1-1 AN ACT
1-2 relating to establishing the Texas Healthy Kids Corporation and
1-3 other health benefit coverage to increase access to health care for
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Subtitle E, Title 2, Health and Safety Code, is
1-7 amended by adding Chapter 109 to read as follows:
1-8 CHAPTER 109. TEXAS HEALTHY KIDS CORPORATION
1-9 SUBCHAPTER A. GENERAL PROVISIONS
1-10 Sec. 109.001. DEFINITIONS. In this chapter:
1-11 (1) "Board" means the board of directors of the
1-13 (2) "Child" means an individual younger than 18 years
1-14 of age.
1-15 (3) "Corporation" means the Texas Healthy Kids
1-16 Corporation established under this chapter.
1-17 (4) "Eligible coverage provider" means an entity that
1-18 meets the requirements for providing coverage under the program
1-19 established by the corporation under Section 109.061.
1-20 (5) "Executive director" means the executive director
1-21 of the corporation.
1-22 (6) "Program" means the health benefit program
1-23 provided by the corporation under this chapter.
1-24 (7) "Title IV-D agency" means the agency designated to
2-1 serve as the state's Title IV-D agency in accordance with Part D,
2-2 Subchapter IV, Social Security Act (42 U.S.C. Section 651 et seq.).
2-3 Sec. 109.002. TEXAS HEALTHY KIDS FUND. (a) The Texas
2-4 healthy kids fund is a fund outside the state treasury held by the
2-5 Texas Treasury Safekeeping Trust Company. The fund is composed of
2-6 money appropriated to the fund and of money appropriated to or
2-7 deposited in the premium stabilization revolving account
2-8 established under Subchapter E. The comptroller shall transfer to
2-9 the fund money appropriated to the fund from the state treasury.
2-10 (b) The comptroller may invest money in the fund in the same
2-11 manner as the comptroller may invest money in the state treasury.
2-12 (c) The board shall file with the comptroller a verified
2-13 copy of a board resolution that designates the authorized
2-14 representatives of the corporation who have authority to spend
2-15 money in the fund.
2-16 (d) In the first fiscal year for which the fund does not
2-17 receive a direct state appropriation of state money, the
2-18 comptroller, at the request of the board, shall transfer the
2-19 balance of the fund to one or more depositories selected by the
2-20 board as depositories for the corporation. On the date a transfer
2-21 is made under this subsection, the fund is abolished.
2-22 Sec. 109.003. BIENNIAL REPORT. (a) Not later than
2-23 January 1 of each odd-numbered year, the corporation shall submit a
2-24 written report to the governor, the lieutenant governor, the
2-25 speaker of the house of representatives, and the commissioner of
2-27 (b) The report must state the program's status and must
3-1 include a statement of the corporation's financial condition and an
3-2 accounting for the corporation's administrative expenses for the
3-3 two years preceding the date of the report.
3-4 (c) The reporting requirement under this section only
3-5 applies during a period in which:
3-6 (1) the corporation receives state money under a
3-7 direct state appropriation; or
3-8 (2) a person appointed by the governor, other than an
3-9 ex officio member of the board, is serving as a member of the
3-11 Sec. 109.004. IMMUNITY FROM LIABILITY. Chapter 84, Civil
3-12 Practice and Remedies Code, applies to the corporation and an
3-13 employee or volunteer of the corporation.
3-14 (Sections 109.005-109.030 reserved for expansion
3-15 SUBCHAPTER B. CORPORATE STRUCTURE
3-16 Sec. 109.031. TEXAS HEALTHY KIDS CORPORATION; PURPOSE.
3-17 (a) The Texas Healthy Kids Corporation is created and has the
3-18 powers that are necessary and proper to carry out its duties. The
3-19 corporation is a nonprofit corporation and shall comply with the
3-20 Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,
3-21 Vernon's Texas Civil Statutes).
3-22 (b) The primary purpose of the corporation is to provide
3-23 health benefits for primary and preventive health care for
3-25 (c) The corporation is not subject to the franchise tax
3-26 imposed by Chapter 171, Tax Code.
3-27 (d) Subject to this chapter, the board shall take any step
4-1 necessary to maintain an exemption from federal income tax under
4-2 Section 501(a) of the Internal Revenue Code of 1986 (26 U.S.C.
4-3 Section 501(a)) by being listed as an exempt organization under
4-4 Section 501(c)(3) or 501(c)(4) of that code (26 U.S.C. Section
4-5 501(c)(3) or (c)(4)) or another similar law.
4-6 Sec. 109.032. BOARD OF DIRECTORS; PRESIDING OFFICER.
4-7 (a) The corporation shall operate subject to the general
4-8 supervision of a board of directors. The board of directors and
4-9 the presiding officer of the board of directors are selected as
4-10 provided by the articles of incorporation and bylaws of the
4-11 corporation, in accordance with the Texas Non-Profit Corporation
4-12 Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes). If
4-13 required by the bylaws of the corporation, the board of directors
4-14 may also include the following voting ex officio members:
4-15 (1) the commissioner of health and human services or a
4-16 person designated by the commissioner;
4-17 (2) the commissioner of insurance or a person
4-18 designated by the commissioner; and
4-19 (3) the director of the Title IV-D agency, or a person
4-20 designated by the director.
4-21 (b) A member of the board may not serve more than two terms,
4-22 without regard to whether the terms are consecutive.
4-23 (c) A person is not eligible to serve on the board if the
4-24 person or the person's spouse is employed by, represents in any
4-25 capacity, owns, or controls any ownership interest in a business or
4-27 (1) that may obtain a pecuniary or other favorable
5-1 interest in the course of a business activity with the corporation;
5-3 (2) from whom the corporation receives funds.
5-4 (d) A person is not eligible to serve on the board if the
5-5 person is or has been an adverse party in litigation against the
5-6 board or corporation.
