Bill not drafted by TLC or Senate E&E.

      Line and page numbers may not match official copy.

      By Van de Putte                                 H.B. No. 1679

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to requirements for certain health insurance benefits.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Subsection (b), Section 3D, Article 3.51-6,

 1-5     Insurance Code, is amended to read as follows:

 1-6           (b)  A health insurance policy that provides coverage for the

 1-7     immediate family or children of a person insured under the policy

 1-8     may not exclude from coverage or limit coverage to a child of the

 1-9     insured solely because the child is adopted.  The insurer shall

1-10     provide full coverage under the policy to the child of an insured

1-11     without limiting coverage of a preexisting condition if an

1-12     application for coverage for the child is made not later than the

1-13     31st day after the date on which the adoption is final or, for the

1-14     period during which the adoption is not final, not later than the

1-15     31st day after the date on which the insured becomes a party in a

1-16     suit in which adoption of the child by the insured is sought.

1-17           SECTION 2.  Article 3.51-14, Insurance Code, is amended by

1-18     adding Section 4 to read as follows:

1-19           Sec. 4.  COMPLIANCE REQUIRED.  Any coverage provided under

1-20     this article to an employee welfare benefit plan as defined in

1-21     Section 3(1) of the Employee Retirement Income Security Act of 1974

1-22     (29 U.S.C. Section 1002(1)) must comply with Article 3.51-15 of

1-23     this code.

1-24           SECTION 3.  Subchapter E, Chapter 3, Insurance Code, is

 2-1     amended by adding Article 3.51-15 to read as follows:

 2-2           Art. 3.51-15.  CERTAIN INSURERS MUST MEET REQUIREMENTS FOR

 2-3     PARITY

 2-4           Sec. 1.  PURPOSE.  The purpose of this article is to

 2-5     coordinate the requirements of Texas law with federal law relating

 2-6     to a requirement of parity between certain mental health benefits

 2-7     and medical and surgical benefits.

 2-8           Sec. 2.  DEFINITIONS.  In this article:

 2-9                 (1)  "Aggregate lifetime limit" means a dollar

2-10     limitation on the total amount of benefits that may be paid under

2-11     the health insurance coverage with respect to an individual or

2-12     other coverage unit.

2-13                 (2)  "Annual limit" means a dollar limitation on the

2-14     total amount of benefits that may be paid in a 12-month period

2-15     under the health insurance coverage with respect to an individual

2-16     or other coverage unit.

2-17                 (3)  "Insurer" means:

2-18                       (A)  an insurance company;

2-19                       (B)  a group hospital service corporation

2-20     operating under Chapter 20 of this code;

2-21                       (C)  a fraternal benefit society operating under

2-22     Chapter 10 of this code;

2-23                       (D)  a stipulated premium insurance company

2-24     operating under Chapter 22 of this code;

2-25                       (E)  a health maintenance organization operating

2-26     under the Texas Health Maintenance Organization Act (Chapter 20A,

2-27     Vernon's Texas Insurance Code); or

2-28                       (F)  an approved nonprofit health corporation

2-29     that is certified under Section 5.01(a), Medical Practice Act

2-30     (Article 4495b, Vernon's Texas Civil Statutes), and that holds a

 3-1     certificate of authority issued by the commissioner under Article

 3-2     21.52F of this code.

 3-3                 (4)  "Medical or surgical benefits" means benefits with

 3-4     respect to medical or surgical services as defined under the terms

 3-5     of the coverage, but such benefits do not include mental health

 3-6     benefits.

 3-7                 (5)  "Mental health benefits" means benefits with

 3-8     respect to mental health services as defined under the terms of the

 3-9     coverage and includes benefits provided for mental or emotional

3-10     illnesses or disorders and serious mental illnesses as defined and

3-11     referenced in this code or in rules promulgated by the commissioner

3-12     under this code but does not include benefits with respect to

3-13     treatment of substance abuse or chemical dependency.

3-14           Sec. 3.  PARITY REQUIREMENTS.  (a)  Any coverage for services

3-15     and benefits for the condition of mental illness or serious mental

3-16     illness provided by an insurer to an employee welfare benefit plan

3-17     as defined in Section 3(1) of the Employee Retirement Income

3-18     Security Act of 1974 (29 U.S.C. Section 1002(1)) must meet the

3-19     requirements of Subsections (b) and (c) of this section regarding

3-20     parity in annual and lifetime aggregate dollar limits between

3-21     medical and surgical benefits and mental illness benefits, unless

3-22     exempted under Section 4 of this article.

