ratio to the basic Texas Employees Uniform coverage will be used. Benefit replacement ratio means the ratio of benefits projected to be paid by the plan to the projected incurred cost of the services provided. Benefit replacement ratio determinations will involve review of applicable factors set forth in the Education Code, §22.004(a) in connection with plan information provided by the district. A plan will be certified as comparable if it has a benefit replacement ratio not more than five percentage points below the ratio of the applicable benchmark plan under the Insurance Code, Article 3.50-2.
      2. (B) The benchmark plan will reflect the basic health coverage provided under the Texas Employees Uniform Group Insurance Benefits Act (Insurance Code, Article 3.50-2) ("Act"). Specifically the benchmark plan is the plan under the Act (or two plans if, in accordance with the Act, there is a distinction between point of service and out-of-network indemnity plans) most prevalent by number of employees participating. If the most prevalent plan(s) under the Act are amended, the benchmark plan(s) will be amended accordingly.
      3. (C) Where a district offers multiple plans, some of which are determined by this methodology to be comparable, while others are not, the plans will be frequency weighted by the number of members therein, such that a weighted average will be determined. Accordingly, the school district composite comparability will be reported, as described by subsection (e) of this section, in addition to the comparability of each individual plan.
      4. (D) TRS staff and the executive director may consult with qualified experts (including a group insurance consultant or actuary as described in the Insurance Code, Article 3.50-4, §5(a)(9)) to evaluate comparability, develop and use methodology, and determine benefit replacement ratios.
      5. (E) For reference purposes, the employee cost for each plan will also be reported, as described by subsection (e) of this section. However, employee cost will not be a factor in determining comparability.
4. (d) Each public school district shall report, using a uniform reporting form or method of reporting prescribed by the Teacher Retirement System (TRS), the district's compliance with the Education Code, §22.004(c), to the executive director of TRS by March 1 of each even-numbered school year. The report must reflect the district group health coverage plan in effect during the current plan year and must include all information required by statute and any additional information requested by TRS staff to complete the certification. A district's failure to submit required information to TRS on or before March 1 of each even-numbered year may result in a TRS report to the Legislative Budget Board and the legislature reflecting the district's non-compliance, as described in subsection (e) of this section.
5. (e) The executive director of the Teacher Retirement System (TRS) shall certify whether a district's coverage is comparable to the basic health coverage provided under the Texas Employees Uniform Group Insurance Benefits Act (Insurance Code, Article 3.50-2). If the executive director of TRS determines that the group health coverage offered by a district is not comparable, the executive director shall report that information to the district and to the Legislative Budget Board. The executive director shall submit a report to the legislature not later than September 1 of each even-numbered year describing the status of each district's group health coverage program based on the information provided by the district and the certification described herein.

Source Note:The provisions of this §41.12 adopted to be effective January 12, 1994, 19 TexReg 86; amended to be effective April 14, 1998, 23 TexReg 3697; amended to be effective July 17, 1998, 23 TexReg 7034; amended to be effective August 13, 2000.