5-7 Sec. 109.033. POWERS AND DUTIES OF BOARD; OVERSIGHT OF
5-8 COMMISSIONER OF INSURANCE. (a) Subject to Subsection (d), the
5-9 board is the oversight and governing entity of the corporation and
5-10 has any power necessary and proper to carry out its duties under
5-11 this chapter, including the power to adopt bylaws governing the
5-12 operations of the board and the corporation. The board has
5-13 complete fiscal control over the corporation and is responsible for
5-14 all corporate operations.
5-15 (b) The board may request and accept grants and gifts of
5-16 money, property, or services. Subject to Subsection (c), the
5-17 corporation may use a grant or gift for any purpose of the
5-18 corporation, including paying the corporation's business expenses
5-19 and the salaries or wages of the corporation's employees.
5-20 (c) The corporation may use a donation made as community
5-21 benefits by a hospital or hospital system under Section 171.063(a),
5-22 Tax Code, only to purchase health benefits for children who:
5-23 (1) have a family income of less than 200 percent of
5-24 poverty level according to the poverty index prepared by the
5-25 federal Office of Management and Budget; and
5-26 (2) reside:
5-27 (A) in the case of a hospital, in the county in
6-1 which the hospital is located or a county contiguous to the county;
6-3 (B) in the case of a hospital system, in a
6-4 county in which the hospital system operates or any county
6-5 contiguous to a county in which the hospital system operates.
6-6 (d) The initial board shall submit to the commissioner of
6-7 insurance for approval and may not implement before receiving that
6-9 (1) the corporation's bylaws, plan of operation, and
6-10 any other standards adopted by the board; and
6-11 (2) the health benefit program and health benefit
6-12 plans established by the corporation under Subchapter C.
6-13 Sec. 109.034. EXECUTIVE DIRECTOR. (a) The board shall
6-14 employ an executive director to help the board perform its duties.
6-15 The executive director shall act on behalf of and subject to
6-16 authorization and supervision of the board to carry out the
6-17 purposes of the corporation.
6-18 (b) The corporation shall pay the executive director a
6-19 salary in an amount established by the board.
6-20 (c) The executive director must make and file a surety bond
6-21 in an amount determined by the board for the faithful performance
6-22 of the executive director's duties and the proper safekeeping and
6-23 disbursement of corporate money.
6-24 Sec. 109.035. EMPLOYEES; CONSULTANTS. The executive
6-25 director may employ employees and retain consultants as necessary
6-26 to administer the programs of the corporation.
6-27 Sec. 109.036. PUBLIC INPUT. The board shall develop and
7-1 implement policies that provide the public with a reasonable
7-2 opportunity to appear before the board and to speak on any issue
7-3 related to the corporation or the program.
7-4 Sec. 109.037. OPEN MEETINGS; OPEN RECORDS. The board and
7-5 the corporation are subject to the open meetings law, Chapter 551,
7-6 Government Code, and the open records law, Chapter 552, Government
7-7 Code, subject to Section 109.064, during a period in which:
7-8 (1) the corporation receives state money under a
7-9 direct state appropriation; or
7-10 (2) a person appointed by the governor, other than an
7-11 ex officio member of the board, is serving as a member of the
7-13 Sec. 109.038. COOPERATION OF AND ASSISTANCE TO STATE
7-14 AGENCIES. (a) A health and human services agency, as that term is
7-15 defined by Section 531.001, Government Code, the Texas Department
7-16 of Insurance, the Title IV-D agency, the board of directors of the
7-17 risk pool established under Article 3.77, Insurance Code, and the
7-18 comptroller shall cooperate with the corporation to assist the
7-19 corporation in performing its duties.
7-20 (b) The corporation shall work with the Title IV-D agency,
7-21 the Texas Department of Human Services, and the Texas Department of
7-22 Health to facilitate the electronic exchange of information among
7-23 the corporation and the agencies that relates to individuals who:
7-24 (1) are covered under the program; and
7-25 (2) are the subject of a medical child support order
7-26 or are or may be eligible for benefits under a federally or
7-27 state-funded program administered by the Texas Department of Human
8-1 Services or the Texas Department of Health.
8-2 (c) The corporation shall work with the board of directors
8-3 of the risk pool established under Article 3.77, Insurance Code, as
8-4 necessary to implement Section 109.067.
8-5 (d) Cooperation requirements in this section apply only in a
8-6 period in which:
8-7 (1) the corporation receives state money under a
8-8 direct state appropriation; or
8-9 (2) a person appointed by the governor, other than an
8-10 ex officio member of the board, is serving as a member of the
8-12 Sec. 109.039. AUDIT BY STATE AUDITOR. (a) The corporation
8-13 is subject to audit by the state auditor under Chapter 321,
8-14 Government Code, only during a period in which:
8-15 (1) the corporation receives state money under a
8-16 direct state appropriation; or
8-17 (2) a person appointed by the governor, other than an
8-18 ex officio member of the board, is serving as a member of the
8-20 (b) The audit may include a financial audit and an economy
8-21 and efficiency audit.
