By Sibley                                             S.B. No. 1665
       74R9306 DLF-F
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to small employer health benefit plans.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Article 26.06, Insurance Code, is amended by
    1-5  amending Subsection (b) and adding Subsection (d) to read as
    1-6  follows:
    1-7        (b)  This <Except as provided by Subsection (a) of this
    1-8  article, this> chapter does not apply to an individual health
    1-9  insurance policy that is underwritten individually.
   1-10        (d)  This chapter may not be used as a standard for, or for
   1-11  purposes of policy approval of, a policy that is not subject to
   1-12  this chapter.
   1-13        SECTION 2.  (a)  Subsection (b), Article 26.21, Insurance
   1-14  Code, is amended to read as follows:
   1-15        (b)  Coverage under a small employer health benefit plan is
   1-16  not available to a small employer unless the small employer pays at
   1-17  least 50 <75> percent of the insurance premium for its eligible
   1-18  employees who elect to be covered by at least one of the small
   1-19  employer health benefit plans selected by the small employer.
   1-20  Coverage is available under a small employer health benefit plan if
   1-21  at least 90 percent of a small employer's eligible employees elect
   1-22  to be covered.  A small employer is not required to pay any amount
   1-23  with respect to an employee who elects not to be covered.  The
   1-24  small employer may elect to pay the premium cost for additional
    2-1  coverage.  This chapter does not require a small employer to
    2-2  purchase health insurance coverage for the employer's employees.
    2-3        (b)  The heading of Article 26.21, Insurance Code, is amended
    2-4  to read as follows:
    2-5        Art. 26.21.  SMALL EMPLOYER HEALTH BENEFIT PLANS;
    2-6  CONTRIBUTION AND PARTICIPATION <EMPLOYER ELECTION>.
    2-7        SECTION 3.  Subsections (a) and (c), Article 26.33, Insurance
    2-8  Code, are amended to read as follows:
    2-9        (a)  The percentage increase in the premium rate charged to a
   2-10  small employer for a new rating period may not exceed the sum of:
   2-11              (1)  the percentage change in the new business premium
   2-12  rate measured from the first day of the prior rating period to the
   2-13  first day of the new rating period;
   2-14              (2)  any adjustment, not to exceed 20 <15> percent
   2-15  annually and adjusted pro rata for rating periods of less than one
   2-16  year, due to the claim experience, health status, or duration of
   2-17  coverage of the employees or dependents of the small employer as
   2-18  determined from the small employer carrier's rate manual for the
   2-19  class of business; and
   2-20              (3)  any adjustment due to change in coverage or change
   2-21  in the case characteristics of the small employer as determined
   2-22  from the small employer carrier's rate manual for the class of
   2-23  business.
   2-24        (c)  A health carrier may use the industry classification to
   2-25  which a small employer belongs as a case characteristic in
   2-26  establishing premium rates, but the highest rate factor associated
   2-27  with any industry classification may not exceed the lowest rate
    3-1  factor associated with any industry classification by more than 20
    3-2  <15> percent, unless actuarially justified based on a loss claims
    3-3  ratio.
    3-4        SECTION 4.  Article 26.42, Insurance Code, is amended by
    3-5  amending Subsection (a) and adding Subsection (e) to read as
    3-6  follows:
    3-7        (a)  A small employer carrier may <shall> offer the
    3-8  <following> three health benefit plans described by this subsection
    3-9  by making an election and complying with Subsection (e) of this
   3-10  article.  The three health benefit plans are:
   3-11              (1)  the preventive and primary care benefit plan;
   3-12              (2)  the in-hospital benefit plan; and
   3-13              (3)  the standard health benefit plan.
   3-14        (e)  A small employer carrier that elects to offer a health
   3-15  benefit plan under Subsection (a) of this article shall attach to
   3-16  the policy an election form provided by the carrier and signed by
   3-17  the employer.
   3-18        SECTION 5.  Subsection (a), Article 26.21, Insurance Code, is
   3-19  repealed.
   3-20        SECTION 6.  This Act takes effect September 1, 1995.
   3-21        SECTION 7.  This Act applies only to a small employer health
   3-22  benefit plan under Chapter 26, Insurance Code, delivered, issued
   3-23  for delivery, or renewed on or after the effective date of this
   3-24  Act.  A small employer health benefit plan delivered, issued for
   3-25  delivery, or renewed before the effective date of this Act is
   3-26  governed by the law as it existed immediately before the effective
   3-27  date, and that law is continued in effect for that purpose.
    4-1        SECTION 8.  The importance of this legislation and the
    4-2  crowded condition of the calendars in both houses create an
    4-3  emergency and an imperative public necessity that the
    4-4  constitutional rule requiring bills to be read on three several
    4-5  days in each house be suspended, and this rule is hereby suspended.