Amend CSHB 3 as follows:
      (1)  On page 22, following line 27, add a new SECTION 4 to
the bill to read as follows:
      SECTION 4.  The Insurance Code is amended by adding Chapter
27 to read as follows:
           CHAPTER 27. HEALTH BENEFIT PLANS FOR CHILDREN
      Art. 27.01.  DEFINITION.  In this chapter, "health benefit
plan" means a health benefit plan described by Article 27.02 of
this code.
      Art. 27.02.  SCOPE OF CHAPTER.  This chapter applies to a
health benefit plan that:
            (1)  provides benefits for medical or surgical expenses
incurred as a result of a health condition, accident, or sickness,
including:
                  (A)  an individual, group, blanket, or franchise
insurance policy or insurance agreement, a group hospital service
contract, or an individual or group evidence of coverage that is
offered by:
                        (i)  an insurance company;
                        (ii)  a group hospital service corporation
operating under Chapter 20 of this code;
                        (iii)  a fraternal benefit society
operating under Chapter 10 of this code;
                        (iv)  a stipulated premium insurance
company operating under Chapter 22 of this code; or
                        (v)  a health maintenance organization
operating under the Texas Health Maintenance Organization Act
(Chapter 20A, Vernon's Texas Insurance Code); or
                  (B)  to the extent permitted by the Employee
Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et
seq.), a health benefit plan that is offered by:
                        (i)  a multiple employer welfare
arrangement as defined by Section 3, Employee Retirement Income
Security Act of 1974 (29 U.S.C. Section 1002) or another analogous
benefit arrangement; or
                        (ii)  any other entity not licensed under
this code or another insurance law of this state that contracts
directly for health care services on a risk sharing basis,
including an entity that contracts for health care services on a
capitation basis; or
            (2)  is offered by an approved nonprofit health
corporation that is certified under Section 5.01(a), Medical
Practice Act (Article 4495b, Vernon's Texas Civil Statutes), and
that holds a certificate of authority  issued by the commissioner
under Article 21.52F of this code.
      Art. 27.03.  CHILDREN'S HEALTH BENEFIT PLAN.  (a)  The issuer
of a health benefit plan may offer a children's health benefit plan
in accordance with this chapter.  The health benefit plan may
provide coverage only to children younger than 18 years of age.
      (b)  An issuer of a health benefit plan may not offer a
children's health benefit plan under this chapter unless the plan's
structure and the benefits offered under the plan have been
approved by the commissioner.
      Art. 27.04.  MANDATED BENEFIT PROVISIONS INAPPLICABLE.  A
children's health benefit plan is not subject to a law that
requires coverage or the offer of coverage of a health care service
or benefit.
      Art. 27.05.  EXEMPTION FROM PREMIUM TAX.  The issuer of a
children's health benefit plan is not subject to the premium tax
imposed by Article 4.11 of this code or the tax on revenues imposed
under Section 33, Texas Health Maintenance Organization Act
(Section 20A.33, Vernon's Texas Insurance Code), with respect to
money received for coverage provided under that plan.
      Art. 27.06.  RULES.  The commissioner may adopt rules to
implement this chapter.
      (2)  In the transition material of the bill, add a section,
appropriately numbered, to read as follows:
      SECTION ____.  The issuer of a health benefit plan may not
offer a children's health benefit plan under Chapter 27, Insurance
Code, as added by this Act, before January 1, 1998.
      (3)  Renumber sections of the bill appropriately.