1-1 By: Berlanga, et al. (Senate Sponsor - Sibley) H.B. No. 3
1-2 (In the Senate - Received from the House April 3, 1997;
1-3 April 3, 1997, read first time and referred to Committee on
1-4 Economic Development; April 29, 1997, reported adversely, with
1-5 favorable Committee Substitute by the following vote: Yeas 8, Nays
1-6 2; April 29, 1997, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 3 By: Sibley
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to establishing the Texas Healthy Kids Corporation and
1-11 other health benefit coverage to increase access to health care for
1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14 SECTION 1. Subtitle E, Title 2, Health and Safety Code, is
1-15 amended by adding Chapter 109 to read as follows:
1-16 CHAPTER 109. TEXAS HEALTHY KIDS CORPORATION
1-17 SUBCHAPTER A. GENERAL PROVISIONS
1-18 Sec. 109.001. DEFINITIONS. In this chapter:
1-19 (1) "Board" means the board of directors of the
1-21 (2) "Child" means an individual younger than 18 years
1-22 of age.
1-23 (3) "Corporation" means the Texas Healthy Kids
1-24 Corporation established under this chapter.
1-25 (4) "Eligible coverage provider" means an entity that
1-26 meets the requirements for providing coverage under the program
1-27 established by the corporation under Section 109.061.
1-28 (5) "Executive director" means the executive director
1-29 of the corporation.
1-30 (6) "Program" means the health benefit program
1-31 provided by the corporation under this chapter.
1-32 (7) "Title IV-D agency" means the agency designated to
1-33 serve as the state's Title IV-D agency in accordance with Part D,
1-34 Subchapter IV, Social Security Act (42 U.S.C. Section 651 et seq.).
1-35 Sec. 109.002. TEXAS HEALTHY KIDS FUND. (a) The Texas
1-36 healthy kids fund is a fund outside the state treasury held by the
1-37 Texas Treasury Safekeeping Trust Company. The fund is composed of
1-38 money appropriated to the fund and of money appropriated to or
1-39 deposited in the premium stabilization revolving account
1-40 established under Subchapter E. The comptroller shall transfer to
1-41 the fund money appropriated to the fund from the state treasury.
1-42 (b) The comptroller may invest money in the fund in the same
1-43 manner as the comptroller may invest money in the state treasury.
1-44 (c) The board shall file with the comptroller a verified
1-45 copy of a board resolution that designates the authorized
1-46 representatives of the corporation who have authority to spend
1-47 money in the fund.
1-48 (d) In the first fiscal year for which the fund does not
1-49 receive a direct state appropriation of state money, the
1-50 comptroller, at the request of the board, shall transfer the
1-51 balance of the fund to one or more depositories selected by the
1-52 board as depositories for the corporation. On the date a transfer
1-53 is made under this subsection, the fund is abolished.
1-54 Sec. 109.003. BIENNIAL REPORT. (a) Not later than
1-55 January 1 of each odd-numbered year, the corporation shall submit a
1-56 written report to the governor, the lieutenant governor, the
1-57 speaker of the house of representatives, and the commissioner of
1-59 (b) The report must state the program's status and must
1-60 include a statement of the corporation's financial condition and an
1-61 accounting for the corporation's administrative expenses for the
1-62 two years preceding the date of the report.
1-63 (c) The reporting requirement under this section only
1-64 applies during a period in which:
2-1 (1) the corporation receives state money under a
2-2 direct state appropriation; or
2-3 (2) a person appointed by the governor, other than an
2-4 ex officio member of the board, is serving as a member of the
2-6 Sec. 109.004. IMMUNITY FROM LIABILITY. Chapter 84, Civil
2-7 Practice and Remedies Code, applies to the corporation and an
2-8 employee or volunteer of the corporation.
2-9 (Sections 109.005-109.030 reserved for expansion
2-10 SUBCHAPTER B. CORPORATE STRUCTURE
2-11 Sec. 109.031. TEXAS HEALTHY KIDS CORPORATION; PURPOSE.
2-12 (a) The Texas Healthy Kids Corporation is created and has the
2-13 powers that are necessary and proper to carry out its duties. The
2-14 corporation is a nonprofit corporation and shall comply with the
2-15 Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,
2-16 Vernon's Texas Civil Statutes).
2-17 (b) The primary purpose of the corporation is to provide
2-18 health benefits for primary and preventive health care for
2-20 (c) The corporation is not subject to the franchise tax
2-21 imposed by Chapter 171, Tax Code.
2-22 (d) Subject to this chapter, the board shall take any step
2-23 necessary to maintain an exemption from federal income tax under
2-24 Section 501(a) of the Internal Revenue Code of 1986 (26 U.S.C.
2-25 Section 501(a)) by being listed as an exempt organization under
2-26 Section 501(c)(3) or 501(c)(4) of that code (26 U.S.C. Section
2-27 501(c)(3) or (c)(4)) or another similar law.
2-28 Sec. 109.032. BOARD OF DIRECTORS; PRESIDING OFFICER.
2-29 (a) The corporation shall operate subject to the general
2-30 supervision of a board of directors. The board of directors and
2-31 the presiding officer of the board of directors are selected as
2-32 provided by the articles of incorporation and bylaws of the
2-33 corporation, in accordance with the Texas Non-Profit Corporation
2-34 Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes). If
2-35 required by the bylaws of the corporation, the board of directors
2-36 may also include the following voting ex officio members:
2-37 (1) the commissioner of health and human services or a
2-38 person designated by the commissioner;
2-39 (2) the commissioner of insurance or a person
2-40 designated by the commissioner; and
2-41 (3) the director of the Title IV-D agency, or a person
2-42 designated by the director.