3-23           (b)  In the case of coverage that provides both medical and

3-24     surgical benefits and mental health benefits:

3-25                 (1)  if the coverage does not include an aggregate

3-26     lifetime limit on substantially all medical and surgical benefits,

3-27     the coverage may not impose any aggregate lifetime limit on mental

3-28     health benefits; and

3-29                 (2)  if the coverage includes an aggregate lifetime

3-30     limit on substantially all medical and surgical benefits, in this

 4-1     article referred to as the "applicable lifetime limit," the

 4-2     coverage shall either:

 4-3                       (A)  apply the applicable lifetime limit both to

 4-4     the medical and surgical benefits to which it otherwise would apply

 4-5     and to mental health benefits and not distinguish in the

 4-6     application of such limit between medical and surgical benefits and

 4-7     mental health benefits; or

 4-8                       (B)  not include any aggregate lifetime limit on

 4-9     mental health benefits that is less than the applicable lifetime

4-10     limit.

4-11           (c)  In the case of coverage that is not described in

4-12     Subsection (b) of this section and that includes no or different

4-13     aggregate lifetime limits on different categories of medical and

4-14     surgical benefits, the insurer must follow rules promulgated by the

4-15     Secretary of the Treasury under the Mental Health Parity Act of

4-16     1996 (Title VII, Pub. L. No. 104-204), under which the rule in

4-17     Subsection (b)(2) of this section is applied to such coverage with

4-18     respect to mental health benefits by substituting for the

4-19     applicable lifetime limit an average aggregate lifetime limit that

4-20     is computed taking into account the weighted average of the

4-21     aggregate lifetime limits applicable to such categories.

4-22           (d)  In the case of coverage that provides both medical and

4-23     surgical benefits and mental health benefits:

4-24                 (1)  if the coverage does not include an annual limit

4-25     on substantially all medical and surgical benefits, the coverage

4-26     may not impose any annual limit on mental health benefits; and

4-27                 (2)  if the coverage includes an annual limit on

4-28     substantially all medical and surgical benefits, in this article

4-29     referred to as the "applicable annual limit," the coverage shall

4-30     either:

 5-1                       (A)  apply the applicable annual limit both to

 5-2     medical and surgical benefits to which it otherwise would apply and

 5-3     to mental health benefits and not distinguish in the application of

 5-4     such limit between such medical and surgical benefits and mental

 5-5     health benefits; or

 5-6                       (B)  not include any annual limit on mental

 5-7     health benefits that is less than the applicable annual limit.

 5-8           (e)  In the case of coverage that is not described in

 5-9     Subsection (d) of this section and that includes no or different

5-10     annual limits on different categories of medical and surgical

5-11     benefits, the insurer must follow rules promulgated by the

5-12     Secretary of the Treasury under the Mental Health Parity Act of

5-13     1996 (Title VII, Pub. L. No. 104-204), under which the rule in

5-14     Subsection (d)(2) of this section is applied to such coverage with

5-15     respect to mental health benefits by substituting for the

5-16     applicable annual limit an average aggregate annual limit that is

5-17     computed taking into account the weighted average of the aggregate

5-18     annual limits applicable to such categories.

5-19           (f)  Nothing in this section shall be construed:

5-20                 (1)  as requiring an insurer to provide or offer any

5-21     mental health benefits, except as otherwise specified in this code;

5-22     or

5-23                 (2)  in the case of coverage that provides mental

5-24     health benefits, as affecting the terms and conditions, including

5-25     cost sharing, limits on numbers of visits or days of coverage, and

5-26     requirements relating to medical necessity, relating to the amount,

5-27     duration, or scope of mental health benefits under the coverage,

5-28     except as specifically provided in this article in regard to parity

5-29     in the imposition of aggregate lifetime limits and annual limits

5-30     for mental health benefits.

 6-1           Sec. 4.  EXEMPTIONS.  (a)  This section does not apply to

 6-2     coverage offered to an employee welfare benefit plan of an employer

 6-3     who, with respect to a calendar year and a plan year, employed an

 6-4     average of at least two but not more than 50 employees on business

 6-5     days during the preceding calendar year and who employs at least

 6-6     two employees on the first day of the plan year, in this article

 6-7     referred to as an "exempt employer."

