By: Denton H.B. No. 2466
73R1713 DLF-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to cancellation or nonrenewal of health insurance
1-3 coverage.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article 3.51-6C(b), Insurance Code, is amended to
1-6 read as follows:
1-7 (b) If an employer in this state agrees to renegotiate a
1-8 health insurance contract through which coverage is provided to his
1-9 employees, subject to Subsection (c) of this article, any changes
1-10 in the renegotiated contract may not operate <solely> to terminate
1-11 eligibility as to any member of the group with coverage under the
1-12 contract before the renegotiation for a sickness or injury for
1-13 which services were being provided or benefits were being paid
1-14 before renegotiation.
1-15 SECTION 2. Article 3.51-6D, Insurance Code, is amended to
1-16 read as follows:
1-17 Art. 3.51-6D. CANCELLATION OR NONRENEWAL FOR SICKNESS OR
1-18 INJURY PROHIBITED <FOR HIV AND AIDS>. (a) Except as provided by
1-19 Subsection (b) of this article, an insurer that delivers or issues
1-20 for delivery a policy or contract of group health insurance in this
1-21 state, including a group hospital service corporation under Chapter
1-22 20 of this code, may not cancel or refuse to renew <during the term
1-23 of the policy or contract> the coverage of a person covered by that
1-24 policy or contract because that person has been injured or has been
2-1 diagnosed as having or has been or is being treated for a sickness
2-2 or other medical condition <HIV or AIDS as defined by Section
2-3 81.101, Health and Safety Code>.
2-4 (b) An insurer may cancel or refuse to renew coverage under
2-5 a policy or contract covered by Subsection (a) of this article if
2-6 there was fraud or misrepresentation in obtaining the coverage by
2-7 not disclosing an injury or a diagnosis of a sickness or other
2-8 medical condition <AIDS and HIV-related conditions>.
2-9 SECTION 3. Section 3A, Chapter 397, Acts of the 54th
2-10 Legislature, Regular Session, 1955 (Article 3.70-3A, Vernon's Texas
2-11 Insurance Code), is amended to read as follows:
2-12 Sec. 3A. CANCELLATION OR NONRENEWAL FOR SICKNESS OR INJURY
2-13 PROHIBITED <FOR HIV AND AIDS>. (a) Except as provided by
2-14 Subsection (b) of this section, an insurer that delivers or issues
2-15 for delivery an accident and sickness insurance policy in this
2-16 state may not cancel or refuse to renew that policy <during its
2-17 term> because the insured has been injured or has been diagnosed as
2-18 having or has been or is being treated for a sickness or other
2-19 medical condition <HIV or AIDS as defined by Section 81.101, Health
2-20 and Safety Code>.
2-21 (b) An insurer may cancel or refuse to renew an insurance
2-22 policy covered by Subsection (a) of this section for fraud or
2-23 misrepresentation in obtaining coverage by not disclosing an injury
2-24 or a diagnosis of a sickness or other medical condition <AIDS or
2-25 HIV-related conditions> or for failure to pay premiums when due.
2-26 SECTION 4. The Texas Health Maintenance Organization Act
2-27 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
3-1 Section 14A to read as follows:
3-2 Sec. 14A. CANCELLATION OR NONRENEWAL FOR SICKNESS OR INJURY
3-3 PROHIBITED. (a) A health maintenance organization may not cancel
3-4 or refuse to renew coverage of an individual under an evidence of
3-5 coverage or a group contract because that individual has been
3-6 injured or has been diagnosed as having or has been or is being
3-7 treated for a sickness or other medical condition.
3-8 (b) A health maintenance organization may cancel or refuse
3-9 to renew coverage under an evidence of coverage or a group contract
3-10 if there was fraud or misrepresentation in obtaining the coverage
3-11 by not disclosing an injury or a diagnosis of a sickness or other
3-12 medical condition.
3-13 SECTION 5. Subchapter E, Chapter 21, Insurance Code, is
3-14 amended by adding Article 21.49-2E to read as follows:
3-15 Art. 21.49-2E. CANCELLATION OR NONRENEWAL OF HEALTH COVERAGE
3-16 ON TRANSFER OF BUSINESS. (a) In this article, "health insurer"
3-17 means:
3-18 (1) any insurer writing individual, group, blanket, or
3-19 franchise insurance policies, insurance agreements, or group
3-20 hospital service contracts that provide benefits for medical or
3-21 surgical expenses incurred as a result of an accident or sickness;
3-22 or
3-23 (2) a health maintenance organization established
3-24 under the Texas Health Maintenance Organization Act (Chapter 20A,
3-25 Vernon's Texas Insurance Code).
3-26 (b) A health insurer who obtains any part of the business of
3-27 another health insurer may not cancel or refuse to renew the health
4-1 coverage of any individual solely because of the transfer of the
4-2 business to that insurer.
4-3 SECTION 6. This Act takes effect September 1, 1993, and
4-4 applies only to an insurance policy or agreement, group hospital
4-5 service contract, or evidence of coverage or group contract issued
4-6 by a health maintenance organization that is delivered, issued for
4-7 delivery, or renewed on or after January 1, 1994. A policy,
4-8 agreement, contract, or evidence of coverage or group contract that
4-9 is delivered, issued for delivery, or renewed before January 1,
4-10 1994, is governed by the law as it existed immediately before the
4-11 effective date of this Act, and that law is continued in effect for
4-12 that purpose.
4-13 SECTION 7. The importance of this legislation and the
4-14 crowded condition of the calendars in both houses create an
4-15 emergency and an imperative public necessity that the
4-16 constitutional rule requiring bills to be read on three several
4-17 days in each house be suspended, and this rule is hereby suspended.