2-43 (b) A member of the board may not serve more than two terms,
2-44 without regard to whether the terms are consecutive.
2-45 (c) A person is not eligible to serve on the board if the
2-46 person or the person's spouse is employed by, represents in any
2-47 capacity, owns, or controls any ownership interest in a business or
2-49 (1) that may obtain a pecuniary or other favorable
2-50 interest in the course of a business activity with the corporation;
2-52 (2) from whom the corporation receives funds.
2-53 (d) A person is not eligible to serve on the board if the
2-54 person is or has been an adverse party in litigation against the
2-55 board or corporation.
2-56 Sec. 109.033. POWERS AND DUTIES OF BOARD; OVERSIGHT OF
2-57 COMMISSIONER OF INSURANCE. (a) Subject to Subsection (d), the
2-58 board is the oversight and governing entity of the corporation and
2-59 has any power necessary and proper to carry out its duties under
2-60 this chapter, including the power to adopt bylaws governing the
2-61 operations of the board and the corporation. The board has
2-62 complete fiscal control over the corporation and is responsible for
2-63 all corporate operations.
2-64 (b) The board may request and accept grants and gifts of
2-65 money, property, or services. Subject to Subsection (c), the
2-66 corporation may use a grant or gift for any purpose of the
2-67 corporation, including paying the corporation's business expenses
2-68 and the salaries or wages of the corporation's employees.
2-69 (c) The corporation may use a donation made as community
3-1 benefits by a hospital or hospital system under Section 171.063(a),
3-2 Tax Code, only to purchase health benefits for children who:
3-3 (1) have a family income of less than 200 percent of
3-4 poverty level according to the poverty index prepared by the
3-5 federal Office of Management and Budget; and
3-6 (2) reside:
3-7 (A) in the case of a hospital, in the county in
3-8 which the hospital is located or a county contiguous to the county;
3-10 (B) in the case of a hospital system, in a
3-11 county in which the hospital system operates or any county
3-12 contiguous to a county in which the hospital system operates.
3-13 (d) The initial board shall submit to the commissioner of
3-14 insurance for approval and may not implement before receiving that
3-16 (1) the corporation's bylaws, plan of operation, and
3-17 any other standards adopted by the board; and
3-18 (2) the health benefit program and health benefit
3-19 plans established by the corporation under Subchapter C.
3-20 Sec. 109.034. EXECUTIVE DIRECTOR. (a) The board shall
3-21 employ an executive director to help the board perform its duties.
3-22 The executive director shall act on behalf of and subject to
3-23 authorization and supervision of the board to carry out the
3-24 purposes of the corporation.
3-25 (b) The corporation shall pay the executive director a
3-26 salary in an amount established by the board.
3-27 (c) The executive director must make and file a surety bond
3-28 in an amount determined by the board for the faithful performance
3-29 of the executive director's duties and the proper safekeeping and
3-30 disbursement of corporate money.
3-31 Sec. 109.035. EMPLOYEES; CONSULTANTS. The executive
3-32 director may employ employees and retain consultants as necessary
3-33 to administer the programs of the corporation.
3-34 Sec. 109.036. PUBLIC INPUT. The board shall develop and
3-35 implement policies that provide the public with a reasonable
3-36 opportunity to appear before the board and to speak on any issue
3-37 related to the corporation or the program.
3-38 Sec. 109.037. OPEN MEETINGS; OPEN RECORDS. The board and
3-39 the corporation are subject to the open meetings law, Chapter 551,
3-40 Government Code, and the open records law, Chapter 552, Government
3-41 Code, subject to Section 109.064, during a period in which:
3-42 (1) the corporation receives state money under a
3-43 direct state appropriation; or
3-44 (2) a person appointed by the governor, other than an
3-45 ex officio member of the board, is serving as a member of the
3-47 Sec. 109.038. COOPERATION OF AN ASSISTANCE TO STATE
3-48 AGENCIES. (a) A health and human services agency, as that term is
3-49 defined by Section 531.001, Government Code, the Texas Department
3-50 of Insurance, the Title IV-D agency, the board of directors of the
3-51 risk pool established under Article 3.77, Insurance Code, and the
3-52 comptroller shall cooperate with the corporation to assist the
3-53 corporation in performing its duties.
3-54 (b) The corporation shall work with the Title IV-D agency,
3-55 the Texas Department of Human Services, and the Texas Department of
3-56 Health to facilitate the electronic exchange of information among
3-57 the corporation and the agencies that relates to individuals who:
3-58 (1) are covered under the program; and
3-59 (2) are the subject of a medical child support order
3-60 or are or may be eligible for benefits under a federally or
3-61 state-funded program administered by the Texas Department of Human
3-62 Services or the Texas Department of Health.
3-63 (c) The corporation shall work with the board of directors
3-64 of the risk pool established under Article 3.77, Insurance Code, as
3-65 necessary to implement Section 109.067.
3-66 Sec. 109.039. AUDIT BY STATE AUDITOR. (a) The corporation
3-67 is subject to audit by the state auditor under Chapter 321,
3-68 Government Code, only during a period in which:
3-69 (1) the corporation receives state money under a
4-1 direct state appropriation; or
4-2 (2) a person appointed by the governor, other than an
4-3 ex officio member of the board, is serving as a member of the
4-5 (b) The audit may include a financial audit and an economy
4-6 and efficiency audit.