 6-8           (b)  In determining employer size for purposes of this

 6-9     section:

6-10                 (1)  rules under Subsections (b), (c), (m), and (o),

6-11     Section 414 of the Internal Revenue Code of 1986 (26 U.S.C. Section

6-12     414) shall apply for purposes of treating persons as a single

6-13     employer;

6-14                 (2)  in the case of an employer which was not in

6-15     existence throughout the preceding calendar year, the determination

6-16     of whether the employer is an exempt employer shall be based on the

6-17     average number of employees that it is reasonably expected such

6-18     employer will employ on business days in the current calendar year;

6-19     and

6-20                 (3)  any reference in this section to an employer shall

6-21     include a reference to any predecessor of such employer.

6-22           (c)  This section shall not apply with respect to insurance

6-23     coverage offered to an employee welfare benefit plan if the

6-24     application of this section to the coverage results in an increase

6-25     in the cost for the coverage of at least one percent.

6-26           Sec. 5.  SEPARATE APPLICATION TO EACH OPTION OFFERED.  In the

6-27     case of an employee welfare benefit plan that offers a participant

6-28     or beneficiary two or more benefit package options under the plan,

6-29     the requirements of this article shall be applied separately to

6-30     each coverage package offered by an insurer or provider with

 7-1     respect to each option.

 7-2           Sec. 6.  RULEMAKING AUTHORITY.  The commissioner may

 7-3     promulgate reasonable rules to implement this article and to

 7-4     coordinate or comply with minimum requirements of federal law and

 7-5     regulations relating to parity of mental health benefits with any

 7-6     other health and accident benefits.

 7-7           SECTION 4.  Subsections (E), (F), (I), and (K), Section 2,

 7-8     Chapter 397, Acts of the 54th Legislature, 1955 (Article 3.70-2,

 7-9     Vernon's Texas Insurance Code), are amended to read as follows:

7-10                       (E)  No individual policy or group policy of

7-11     accident and sickness insurance, including policies issued by

7-12     companies subject to Chapter 20, [Texas] Insurance Code, [as

7-13     amended,] delivered or issued for delivery to any person in this

7-14     state which provides for accident and sickness coverage of

7-15     immediate family or children of an enrollee, which permits the

7-16     enrollment of any enrollee's immediate family or [additional

7-17     newborn] children for such coverage, or which provides maternity

7-18     benefits[,] may be issued in this state if it contains any

7-19     provisions excluding or limiting initial coverage of a newborn

7-20     infant for a period of time, or limitations or exclusions for

7-21     congenital defects of a newborn child.

7-22                       (F)  A group policy of accident and sickness

7-23     insurance delivered or issued for delivery to a person in this

7-24     state, including a group policy issued by a company subject to

7-25     Chapter 20, Insurance Code, or the Texas Health Maintenance

7-26     Organization Act (Chapter 20A, Vernon's Texas Insurance Code), that

7-27     provides coverage for treatment of mental or emotional illness or

7-28     disorder for a person when confined in a hospital must also provide

7-29     that coverage, which is not less favorable, shall be applicable for

7-30     treatment under the direction and continued medical supervision of

 8-1     a doctor of medicine or doctor of osteopathy in a psychiatric day

 8-2     treatment facility that provides organizational structure and

 8-3     individualized treatment plans separate from an in-patient program;

 8-4     subject to the same durational limits, deductibles, and coinsurance

 8-5     factors.  Any benefits so provided shall be determined as if

 8-6     necessary care and treatment in a psychiatric day treatment

 8-7     facility were in-patient care and treatment in a hospital, and each

 8-8     full day of treatment in a psychiatric day treatment facility shall

 8-9     be considered equal to one-half of one day of treatment of mental

8-10     or emotional illness or disorder in a hospital or in-patient

8-11     program for the purpose of determining policy benefits and benefit

8-12     maximums.  An insurer shall offer and the policyholder shall have

8-13     the right to reject such coverage for treatment of mental or

8-14     emotional illness or disorder when confined in a hospital or in a

8-15     psychiatric day treatment facility or may select an alternative

8-16     level of benefits thereunder if such coverage is offered by or

8-17     negotiated with such insurer, service plan corporation or health

8-18     maintenance organization, except that[; provided, however,] any

8-19     such alternative level of benefits shall provide policy benefits

8-20     and benefit maximums for treatment in psychiatric day treatment

8-21     facilities equal to at least one half of that provided for

8-22     treatment in hospital facilities, but not to exceed the usual and

8-23     customary charge of the psychiatric day treatment facility, and any

8-24     coverage provided to an employee welfare benefit plan as defined in

8-25     Section 3(1) of the Employee Retirement Income Security Act of 1974

8-26     (29 U.S.C. Section 1002(1)) must comply with Article 3.51-15,

8-27     Insurance Code.   Any such policy may require that the treatment

8-28     must be provided by a day treatment facility that treats a patient

8-29     for not more than eight hours in any 24-hour period, that the

8-30     attending physician certifies that such treatment is in lieu of

 9-1     hospitalization, and that the psychiatric treatment facility is

 9-2     accredited by the Program for Psychiatric Facilities, or its

 9-3     successor, of the Joint Commission on Accreditation of Hospitals.