8-22 (Sections 109.040-109.060 reserved for expansion
8-23 SUBCHAPTER C. HEALTH BENEFIT PROGRAM
8-24 Sec. 109.061. HEALTH BENEFIT PROGRAM. (a) The corporation
8-26 (1) establish a program to provide, through eligible
8-27 coverage providers, health benefits for eligible children in this
9-1 state who:
9-2 (A) are not covered by insurance or another type
9-3 of health benefit plan;
9-4 (B) are not covered by insurance or another type
9-5 of health benefit plan for a specified medical condition; or
9-6 (C) are not covered by insurance or another type
9-7 of health benefit plan that provides benefits for primary and
9-8 preventive care;
9-9 (2) develop, in accordance with the purpose of the
9-10 corporation established under Section 109.031(b), the design and
9-11 benefits structure of the health benefit program offered by the
9-12 corporation through eligible coverage providers;
9-13 (3) determine eligibility criteria that children and
9-14 their family members must meet before the children may participate
9-15 in the program;
9-16 (4) develop participation criteria, subject to Section
9-17 109.063, for authorized insurers, health service organizations,
9-18 health maintenance organizations, and other entities eligible to
9-19 provide coverage under the health benefit program;
9-20 (5) develop and implement a public awareness program
9-21 to educate the public about the program;
9-22 (6) establish participation objectives for the
9-24 (7) negotiate premiums for coverage under the program
9-25 and applicable copayments, coinsurance, or deductibles to be paid
9-26 on behalf of a covered child; and
9-27 (8) contract for the provision of health benefit
10-1 coverage under the program.
10-2 (b) The board may contract for or otherwise obtain
10-3 third-party administration services for the corporation.
10-4 (c) In developing the program, the corporation may consult
10-5 with the Texas Department of Health, appropriate professional
10-6 organizations, coverage providers, other agency officials, and
10-7 consultants. The corporation shall consult with the Title IV-D
10-8 agency in matters relating to coverage for children who are the
10-9 subject of a medical child support order and for whom the agency is
10-10 providing enforcement services.
10-11 (d) Notwithstanding Article 3.51-6, Insurance Code, the
10-12 corporation may establish group coverage plans for children under
10-13 the program in specified geographic regions of the state or based
10-14 on other criteria approved by the commissioner of insurance.
10-15 (e) The parent, managing conservator, or guardian of a
10-16 child, or another person sponsoring coverage for the child, is
10-17 responsible for premiums for coverage under the program and for
10-18 applicable copayments, coinsurance, or deductibles, as determined
10-19 by the corporation. The corporation may develop a premium
10-20 structure that varies according to ability to pay and may require,
10-21 in accordance with the premium structure, that the parent,
10-22 conservator, guardian, or sponsor pay the full cost of the child's
10-24 (f) The corporation may require that the parent, managing
10-25 conservator, or guardian of a child, or another person sponsoring
10-26 coverage for the child, pay to the corporation a reasonable
10-27 enrollment fee, in an amount set by the corporation, before the
11-1 child is enrolled in coverage under the program.
11-2 (g) The health benefit coverage provided under the
11-3 corporation's program is secondary to any other available private
11-4 coverage covering a child. The corporation shall ensure that
11-5 benefits provided by the program are the payor of last resort with
11-6 respect to private coverage covering a child.
11-7 (h) In developing eligibility criteria under Subsection
11-8 (a)(3), the corporation shall consider the impact of the
11-9 eligibility criteria on the availability of other health benefit
11-10 plan coverage for children. The corporation shall restrict
11-11 eligibility for coverage under the program or impose a waiting
11-12 period or other appropriate restriction to minimize any adverse
11-13 impact on the availability of other health benefit plan coverage.
11-14 (i) The board may develop a marketing plan under which each
11-15 participating eligible coverage provider is required to market the
11-16 program. The corporation or eligible coverage providers may
11-17 publicize the corporation and the general nature of the program.
11-18 Direct sale or solicitation of a health benefit plan offered
11-19 through the program must be done in accordance with the Insurance
11-20 Code and other insurance laws of this state.
11-21 Sec. 109.062. CORPORATE OPERATIONS; LICENSING REQUIREMENTS.
11-22 (a) The corporation is not an insurer and may not self-insure or
11-23 self-fund the coverage provided through the program. The board and
11-24 employees of the corporation are not agents of an insurer. The
11-25 corporation, the board, and the employees of the corporation are
11-26 not subject to any licensing requirement imposed under the
11-27 Insurance Code or another insurance law of this state.
12-1 (b) The corporation shall use prudent business practices in
12-2 the procurement of goods and services. A law governing the
12-3 procurement of goods or services by a state agency, including
12-4 Chapter 2054 or 2254, Government Code, or Subtitle D, Title 10,
12-5 Government Code, applies only during a period in which:
12-6 (1) the corporation receives state money under a
12-7 direct state appropriation; or
12-8 (2) a person appointed by the governor, other than an
12-9 ex officio member of the board, is serving as a member of the
12-11 Sec. 109.063. OPERATIONS OF ELIGIBLE COVERAGE PROVIDER.
12-12 (a) An eligible coverage provider must:
12-13 (1) hold a certificate of authority or other
12-14 appropriate license issued by the Texas Department of Insurance
12-15 that authorizes the eligible coverage provider to provide the type
12-16 of coverage to be offered through the program; and
12-17 (2) satisfy, except as provided by this section, any
12-18 other applicable requirement of the Insurance Code or another
12-19 insurance law of this state.
12-20 (b) A health benefit plan provider under the program is not
12-21 subject to a law that requires coverage or the offer of coverage of
12-22 a health care service or benefit.
12-23 (c) An eligible coverage provider is not subject to the
12-24 premium tax imposed by Article 4.11, Insurance Code, or the tax on
12-25 revenues imposed under Section 33, Texas Health Maintenance
12-26 Organization Act (Article 20A.33, Vernon's Texas Insurance Code),
12-27 with respect to money received for coverage provided under this
13-2 (d) The participation criteria for authorized insurers,
13-3 health service organizations, health maintenance organizations, and
13-4 other entities that provide coverage under the health benefit
13-5 program shall not allow an eligible coverage provider to establish
13-6 a school-based clinic for the provision of covered treatment
13-7 services, except for routine health screening and preventive
13-8 measures including, but not limited to, immunizations,
13-9 inoculations, or hearing and vision testing.
13-10 Sec. 109.064. ACCESS TO RECORDS; CONFIDENTIALITY.
