By: C. Harris S.B. No. 101
73R1531 DLF-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to health insurance policies, policy applications, and
1-3 claim forms.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter F, Chapter 3, Insurance Code, is
1-6 amended by adding Article 3.64 to read as follows:
1-7 Art. 3.64. HEALTH INSURANCE POLICIES, POLICY APPLICATIONS,
1-8 AND CLAIM FORMS
1-9 Sec. 1. DEFINITIONS. In this article:
1-10 (1) "Authorized person" means any person who:
1-11 (A) is an authorized agent of an insurer for the
1-12 solicitation of, negotiation for, procurement of, or collection of
1-13 premiums for a health insurance policy; or
1-14 (B) as an employee of an insurer, advises
1-15 individuals about a health insurance application form or advises
1-16 individuals who are covered under a health insurance policy about a
1-17 health insurance policy provision or a health insurance claim form.
1-18 (2) "Health insurance application form" means the
1-19 first form signed and submitted to an insurer by an applicant for
1-20 coverage under a health insurance policy. The term does not
1-21 include supplemental forms submitted by an applicant at the request
1-22 of the insurer after the first signed form is submitted by the
1-23 applicant.
1-24 (3) "Health insurance certificate" means a certificate
2-1 issued to an individual evidencing that the individual is insured
2-2 under a group health insurance policy.
2-3 (4) "Health insurance claim form" means a claim form
2-4 to be used to claim a benefit payable under a health insurance
2-5 policy.
2-6 (5) "Health insurance policy" means an individual,
2-7 group, blanket, or franchise insurance policy, insurance agreement,
2-8 or group hospital service contract that provides benefits for
2-9 medical or surgical expenses incurred as a result of an accident or
2-10 sickness.
2-11 Sec. 2. PLAIN LANGUAGE REQUIREMENT. (a) An insurer may not
2-12 issue a health insurance certificate or policy or an endorsement to
2-13 a health insurance certificate or policy unless it is approved by
2-14 the board.
2-15 (b) The board may not approve a health insurance certificate
2-16 or policy or an endorsement to a health insurance certificate or
2-17 policy unless it is in plain language.
2-18 (c) The board may not approve a health insurance certificate
2-19 or policy unless each provision relating to renewal of coverage,
2-20 conditions of coverage, or per occurrence or aggregate dollar
2-21 limitations on coverage are clearly explained in plain language.
2-22 The board may approve the certificate or policy only if each of
2-23 those provisions is written in plain language, regardless of
2-24 whether the certificate or policy, as a whole, is written in plain
2-25 language.
2-26 (d) This section applies to a policy provision required by
2-27 law unless the specific language to be used is mandated by federal
3-1 law or state statute.
3-2 Sec. 3. HEALTH INSURANCE APPLICATION FORM. (a) An insurer
3-3 may not use a health insurance application form unless it is
3-4 approved by the board.
3-5 (b) The board may not approve an insurance application form
3-6 unless each provision about renewal of coverage or a policy benefit
3-7 is clearly explained in plain language on the form.
3-8 Sec. 4. PLAIN LANGUAGE. For purposes of this article, a
3-9 health insurance certificate or policy, an endorsement to or a
3-10 provision of a health insurance certificate or policy, or an
3-11 explanation of a health insurance policy provision is written in
3-12 plain language if:
3-13 (1) it achieves the minimum score established by the
3-14 commissioner on the Flesch reading ease test or an equivalent test
3-15 selected by the commissioner; or
3-16 (2) at the option of the commissioner, it conforms to
3-17 the requirements of a National Association of Insurance
3-18 Commissioners model act relating to plain language.
3-19 Sec. 5. UNIFORM HEALTH INSURANCE CLAIM FORMS. (a) The
3-20 board by rule shall adopt a uniform health insurance claim form to
3-21 be used to claim a benefit payable under a health insurance policy.
3-22 (b) An insurer may not require a person to submit a claim
3-23 for a benefit payable under a health insurance policy on a claim
3-24 form other than the uniform health insurance claim form.
3-25 Sec. 6. REPRESENTATIONS OF AUTHORIZED PERSON. (a) If an
3-26 authorized person makes a representation to a person covered under
3-27 a health insurance policy with respect to a health insurance
4-1 application form, a health insurance policy provision, or a health
4-2 insurance claim form, the insurer shall honor the representation at
4-3 the request of the covered person.
4-4 (b) A person who is covered under a health insurance policy
4-5 may bring an action to enjoin an insurer to comply with Subsection
4-6 (a) of this section. The court may award attorney's fees and costs
4-7 to a claimant who prevails in an action against an insurer under
4-8 this subsection.
4-9 (c) This section does not apply to a representation that
4-10 contradicts law, except it does apply to a representation
4-11 indicating that the coverage provided under the policy is greater
4-12 than that actually provided, regardless of whether the coverage is
4-13 mandated or limited by law.
4-14 (d) A provision of a health insurance policy, certificate,
4-15 endorsement, or application form is void if it:
4-16 (1) negates a covered person's rights under this
4-17 section; or
4-18 (2) states that representations were not made in
4-19 connection with the policy, certificate, endorsement, or form, if
4-20 an authorized person made such a representation.
4-21 Sec. 7. RULES. The board shall adopt rules, including
4-22 procedural rules, governing approval of health insurance
4-23 certificates and policies, endorsements to health insurance
4-24 certificates and policies, and health insurance application forms.
4-25 SECTION 2. (a) This Act takes effect September 1, 1993.
4-26 (b) This Act applies only to a health insurance certificate
4-27 or policy, or an endorsement to a health insurance certificate or
5-1 policy, that is delivered, issued for delivery, or renewed on or
5-2 after January 1, 1994. A policy, certificate, or endorsement that
5-3 is delivered, issued for delivery, or renewed before January 1,
5-4 1994, is governed by the law as it existed immediately before the
5-5 effective date of this Act, and that law is continued in effect for
5-6 that purpose.
5-7 (c) This Act applies only to a health insurance application
5-8 form used by an insurer on or after January 1, 1994. A health
5-9 insurance application form used by an insurer before January 1,
5-10 1994, is governed by the law as it existed immediately before the
5-11 effective date of this Act, and that law is continued in effect for
5-12 that purpose.
5-13 (d) Section 5(b), Article 3.64, Insurance Code, as added by
5-14 this Act, applies only to a form used to claim a benefit under a
5-15 health insurance policy on or after January 1, 1994. The use of a
5-16 form to claim a benefit under a health insurance policy before
5-17 January 1, 1994, is governed by the law as it existed immediately
5-18 before the effective date of this Act, and that law is continued in
5-19 effect for that purpose.
5-20 (e) This Act applies only to a representation made by an
5-21 authorized person, as that term is defined by Article 3.64,
5-22 Insurance Code, as added by this Act, made on or after the
5-23 effective date of this Act.
5-24 SECTION 3. The importance of this legislation and the
5-25 crowded condition of the calendars in both houses create an
5-26 emergency and an imperative public necessity that the
5-27 constitutional rule requiring bills to be read on three several
6-1 days in each house be suspended, and this rule is hereby suspended.