By Shields, et al. H.B. No. 129
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to medical savings accounts; providing a penalty.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. DEFINITIONS. In this Act:
1-5 (1) "Account" means a medical savings account
1-6 established under this Act.
1-7 (2) "Account administrator" means a person qualified
1-8 to act as an account administrator under Section 3 of this Act.
1-9 (3) "Account holder" means:
1-10 (A) an employee of an employer if the employer
1-11 contributes to a medical savings account on that employee's behalf;
1-12 or
1-13 (B) an individual who makes contributions to a
1-14 medical savings account on the individual's own behalf.
1-15 (4) "Dependent" means:
1-16 (A) the spouse of an account holder;
1-17 (B) a child of an account holder who is:
1-18 (i) under 19 years of age, including a
1-19 newborn child;
1-20 (ii) under 23 years of age and enrolled as
1-21 a full-time student at an accredited institution of higher
1-22 education; or
1-23 (iii) medically certified as mentally or
1-24 physically disabled and who is financially dependent on the account
2-1 holder; or
2-2 (C) any person who must be covered under:
2-3 (i) Section 3D or 3E, Article 3.51-6,
2-4 Insurance Code; or
2-5 (ii) Section 2(L), Chapter 397, Acts of
2-6 the 54th Legislature, Regular Session, 1955 (Article 3.70-2,
2-7 Vernon's Texas Insurance Code).
2-8 (5) "Health plan" means any plan that provides
2-9 benefits for health care services or for medical or surgical
2-10 expenses incurred as a result of accident or sickness including:
2-11 (A) an individual, group, blanket, or franchise
2-12 insurance policy;
2-13 (B) an evidence of coverage issued by a health
2-14 maintenance organization under the Texas Health Maintenance
2-15 Organization Act (Chapter 20A, Vernon's Texas Insurance Code);
2-16 (C) a group hospital service contract issued by
2-17 a group hospital service corporation under Chapter 20, Insurance
2-18 Code; or
2-19 (D) an employer-funded health benefit plan,
2-20 including a self-insured health benefit plan.
2-21 (6) "Person" means an individual, corporation,
2-22 government or governmental subdivision or agency, business trust,
2-23 estate, trust, partnership, association, or any other legal entity.
2-24 (7) "Program" means a medical savings account program
2-25 established under this Act.
2-26 SECTION 2. ACCOUNT AUTHORIZED. (a) An individual may
2-27 establish a medical savings account program for the benefit of the
3-1 individual and the individual's dependents. An employer may
3-2 establish a medical savings account program for the benefit of the
3-3 employer's employees and the employees' dependents.
3-4 (b) A program established under this section must provide
3-5 for:
3-6 (1) the contribution into a medical savings account by
3-7 the account holder or by the employer on behalf of the account
3-8 holder; and
3-9 (2) an account administrator to manage the medical
3-10 savings account.
3-11 (c) The program may provide for a health plan to provide
3-12 coverage for each account holder and the dependents of the account
3-13 holder.
3-14 (d) An employer that establishes a medical savings account
3-15 program and that does not provide a health plan as specified in
3-16 Subsection (c) of this section shall make an annual contribution of
3-17 at least $1,000 for the benefit of each employee who is an account
3-18 holder.
3-19 (e) An employer that offers a program shall inform each
3-20 employee in writing of the federal tax consequences of the
3-21 contributions made by the employer before making a contribution on
3-22 behalf of that employee.
3-23 (f) An employer that provides a health plan as specified in
3-24 Subsection (c) of this section shall make an annual contribution of
3-25 at least $250 to the account of each employee who is an account
3-26 holder.
3-27 (g) An account under this Act must be a separate account
4-1 that is federally insured or administered by a fidelity-bonded
4-2 administrator.
4-3 (h) For purposes of Chapter 61, Labor Code, the term
4-4 "wages," as defined by Section 61.001, Labor Code, includes a
4-5 contribution required to be made by an employer to a medical
4-6 savings account under this section or under an agreement between
4-7 the employer and the employee.
4-8 SECTION 3. ACCOUNT ADMINISTRATOR. (a) The following
4-9 persons may act as an account administrator under this Act:
4-10 (1) a bank, savings and loan association, savings
4-11 bank, or credit union chartered under the laws of this state or the
4-12 United States;
4-13 (2) a trust company authorized to act as a fiduciary;
4-14 (3) an insurance company authorized to do business in
4-15 this state under Chapter 3, Insurance Code, a group hospital
4-16 service corporation authorized to do business in this state under
4-17 Chapter 20, Insurance Code, or a health maintenance organization
4-18 authorized to do business in this state under the Texas Health
4-19 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
4-20 Code);
4-21 (4) a third-party administrator holding a certificate
4-22 of authority issued under Article 21.07-6, Insurance Code;
4-23 (5) a certified public accountant licensed by the
4-24 Texas State Board of Public Accountancy; or
4-25 (6) an employer that:
4-26 (A) operates a self-insured health plan under
4-27 the Employee Retirement Income Security Act of 1974 (29 U.S.C.