 9-4     For the purpose of this subsection a psychiatric day treatment

 9-5     facility is a mental health facility which provides treatment for

 9-6     individuals suffering from acute, mental and nervous disorders in a

 9-7     structured psychiatric program utilizing individualized treatment

 9-8     plans with specific attainable goals and objectives appropriate

 9-9     both to the patient and the treatment modality of the program and

9-10     that is clinically supervised by a doctor of medicine who is

9-11     certified in psychiatry by the American Board of Psychiatry and

9-12     Neurology.

9-13                       (I)  An individual or group policy of accident

9-14     and sickness insurance that provides any emergency care benefit,

9-15     including policies issued by companies subject to Chapter 20,

9-16     Insurance Code, delivered or issued for delivery in this state must

9-17     define emergency care as follows:  "Emergency care" means health

9-18     care [bona fide emergency] services provided in a hospital

9-19     emergency facility to evaluate and treat medical conditions of a

9-20     recent [after the sudden] onset and [of a medical condition

9-21     manifesting itself by acute symptoms of sufficient] severity,

9-22     including but not limited to severe pain, [such] that would lead a

9-23     prudent layperson possessing an average knowledge of medicine and

9-24     health to believe that his or her condition, sickness, or injury is

9-25     of such a nature that failure to get [the absence of] immediate

9-26     medical care [attention] could [reasonably be expected to] result

9-27     in:

9-28                 (1)  placing the patient's health in serious jeopardy;

9-29                 (2)  serious impairment to bodily functions; [or]

9-30                 (3)  serious dysfunction of any bodily organ or part;

 10-1                (4)  serious disfigurement; or

 10-2                (5)  in the case of a pregnant woman, serious jeopardy

 10-3    to the health of the fetus.

 10-4                      (K)  An accident and sickness insurance policy

 10-5    that provides coverage for the immediate family or children of a

 10-6    person insured under the policy may not exclude from coverage or

 10-7    limit coverage to a child of the insured solely because the child

 10-8    is adopted.  The insurer shall provide full coverage under the

 10-9    policy to the child without limiting coverage of a preexisting

10-10    condition if an application for the child is made not later than

10-11    the 31st day after the date on which the adoption is final or, for

10-12    the period during which the adoption is not final, not later than

10-13    the 31st day after the date on which the insured becomes a party in

10-14    a suit in which adoption of the child by the insured is sought.

10-15    For the purposes of this subsection, a child is considered to be

10-16    the child of an insured if the insured is a party in a suit in

10-17    which the adoption of the child by the insured is sought.

10-18          SECTION 5.  Section 9, Texas Health Maintenance Organization

10-19    Act (Article 20A.09, Vernon's Texas Insurance Code), is amended by

10-20    adding Subsections (k), (l), and (m) to read as follows:

10-21          (k)(1)  A health maintenance organization shall provide a

10-22    group continuation privilege as required by this subsection.  Any

10-23    enrollee whose coverage under the group contract has been

10-24    terminated for any reason except involuntary termination for cause

10-25    and who has been continuously covered under the group contract and

10-26    under any group contract providing similar services and benefits

10-27    which it replaces for at least three consecutive months immediately

10-28    prior to termination shall be entitled to the group continuation

10-29    privilege as outlined in this subsection.  Involuntary termination

10-30    for cause does not include termination for any health-related

 11-1    cause.  Health maintenance organization contracts subject to this

 11-2    section shall provide continuation of group coverage for enrollees

 11-3    subject to the following eligibility provisions:

 11-4                      (A)  continuation of group coverage must be

 11-5    requested in writing not later than the 31st day after the later

 11-6    of:

 11-7                            (i)  the date the group coverage would

 11-8    otherwise terminate; or

 11-9                            (ii)  the date the enrollee is given notice

11-10    of the right of continuation by either the employer or the group

11-11    contract holder;

11-12                      (B)  an enrollee electing continuation must pay

11-13    to the group contract holder or employer on a monthly basis, in

11-14    advance, the amount of contribution required by the contract holder

11-15    or employer, plus two percent of the group rate for the coverage

11-16    being continued under the group contract, on the due date of each

11-17    payment;

