Enrolled Bill Summary

Senate Bill 805	Senate Author:  Averitt
Effective:  9-1-05	House Sponsor:  Taylor

            Senate Bill 805 amends the Insurance Code to clarify that a health benefit plan issuer may voluntarily participate in one or more health group cooperatives of its choice and to specify that a cooperative may consist only of small or large employers but not both. The bill provides that a cooperative composed only of small employers that -- at the time the cooperative is initially formed and no later than December 31, 2005 -- has not elected to place certain restrictions on its membership is treated as a single small employer for the purpose of premium rates and as a single large employer for all other purposes and that a cooperative composed only of large employers that does not elect such restricted membership is treated as a single large employer.   

            Senate Bill 805 removes a provision that prohibits a reinsured health benefit plan issuer from writing policies for a small employer health benefit plan on a guaranteed issue basis during a period in which assessments on behalf of the Texas Health Reinsurance System, or expected losses of the system, exceed a specified limit and instead prohibits the issuer from transferring to the system the additional risk of the policies during such a period. The bill temporarily increases from 5 to 10 percent the maximum assessment amount of total premiums that a reinsured health benefit plan issuer may earn in the preceding calendar year from a small employer health benefit plan and also temporarily increases from 5 to 10 percent the ratio between the assessment amount payable for the preceding calendar year and the total applicable reinsurance premiums earned in that year, at or above which certain limitations are imposed on the issuer. The temporary increases expire September 1, 2007.