5-1 Section 1001 et seq.); or
5-2 (B) participates in the medical savings account
5-3 program established under this Act.
5-4 (b) If the account administrator is not an employer under
5-5 Subsection (a)(6) of this section, the account administrator may
5-6 charge a fee. The amount of the fee may not exceed 10 percent of
5-7 the amount deposited to the account in a year and shall be
5-8 established by an agreement between the account administrator and
5-9 the employer or account holder.
5-10 (c) The account administrator is the fiduciary of the
5-11 account holder.
5-12 SECTION 4. IDENTIFICATION CARDS. (a) The account
5-13 administrator shall issue to the account holder an identification
5-14 card indicating:
5-15 (1) the name of the account holder and any dependent
5-16 of the account holder for whom eligible expenses may be paid under
5-17 the program;
5-18 (2) the name, address, and phone number of the account
5-19 administrator; and
5-20 (3) whether or not the account holder is covered by a
5-21 health plan that is qualified for purposes of Section 9 of this
5-22 Act.
5-23 (b) The account administrator shall issue a duplicate
5-24 identification card to each dependent of an account holder for whom
5-25 eligible expenses may be paid under the program.
5-26 SECTION 5. USE OF ACCOUNT; PENALTY. (a) The account
5-27 administrator shall use money in an account for either or both of
6-1 the following purposes:
6-2 (1) to pay eligible medical expenses of the account
6-3 holder or the account holder's dependents or to reimburse the
6-4 account holder for these expenses; or
6-5 (2) to purchase a health plan that provides benefits
6-6 for the account holder and the account holder's dependents.
6-7 (b) A medical expense is eligible for payment or
6-8 reimbursement under Subsection (a) of this section if:
6-9 (1) it is a medical expense described under Section
6-10 213(d), Internal Revenue Code (26 U.S.C. Section 213(d)); and
6-11 (2) payment or reimbursement for the expense is not
6-12 otherwise provided for under any health plan or other insurance
6-13 policy, including a motor vehicle or workers' compensation
6-14 insurance policy.
6-15 (c) An account holder commits an offense if the account
6-16 holder:
6-17 (1) submits a false, deceptive, or misleading claim to
6-18 an account administrator to obtain reimbursement for an expense
6-19 that the account holder knows is not reimbursable under Subsection
6-20 (a)(1) of this section; or
6-21 (2) knowingly seeks or obtains reimbursement for an
6-22 expense that was not incurred by the account holder.
6-23 (d) An offense under Subsection (c) of this section is a
6-24 Class C misdemeanor.
6-25 (e) When an employer provides a health plan as specified in
6-26 Section 2(c) of this Act, an employee may withdraw up to 90 percent
6-27 of the balance in his or her account for any purpose other than a
7-1 purpose described in Subsection (a) of this section only on the
7-2 last business day of the account administrator's business year.
7-3 SECTION 6. PROMPT PAYMENT OF CLAIMS. (a) Except as
7-4 provided by Subsection (b) of this section, the account
7-5 administrator shall pay a claim that is eligible for payment from
7-6 the account not later than the 30th day after the date the claim is
7-7 submitted to the account administrator.
7-8 (b) The account administrator may request documents
7-9 necessary to verify whether a claim is eligible for payment from
7-10 the account. If the account administrator makes a request under
7-11 this subsection, the account administrator shall pay a claim that
7-12 is eligible for payment from the account not later than the 30th
7-13 day after the date the documents are received by the account
7-14 administrator.
7-15 SECTION 7. EMPLOYER ADVANCES. (a) If, in any month, an
7-16 account holder or a dependent of an account holder incurs a medical
7-17 expense that is eligible for payment or reimbursement under Section
7-18 5(a) of this Act from an account established by an employer and
7-19 that exceeds the amount of money in the account, the employer may
7-20 advance to the employee the amount necessary to cover the expenses.
7-21 (b) An advance under this section shall be made free of
7-22 interest.
7-23 (c) An employee on whose behalf an advance is made under
7-24 this section is liable to the employer for the amount of the
7-25 advance, and the employer who made the advance may set off the
7-26 amount of the advance against future contributions to the account.