4-7 (Sections 109.040-109.060 reserved for expansion
4-8 SUBCHAPTER C. HEALTH BENEFIT PROGRAM
4-9 Sec. 109.061. HEALTH BENEFIT PROGRAM. (a) The corporation
4-11 (1) establish a program to provide, through eligible
4-12 coverage providers, health benefits for eligible children in this
4-13 state who:
4-14 (A) are not covered by insurance or another type
4-15 of health benefit plan;
4-16 (B) are not covered by insurance or another type
4-17 of health benefit plan for a specified medical condition; or
4-18 (C) are not covered by insurance or another type
4-19 of health benefit plan that provides benefits for primary and
4-20 preventive care;
4-21 (2) develop, in accordance with the purpose of the
4-22 corporation established under Section 109.031(b), the design and
4-23 benefits structure of the health benefit program offered by the
4-24 corporation through eligible coverage providers;
4-25 (3) determine eligibility criteria that children and
4-26 their family members must meet before the children may participate
4-27 in the program;
4-28 (4) develop participation criteria, subject to Section
4-29 109.063, for authorized insurers, health service organizations,
4-30 health maintenance organizations, and other entities eligible to
4-31 provide coverage under the health benefit program;
4-32 (5) develop and implement a public awareness program
4-33 to educate the public about the program;
4-34 (6) establish participation objectives for the
4-36 (7) negotiate premiums for coverage under the program
4-37 and applicable copayments, coinsurance, or deductibles to be paid
4-38 on behalf of a covered child; and
4-39 (8) contract for the provision of health benefit
4-40 coverage under the program.
4-41 (b) The board may contract for or otherwise obtain
4-42 third-party administration services for the corporation.
4-43 (c) In developing the program, the corporation may consult
4-44 with the Texas Department of Health, appropriate professional
4-45 organizations, coverage providers, other agency officials, and
4-46 consultants. The corporation shall consult with the Title IV-D
4-47 agency in matters relating to coverage for children who are the
4-48 subject of a medical child support order and for whom the agency is
4-49 providing enforcement services.
4-50 (d) Notwithstanding Article 3.51-6, Insurance Code, the
4-51 corporation may establish group coverage plans for children under
4-52 the program in specified geographic regions of the state or based
4-53 on other criteria approved by the commissioner of insurance.
4-54 (e) The parent, managing conservator, or guardian of a
4-55 child, or another person sponsoring coverage for the child, is
4-56 responsible for premiums for coverage under the program and for
4-57 applicable copayments, coinsurance, or deductibles, as determined
4-58 by the corporation. The corporation may develop a premium
4-59 structure that varies according to ability to pay and may require,
4-60 in accordance with the premium structure, that the parent,
4-61 conservator, guardian, or sponsor pay the full cost of the child's
4-63 (f) The corporation may require that the parent, managing
4-64 conservator, or guardian of a child, or another person sponsoring
4-65 coverage for the child, pay to the corporation a reasonable
4-66 enrollment fee, in an amount set by the corporation, before the
4-67 child is enrolled in coverage under the program.
4-68 (g) The health benefit coverage provided under the
4-69 corporation's program is secondary to any other available private
5-1 coverage covering a child. The corporation shall ensure that
5-2 benefits provided by the program are the payor of last resort with
5-3 respect to private coverage covering a child.
5-4 (h) In developing eligibility criteria under Subsection
5-5 (a)(3), the corporation shall consider the impact of the
5-6 eligibility criteria on the availability of other health benefit
5-7 plan coverage for children. The corporation shall restrict
5-8 eligibility for coverage under the program or impose a waiting
5-9 period or other appropriate restriction to minimize any adverse
5-10 impact on the availability of other health benefit plan coverage.
5-11 (i) The board may develop a marketing plan under which each
5-12 participating eligible coverage provider is required to market the
5-13 program. The corporation or eligible coverage providers may
5-14 publicize the corporation and the general nature of the program.
5-15 Direct sale or solicitation of a health benefit plan offered
5-16 through the program must be done in accordance with the Insurance
5-17 Code and other insurance laws of this state.
5-18 Sec. 109.062. CORPORATE OPERATIONS; LICENSING REQUIREMENTS.
5-19 (a) The corporation is not an insurer and may not
5-20 self-insure or self-fund the coverage provided through the program.
5-21 The board and employees of the corporation are not agents of an
5-22 insurer. The corporation, the board, and the employees of the
5-23 corporation are not subject to any licensing requirement imposed
5-24 under the Insurance Code or another insurance law of this state.
5-25 (b) The corporation shall use prudent business practices in
5-26 the procurement of goods and services. A law governing the
5-27 procurement of goods or services by a state agency, including
5-28 Chapter 2054 or 2254, Government Code, or Subtitle D, Title 10,
5-29 Government Code, applies only during a period in which:
5-30 (1) the corporation receives state money under a
5-31 direct state appropriation; or
5-32 (2) a person appointed by the governor, other than an
5-33 ex officio member of the board, is serving as a member of the
5-35 Sec. 109.063. OPERATIONS OF ELIGIBLE COVERAGE PROVIDER.
5-36 (a) An eligible coverage provider must:
5-37 (1) hold a certificate of authority or other
5-38 appropriate license issued by the Texas Department of Insurance
5-39 that authorizes the eligible coverage provider to provide the type
5-40 of coverage to be offered through the program; and
5-41 (2) satisfy, except as provided by this section, any
5-42 other applicable requirement of the Insurance Code or another
5-43 insurance law of this state.
5-44 (b) A health benefit plan provider under the program is not
5-45 subject to a law that requires coverage or the offer of coverage of
5-46 a health care service or benefit.