11-18                      (C)  the enrollee's written election of

11-19    continuation, together with the first contribution required to

11-20    establish contributions on a monthly basis, in advance, must be

11-21    given to the contract holder or employer not later than the 31st

11-22    day after the later of:

11-23                            (i)  the date the group coverage would

11-24    otherwise terminate; or

11-25                            (ii)  the date the enrollee is given notice

11-26    of the right of continuation by either the employer or the group

11-27    contract holder;

11-28                      (D)  continuation may not terminate until the

11-29    earliest of:

11-30                            (i)  180 days after the date the election

 12-1    is made;

 12-2                            (ii)  the date on which failure to make

 12-3    timely payments would terminate coverage;

 12-4                            (iii)  the date on which the covered person

 12-5    is covered for similar services and benefits by another hospital,

 12-6    surgical, medical, or major medical expense insurance policy or

 12-7    hospital or medical service subscriber contract or medical practice

 12-8    or other prepayment plan or any other plan or program; or

 12-9                            (iv)  the date on which the group coverage

12-10    terminates in its entirety; and

12-11                      (E)  not less than 30 days before the end of the

12-12    180-day period following the date the enrollee elects continuation

12-13    of the contract, the health maintenance organization shall notify

12-14    the enrollee that the enrollee may be eligible for coverage under

12-15    the Texas Health Insurance Risk Pool as provided under Article

12-16    3.77, Insurance Code, and shall provide the address for applying to

12-17    such pool to the enrollee.

12-18                (2)  A health maintenance organization may offer to

12-19    each enrollee a conversion contract.  Such conversion contract

12-20    shall be issued without evidence of insurability if a written

12-21    application and payment of the first premium are made not later

12-22    than the 31st day after the date of termination.  The conversion

12-23    contract shall meet the minimum standards for services and benefits

12-24    for conversion contracts.  The commissioner shall issue rules and

12-25    regulations to establish minimum standards for services and

12-26    benefits under contracts issued pursuant to this subsection.

12-27                (3)  The premium for a conversion contract issued under

12-28    this Act shall be determined in accordance with the health

12-29    maintenance organization's premium rates for coverage that were

12-30    provided under the group contract or plan.  The premium may be

 13-1    based on the geographic location of each person to be covered and

 13-2    the type of conversion contract and coverage provided.  The premium

 13-3    for the same coverage under a conversion contract may not exceed

 13-4    200 percent of the premium determined in accordance with this

 13-5    subdivision.  The premium must be based on the type of conversion

 13-6    contract and the coverage provided by the contract.

 13-7          (l)(1)  An individual health care plan provided by a health

 13-8    maintenance organization must meet the requirements of this

 13-9    subsection.

13-10                (2)  For purposes of this subsection, an "individual

13-11    health care plan" means a health care plan:

13-12                      (A)  which provides health care services for

13-13    individuals and their dependents;

13-14                      (B)  in which an enrollee pays the premium and is

13-15    not being covered under a contract pursuant to continuation of

13-16    services and benefits provisions applicable under federal or state

13-17    law; and

13-18                      (C)  in which the evidence of coverage meets the

13-19    requirements of Section 2(a) of this Act.

13-20                (3)  A health maintenance organization may limit its

13-21    enrollees to those who live, reside, or work within the service

13-22    area for an individual health care plan.

13-23                (4)  An individual health care plan or a conversion

13-24    contract providing health care services shall be renewable with

13-25    respect to an enrollee at the option of the enrollee and may be

13-26    nonrenewed only if:

13-27                      (A)  premiums or contributions have not been paid

13-28    in accordance with the terms of the plan or the issuer has not

13-29    received timely premium payments;

13-30                      (B)  fraud or intentional misrepresentation has

 14-1    occurred;

 14-2                      (C)  the health maintenance organization is

 14-3    ceasing to offer coverage in the individual market in accordance

 14-4    with rules established by the commissioner;

 14-5                      (D)  the enrollee no longer lives, resides, or

 14-6    works in the area in which the health maintenance organization is

 14-7    authorized to provide coverage, but only if coverage is terminated

 14-8    under this paragraph uniformly without regard to any health

 14-9    status-related factor of covered enrollees; or

14-10                      (E)  the nonrenewal is in accordance with

14-11    applicable federal law and regulations.

14-12                (5)  The commissioner may adopt rules necessary to

14-13    implement this section and to meet the minimum requirements of

14-14    federal law and regulations.

