Amends TCA Title 8, Chapter 27, Part 3 and Title 49.

This bill provides for health savings accounts and flexible spending accounts for eligible instructional employees of a local education agency, in certain circumstances, as discussed below. Present law: (1) Requires the local education insurance committee to approve a group insurance plan for eligible employees of local education agencies (LEAs); (2) Authorizes the department of education to pay, on behalf of each eligible instructional employee of a local education agency (LEA), and the employee's dependents, an amount, determined annually in the general appropriations act, on the total cost of the person's participation in a basic health plan; and (3) Requires each LEA to pay on behalf of each instructional employee, participating in the health insurance coverage described above in (1), as a minimum, the percentage specified in the general appropriations act of the premium collected on behalf of each employee of the LEA. Under this bill, an eligible instructional employee who does not enroll in a state or local health plan and is eligible for a health savings account pursuant to federal requirements will receive the money the state and local government save due to the employee not enrolling in a state or local health plan (referred to in this bill and summary as "cost savings") in a health savings account. If the employee is ineligible for a health savings account, then the employee will receive the cost savings in a flexible spending account. This bill makes corresponding revisions in the provisions described above in (2) and (3) to account for the payment of the costs savings as provided for in this bill.