1. (a) Group Benefits Advisory Committee (GBAC).

   1. (1) The GBAC is established by the Act, §18, as amended. Its membership shall be composed as defined in the Act. The Executive Director of the Employees Retirement System of Texas shall establish procedures for the determination of the committee's membership, terms of office, and representation of the applicable state agencies and institutions of higher education, in accordance with the Act.
   2. (2) The GBAC shall advise and consult with the trustee on matters concerning all insurance coverage provided under this Act and shall present recommendations to the trustee regarding other existing or proposed state employee benefits, other than retirement benefits. The committee shall cooperate and work with the trustee in coordinating and correlating the administration of the Texas Employees Uniform Group Insurance Program among the various state agencies and institutions of higher education. The duties of each member of the GBAC shall be to secure input from fellow employees and shall be considered additional duties required of the member's other state office or employment, and all expenses incurred by any such member in performing the member's duties as a member of the committee shall be paid from funds made available for those purposes to the agency or institution of higher education of which the member is an employee or officer.

   3. (3) During a term of appointment or election, a vacancy shall be filled by an employee of the same agency or institution of higher education from which the vacancy occurred, being appointed by its governing body or designee for the balance of the vacated term. A vacancy on the GBAC exists when any member of the GBAC:

      1. (A) resigns from the GBAC;
      2. (B) transfers from a state agency or institution of higher education from which the member was appointed or elected to serve on the GBAC; or
      3. (C) terminates employment from a state agency or institution of higher education.
   4. (4) A vacancy in a position held by a member appointed by the trustee or the Texas Higher Education Coordinating Board shall be filled by such body for the balance of the term.
   5. (5) A vacancy in a position held by a member of the private sector shall be filled by the officer who originally made the appointment to that position.
   6. (6) All GBAC meetings are to be open to the public.
   7. (7) The Executive Director of the Employees Retirement System of Texas shall file a notice of the GBAC's meetings with the Secretary of State for publication in the Texas Register.
   8. (8) The Executive Director shall be the custodian of the minutes of the GBAC's meetings and will have those minutes available for public inspection at the offices of the Employees Retirement System of Texas during normal working hours.

2. (b) Petitions for supplemental coverage.

   1. (1) An agency head or a group of employees or retirees may submit a written petition to the board or to the GBAC requesting the establishment of a supplemental insurance benefits plan.
   2. (2) The petition must include a clear and concise statement of the type and extent of coverage desired. The petition must show the relationship of the requested coverage to the existing coverages provided by the program. The proposed plan must provide coverage that is not available in the program or must be an extension of the coverage over and above that provided by the related benefit in the program. The plan must provide that employees enrolling in an approved supplemental plan must first be enrolled for the maximum related benefits provided by the program.

   3. (3) The proposed plan must meet the requirements of the Act, including the following:

      1. (A) the plan must be reviewed by the GBAC;
      2. (B) the plan must be actuarially sound;
      3. (C) carriers for the plan must be selected by competitive bidding;
      4. (D) the plan must satisfy the Act's minimum enrollment requirements; and
      5. (E) the proposal must provide evidence that the proposed coverage is in the best interests of the people covered by the Act.
   4. (4) If a proposed plan is approved for payroll deduction in any state agency, a percentage of all premiums paid is to be paid into the employees life, accident and health insurance and benefits fund; such percentage shall be determined by the board, in its sole discretion, at the time of approval.

3. (c) Health maintenance organizations.

   1. (1) The board may approve a health maintenance organization (HMO) to offer a health benefits plan to participants in the Program. The board may:

      1. (A) utilize a bidding process to approve one or more HMOs in areas of the state determined by the board to be regional bidding areas (RBAs);
      2. (B) utilize an application process to approve one or more HMOs in areas of the state determined by the board to be non-bidding areas;
      3. (C) determine the criteria to be used to approve the HMOs for the RBAs and non-bidding areas;
      4. (D) determine the number of HMOs to approve in each RBA and non-bidding area; and
      5. (E) determine the length of the contracts with the approved HMOs.

