RS H.B. 2795 75(R) BILL ANALYSIS INSURANCE H.B. 2795 By: Averitt 4-21-97 Committee Report (Unamended) BACKGROUND The Legislature created the Texas Health Benefits Purchasing Cooperative in 1993 to help small employers obtain health insurance coverage. The cooperative, which operates under the business name Texas Insurance Purchasing Alliance, began statewide service in 1995 and now serves over 1,000 Texas employers. The cooperative is governed by a 6-member board appointed by the Governor. PURPOSE This bill seeks to make minor changes in the statute creating the cooperative in order to streamline operations. 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. Amends Article 26.11(4), Insurance Code, as follows: (4) Adds non-profit corporation to definition of Texas Cooperative. SECTION 2. Amends 26.13(a), Insurance Code, to read as follows: Art. 26.13 TEXAS HEALTH BENEFITS PURCHASING COOPERATIVE (a) Changes "organization" to "corporation" in defining the Texas Health Benefits Purchasing Cooperative. SECTION 3. Amends Article 26.13(b), Insurance Code, as follows: (b) Deletes language that makes executive director of Texas Department of Commerce a nonvoting ex officio member of the Texas Cooperative. SECTION 4. Amends Article 26.13(h), Insurance Code, as follows: (h) Amends section to make Texas cooperative as well as members of the cooperative not liable for an act of good faith in connection with the duties of the Texas Cooperative, and for an action of a small employer insurance carrier or a person who provides health care services under a health benefit plan. SECTION 5. Amends Article 26.15(a), Insurance Code, by adding paragraph 10 as follows: Art. 26.15. POWERS AND DUTIES OF TEXAS HEALTH BENEFITS PURCHASING COOPERATIVE AND PRIVATE PURCHASING COOPERATIVE (a) (10) A cooperative may offer ancillary products and services to its members as are customarily offered in conjunction with health benefit plans. SECTION 6. Amends Article 26.15(d), Insurance Code, to read as follows: (d) A cooperative shall comply with federal laws applicable to cooperatives and health benefit plans issued by cooperatives to the extent required by state law or rules adopted by the commissioner. A cooperative will comply with state laws applicable to cooperatives and health benefit plans issued through cooperatives. SECTION 7. Amends Article 26.16, Insurance Code, to read as follows: (b) A cooperative is considered an employer solely for the purposes of benefit elections under this code. (c) Reletters subsection (c). (d) Adds subsection saying that a licensed agent used and paid by the cooperative does not need to be appointed by each small employer carrier participating in the cooperative in order to market the products and services sponsored by the cooperative. A licensed agent may not market a non-sponsored product or service of a participating small employer carrier without being appointed by the small employer carrier. SECTION 8. Act takes effect on September 1, 1997. SECTION 9. Emergency Clause