13-11 (a) Notwithstanding any other law, the corporation may obtain the
13-12 medical records of and other information relating to a child
13-13 covered by the program or applying to be covered by the program on
13-14 receipt of the informed written consent of the child's parent,
13-15 managing conservator, or guardian.
13-16 (b) Information in the possession of the corporation that
13-17 identifies an individual, including medical records and family
13-18 financial information, is confidential and exempt from disclosure
13-19 and discovery in a civil action. Subject to Section 109.038(b) and
13-20 any requirement of federal law, the corporation or an employee or
13-21 agent of the corporation may not release confidential information
13-22 to any person, including a state or federal agency, without the
13-23 written consent of a parent, managing conservator, or guardian of
13-24 the participating child.
13-25 Sec. 109.065. GRIEVANCES AND APPEALS. The corporation shall
13-26 develop a plan for the receipt and consideration of complaints
13-27 regarding participating eligible coverage providers to ensure
14-1 appropriate delivery of health care services to participating
14-2 children and to ensure that eligible coverage providers comply with
14-3 any applicable complaint procedure imposed by law or the
14-4 requirements of the corporation.
14-5 Sec. 109.066. TEXAS DEPARTMENT OF HEALTH PROGRAMS. (a) The
14-6 department may use appropriated funds, in accordance with the
14-7 General Appropriations Act, to purchase coverage under a health
14-8 benefit plan provided through the program for children who are
14-9 eligible for coverage for the program if:
14-10 (1) the children receive health care benefits under
14-11 the chronically ill and disabled children's program or another
14-12 federally funded or state-funded program, other than the state
14-13 Medicaid program, that is administered by the department;
14-14 (2) provision of the benefits through a health benefit
14-15 plan provided through the program is a more cost-effective means of
14-16 providing some or all of the benefits described by Subdivision (1);
14-18 (3) no benefit or service provided to the children is
14-19 eliminated or adversely affected as a result of the provision of
14-20 the benefits through the program.
14-21 (b) Services provided to children under a federally funded
14-22 or state-funded program administered by the department, including
14-23 the chronically ill and disabled children's program, may not be
14-24 reduced or eliminated because some or all of the services are
14-25 provided through the program or otherwise provided because of the
14-26 establishment of the corporation or the program.
14-27 Sec. 109.067. AVAILABILITY OF RISK POOL COVERAGE. The
15-1 corporation shall notify the parent, managing conservator, or
15-2 guardian of a child who applies for coverage through the program of
15-3 the availability of coverage from the risk pool established under
15-4 Article 3.77, Insurance Code.
15-5 Sec. 109.068. PROGRAM NOT AN ENTITLEMENT. This chapter does
15-6 not establish an entitlement to health benefits provided through
15-7 the corporation or any other entitlement.
15-8 (Sections 109.069-109.100 reserved for expansion
15-9 SUBCHAPTER D. COVERAGE UNDER ORDER OF MEDICAL
15-10 SUPPORT FOR CHILD
15-11 Sec. 109.101. APPLICATION. A party ordered under Chapter
15-12 154, Family Code, to apply for coverage for a child under the
15-13 program shall provide to the corporation:
15-14 (1) a copy of the order rendered under Chapter 154;
15-16 (2) the name and address of the obligor's employer.
15-17 Sec. 109.102. DUTIES OF CORPORATION OR DESIGNEE OF
15-18 CORPORATION. (a) The corporation or the designee of the
15-19 corporation shall review an application and, if the corporation or
15-20 designee finds that the child is eligible for coverage under the
15-21 program, shall:
15-22 (1) issue coverage to the child in accordance with the
15-23 program; and
15-24 (2) notify the obligor's employer in accordance with
15-25 Subsection (b).
15-26 (b) The notice provided under Subsection (a)(2) must:
15-27 (1) explain the employer's obligations under Section
16-2 (2) state:
16-3 (A) the amount to be paid for coverage of the
16-4 child, including the amount of the premium and the premium
16-5 stabilization revolving account fee imposed under Subchapter E;
16-6 (B) whether the amount is to be paid to the
16-7 corporation or the corporation's designee; and
16-8 (C) the address to which the payment is to be
16-9 sent; and
16-10 (3) include a copy of the medical child support order
16-11 rendered under Chapter 154, Family Code.
16-12 (c) The corporation or the corporation's designee shall
16-13 notify the employer of an obligor of any increase in the amount to
16-14 be paid for coverage of the child under the program.
16-15 Sec. 109.103. DUTY OF EMPLOYER. (a) An employer who
16-16 receives notice under Section 109.102 shall withhold an appropriate
16-17 amount from the obligor's earnings for the required payment and
16-18 remit the amount as instructed on the notice.
16-19 (b) An employer who fails to withhold or remit payments as
16-20 required by this section or who discriminates in hiring or
16-21 employment on the basis of a medical support order is subject to
16-22 the penalties and fines imposed under Subchapter C, Chapter 158,
16-23 Family Code.
16-24 (Sections 109.104-109.150 reserved for expansion
16-25 SUBCHAPTER E. ELIGIBILITY OF CERTAIN CHILDREN;
16-26 STABILIZATION FUND
16-27 Sec. 109.151. TERMINATION FOR FAILURE TO PAY PREMIUMS.
17-1 Except as provided by this subchapter, the corporation shall
17-2 terminate the coverage of a child for failure to pay a premium as
17-3 required under Section 109.061(e).
17-4 Sec. 109.152. PREMIUM STABILIZATION REVOLVING ACCOUNT.
17-5 (a) The premium stabilization revolving account is an account
17-6 within the Texas healthy kids fund.
17-7 (b) The premium stabilization revolving account is composed
17-8 of money contributed to the account under this subchapter, any
17-9 money appropriated to the account by the legislature, and any gift
17-10 of money accepted by the board for the purposes of the account.