5-47 (c) An eligible coverage provider is not subject to the
5-48 premium tax imposed by Article 4.11, Insurance Code, or the tax on
5-49 revenues imposed under Section 33, Texas Health Maintenance
5-50 Organization Act (Section 20A.33, Vernon's Texas Insurance Code),
5-51 with respect to money received for coverage provided under this
5-53 (d) The participation criteria for authorized insurers,
5-54 health service organizations, health maintenance organizations, and
5-55 other entities that provide coverage under the health benefit
5-56 program shall not require that an eligible coverage provider
5-57 provide benefits in a school-based clinic.
5-58 Sec. 109.064. ACCESS TO RECORDS; CONFIDENTIALITY.
5-59 (a) Notwithstanding any other law, the corporation may obtain the
5-60 medical records of and other information relating to a child
5-61 covered by the program or applying to be covered by the program on
5-62 receipt of the informed written consent of the child's parent,
5-63 managing conservator, or guardian.
5-64 (b) Information in the possession of the corporation that
5-65 identifies an individual, including medical records and family
5-66 financial information, is confidential and exempt from disclosure
5-67 and discovery in a civil action. Subject to Section 109.038(b) and
5-68 any requirement of federal law, the corporation or an employee or
5-69 agent of the corporation may not release confidential information
6-1 to any person, including a state or federal agency, without the
6-2 written consent of a parent, managing conservator, or guardian of
6-3 the participating child.
6-4 Sec. 109.065. GRIEVANCES AND APPEALS. The corporation shall
6-5 develop a plan for the receipt and consideration of complaints
6-6 regarding participating eligible coverage providers to ensure
6-7 appropriate delivery of health care services to participating
6-8 children and to ensure that eligible coverage providers comply with
6-9 any applicable complaint procedure imposed by law or the
6-10 requirements of the corporation.
6-11 Sec. 109.066. TEXAS DEPARTMENT OF HEALTH PROGRAMS. (a) The
6-12 department may use appropriated funds, in accordance with the
6-13 General Appropriations Act, to purchase coverage under a health
6-14 benefit plan provided through the program for children who are
6-15 eligible for coverage for the program if:
6-16 (1) the children receive health care benefits under
6-17 the chronically ill and disabled children's program or another
6-18 federally funded or state-funded program, other than the state
6-19 Medicaid program, that is administered by the department;
6-20 (2) provision of the benefits through a health benefit
6-21 plan provided through the program is a more cost-effective means of
6-22 providing some or all of the benefits described by Subdivision (1);
6-24 (3) no benefit or service provided to the children is
6-25 eliminated or adversely affected as a result of the provision of
6-26 the benefits through the program.
6-27 (b) Services provided to children under a federally funded
6-28 or state-funded program administered by the department, including
6-29 the chronically ill and disabled children's program, may not be
6-30 reduced or eliminated because some or all of the services are
6-31 provided through the program or otherwise provided because of the
6-32 establishment of the corporation or the program.
6-33 Sec. 109.067. AVAILABILITY OF RISK POOL COVERAGE. The
6-34 corporation shall notify the parent, managing conservator, or
6-35 guardian of a child who applies for coverage through the program of
6-36 the availability of coverage from the risk pool established under
6-37 Article 3.77, Insurance Code.
6-38 Sec. 109.068. PROGRAM NOT AN ENTITLEMENT. This chapter does
6-39 not establish an entitlement to health benefits provided through
6-40 the corporation or any other entitlement.
6-41 (Sections 109.069-109.100 reserved for expansion
6-42 SUBCHAPTER D. COVERAGE UNDER ORDER OF MEDICAL
6-43 SUPPORT FOR CHILD
6-44 Sec. 109.101. APPLICATION. A party ordered under Chapter
6-45 154, Family Code, to apply for coverage for a child under the
6-46 program shall provide to the corporation:
6-47 (1) a copy of the order rendered under Chapter 154;
6-49 (2) the name and address of the obligor's employer.
6-50 Sec. 109.102. DUTIES OF CORPORATION OR DESIGNEE OF
6-51 CORPORATION. (a) The corporation or the designee of the
6-52 corporation shall review an application and, if the corporation or
6-53 designee finds that the child is eligible for coverage under the
6-54 program, shall:
6-55 (1) issue coverage to the child in accordance with the
6-56 program; and
6-57 (2) notify the obligor's employer in accordance with
6-58 Subsection (b).
6-59 (b) The notice provided under Subsection (a)(2) must:
6-60 (1) explain the employer's obligations under Section
6-62 (2) state:
6-63 (A) the amount to be paid for coverage of the
6-64 child, including the amount of the premium and the premium
6-65 stabilization revolving account fee imposed under Subchapter E;
6-66 (B) whether the amount is to be paid to the
6-67 corporation or the corporation's designee; and
6-68 (C) the address to which the payment is to be
6-69 sent; and
7-1 (3) include a copy of the medical child support order
7-2 rendered under Chapter 154, Family Code.
7-3 (c) The corporation or the corporation's designee shall
7-4 notify the employer of an obligor of any increase in the amount to
7-5 be paid for coverage of the child under the program.
7-6 Sec. 109.103. DUTY OF EMPLOYER. (a) An employer who
7-7 receives notice under Section 109.102 shall withhold an appropriate
7-8 amount from the obligor's earnings for the required payment and
7-9 remit the amount as instructed on the notice.
7-10 (b) An employer who fails to withhold or remit payments as
7-11 required by this section or who discriminates in hiring or
7-12 employment on the basis of a medical support order is subject to
7-13 the penalties and fines imposed under Subchapter C, Chapter 158,
7-14 Family Code.