   2. (2) In order to seek approval, an HMO must:

      1. (A) submit an application to provide health benefits in the areas within the State of Texas determined by the board to be non-bidding areas;
      2. (B) submit a proposal, in response to a request for bid, in the format determined by the system for one or more of the designated RBAs; or
      3. (C) submit application(s) and bid(s).

   3. (3) An HMO seeking board approval in response to a request for bid in one or more of the RBAs, must satisfy the following conditions:

      1. (A) The HMO must be licensed by the Texas Department of Insurance to operate in the State of Texas.
      2. (B) The HMO must have been providing services in the RBA for at least 6 months prior to September 1 of the fiscal year in which the bid response is due to be filed with the system. Also, the HMO must demonstrate the capacity to provide adequate services, as determined by the system, to the program participants.
      3. (C) The HMO must submit the bid, with rates, to the board at the time and in the format prescribed by the system. Once adopted by the board, the rates may not be modified without the approval of the board. A request for expansion of a non-contiguous service area, as described in this section, shall require a separate application.
      4. (D) The HMO agrees to the provisions contained in the contract between the system and the HMO as adopted for the entire time specified in the contract.
      5. (E) The HMO must provide standardized benefits as described in the contract between the system and the HMO. This document, which is to be considered a part of this section for all purposes, may be obtained from the Executive Director of the system.
      6. (F) If an HMO, approved by the board, fails to maintain compliance with the contract, the board has the right to cancel the existing contract with that HMO upon proper notice as specified in the contract.
      7. (G) An HMO that loses its state license will automatically become ineligible to offer its health benefits plan to participants in the Program.

   4. (4) An HMO, seeking board approval in response to an application in one or more of the non-bidding areas, must satisfy the following conditions:

      1. (A) The HMO must be licensed by the Texas Department of Insurance to operate in the State of Texas.
      2. (B) The HMO must have been providing managed care services in the area for which the application is made for at least 6 months prior to September 1 of the fiscal year in which the application is due to be filed with the system. Also, the HMO must demonstrate the capacity to provide adequate services, as determined by the system, to the program participants.
      3. (C) The HMO must submit the application, with rates, to the board at the time and in the format prescribed by the system. Once adopted by the board, the rates may not be modified without the approval of the board.
      4. (D) The HMO agrees to the provisions contained in the contract between the system and the HMO as adopted for the entire time specified in the contract.
      5. (E) The HMO must provide standardized benefits as described in the contract between the system and the HMO. This document, which is to be considered a part of this section for all purposes, may be obtained from the Executive Director of the system.
      6. (F) If an HMO, approved by the board, fails to maintain compliance with the contract, the board has the right to cancel the existing contract with that HMO upon proper notice as specified in the contract.
      7. (G) An HMO that loses its state license will automatically become ineligible to offer its health benefits plan to participants in the insurance program.

4. (d) Payment of Premiums.

   1. (1) Premiums for coverage provided under the program are funded from three sources: state contributions, system contributions, and participant contributions. The legislature appropriates monies to fund group insurance benefits for all employees as defined in the Act. Monies for employees compensated from funds other than the General Appropriations Act are appropriated from the official operating budget of the respective department. In addition, the system may contribute an additional amount, as determined by the trustee, for payment of premiums for participants. A participant who applies for coverage for which the monthly premium exceeds the state's or employing department's and the system's contribution must pay the excess amount.

   2. (2) A participant's share of premiums shall be paid through deductions from monthly compensation or annuities or by direct payment, as provided in this paragraph.

      1. (A) An employee or annuitant who applies for coverage for which the monthly premium exceeds the state or employing department and the system contributions must authorize on a form prescribed by the system a deduction from his or her monthly compensation or annuity to pay the difference. If the compensation or annuity is insufficient to provide for the appropriate deduction, the participant must pay premiums directly as provided in subparagraph (B)(i) of this paragraph. Failure to make the required payment of premiums by the due date will result in the cancellation of all coverages not fully funded by the state contribution. A participant entitled to the state contribution will retain member only health and basic life coverage provided the state contribution is sufficient to cover the premium for such coverage. If the state contribution is not sufficient for member only coverage in the health plan selected, the participant will be enrolled in the basic plan except as provided for in §81.7(l)(2)(B) of this title.