17-11 Sec. 109.153. FEE; DEPOSIT TO ACCOUNT. (a) The corporation
17-12 shall charge for each child covered under the program a reasonable
17-13 premium stabilization revolving account fee, not to exceed $5 each
17-15 (b) The corporation shall remit money collected under this
17-16 section to the comptroller, in accordance with rules adopted by the
17-17 comptroller, for deposit to the credit of the premium stabilization
17-18 revolving account.
17-19 Sec. 109.154. USE OF MONEY IN ACCOUNT. (a) Money in the
17-20 premium stabilization revolving account may be used by the
17-21 corporation only to pay a premium for coverage provided through the
17-22 program for a child for whom a premium is not paid in accordance
17-23 with Section 109.061(e).
17-24 (b) A premium may not be paid for a child who is covered by
17-25 a health benefit plan other than the plan offered by the
17-27 (c) The corporation shall determine the period for which
18-1 premiums may be paid from the fund and the circumstances under
18-2 which the premiums may be paid.
18-3 (d) The parent, managing conservator, or guardian of a child
18-4 for whom a premium is paid from the premium stabilization revolving
18-5 account, or another person sponsoring coverage for the child,
18-6 remains responsible for reimbursing the account for the premium
18-7 paid. The coverage for the child is subject to termination, in
18-8 accordance with criteria adopted by the board, if the parent,
18-9 managing conservator, guardian, or sponsor fails to reimburse the
18-10 account as required by this subsection. The corporation shall
18-11 remit money collected under this subsection to the comptroller for
18-12 deposit to the credit of the account.
18-13 SECTION 2. Section 154.182, Family Code, is amended by
18-14 amending Subsection (b) and adding Subsection (c) to read as
18-16 (b) Except as provided for by Subdivision (6), in [
18-17 determining the manner in which health insurance for the child is
18-18 to be ordered, the court shall render its order in accordance with
18-19 the following priorities, unless a party shows good cause why a
18-20 particular order would not be in the best interest of the child:
18-21 (1) if health insurance is available for the child
18-22 through the obligor's employment or membership in a union, trade
18-23 association, or other organization, the court shall order the
18-24 obligor to include the child in the obligor's health insurance;
18-25 (2) if health insurance is not available for the child
18-26 through the obligor's employment but is available for the child
18-27 through the obligee's employment or membership in a union, trade
19-1 association, or other organization, the court may order the obligee
19-2 to provide health insurance for the child, and, in such event,
19-3 shall order the obligor to pay additional child support to be
19-4 withheld from earnings under Chapter 158 to the obligee for the
19-5 actual cost of the health insurance for the child; [ or]
19-6 (3) if health insurance is not available for the child
19-7 under Subdivision (1) or (2), the court shall order the obligor to
19-8 provide health insurance for the child if the court finds that
19-9 health insurance is available for the child from another source and
19-10 that the obligor is financially able to provide it;
19-11 (4) if health insurance is not available for the child
19-12 under Subdivision (1), (2), or (3), the court shall order the
19-13 obligor to apply for coverage through the Texas Healthy Kids
19-14 Corporation established under Chapter 109, Health and Safety Code;
19-15 (5) if health coverage is not available for the child
19-16 under Subdivision (1), (2), (3), or (4), the court shall order the
19-17 obligor to pay the obligee, in addition to any amount ordered under
19-18 the guidelines for child support, a reasonable amount each month as
19-19 medical support for the child to be withheld from earnings under
19-20 Chapter 158; or
19-21 (6) notwithstanding Subdivisions (1) through (3), an
19-22 obligor whose employer, union, trade association, or other
19-23 organization does not offer a child/children coverage option in
19-24 lieu of a spouse/child/children option of health insurance coverage
19-25 may elect to apply for coverage through the Texas Healthy Kids
19-26 Corporation. An obligor required to pay additional child support
19-27 to an obligee for health insurance coverage may elect to apply for
20-1 coverage through the Texas Healthy Kids Corporation if the
20-2 obligee's employer, union, trade association, or other organization
20-3 does not offer a child/children coverage option in lieu of a
20-4 spouse/child/children option of health insurance coverage.
20-5 (c) In establishing the amount of additional medical child
20-6 support under Subsection (b)(5), the court shall presume that $38
20-7 each month is a reasonable amount for a child but may order a
20-8 greater or lesser amount as appropriate under the circumstances.
20-9 The Health and Human Services Commission may promulgate guidelines
20-10 for the dollar amounts of medical child support that the court may
20-11 presumptively apply in circumstances in which the obligor is
20-12 responsible for medical child support for more than one child.