7-15 (Sections 109.104-109.150 reserved for expansion
7-16 SUBCHAPTER E. ELIGIBILITY OF CERTAIN CHILDREN;
7-17 STABILIZATION FUND
7-18 Sec. 109.151. TERMINATION FOR FAILURE TO PAY PREMIUMS.
7-19 Except as provided by this subchapter, the corporation shall
7-20 terminate the coverage of a child for failure to pay a premium as
7-21 required under Section 109.061(e).
7-22 Sec. 109.152. PREMIUM STABILIZATION REVOLVING ACCOUNT.
7-23 (a) The premium stabilization revolving account is an
7-24 account within the Texas healthy kids fund.
7-25 (b) The premium stabilization revolving account is composed
7-26 of money contributed to the account under this subchapter, any
7-27 money appropriated to the account by the legislature, and any gift
7-28 of money accepted by the board for the purposes of the account.
7-29 Sec. 109.153. FEE; DEPOSIT TO ACCOUNT. (a) The corporation
7-30 shall charge for each child covered under the program a reasonable
7-31 premium stabilization revolving account fee, not to exceed $5 each
7-33 (b) The corporation shall remit money collected under this
7-34 section to the comptroller, in accordance with rules adopted by the
7-35 comptroller, for deposit to the credit of the premium stabilization
7-36 revolving account.
7-37 Sec. 109.154. USE OF MONEY IN ACCOUNT. (a) Money in the
7-38 premium stabilization revolving account may be used by the
7-39 corporation only to pay a premium for coverage provided through the
7-40 program for a child for whom a premium is not paid in accordance
7-41 with Section 109.061(e).
7-42 (b) A premium may not be paid for a child who is covered by
7-43 a health benefit plan other than the plan offered by the
7-45 (c) The corporation shall determine the period for which
7-46 premiums may be paid from the fund and the circumstances under
7-47 which the premiums may be paid.
7-48 (d) The parent, managing conservator, or guardian of a child
7-49 for whom a premium is paid from the premium stabilization revolving
7-50 account, or another person sponsoring coverage for the child,
7-51 remains responsible for reimbursing the account for the premium
7-52 paid. The coverage for the child is subject to termination, in
7-53 accordance with criteria adopted by the board, if the parent,
7-54 managing conservator, guardian, or sponsor fails to reimburse the
7-55 account as required by this subsection. The corporation shall
7-56 remit money collected under this subsection to the comptroller for
7-57 deposit to the credit of the account.
7-58 SECTION 2. Section 154.182, Family Code, is amended by
7-59 amending Subsection (b) and adding Subsection (c) to read as
7-61 (b) In determining the manner in which health insurance for
7-62 the child is to be ordered, the court shall render its order in
7-63 accordance with the following priorities, unless a party shows good
7-64 cause why a particular order would not be in the best interest of
7-65 the child:
7-66 (1) if health insurance is available for the child
7-67 through the obligor's employment or membership in a union, trade
7-68 association, or other organization, the court shall order the
7-69 obligor to include the child in the obligor's health insurance;
8-1 (2) if health insurance is not available for the child
8-2 through the obligor's employment but is available for the child
8-3 through the obligee's employment or membership in a union, trade
8-4 association, or other organization, the court may order the obligee
8-5 to provide health insurance for the child, and, in such event,
8-6 shall order the obligor to pay additional child support to be
8-7 withheld from earnings under Chapter 158 to the obligee for the
8-8 actual cost of the health insurance for the child; [
8-9 (3) if health insurance is not available for the child
8-10 under Subdivision (1) or (2), the court shall order the obligor to
8-11 provide health insurance for the child if the court finds that
8-12 health insurance is available for the child from another source and
8-13 that the obligor is financially able to provide it;
8-14 (4) if health insurance is not available for the child
8-15 under Subdivision (1), (2), or (3), the court shall order the
8-16 obligor to apply for coverage through the Texas Healthy Kids
8-17 Corporation established under Chapter 109, Health and Safety Code;
8-19 (5) if health coverage is not available for the child
8-20 under Subdivision (1), (2), (3), or (4), the court shall order the
8-21 obligor to pay the obligee, in addition to any amount ordered under
8-22 the guidelines for child support, a reasonable amount each month as
8-23 medical support for the child to be withheld from earnings under
8-24 Chapter 158.
8-25 (c) In establishing the amount of additional medical child
8-26 support under Subsection (b)(5), the court shall presume that $38
8-27 each month is a reasonable amount for a child but may order a
8-28 greater or lesser amount as appropriate under the circumstances.
8-29 The Health and Human Services Commission may promulgate guidelines
8-30 for the dollar amounts of medical child support that the court may
8-31 presumptively apply in circumstances in which the obligor is
8-32 responsible for medical child support for more than one child.