      2. (B) Persons who are eligible participants in the program and who are not on a payroll or who are not receiving an annuity from a state retirement system from which the appropriate premiums may be deducted or whose salary or annuity are insufficient to allow for a full required deduction must pay premiums directly as indicated in the following.

         1. (i) An employee who is in a leave without pay status or whose salary is insufficient, or who is a non-salaried board member, shall pay monthly premiums in advance through the employing department. Any other participant to whom this subparagraph applies shall pay monthly premiums in advance to the system. Premium payments are due on the first day of the month covered and must be postmarked or received by the system or the employing department, whichever is appropriate, within 30 days of the due date to avoid cancellation of coverage. Failure to make the required premium payment by the due date will result in cancellation of all coverages not fully funded by the state contribution, if applicable. A person entitled to the state contribution will retain member only health and basic life coverage provided the state contribution is sufficient to cover the premium for such coverage. If the state contribution is not sufficient for member only coverage in the health plan selected by the employee or retiree, the employee or retiree will be enrolled in the basic plan except as provided for in §81.7(l)(2)(B) of this title.
         2. (ii) A person who continues group health and dental benefits as provided in §81.5(k) of this title (relating to Eligibility) must pay premiums in advance on a monthly basis. Premiums for such a person will be 102% of the rates charged for other participants in the same coverage category and with the same plan. All premiums due for the election/enrollment period must be postmarked or received by the Employees Retirement System of Texas on or before the date indicated on the continuation of coverage enrollment form. Subsequent premiums are due on the first day of the month covered and must be postmarked or received by the Employees Retirement System of Texas within 30 days of the due date to avoid cancellation of coverage.
         3. (iii) A person who continues group health and dental benefits as provided in §81.5(k)(3) of this title (relating to Eligibility) must pay premiums in advance on a monthly basis. Premiums for such a person for each month of coverage after the 18th month of coverage will be 150% of the rates charged for other participants in the same coverage category and with the same plan. All premiums are due on the first day of the coverage month and must be postmarked or received by the Employees Retirement System of Texas within 30 days of the due date to avoid cancellation of coverage.

   3. (3) An employee whose dependent child is eligible for coverage under Section 14A of the Act is eligible for the supplemental state contribution as authorized by that section and provided in this paragraph.

      1. (A) An employee becomes eligible for the supplemental contribution on the first day of the month following the date on which the system receives certification of the dependent child's eligibility for coverage under that section. Eligibility for the supplemental contribution terminates on the last day of the contract year. An employee may apply for the supplemental contribution for an additional period of coverage during the annual enrollment period applicable to that period of coverage.
      2. (B) A dependent child of an employee who is eligible for the supplemental contribution is not required to provide evidence of insurability.

Source Note:The provisions of this §81.3 adopted to be effective September 1, 1985, 10 TexReg 2321; amended to be effective September 1, 1986, 11 TexReg 3862; amended to be effective October 14, 1986, 11 TexReg 4114; amended to be effective December 19, 1986, 11 TexReg 5133; amended to be effective November 1, 1987, 12 TexReg 3480; amended to be effective February 16, 1988, 13 TexReg 625; amended to be effective March 28, 1989, 14 TexReg 1371; amended to be effective March 27, 1990, 15 TexReg 1411; amended to be effective August 21, 1990, 15 TexReg 4504; amended to be effective May 19, 1992, 17 TexReg 3252; amended to be effective September 2, 1993, 18 TexReg 5594; amended to be effective February 21, 1994,19TexReg 806; amended to be effective January 25, 1995, 20 TexReg 151; amended to be effective February 16, 1998, 23 TexReg 1099; amended to be effective March 26, 2000, 25 TexReg 2400; amended to be effective July 10, 2000, 25 TexReg 6557.