7-27 SECTION 8. MANDATED BENEFITS LAWS INAPPLICABLE TO HEALTH
8-1 PLAN FOR EMPLOYER PROGRAM. (a) Except as provided by Subsection
8-2 (b) of this section, a health plan, including a health benefit plan
8-3 that is qualified for purposes of Section 9 of this Act, is not
8-4 subject to a law that requires coverage or the offer of coverage of
8-5 a specific health care service or benefit if the health plan is:
8-6 (1) purchased by an employer under Section 2(c) of
8-7 this Act in conjunction with the establishment of a medical savings
8-8 account program for the benefit of the employer's employees and the
8-9 employees' dependents; or
8-10 (2) purchased under Section 5(a)(2) of this Act by the
8-11 account administrator of a medical savings account program
8-12 established by an employer for the benefit of the employer's
8-13 employees and the employees' dependents.
8-14 (b) A health plan described by Subsection (a) of this
8-15 section is subject to Chapter 26, Insurance Code, to the extent
8-16 that chapter would otherwise be applicable to the plan.
8-17 SECTION 9. QUALIFIED HEALTH PLAN; ACCESS TO SERVICES. (a)
8-18 A hospital or emergency clinic may not refuse to provide services
8-19 to an individual on the basis of that individual's ability to pay
8-20 for the services if the individual presents an identification card
8-21 issued under Section 4 of this Act that indicates the person is
8-22 covered by a qualified health plan.
8-23 (b) A hospital may delay providing services to an individual
8-24 for a period of not longer than 24 hours to contact the account
8-25 administrator to confirm the individual's participation in a
8-26 program. The hospital may not delay the provision of services
8-27 needed on an emergency basis under this subsection.
9-1 (c) The Texas Department of Health may suspend or revoke, in
9-2 the manner provided by Section 241.053, Health and Safety Code, the
9-3 license of a hospital that fails to comply with this section.
9-4 (d) A health plan is qualified for purposes of this section
9-5 if the plan is subject to an annual deductible of not more than
9-6 $2,000 for each individual covered under the plan.
9-7 SECTION 10. DEATH OF ACCOUNT HOLDER. (a) On the death of
9-8 the account holder, the account administrator shall transfer the
9-9 account to a dependent of the account holder named as a successor
9-10 account holder by the account holder in the agreement establishing
9-11 the account. If the agreement does not designate a successor
9-12 account holder, the account administrator shall pay to the estate
9-13 of the deceased account holder any money in the account, including
9-14 any interest on the account.
9-15 (b) If an account is transferred to a successor account
9-16 holder under this section, the account administrator shall continue
9-17 to administer the account for the benefit of the dependents of the
9-18 original account holder.
9-19 (c) A successor account holder may contribute to the
9-20 account. If an account established by an employer is transferred
9-21 to a successor account holder, the employer's obligation to
9-22 contribute to the account is terminated.
9-23 (d) An account administrator shall make the transfer or
9-24 payment required by Subsection (a) of this section not later than
9-25 the 30th day after the date on which the account administrator
9-26 receives proof of the death of the account holder.
9-27 SECTION 11. TRANSFER OF ACCOUNT. (a) On the request of the
10-1 account holder, the account administrator shall pay any money in
10-2 the account, including interest earned on the account, to another
10-3 account established under this Act for the benefit of the account
10-4 holder.
10-5 (b) If the account holder ceases to be employed by an
10-6 employer who has established a program under this Act, the
10-7 administrator shall, not later than the 60th day after the account
10-8 holder's last day of employment, pay any money in the account,
10-9 including interest earned on the account:
10-10 (1) to the account holder; or
10-11 (2) at the option of the account holder, to the credit
10-12 of another account established under this Act for the benefit of
10-13 the account holder.
10-14 (c) The account administrator may not pay money in the
10-15 account to the credit of an account established by an employer of
10-16 an account holder unless the employer agrees to the transfer.
10-17 (d) The account administrator of an account established by
10-18 an employer may retain and continue to administer the account for
10-19 the benefit of an account holder whose employment with the employer
10-20 has terminated if, not later than the 30th day after the account
10-21 holder's last day of employment, the account holder requests that
10-22 the account administrator do so.
10-23 SECTION 12. APPLICABILITY AND SCOPE. This Act applies only
10-24 to any medical savings account program which is established on or
10-25 after September 1, 1995.
10-26 SECTION 13. EMERGENCY. The importance of this legislation
10-27 and the crowded condition of the calendars in both houses create an
11-1 emergency and an imperative public necessity that the
11-2 constitutional rule requiring bills to be read on three several
11-3 days in each house be suspended, and this rule is hereby suspended,
11-4 and that this Act take effect and be in force from and after its
11-5 passage, and it is so enacted.