20-13 SECTION 3. Section 171.063(a), Tax Code, is amended to read
20-14 as follows:
20-15 (a) The following corporations are exempt from the franchise
20-17 (1) a nonprofit corporation exempted from the federal
20-18 income tax under Section 501(c)(3), (4), (5), (6), (7), (8), (10),
20-19 or (19), Internal Revenue Code which in the case of a nonprofit
20-20 hospital means a hospital providing charity care and community
20-21 benefits as set forth in Paragraph (A), (B), (C), (D), (E), (F), or
20-23 (A) charity care and government-sponsored
20-24 indigent health care are provided at a level which is reasonable in
20-25 relation to the community needs, as determined through the
20-26 community needs assessment, the available resources of the hospital
20-27 or hospital system, and the tax-exempt benefits received by the
21-1 hospital or hospital system;
21-2 (B) charity care and government-sponsored
21-3 indigent health care are provided in an amount equal to at least
21-4 four percent of the hospital's or hospital system's net patient
21-6 (C) charity care and government-sponsored
21-7 indigent health care are provided in an amount equal to at least
21-8 100 percent of the hospital's or hospital system's tax-exempt
21-9 benefits, excluding federal income tax;
21-10 (D) for tax periods beginning before January 1,
21-11 1996, charity care and community benefits are provided in a
21-12 combined amount equal to at least five percent of the hospital's
21-13 net patient revenue, provided that charity care and
21-14 government-sponsored indigent health care are provided in an amount
21-15 equal to at least three percent of net patient revenue;
21-16 (E) for tax periods beginning after December 31,
21-17 1995, charity care and community benefits are provided in a
21-18 combined amount equal to at least five percent of the hospital's or
21-19 hospital system's net patient revenue, provided that charity care
21-20 and government-sponsored indigent health care are provided in an
21-21 amount equal to at least four percent of net patient revenue;
21-22 (F) a nonprofit hospital that has been
21-23 designated as a disproportionate share hospital under the state
21-24 Medicaid program in the current year or in either of the previous
21-25 two fiscal years is considered to have provided a reasonable amount
21-26 of charity care and government-sponsored indigent health care and
21-27 is considered in compliance with the standards provided by this
22-1 subsection; or
22-2 (G) a hospital operated on a nonprofit basis
22-3 that is located in a county with a population of less than 50,000
22-4 and in which the entire county or the population of the entire
22-5 county has been designated as a health professionals shortage area
22-6 is considered in compliance with the standards provided by this
22-8 (2) a corporation exempted under Section 501(c)(2) or
22-9 (25), Internal Revenue Code, if the corporation or corporations for
22-10 which it holds title to property is either exempt from or not
22-11 subject to the franchise tax;
22-12 (3) a corporation exempted from federal income tax
22-13 under Section 501(c)(16), Internal Revenue Code; and
22-14 (4) a nonprofit corporation exempted from the federal
22-15 income tax under Section 501(c)(3), Internal Revenue Code, that
22-16 does not receive any payment for providing health care services to
22-17 inpatients or outpatients from any source including but not limited
22-18 to the patient or person legally obligated to support the patient,
22-19 third-party payors, Medicare, Medicaid, or any other state or local
22-20 indigent care program. Payment for providing health care services
22-21 does not include charitable donations, legacies, bequests, or
22-22 grants or payments for research.
22-23 For purposes of satisfying Paragraph (E) of Subdivision (1),
22-24 a hospital or hospital system may not change its existing fiscal
22-25 year unless the hospital or hospital system changes its ownership
22-26 or corporate structure as a result of a sale or merger.
22-27 For purposes of this subsection, a hospital that satisfies
23-1 Paragraph (A), (F), or (G) of Subdivision (1) shall be excluded in
23-2 determining a hospital system's compliance with the standards
23-3 provided by Paragraph (B), (C), (D), or (E) of Subdivision (1).
23-4 For purposes of this subsection, the terms "charity care,"
23-5 "government-sponsored indigent health care," "health care
23-6 organization," "hospital system," "net patient revenue," "nonprofit
23-7 hospital," and "tax-exempt benefits" have the meanings set forth in
23-8 Sections 311.031 and 311.042, Health and Safety Code. A
23-9 determination of the amount of community benefits and charity care
23-10 and government-sponsored indigent health care provided by a
23-11 hospital or hospital system and the hospital's or hospital system's
23-12 compliance with the requirements of Section 311.045, Health and
23-13 Safety Code, shall be based on the most recently completed and
23-14 audited prior fiscal year of the hospital or hospital system.
23-15 A requirement that a nonprofit hospital provide charity care
23-16 and community benefits under this subsection may be satisfied by a
23-17 donation of money to the Texas Healthy Kids Corporation established
23-18 by Chapter 109, Health and Safety Code, provided that:
23-19 (1) the money is donated to be used for a purpose
23-20 described by Section 109.033(c), Health and Safety Code; and
23-21 (2) not more than 10 percent of the charity care
23-22 required under any provision of this subsection may be satisfied by
23-23 the donation.
23-24 The providing of charity care and government-sponsored
23-25 indigent health care in accordance with Paragraph (A) of
23-26 Subdivision (1) shall be guided by the prudent business judgment of
23-27 the hospital which will ultimately determine the appropriate level
24-1 of charity care and government-sponsored indigent health care based
24-2 on the community needs, the available resources of the hospital,
24-3 the tax-exempt benefits received by the hospital, and other factors
24-4 that may be unique to the hospital, such as the hospital's volume
24-5 of Medicare and Medicaid patients. These criteria shall not be
24-6 determinative factors, but shall be guidelines contributing to the
24-7 hospital's decision along with other factors which may be unique to
24-8 the hospital. The formulas contained in Paragraphs (B), (C), (D),
24-9 and (E) of Subdivision (1) shall also not be considered
24-10 determinative of a reasonable amount of charity care and
24-11 government-sponsored indigent health care.
24-12 The requirements of this subsection shall not apply to the
24-13 extent a hospital or hospital system demonstrates that reductions
24-14 in the amount of community benefits, charity care, and
24-15 government-sponsored indigent health care are necessary to maintain
24-16 financial reserves at a level required by a bond covenant, are
24-17 necessary to prevent the hospital or hospital system from
24-18 endangering its ability to continue operations, or if the hospital,
24-19 as a result of a natural or other disaster, is required
24-20 substantially to curtail its operations.
24-21 In any fiscal year that a hospital or hospital system,
24-22 through unintended miscalculation, fails to meet any of the
24-23 standards in Subdivision (1), the hospital or hospital system shall
24-24 not lose its tax-exempt status without the opportunity to cure the
24-25 miscalculation in the fiscal year following the fiscal year the
24-26 failure is discovered by both meeting one of the standards and
24-27 providing an additional amount of charity care and
25-1 government-sponsored indigent health care that is equal to the
25-2 shortfall from the previous fiscal year. A hospital or hospital
25-3 system may apply this provision only once every five years.