8-33 SECTION 3. Section 171.063(a), Tax Code, is amended to read
8-34 as follows:
8-35 (a) The following corporations are exempt from the franchise
8-37 (1) a nonprofit corporation exempted from the federal
8-38 income tax under Section 501(c)(3), (4), (5), (6), (7), (8), (10),
8-39 or (19), Internal Revenue Code which in the case of a nonprofit
8-40 hospital means a hospital providing charity care and community
8-41 benefits as set forth in Paragraph (A), (B), (C), (D), (E), (F), or
8-43 (A) charity care and government-sponsored
8-44 indigent health care are provided at a level which is reasonable in
8-45 relation to the community needs, as determined through the
8-46 community needs assessment, the available resources of the hospital
8-47 or hospital system, and the tax-exempt benefits received by the
8-48 hospital or hospital system;
8-49 (B) charity care and government-sponsored
8-50 indigent health care are provided in an amount equal to at least
8-51 four percent of the hospital's or hospital system's net patient
8-53 (C) charity care and government-sponsored
8-54 indigent health care are provided in an amount equal to at least
8-55 100 percent of the hospital's or hospital system's tax-exempt
8-56 benefits, excluding federal income tax;
8-57 (D) for tax periods beginning before January 1,
8-58 1996, charity care and community benefits are provided in a
8-59 combined amount equal to at least five percent of the hospital's
8-60 net patient revenue, provided that charity care and
8-61 government-sponsored indigent health care are provided in an amount
8-62 equal to at least three percent of net patient revenue;
8-63 (E) for tax periods beginning after December 31,
8-64 1995, charity care and community benefits are provided in a
8-65 combined amount equal to at least five percent of the hospital's or
8-66 hospital system's net patient revenue, provided that charity care
8-67 and government-sponsored indigent health care are provided in an
8-68 amount equal to at least four percent of net patient revenue;
8-69 (F) a nonprofit hospital that has been
9-1 designated as a disproportionate share hospital under the state
9-2 Medicaid program in the current year or in either of the previous
9-3 two fiscal years is considered to have provided a reasonable amount
9-4 of charity care and government-sponsored indigent health care and
9-5 is considered in compliance with the standards provided by this
9-6 subsection; or
9-7 (G) a hospital operated on a nonprofit basis
9-8 that is located in a county with a population of less than 50,000
9-9 and in which the entire county or the population of the entire
9-10 county has been designated as a health professionals shortage area
9-11 is considered in compliance with the standards provided by this
9-13 (2) a corporation exempted under Section 501(c)(2) or
9-14 (25), Internal Revenue Code, if the corporation or corporations for
9-15 which it holds title to property is either exempt from or not
9-16 subject to the franchise tax;
9-17 (3) a corporation exempted from federal income tax
9-18 under Section 501(c)(16), Internal Revenue Code; and
9-19 (4) a nonprofit corporation exempted from the federal
9-20 income tax under Section 501(c)(3), Internal Revenue Code, that
9-21 does not receive any payment for providing health care services to
9-22 inpatients or outpatients from any source including but not limited
9-23 to the patient or person legally obligated to support the patient,
9-24 third-party payors, Medicare, Medicaid, or any other state or local
9-25 indigent care program. Payment for providing health care services
9-26 does not include charitable donations, legacies, bequests, or
9-27 grants or payments for research.
9-28 For purposes of satisfying Paragraph (E) of Subdivision (1),
9-29 a hospital or hospital system may not change its existing fiscal
9-30 year unless the hospital or hospital system changes its ownership
9-31 or corporate structure as a result of a sale or merger.
9-32 For purposes of this subsection, a hospital that satisfies
9-33 Paragraph (A), (F), or (G) of Subdivision (1) shall be excluded in
9-34 determining a hospital system's compliance with the standards
9-35 provided by Paragraph (B), (C), (D), or (E) of Subdivision (1).
9-36 For purposes of this subsection, the terms "charity care,"
9-37 "government-sponsored indigent health care," "health care
9-38 organization," "hospital system," "net patient revenue," "nonprofit
9-39 hospital," and "tax-exempt benefits" have the meanings set forth in
9-40 Sections 311.031 and 311.042, Health and Safety Code. A
9-41 determination of the amount of community benefits and charity care
9-42 and government-sponsored indigent health care provided by a
9-43 hospital or hospital system and the hospital's or hospital system's
9-44 compliance with the requirements of Section 311.045, Health and
9-45 Safety Code, shall be based on the most recently completed and
9-46 audited prior fiscal year of the hospital or hospital system.
9-47 A requirement that a nonprofit hospital provide charity care
9-48 and community benefits under this subsection may be satisfied by a
9-49 donation of money to the Texas Healthy Kids Corporation established
9-50 by Chapter 109, Health and Safety Code, provided that:
9-51 (1) the money is donated to be used for a purpose
9-52 described by Section 109.033(c), Health and Safety Code; and
9-53 (2) not more than 10 percent of the charity care
9-54 required under any provision of this subsection may be satisfied by
9-55 the donation.
9-56 The providing of charity care and government-sponsored
9-57 indigent health care in accordance with Paragraph (A) of
9-58 Subdivision (1) shall be guided by the prudent business judgment of
9-59 the hospital which will ultimately determine the appropriate level
9-60 of charity care and government-sponsored indigent health care based
9-61 on the community needs, the available resources of the hospital,
9-62 the tax-exempt benefits received by the hospital, and other factors
9-63 that may be unique to the hospital, such as the hospital's volume
9-64 of Medicare and Medicaid patients. These criteria shall not be
9-65 determinative factors, but shall be guidelines contributing to the
9-66 hospital's decision along with other factors which may be unique to
9-67 the hospital. The formulas contained in Paragraphs (B), (C), (D),
9-68 and (E) of Subdivision (1) shall also not be considered
9-69 determinative of a reasonable amount of charity care and
10-1 government-sponsored indigent health care.
10-2 The requirements of this subsection shall not apply to the
10-3 extent a hospital or hospital system demonstrates that reductions
10-4 in the amount of community benefits, charity care, and
10-5 government-sponsored indigent health care are necessary to maintain
10-6 financial reserves at a level required by a bond covenant, are
10-7 necessary to prevent the hospital or hospital system from
10-8 endangering its ability to continue operations, or if the hospital,
10-9 as a result of a natural or other disaster, is required
10-10 substantially to curtail its operations.