14-15                (6)  A health maintenance organization may impose an

14-16    affiliation period as an alternative to a preexisting condition

14-17    limitation.  For the purposes of this subdivision, "affiliation

14-18    period" means a period not to exceed 60 days during which no

14-19    premiums shall be collected and coverage issued will not become

14-20    effective.  An affiliation period shall be waived for the period an

14-21    individual was covered by qualifying previous coverage, provided

14-22    that the qualifying previous coverage was continuous to a date not

14-23    more than 60 days prior to the effective date of the new coverage.

14-24    An affiliation period must be applied uniformly without regard to

14-25    any health status-related factors.

14-26                (7)  A health maintenance organization may not modify

14-27    an individual health care plan with respect to an enrollee or

14-28    dependent through riders or endorsements based on health status or

14-29    claim experience or otherwise restrict or exclude coverage of

14-30    benefits for specific diseases, medical services, or conditions

 15-1    otherwise covered by the health benefit plan.

 15-2                (8)  Denial by a health maintenance organization of an

 15-3    application for coverage from an individual shall be in writing and

 15-4    shall state the reason or reasons for the denial.

 15-5                (9)  A health maintenance organization may consider age

 15-6    and gender characteristics in determining and establishing the

 15-7    schedule of charges for individual coverage.  The rating formulas

 15-8    and methods for calculating the schedule of charges must be based

 15-9    on sound actuarial principles and must produce charges that are not

15-10    excessive, inadequate, or unfairly discriminatory.  Benefits must

15-11    be reasonable with respect to the rates produced by the formula or

15-12    method.

15-13                (10)  The commissioner shall issue rules and

15-14    regulations to establish minimum standards for benefits and

15-15    determine the percentage increase in the premium rates charged.

15-16          (m)  Articles 3.51-14 and 3.51-15, Insurance Code, and

15-17    Subsections (F) and (L), Section 2, Chapter 397, Acts of the 54th

15-18    Legislature, 1955 (Article 3.70-2, Vernon's Texas Insurance Code),

15-19    apply to health maintenance organizations.

15-20          SECTION 6.  The Texas Health Maintenance Organization Act

15-21    (Article 20A, Vernon's Texas Insurance Code), is amended by adding

15-22    Section 9A to read as follows:

15-23          Sec. 9A.  REQUIRED COVERAGE FOR NEWBORNS; ADOPTED CHILDREN.

15-24    (a)  Each health maintenance organization that provides coverage

15-25    for health care services for the spouse and dependent children of

15-26    an enrollee or permits the enrollment of any enrollee's immediate

15-27    family or children under a health benefit plan shall not exclude or

15-28    limit the initial coverage of a newborn child for a period of time

15-29    or exclude or limit coverage for congenital defect of a newborn

15-30    child if the child is enrolled in the health care plan not later

 16-1    than the 31st day after the date of the child's birth.

 16-2          (b)  A health maintenance organization that provides coverage

 16-3    for the immediate family or children of an enrollee or permits the

 16-4    enrollment of any enrollee's immediate family or children under a

 16-5    health benefit plan may not exclude from coverage in a health care

 16-6    plan a child of an enrollee or limit coverage under the plan to a

 16-7    child of an enrollee solely because the child is adopted.  The

 16-8    health maintenance organization shall provide full coverage under

 16-9    the plan to the child without limiting coverage of a preexisting

16-10    condition if the child is enrolled in the plan not later than the

16-11    31st day after the date on which the adoption is final or, for the

16-12    period during which the adoption is not final, not later than the

16-13    31st day after the date on which the enrollee becomes a party in a

16-14    suit in which adoption of the child by the enrollee is sought.  For

16-15    the purposes of this subsection, a child is considered to be the

16-16    child of an enrollee if the enrollee is a party in a suit in which

16-17    the adoption of the child by the enrollee is sought.

16-18          SECTION 7.  Subchapter E, Chapter 21, Insurance Code, is

16-19    amended by adding Articles 21.53D and 21.53E to read as follows:

16-20          Art. 21.53D.  ACCESS TO CERTAIN OBSTETRIC OR GYNECOLOGICAL

16-21    CARE

16-22          Sec. 1.  DEFINITION.  In this article, "health benefit plan"

16-23    means a plan described by Section 2 of this article.

