Bill not drafted by TLC or Senate E&E.
Line and page numbers may not match official copy.
By Averitt H.B. No. 2090
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of stop loss insurance policies.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter E, Chapter 21, Insurance Code, is
1-5 amended by adding Article 21.29 to read as follows:
1-6 Art. 21.29. STOP-LOSS INSURANCE.
1-7 Sec. 1. DEFINITIONS. In this article:
1-8 (1) "Aggregate attachment point" means the dollar
1-9 amount of a self-funded benefit plan's liability incurred for all
1-10 plan participants, beyond which the issuer of a policy of stop-loss
1-11 insurance becomes liable.
1-12 (2) "Expected claims" means the dollar amount of
1-13 claims for which a self-funded health plan would reasonably be
1-14 expected to incur liability in the absence of a stop-loss insurance
1-15 policy or other insurance.
1-16 (3) "Individual attachment point" means the dollar
1-17 amount of a self-funded health plan's liability incurred, during
1-18 the policy year, for an individual plan participant, beyond which
1-19 the issuer of a policy of stop-loss insurance becomes liable.
1-20 (4) "Plan participant" means an eligible employee, a
1-21 retired employee, or a dependent of an employee or retired employee
1-22 who is covered by a self-funded health plan.
1-23 (5) "Self-funded health plan" means an employee
1-24 welfare benefit plan or other arrangement authorized by law that:
2-1 (A) provides accident and sickness benefits to
2-2 plan participants; and
2-3 (B) retains at least partial liability for
2-4 payment of the benefits.
2-5 (6) "Stop loss insurance" means a policy of insurance
2-6 which indemnifies, directly or indirectly, a self-funded health
2-7 plan for a portion of the plan's liability for plan participants.
2-8 The term includes excess loss insurance other equivalent coverage.
2-9 Sec. 2. APPLICATION OF ARTICLE. This Article applies to
2-10 stop-loss insurance that, due to the low level at which the
2-11 insurer's liability attaches, serves the same function as
2-12 conventional group accident and health insurance policies. This
2-13 article does not apply to employers or self-funded health plans.
2-14 Sec. 3. APPLICABILITY OF INSURANCE LAWS TO STOP-LOSS
2-15 INSURANCE POLICIES. (a) This article applies to each insurer
2-16 subject to Chapter 8, 18, or 19 of this code, as amended, and every
2-17 life, health, and accident insurer governed by Chapter 3 and
2-18 Chapter 20 of this code, as amended, that is authorized to issue
2-19 stop-loss insurance.
2-20 (b) An insurer may not deliver, issue for delivery, or use a
2-21 policy of stop-loss insurance in this state unless the policy form
2-22 has been filed with and approved by the department as provided by
2-23 Article 3.42 of this code.
2-24 (c) Each provision of this code that applies to a policy or
2-25 certificate of group accident and health insurance shall apply to a
2-26 policy of stop-loss insurance that:
2-27 (1) is issued on or after September 1, 1997, and:
2-28 (A) has an individual attachment point of less
2-29 than $5,000; or
2-30 (B) has an aggregate attachment point that is
3-1 lower than 110 percent of expected claims; or
3-2 (2) is issued or renewed, except as provided in
3-3 paragraph (d) of this Section, on or after September 1, 1998, and
3-4 has an individual attachment point of less than $10,000.
3-5 (d) Any stop loss policy issued prior to September 1, 1997,
3-6 and subsequently renewed, shall be grandfathered from the
3-7 requirements of this Article and shall be subject to the law as it
3-8 existed immediately prior to the effective date of this Article.
3-9 Sec. 5. RULEMAKING AUTHORITY. The commissioner may adopt
3-10 rules as necessary to implement this article.
3-11 SECTION 2. This Act shall take effect on September 1, 1997
3-12 and will apply to any policy issued on or after the effective date.
3-13 Any policy issued prior to September 1, 1997, and subsequently
3-14 renewed, shall be grandfathered from the requirements of this Act
3-15 and shall be subject to the law as it existed immediately prior to
3-16 the effective date of this Act.
3-17 SECTION 3. The importance of this legislation and the
3-18 crowded condition of the calendars in both houses create an
3-19 emergency and an imperative public necessity that the
3-20 constitutional rule requiring bills to be read on three several
3-21 days in each house be suspended, and this rule is hereby suspended.