10-11 In any fiscal year that a hospital or hospital system,
10-12 through unintended miscalculation, fails to meet any of the
10-13 standards in Subdivision (1), the hospital or hospital system shall
10-14 not lose its tax-exempt status without the opportunity to cure the
10-15 miscalculation in the fiscal year following the fiscal year the
10-16 failure is discovered by both meeting one of the standards and
10-17 providing an additional amount of charity care and
10-18 government-sponsored indigent health care that is equal to the
10-19 shortfall from the previous fiscal year. A hospital or hospital
10-20 system may apply this provision only once every five years.
10-21 SECTION 4. The Insurance Code is amended by adding Chapter
10-22 27 to read as follows:
10-23 CHAPTER 27. HEALTH BENEFIT PLANS FOR CHILDREN
10-24 Art. 27.01. DEFINITION. In this chapter, "health benefit
10-25 plan" means a health benefit plan described by Article 27.02 of
10-26 this code.
10-27 Art. 27.02. SCOPE OF CHAPTER. This chapter applies to a
10-28 health benefit plan that:
10-29 (1) provides benefits for medical or surgical expenses
10-30 incurred as a result of a health condition, accident, or sickness,
10-32 (A) an individual, group, blanket, or franchise
10-33 insurance policy or insurance agreement, a group hospital service
10-34 contract, or an individual or group evidence of coverage that is
10-35 offered by:
10-36 (i) an insurance company;
10-37 (ii) a group hospital service corporation
10-38 operating under Chapter 20 of this code;
10-39 (iii) a fraternal benefit society
10-40 operating under Chapter 10 of this code;
10-41 (iv) a stipulated premium insurance
10-42 company operating under Chapter 22 of this code; or
10-43 (v) a health maintenance organization
10-44 operating under the Texas Health Maintenance Organization Act
10-45 (Chapter 20A, Vernon's Texas Insurance Code); or
10-46 (B) to the extent permitted by the Employee
10-47 Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et
10-48 seq.), a health benefit plan that is offered by:
10-49 (i) a multiple employer welfare
10-50 arrangement as defined by Section 3, Employee Retirement Income
10-51 Security Act of 1974 (29 U.S.C. Section 1002) or another analogous
10-52 benefit arrangement; or
10-53 (ii) any other entity not licensed under
10-54 this code or another insurance law of this state that contracts
10-55 directly for health care services on a risk sharing basis,
10-56 including an entity that contracts for health care services on a
10-57 capitation basis; or
10-58 (2) is offered by an approved nonprofit health
10-59 corporation that is certified under Section 5.01(a), Medical
10-60 Practice Act (Article 4495b, Vernon's Texas Civil Statutes), and
10-61 that holds a certificate of authority issued by the commissioner
10-62 under Article 21.52F of this code.
10-63 Art. 27.03. CHILDREN'S HEALTH BENEFIT PLAN. (a) The issuer
10-64 of a health benefit plan may offer a children's health benefit plan
10-65 in accordance with this chapter. The health benefit plan may
10-66 provide coverage only to children younger than 18 years of age.
10-67 (b) An issuer of a health benefit plan may not offer a
10-68 children's health benefit plan under this chapter unless the plan's
10-69 structure and the benefits offered under the plan have been
11-1 approved by the commissioner.
11-2 Art. 27.04. MANDATED BENEFIT PROVISIONS INAPPLICABLE. A
11-3 children's health benefit plan is not subject to a law that
11-4 requires coverage or the offer of coverage of a health care service
11-5 or benefit.
11-6 Art. 27.05. EXEMPTION FROM PREMIUM TAX. The issuer of a
11-7 children's health benefit plan is not subject to the premium tax
11-8 imposed by Article 4.11 of this code or the tax on revenues imposed
11-9 under Section 33, Texas Health Maintenance Organization Act
11-10 (Article 20A.33, Vernon's Texas Insurance Code), with respect to
11-11 money received for coverage provided under that plan.
11-12 Art. 27.06. RULES. The commissioner may adopt rules to
11-13 implement this chapter.
11-14 SECTION 5. (a) Notwithstanding Section 109.032, Health and
11-15 Safety Code, as added by this Act, the initial board of directors
11-16 of the Texas Healthy Kids Corporation appointed under this section
11-17 shall be composed of:
11-18 (1) six members appointed by the governor with the
11-19 advice and consent of the senate;
11-20 (2) the commissioner of health and human services or
11-21 the commissioner's designee, who serves as a voting ex officio
11-23 (3) the commissioner of insurance or the
11-24 commissioner's designee, who serves as a voting ex officio member;
11-26 (4) the director of the Title IV-D agency, or the
11-27 director's designee, who serves as a voting ex officio member.
11-28 (b) The governor shall appoint the members of the board of
11-29 directors appointed under Subsection (a)(1) of this section as soon
11-30 as practical after the effective date of this Act. The terms of
11-31 those members expire on September 1, 1999.
11-32 (c) On expiration of the terms of the initial appointed
11-33 members of the board, the governor shall appoint four members for
11-34 terms expiring September 1, 2001, and two of the formerly appointed
11-35 positions shall be filled as provided by the articles and bylaws of
11-36 the corporation.
11-37 (d) On expiration of the terms of the four members appointed
11-38 under Subsection (c), the governor shall appoint two members to
11-39 serve terms expiring September 1, 2003. The two other positions of
11-40 the formerly appointed members shall be filled as provided by the
11-41 articles and bylaws of the corporation.
11-42 (e) After September 1, 2003, all members of the board of
11-43 directors shall be selected as provided by Section 109.032, Health
11-44 and Safety Code, as added by this Act.
11-45 (f) A person is not eligible for appointment by the governor
11-46 to the board of directors under this section if the person does not
11-47 satisfy the requirements of Section 109.032, Health and Safety
11-48 Code, as added by this Act.
