BILL ANALYSIS



C.S.H.B. 129
By: Shields
04-10-95
Committee Report (Substituted)


BACKGROUND

     A medical savings account (MSA) is an account into which an
employer or individual contributes a limited amount to pay for
routine medical care.  MSA's would allow employers, the self-employed and individuals to purchase a high-deductible policy and
deposit the premium into a savings account to accumulate over time,
funding preventive care and future health care expenses.

PURPOSE

     As proposed, House Bill 129 would establish an additional
health care option for employers of all sizes by creating medical
savings accounts on behalf of employees.

RULEMAKING AUTHORITY

     It is the committee's opinion that this bill does not
expressly grant any additional rulemaking authority to a state
officer, department, agency or institution.

SECTION BY SECTION ANALYSIS


SECTION 1. DEFINITIONS

Defines the following terms:

     1)    Account                 5)   Health plan
     2)    Account Administrator        6)   Person
     3)    Account Holder               7)   Program
     4)    Dependent

SECTION 2. AUTHORIZED ACCOUNTS

Provides for the establishment of medical savings accounts for the
benefit of individuals and the individual's dependents. 
Establishes program requirements, coverages, an annual employer
contributions, and requires employers to inform employees of any
federal tax consequences.

SECTION 3. ACCOUNT ADMINISTRATOR

Defines who may act as an account administrator under this Act and
allows for a fee to be charged if the employer is not the account
administrator.  The fee may not exceed 10% of the amount deposited
into an account in a year.

SECTION 4. IDENTIFICATION CARDS

The account administrator shall issue identification cards to
account holders containing the following information: name of
account holder and any dependents of the account holder for whom
eligible expenses may be paid.  Identification cards shall contain
the name, address, and phone number of the account administrator.
Identifies if an account holder is covered by a health plan that is
qualified under Section 9 of this Act.  Provides for a duplicate
identification card to be issued to each dependent of an account
holder for whom eligible expenses may be paid.


SECTION 5. USE OF ACCOUNT; PENALTY

Money in an account shall be used for the following purposes: to
pay eligible medical expenses, reimbursement for account holder
expenses, or to pay for an eligible health plan.  Provides for a
Class C misdemeanor if an account holder submits false, deceptive
or misleading claims; or knowingly seeks or obtains reimbursement
for an expense not incurred by the account holder.

SECTION 6. PROMPT PAYMENT OF CLAIMS

Provides for the prompt payment of a claim from the account not
later than the 30th day after the date the claim is submitted to
the account administrator.  The account administrator may request
documents necessary to verify whether a claim is eligible for
payment from the account.

SECTION 7. EMPLOYER ADVANCES

Provides for employer advances if the amount of money in the
holder's account is insufficient to pay for medical expenses
incurred by the account holder.  An advance shall be made interest
free.  An employee on whose behalf an advance is made is liable to
the employer for the amount of the advance.  An employer may off
set the amount of the advance against future contributions to the
account.

SECTION 8. MANDATED BENEFITS LAWS INAPPLICABLE TO HEALTH PLANS
                    FOR EMPLOYER PROGRAM

A health plan, including a health benefit plan, that is qualified
under Section 9 of this Act is not subject to a law that requires
coverage or offer of coverage if purchased by an employer under
Section 2(c) or Section 5 (a)(2) of this Act.  A health plan
described by Subsection (a) of this section is subject to Chapter
26, Insurance Code.

SECTION 9. QUALIFIED HEALTH PLAN; ACCESS TO SERVICES

A hospital or emergency clinic may not refuse to provide services
on the basis of that individual's ability to pay if the individual
presents an identification card issued under Section 4 of this Act. 
A hospital may delay providing services for a period not longer
than 24 hours to contact the account administrator to confirm the
individual's participation in a program.  A health plan is subject
to an annual deductible of not more than $2,000 for each individual
covered under the plan.

SECTION 10.    DEATH OF ACCOUNT HOLDER

On the death of an account holder, the account shall transfer to a
dependent of the account holder named as a successor by the account
holder.  If a successor is not named, the account administrator
shall pay the estate of the deceased account holder any money in
the account, including any interest.  If an account is transferred,
the account administrator shall continue to administer the account
for the benefit of the dependent of the account holder.  A
successor account holder may contribute to the account.


SECTION 11.    TRANSFER OF ACCOUNT

On request of the account holder, the account administrator shall
pay any money, including interest, to another account established
under this Act.  Upon termination of employment, the account
administrator shall, not later than the 60th day after the account
holder's last day of employment, pay any money in the account to
the account holder or credit another account established under this
Act.


SECTION 12.    Emergency Clause and Effective Date.



COMPARISON OF ORIGINAL TO SUBSTITUTE

     The substitute to H.B. 129 supplements the filed bill by
allowing for the issuing of medical savings account identification
cards under Section 4 the substitute.  The substitute also provides
for the authorization of who may use the medical savings account
and adds a penalty for the submission of false, deceptive or
misleading claims; or if the account holder knowingly seeks or
obtains reimbursement for an expense not incurred. 

     As substituted, H.B. 129 provides for the prompt payment of a
claim from the account not later than the 30th day after the date
the claim is submitted to the account administrator.  A health plan
established under the substitute would be subject to Chapter 26,
Insurance Code, the Small Employer Health Availability Act.  The
substitute prevents a hospital or emergency clinic from refusing to
provide services on the basis of an individual's ability to pay if
the individual presents an identification card issued under Section
4 of this Act.  The substitute allows for the transfer of an
medical savings account.

SUMMARY OF COMMITTEE ACTION

     In accordance with House Rules, H.B., 129 was heard in a
public hearing on April 5, 1995.  The Chair laid out H.B. 129 and
recognized Representative Shields who offered a substitute to H.B.
129 and explained the difference between the substitute to H.B. 129
and the filed bill.  The Chair recognized the following persons to
testify in support of H.B. 129:
Dorothy Thorson, Golden Rule; Janet A. Stokes, Texas Association of
Health Underwriters.  The Chair recognized the following person to
testify neutrally on H.B. 129:  Rhonda Myron, Texas Department of
Insurance.  The Chair left H.B. 129 pending before the Committee.

     The House Committee on Insurance met in a formal meeting on
April 10, 1995 on the House Floor. The Chair laid out H.B. 129 as
pending business and recognized Representative Shields who re-offered the substitute to H.B. 129.  The Chair recognized
Representative De La Garza who moved the Committee adopt the
substitute to H.B. 129.  The Chair heard no objections and the
substitute to H.B. 129 was adopted.

     The Chair recognized Representative De La Garza who moved the
Committee report H.B. 129 as substituted to the full House with the
recommendation that it do pass and be printed. Representative
Driver seconded the motion and the motion prevailed by the
following vote:
AYES (7); NAYES (0); ABSENT (2); PNV (0).