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).