25-4 SECTION 4. The Insurance Code is amended by adding Chapter
25-5 27 to read as follows:
25-6 CHAPTER 27. HEALTH BENEFIT PLANS FOR CHILDREN
25-7 Art. 27.01. DEFINITION. In this chapter, "health benefit
25-8 plan" means a health benefit plan described by Article 27.02 of
25-9 this code.
25-10 Art. 27.02. SCOPE OF CHAPTER. This chapter applies to a
25-11 health benefit plan that:
25-12 (1) provides benefits for medical or surgical expenses
25-13 incurred as a result of a health condition, accident, or sickness,
25-15 (A) an individual, group, blanket, or franchise
25-16 insurance policy or insurance agreement, a group hospital service
25-17 contract, or an individual or group evidence of coverage that is
25-18 offered by:
25-19 (i) an insurance company;
25-20 (ii) a group hospital service corporation
25-21 operating under Chapter 20 of this code;
25-22 (iii) a fraternal benefit society
25-23 operating under Chapter 10 of this code;
25-24 (iv) a stipulated premium insurance
25-25 company operating under Chapter 22 of this code; or
25-26 (v) a health maintenance organization
25-27 operating under the Texas Health Maintenance Organization Act
26-1 (Chapter 20A, Vernon's Texas Insurance Code); or
26-2 (B) to the extent permitted by the Employee
26-3 Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et
26-4 seq.), a health benefit plan that is offered by:
26-5 (i) a multiple employer welfare
26-6 arrangement as defined by Section 3, Employee Retirement Income
26-7 Security Act of 1974 (29 U.S.C. Section 1002) or another analogous
26-8 benefit arrangement; or
26-9 (ii) any other entity not licensed under
26-10 this code or another insurance law of this state that contracts
26-11 directly for health care services on a risk sharing basis,
26-12 including an entity that contracts for health care services on a
26-13 capitation basis; or
26-14 (2) is offered by an approved nonprofit health
26-15 corporation that is certified under Section 5.01(a), Medical
26-16 Practice Act (Article 4495b, Vernon's Texas Civil Statutes), and
26-17 that holds a certificate of authority issued by the commissioner
26-18 under Article 21.52F of this code.
26-19 Art. 27.03. CHILDREN'S HEALTH BENEFIT PLAN. (a) The issuer
26-20 of a health benefit plan may offer a children's health benefit plan
26-21 in accordance with this chapter. The health benefit plan may
26-22 provide coverage only to children younger than 18 years of age.
26-23 (b) An issuer of a health benefit plan may not offer a
26-24 children's health benefit plan under this chapter unless the plan's
26-25 structure and the benefits offered under the plan have been
26-26 approved by the commissioner.
26-27 Art. 27.04. MANDATED BENEFIT PROVISIONS INAPPLICABLE. A
27-1 children's health benefit plan is not subject to a law that
27-2 requires coverage or the offer of coverage of a health care service
27-3 or benefit.
27-4 Art. 27.05. EXEMPTION FROM PREMIUM TAX. The issuer of a
27-5 children's health benefit plan is not subject to the premium tax
27-6 imposed by Article 4.11 of this code or the tax on revenues imposed
27-7 under Section 33, Texas Health Maintenance Organization Act
27-8 (Article 20A.33, Vernon's Texas Insurance Code), with respect to
27-9 money received for coverage provided under that plan.
27-10 Art. 27.06. RULES. The commissioner may adopt rules to
27-11 implement this chapter.
27-12 SECTION 5. (a) Notwithstanding Section 109.032, Health and
27-13 Safety Code, as added by this Act, the initial board of directors
27-14 of the Texas Healthy Kids Corporation appointed under this section
27-15 shall be composed of:
27-16 (1) six members appointed by the governor with the
27-17 advice and consent of the senate;
27-18 (2) the commissioner of health and human services or
27-19 the commissioner's designee, who serves as a voting ex officio
27-21 (3) the commissioner of insurance or the
27-22 commissioner's designee, who serves as a voting ex officio member;
27-24 (4) the director of the Title IV-D agency, or the
27-25 director's designee, who serves as a voting ex officio member.
27-26 (b) The governor shall appoint the members of the board of
27-27 directors appointed under Subsection (a)(1) of this section as soon
28-1 as practical after the effective date of this Act. The terms of
28-2 those members expire on September 1, 1999.
28-3 (c) On expiration of the terms of the initial appointed
28-4 members of the board, the governor shall appoint four members for
28-5 terms expiring September 1, 2001, and two of the formerly appointed
28-6 positions shall be filled as provided by the articles and bylaws of
28-7 the corporation.
28-8 (d) On expiration of the terms of the four members appointed
28-9 under Subsection (c), the governor shall appoint two members to
28-10 serve terms expiring September 1, 2003. The two other positions of
28-11 the formerly appointed members shall be filled as provided by the
28-12 articles and bylaws of the corporation.
28-13 (e) After September 1, 2003, all members of the board of
28-14 directors shall be selected as provided by Section 109.032, Health
28-15 and Safety Code, as added by this Act.
28-16 (f) A person is not eligible for appointment by the governor
28-17 to the board of directors under this section if the person does not
28-18 satisfy the requirements of Section 109.032, Health and Safety
28-19 Code, as added by this Act.
28-20 (g) The members of the board shall annually elect a member
28-21 to serve as the presiding officer of the board.
28-22 (h) Members of the board of directors appointed by the
28-23 governor serving under this section serve without compensation, but
28-24 are entitled to reimbursement of their travel expenses as provided
28-25 for in the General Appropriations Act for state board or commission
28-26 members. Money appropriated to the Texas Department of Insurance,
28-27 the Health and Human Services Commission, or the Title IV-D agency
29-1 may be spent, consistent with the General Appropriations Act, in
29-2 connection with the work or expenses of the ex officio members of
29-3 the initial board of directors.
