Enrolled Bill Summary

            House Bill 3 creates the Texas Healthy Kids Corporation and directs the corporation to establish a program to provide affordable health care benefits to children who do not have adequate health insurance coverage. The act does not establish the corporation as an insurer, but rather bases the program on the participation of insurance carriers and other health benefit providers. It authorizes the corporation to negotiate premiums and contract with health benefit providers and to establish participation requirements for providers. It exempts providers from certain taxes on money received from the program and provides that, under the program, a provider is not required to offer services or benefits that are otherwise required by law. In addition, the act authorizes the corporation to determine eligibility criteria for coverage by the program, to develop a premium structure based on ability to pay, and to require a reasonable enrollment fee. The parent or guardian of a covered child is held responsible for any required premiums, deductibles, or other payments.

            House Bill 3 establishes the powers and duties of the board of directors of the corporation and subjects the corporation to the Texas Non-Profit Corporation Act. The corporation is subject to the open meetings and open records laws, to certain reporting requirements, and to audits by the state auditor during a period in which the corporation receives state money or in which a person appointed by the governor is serving as a member of the board. The act exempts the corporation from the franchise tax and gives the corporation and its employees and volunteers immunity from liability extended to charitable organizations.

            House Bill 3 authorizes the Texas Department of Health to purchase coverage from the corporation to cover children who receive benefits from programs administered by the department, other than the Medicaid program, if it would be cost effective to do so. It also amends the Tax Code to allow a nonprofit hospital to satisfy up to 10 percent of required charity care and community benefits through a donation to the corporation if the donation is used to purchase health benefits for children with a family income of less than 200 percent of the federal poverty level and who reside in the area in which the hospital or hospital system operates.

            The act establishes the Texas Healthy Kids Fund, and a premium stabilization revolving account within the fund, consisting of appropriations and contributions to the account. The account is to be used by the corporation to pay premiums for covered children whose parents or guardians have not paid the required premiums. Parents and guardians of children for whom premiums are paid by the corporation are responsible for reimbursing the account. The act requires the corporation to charge a premium stabilization account fee of up to five dollars for each covered child. The fund is to be abolished and the balance of the fund transferred to a depository of the corporation after the first fiscal year in which the fund does not receive a direct state appropriation.

            House Bill 3 amends the Family Code to require a court to order a parent under a court order to pay child support to: (1) apply for coverage for the child through the corporation if other health insurance options are unavailable; or (2) pay a reasonable amount each month for the medical support of the child if coverage is not available through the corporation. The act provides that $38 is a reasonable amount for monthly medical support but authorizes courts to establish a different amount when appropriate.

            House Bill 3 amends the Insurance Code to authorize an insurer to offer a children's health benefit plan approved by the commissioner of insurance. An approved children's health benefit plan is not subject to a law that requires coverage of a health care service or benefit, and money received for providing coverage through a children's health benefit plan is not subject to the premium tax.

            House Bill 3 is effective June 2, 1997, except that the provision that allows a nonprofit hospital to satisfy charity care and community benefits requirements through a donation to the Texas Healthy Kids Corporation is effective January 1, 1998.