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Texas Payroll/Personnel Resource

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Insurance Plans

State agencies and institutions of higher education may be able to offer their employees insurance from cafeteria and/or group benefit plans. The plan administrator determines employee eligibility and enrollment opportunities. Agencies or institutions should contact the appropriate administrator for more information on employee eligibility, deadlines, exclusions, etc., that apply to their employees.

Cafeteria Plans

Cafeteria Plans — also called reimbursement accounts, flexible benefit plans, or flexible spending accounts (FSAs) — are authorized by Internal Revenue Code Section 125. Cafeteria plans provide a tax-advantaged way to pay certain out-of-pocket health care expenses and work-related dependent care expenses. Cafeteria plans allow employees to pay expenses using pre-tax dollars. Employees do not pay federal income, Social Security or Medicare taxes on this allocated money.

Employees covered by the Texas Employees Group Benefit Program or employees of the University of Texas or Texas A&M systems may use group insurance plans other than cafeteria plans.

The Employees Retirement System administers a cafeteria plan (TexFlex) that most state employees may participate in. Two benefits currently are included in the plan: health care reimbursement and dependent care reimbursement. Participation in either benefit is optional.

The governing boards of the University of Texas System (UT System) and the Texas A&M University System also administer cafeteria plans for their employees. UT FLEX is the program administered by the UT System. FlexConnect is the program administered by the Texas A&M System.

The benefits included in the cafeteria plans adopted by the respective governing boards may differ. See TexFlex, UT FLEX and FlexConnect for participation and election details.

Other Considerations

An employee who chooses to participate in one of these plans must pay for his or her participation costs by completing a salary reduction agreement that creates a payroll deduction. This deduction is in addition to the plan deduction and begins at the same time as the plan deduction. The amount deducted each pay period is binding until the next annual enrollment period unless a qualifying life event occurs.

Sources

Texas State Employees Uniform Group Insurance Benefits Act; Texas Insurance Code, Article 3.50-2, Sections 3(a)(11), 5(a), 13B, 13Ba, 14(a), (d)-(f), (h), 15, 16B(b); 34 Texas Administrative Code Sections 81.7(a)(4), (f)(1), 85.5(a), 85.7(c)(1)–(2); Texas State College and University Employees Uniform Insurance Benefits Act, Texas Insurance Code, Article 3.50-3, Sections 3(a)(7), 4(a)(e), 12(a)-(b), 14B(b), 17(a).