16-24          Sec. 2.  SCOPE OF ARTICLE.  (a)  This article applies to a

16-25    health benefit plan that provides benefits for medical or surgical

16-26    expenses incurred as a result of a health condition, accident, or

16-27    sickness, including:

16-28                (1)  an individual, group, blanket, or franchise

16-29    insurance policy or insurance agreement, a group hospital service

16-30    contract, or an individual or group evidence of coverage that is

 17-1    offered by:

 17-2                      (A)  an insurance company;

 17-3                      (B)  a group hospital service corporation

 17-4    operating under Chapter 20 of this code;

 17-5                      (C)  a fraternal benefit society operating under

 17-6    Chapter 10 of this code;

 17-7                      (D)  a stipulated premium insurance company

 17-8    operating under Chapter 22 of this code; or

 17-9                      (E)  a health maintenance organization operating

17-10    under the Texas Health Maintenance Organization Act (Chapter 20A,

17-11    Vernon's Texas Insurance Code); and

17-12                (2)  to the extent permitted by the Employee Retirement

17-13    Income Security Act of 1974 (29 U.S.C. Section 1001 et seq.), a

17-14    health benefit plan that is offered by:

17-15                      (A)  a multiple employer welfare arrangement as

17-16    defined by Section 3, Employee Retirement Income Security Act of

17-17    1974 (29 U.S.C. Section 1002); or

17-18                      (B)  another analogous benefit arrangement.

17-19          (b)  This article does not apply to:

17-20                (1)  a plan that provides coverage:

17-21                      (A)  only for a specified disease;

17-22                      (B)  only for accidental death or dismemberment;

17-23                      (C)  for wages or payments in lieu of wages for a

17-24    period during which an employee is absent from work because of

17-25    sickness or injury; or

17-26                      (D)  as a supplement to liability insurance;

17-27                (2)  a plan written under Chapter 26 of this code;

17-28                (3)  a Medicare supplemental policy as defined by

17-29    Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss);

17-30                (4)  workers' compensation insurance coverage;

 18-1                (5)  medical payment insurance issued as part of a

 18-2    motor vehicle insurance policy; or

 18-3                (6)  a long-term care policy, including a nursing home

 18-4    fixed indemnity policy, unless the commissioner determines that the

 18-5    policy provides benefit coverage so comprehensive that the policy

 18-6    is a health benefit plan as described by Subsection (a) of this

 18-7    section.

 18-8          Sec. 3.  ACCESS TO CARE.  (a)  In addition to other benefits

 18-9    as authorized by the plan, each health benefit plan shall permit a

18-10    woman who is entitled to coverage under the plan direct access as

18-11    provided by Subsection (b) of this section to primary and

18-12    preventative obstetric and gynecological health care services from

18-13    a qualified provider of those services who is:

18-14                (1)  authorized to provide services under the plan; and

18-15                (2)  selected by the covered individual.

18-16          (b)  The access to health care services required under this

18-17    section includes:

18-18                (1)  physical examinations for those obstetric and

18-19    gynecological health care services;

18-20                (2)  any care related to pregnancy; and

18-21                (3)  any additional services determined to be necessary

18-22    based on a physical examination provided under Subdivision (1) of

18-23    this subsection or as a result of an active gynecological

18-24    condition.

18-25          Sec. 4.  LIMITATION; CONSULTATION.  (a)  A health benefit

18-26    plan may limit the physical examinations provided under Section

18-27    3(b)(1) of this article to two physical examinations per year.

18-28          (b)  If a health care provider who provides services to a

18-29    woman under Section 3 of this article is not the woman's primary

18-30    care practitioner and the health benefit plan provides benefits for

 19-1    certain specialty health care services only through a referral made

 19-2    by a primary care practitioner, the provider shall, in accordance

 19-3    with any requirements adopted by that health benefit plan, discuss

 19-4    with the woman's primary care practitioner the gynecological health

 19-5    care services to be provided and the treatment plan proposed by

 19-6    that provider.  This subsection does not require that health care

 19-7    provider to obtain a referral from the woman's primary care

 19-8    practitioner in order to be authorized to provide any additional

 19-9    services determined to be necessary under Section 3(b)(3) of this

19-10    article.

19-11          Sec. 5.  RESTRICTION ON IMPOSITION OF COPAYMENT OR

19-12    DEDUCTIBLE.  A health benefit plan may not impose a copayment or

19-13    deductible for direct access to the health care services of an

19-14    obstetrician or gynecologist under this article unless such an

19-15    additional cost is imposed for access to other health care services

19-16    provided under the plan.

19-17          Sec. 6.  NOTICE.  Each health benefit plan shall provide to

19-18    persons covered by the plan a timely written notice in clear and

19-19    accurate language of the direct access to health care services

19-20    required by this article.

19-21          Sec. 7.  RULES.  The commissioner shall adopt rules as

19-22    necessary to implement this article.

19-23          Sec. 8.  ADMINISTRATIVE PENALTY.  An insurance company,

19-24    health maintenance organization, or other entity that operates a

19-25    health benefit plan in violation of this article is subject to an

19-26    administrative penalty as provided by Article 1.10E of this code.