29-4 (i) This section expires September 1, 2003.
29-5 SECTION 6. (a) Not later than the 60th day after the
29-6 effective date of this Act, the commissioner of insurance, acting
29-7 as incorporator, shall take the steps necessary to create the Texas
29-8 Healthy Kids Corporation as a nonprofit corporation under the Texas
29-9 Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
29-10 Texas Civil Statutes).
29-11 (b) Not later than the 90th day after the effective date of
29-12 this Act, the commissioner of insurance, acting on behalf of the
29-13 Texas Healthy Kids Corporation, shall employ an acting executive
29-14 director for the corporation. The acting executive director may:
29-15 (1) develop a proposed business plan for the
29-17 (2) solicit alternative funding for the corporation
29-18 and for the health benefit plan program to be established by the
29-19 corporation; and
29-20 (3) develop, to the extent possible, a proposed health
29-21 benefit plan program for the consideration of the board of
29-22 directors of the Texas Healthy Kids Corporation.
29-23 (c) The commissioner of insurance, on behalf of the
29-24 corporation, may accept grants and gifts of money, property, or
29-25 services to assist the acting executive director appointed under
29-26 Subsection (b) of this section in carrying out the acting executive
29-27 director's powers. The commissioner's authority under this section
30-1 expires on the date all of the appointed members of the board of
30-2 directors of the Texas Healthy Kids Corporation have been appointed
30-3 by the governor and have qualified for office.
30-4 (d) The acting executive director appointed under this
30-5 section serves until the earlier of:
30-6 (1) the date the acting executive director is
30-7 dismissed by the commissioner of insurance;
30-8 (2) the date the acting executive director is
30-9 dismissed by the board of directors of the Texas Healthy Kids
30-10 Corporation; or
30-11 (3) the date the board of directors of the corporation
30-12 employs an executive director for the corporation.
30-13 (e) Notwithstanding Subsection (b) of this section, the
30-14 commissioner of insurance may not employ an acting executive
30-15 director on or after the date all of the appointed members of the
30-16 board of directors of the Texas Healthy Kids Corporation have been
30-17 appointed and have qualified for office.
30-18 SECTION 7. (a) The Texas Healthy Kids Corporation shall
30-19 offer an initial health benefit plan under Chapter 109, Health and
30-20 Safety Code, as added by this Act, not later than the first
30-21 anniversary of the effective date of this Act.
30-22 (b) Not later than the date the Texas Healthy Kids
30-23 Corporation first offers a health benefit plan in accordance with
30-24 Subsection (a) of this section, the board of directors of the Texas
30-25 Healthy Kids Corporation shall:
30-26 (1) establish general administrative and accounting
30-27 procedures for the corporation;
31-1 (2) develop the design and benefits structure of any
31-2 health benefit plan that may be offered by the corporation through
31-3 eligible coverage providers in accordance with Chapter 109, Health
31-4 and Safety Code, as added by this Act; and
31-5 (3) develop a plan for the receipt and consideration
31-6 of complaints as required by Section 109.065, Health and Safety
31-7 Code, as added by this Act.
31-8 (c) The board of directors of the Texas Healthy Kids
31-9 Corporation shall determine whether it is feasible, considering the
31-10 resources available, to initially offer the health benefit plan
31-11 required under Chapter 109, Health and Safety Code, as added by
31-12 this Act, in each region of the state. If the board determines
31-13 that it is not feasible to initially offer the health benefit plan
31-14 on a statewide basis, the board shall develop and the corporation
31-15 shall implement a schedule to stagger implementation of the health
31-16 benefit program in different regions of the state.
31-17 SECTION 8. The issuer of a health benefit plan may not offer
31-18 a children's health benefit plan under Chapter 27, Insurance Code,
31-19 as added by this Act, before January 1, 1998.
31-20 SECTION 9. A court may not order that coverage be provided
31-21 to a child through the Texas Healthy Kids Corporation under Section
31-22 154.182, Family Code, as amended by this Act, before the date that
31-23 corporation first offers coverage under a health benefit plan in
31-24 the applicable region of the state.
31-25 SECTION 10. As soon as practicable after the effective date
31-26 of this Act, the Title IV-D agency shall seek the modification of
31-27 child support orders that are enforced by the agency and to which
32-1 Section 154.182(b)(5), Family Code, as added by this Act, applies
32-2 to obtain additional medical child support under that subdivision.
32-3 SECTION 11. (a) Except as provided by Subsection (b) of
32-4 this section, this Act takes effect immediately.
32-5 (b) Section 3 of this Act takes effect January 1, 1998, and
32-6 applies to a report originally due on or after that date.
32-7 SECTION 12. The importance of this legislation and the
32-8 crowded condition of the calendars in both houses create an
32-9 emergency and an imperative public necessity that the
32-10 constitutional rule requiring bills to be read on three several
32-11 days in each house be suspended, and this rule is hereby suspended,
32-12 and that this Act take effect and be in force according to its
32-13 terms, and it is so enacted.
President of the Senate Speaker of the House
I certify that H.B. No. 3 was passed by the House on April 2,
1997, by the following vote: Yeas 113, Nays 26, 3 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 3 on May 12, 1997, by the following vote: Yeas 105, Nays 30, 1
present, not voting; and that the House adopted H.C.R. No. 273
authorizing certain corrections in H.B. No. 3 on May 16, 1997, by a
Chief Clerk of the House
I certify that H.B. No. 3 was passed by the Senate, with
amendments, on May 8, 1997, by the following vote: Yeas 25, Nays
5; and that the Senate adopted H.C.R. No. 273 authorizing certain
corrections in H.B. No. 3 on May 19, 1997, by a viva-voce vote.
Secretary of the Senate