11-49 (g) The members of the board shall annually elect a member
11-50 to serve as the presiding officer of the board.
11-51 (h) Members of the board of directors appointed by the
11-52 governor serving under this section serve without compensation, but
11-53 are entitled to reimbursement of their travel expenses as provided
11-54 for in the General Appropriations Act for state board or commission
11-55 members. Money appropriated to the Texas Department of Insurance,
11-56 the Health and Human Services Commission, or the Title IV-D agency
11-57 may be spent, consistent with the General Appropriations Act, in
11-58 connection with the work or expenses of the ex officio members of
11-59 the initial board of directors.
11-60 (i) This Section expires September 1, 2003.
11-61 SECTION 6. (a) Not later than the 60th day after the
11-62 effective date of this Act, the commissioner of insurance, acting
11-63 as incorporator, shall take the steps necessary to create the Texas
11-64 Healthy Kids Corporation as a nonprofit corporation under the Texas
11-65 Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
11-66 Texas Civil Statutes).
11-67 (b) Not later than the 90th day after the effective date of
11-68 this Act, the commissioner of insurance, acting on behalf of the
11-69 Texas Healthy Kids Corporation, shall employ an acting executive
12-1 director for the corporation. The acting executive director may:
12-2 (1) develop a proposed business plan for the
12-4 (2) solicit alternative funding for the corporation
12-5 and for the health benefit plan program to be established by the
12-6 corporation; and
12-7 (3) develop, to the extent possible, a proposed health
12-8 benefit plan program for the consideration of the board of
12-9 directors of the Texas Healthy Kids Corporation.
12-10 (c) The commissioner of insurance, on behalf of the
12-11 corporation, may accept grants and gifts of money, property, or
12-12 services to assist the acting executive director appointed under
12-13 Subsection (b) of this section in carrying out the acting executive
12-14 director's powers. The commissioner's authority under this section
12-15 expires on the date all of the appointed members of the board of
12-16 directors of the Texas Healthy Kids Corporation have been appointed
12-17 by the governor and have qualified for office.
12-18 (d) The acting executive director appointed under this
12-19 section serves until the earlier of:
12-20 (1) the date the acting executive director is
12-21 dismissed by the commissioner of insurance;
12-22 (2) the date the acting executive director is
12-23 dismissed by the board of directors of the Texas Healthy Kids
12-24 Corporation; or
12-25 (3) the date the board of directors of the corporation
12-26 employs an executive director for the corporation.
12-27 (e) Notwithstanding Subsection (b) of this section, the
12-28 commissioner of insurance may not employ an acting executive
12-29 director on or after the date all of the appointed members of the
12-30 board of directors of the Texas Healthy Kids Corporation have been
12-31 appointed and have qualified for office.
12-32 SECTION 7. (a) The Texas Healthy Kids Corporation shall
12-33 offer an initial health benefit plan under Chapter 109, Health and
12-34 Safety Code, as added by this Act, not later than the first
12-35 anniversary of the effective date of this Act.
12-36 (b) Not later than the date the Texas Healthy Kids
12-37 Corporation first offers a health benefit plan in accordance with
12-38 Subsection (a) of this section, the board of directors of the Texas
12-39 Healthy Kids Corporation shall:
12-40 (1) establish general administrative and accounting
12-41 procedures for the corporation;
12-42 (2) develop the design and benefits structure of any
12-43 health benefit plan that may be offered by the corporation through
12-44 eligible coverage providers in accordance with Chapter 109, Health
12-45 and Safety Code, as added by this Act; and
12-46 (3) develop a plan for the receipt and consideration
12-47 of complaints as required by Section 109.065, Health and Safety
12-48 Code, as added by this Act.
12-49 (c) The board of directors of the Texas Healthy Kids
12-50 Corporation shall determine whether it is feasible, considering the
12-51 resources available, to initially offer the health benefit plan
12-52 required under Chapter 109, Health and Safety Code, as added by
12-53 this Act, in each region of the state. If the board determines
12-54 that it is not feasible to initially offer the health benefit plan
12-55 on a statewide basis, the board shall develop and the corporation
12-56 shall implement a schedule to stagger implementation of the health
12-57 benefit program in different regions of the state.
12-58 SECTION 8. The issuer of a health benefit plan may not offer
12-59 a children's health benefit plan under Chapter 27, Insurance Code,
12-60 as added by this Act, before January 1, 1998.
12-61 SECTION 9. A court may not order that coverage be provided
12-62 to a child through the Texas Healthy Kids Corporation under Section
12-63 154.182, Family Code, as amended by this Act, before the date that
12-64 corporation first offers coverage under a health benefit plan in
12-65 the applicable region of the state.
12-66 SECTION 10. As soon as practicable after the effective date
12-67 of this Act, the Title IV-D agency shall seek the modification of
12-68 child support orders that are enforced by the agency and to which
12-69 Section 154.182(b)(5), Family Code, as added by this Act, applies
13-1 to obtain additional medical child support under that subdivision.
13-2 SECTION 11. (a) Except as provided by Subsection (b) of
13-3 this section, this Act takes effect immediately.
13-4 (b) Section 3 of this Act takes effect January 1, 1998, and
13-5 applies to a report originally due on or after that date.
13-6 SECTION 12. The importance of this legislation and the
13-7 crowded condition of the calendars in both houses create an
13-8 emergency and an imperative public necessity that the
13-9 constitutional rule requiring bills to be read on three several
13-10 days in each house be suspended, and this rule is hereby suspended,
13-11 and that this Act take effect and be in force according to its
13-12 terms, and it is so enacted.
13-13 * * * * *