19-27          Art. 21.53E.  COVERAGE FOR MINIMUM INPATIENT STAY IN HEALTH

19-28    CARE FACILITY

19-29          Sec. 1.  DEFINITIONS.  In this article:

19-30                (1)  "Health benefit plan" means a plan that is offered

 20-1    by any insurer that provides benefits for medical or surgical

 20-2    expenses incurred as a result of a health condition, accident, or

 20-3    sickness or that is offered by any insurance company, group

 20-4    hospital service corporation subject to Chapter 20 of this code,

 20-5    fraternal benefit society subject to Chapter 10 of this code,

 20-6    stipulated premium insurance company subject to Chapter 22 of this

 20-7    code, health maintenance organization subject to the Texas Health

 20-8    Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance

 20-9    Code), or multiple employer welfare arrangement subject to Article

20-10    3.95-1 of this code that delivers or issues for delivery an

20-11    individual, group, blanket, or franchise insurance policy,

20-12    certificate of insurance agreement, a group hospital service

20-13    contract, or individual evidence of coverage.  The term does not

20-14    include:

20-15                      (A)  a plan that provides coverage:

20-16                            (i)  only for accidental death or

20-17    dismemberment or a specified disease;

20-18                            (ii)  for wages or payments in lieu of

20-19    wages for a period during which an employee is absent from work

20-20    because of sickness or injury; or

20-21                            (iii)  as a supplement to liability

20-22    insurance;

20-23                      (B)  a Medicare supplemental policy as defined by

20-24    Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss);

20-25                      (C)  workers' compensation insurance coverage;

20-26                      (D)  medical payment insurance issued as part of

20-27    a motor vehicle insurance policy; or

20-28                      (E)  a long-term care policy, including a nursing

20-29    home fixed indemnity policy.

20-30                (2)  "Provider" means a physician or other

 21-1    appropriately licensed health care provider acting within the scope

 21-2    of the physician's or other provider's license who attends an

 21-3    individual who has given birth or who attends the newborn child.

 21-4          Sec. 2.  REQUIRED COVERAGE FOR MINIMUM INPATIENT STAY

 21-5    FOLLOWING BIRTH; EXCEPTION.  (a)  A health benefit plan that

 21-6    provides maternity benefits, including benefits for childbirth,

 21-7    must:

 21-8                (1)  include coverage for patient care for a mother and

 21-9    her newborn child in a health care facility for a minimum of:

21-10                      (A)  48 hours following a vaginal delivery; and

21-11                      (B)  96 hours following a delivery by caesarean

21-12    section; and

21-13                (2)  provide for maternity and pediatric care in

21-14    accordance with guidelines established by the American College of

21-15    Obstetricians and Gynecologists, the American Academy of

21-16    Pediatrics, or other established medical associations.

21-17          (b)  Notwithstanding Subsection (a) of this section, the

21-18    hospital length of stay shall be left to the decision of the

21-19    provider in consultation with the mother.

21-20          Sec. 3.  RULES.  The commissioner shall adopt rules as

21-21    necessary to administer this article.

21-22          SECTION 8.  This Act takes effect July 1, 1997, and, except

21-23    as provided by Sections 9 and 10 of this Act, applies only to an

21-24    insurance policy, contract, or evidence of coverage that is issued,

21-25    delivered, or renewed on or after the effective date of this Act.

21-26    A policy, contract, or evidence of coverage that is issued,

21-27    delivered, or renewed before July 1, 1997, is governed by the law

21-28    as it existed immediately before the effective date of this Act,

21-29    and that law is continued in effect for that purpose.

21-30          SECTION 9.  The requirements of Article 3.51-15, Insurance

 22-1    Code, as added by Section 3 of this Act, apply to an insurance

 22-2    policy or evidence of coverage that is issued, delivered, or

 22-3    renewed on or after January 1, 1998.

 22-4          SECTION 10.  The requirements of Articles 21.53D and 21.53E,

 22-5    Insurance Code, as added by Section 7 of this Act, apply to an

 22-6    insurance policy or evidence of coverage that is issued, delivered,

 22-7    or renewed on or after January 1, 1998.

 22-8          SECTION 11.  The importance of this legislation and the

 22-9    crowded condition of the calendars in both houses create an

22-10    emergency and an imperative public necessity that the

22-11    constitutional rule requiring bills to be read on three several

22-12    days in each house be suspended, and this rule is hereby suspended,

22-13    and that this Act take effect and be in force according to its

22-14    terms, and it is so enacted.