AN ACT

 1-1     relating to advertisements for certain health benefit plans.

 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-3           SECTION 1.  Subchapter B, Chapter 21, Insurance Code, is

 1-4     amended by adding Article 21.20-2 to read as follows:

 1-5           Art. 21.20-2.  ADVERTISEMENTS FOR CERTAIN HEALTH BENEFIT

 1-6     PLANS

 1-7           Sec. 1.  SCOPE OF ARTICLE.  (a)  This article applies only to

 1-8     a health benefit plan that provides benefits for medical or

 1-9     surgical expenses incurred as a result of a health condition,

1-10     accident, or sickness, including an individual, group, blanket, or

1-11     franchise insurance policy or agreement, a group hospital service

1-12     contract, or an individual or group evidence of coverage issued by:

1-13                 (1)  an insurance company;

1-14                 (2)  a group hospital service corporation operating

1-15     under Chapter 20 of this code;

1-16                 (3)  a health maintenance organization operating under

1-17     the Texas Health Maintenance Organization Act (Chapter 20A,

1-18     Vernon's Texas Insurance Code); or

1-19                 (4)  an approved nonprofit health corporation that is

1-20     certified under Section 5.01(a), Medical Practice Act (Article

1-21     4495b, Vernon's Texas Civil Statutes), and that holds a certificate

1-22     of authority issued by the commissioner under Article 21.52F of

1-23     this code.

 2-1           (b)  This article does not apply to:

 2-2                 (1)  a health benefit plan that provides coverage:

 2-3                       (A)  only for a specified disease;

 2-4                       (B)  only for accidental death or dismemberment;

 2-5     or

 2-6                       (C)  for wages or payments in lieu of wages for a

 2-7     period during which an employee is absent from work because of

 2-8     sickness or injury; or

 2-9                 (2)  a long-term care policy, including a nursing home

2-10     fixed indemnity policy, unless the commissioner determines that the

2-11     policy provides benefit coverage so comprehensive that the policy

2-12     is a health benefit plan as described by Subsection (a) of this

2-13     section.

2-14           Sec. 2.  DISCLAIMERS.  (a)  Subject to Article 21.21 of this

2-15     code, an advertisement for a health benefit plan may include rate

2-16     information without including information about all benefit

2-17     exclusions and limitations if the advertisement includes prominent

2-18     disclaimers that clearly indicate that:

2-19                 (1)  the rates are illustrative;

2-20                 (2)  a person should not send money to the issuer of

2-21     the health benefit plan in response to the advertisement;

2-22                 (3)  a person cannot obtain coverage under the health

2-23     benefit plan until the person completes an application for

2-24     coverage; and

2-25                 (4)  benefit exclusions and limitations may apply to

 3-1     the health benefit plan.

 3-2           (b)  Any rate mentioned in the advertisement shall indicate

 3-3     the age, gender, and geographic location on which that rate is

 3-4     based.

 3-5           SECTION 2.  The importance of this legislation and the

 3-6     crowded condition of the calendars in both houses create an

 3-7     emergency and an imperative public necessity that the

 3-8     constitutional rule requiring bills to be read on three several

 3-9     days in each house be suspended, and this rule is hereby suspended,

3-10     and that this Act take effect and be in force from and after its

3-11     passage, and it is so enacted.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I hereby certify that S.B. No. 682 passed the Senate on

         April 16, 1997, by the following vote:  Yeas 31, Nays 0.

                                             _______________________________

                                                 Secretary of the Senate

               I hereby certify that S.B. No. 682 passed the House on

         May 16, 1997, by a non-record vote.

                                             _______________________________

                                                 Chief Clerk of the House

         Approved:

         _______________________________

                     Date

         _______________________________

                   Governor