By Janek H.B. No. 1498 Line and page numbers may not match official copy. Bill not drafted by TLC or Senate E&E. A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the availability of health benefit coverage options for 1-3 health maintenance organization eligible enrollees. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Subchapter E, Chapter 21, Insurance Code, is 1-6 amended by adding Article 21.74 to read as follows: 1-7 Art. 21.74. AVAILABILITY OF HEALTH BENEFIT COVERAGE OPTIONS. 1-8 SECTION 1. DEFINITIONS. In this article: 1-9 (a) "non-network plan" means health benefit coverage which 1-10 provides enrollees an opportunity to obtain health care services 1-11 through a health delivery system other than a health maintenance 1-12 organization delivery network as defined in Article 20A.02(z). A 1-13 non-network plan may include but is not limited to a 1-14 point-of-service plan or a preferred provider benefit plan. 1-15 (b) "point-of-service plan" means a plan under which an 1-16 enrollee may choose to obtain benefits and services, or both 1-17 benefits and services through either a health maintenance 1-18 organization delivery network or through a non-network delivery 1-19 system outside the health maintenance organization's health care 1-20 delivery network, and which are administered through an indemnity 1-21 benefit arrangement for the cost of health care services. 2-1 (c) "preferred provider benefit plan" means an insurance 2-2 policy issued and licensed under Article 3.70-3C, Insurance Code. 2-3 SECTION 2. OFFERING OF HEALTH BENEFIT COVERAGE OPTIONS. (a) 2-4 A health maintenance organization whose network based delivery 2-5 system of coverage is the only health benefit coverage being 2-6 offered under an employer's health benefit plan, must offer to all 2-7 eligible employees the opportunity to obtain health benefit 2-8 coverage through a non-network plan at the time of enrollment and 2-9 at least annually. Such coverage may be provided through a point 2-10 of service plan, a preferred provider benefit plan or any coverage 2-11 arrangement that allows access to services outside the health 2-12 maintenance organization's delivery network. 2-13 (b) The premium for the optional non-network plan shall be 2-14 based on the actuarial value of that coverage, and accordingly such 2-15 premium may be different than the premium for the health 2-16 maintenance organization coverage. 2-17 (c) Different cost sharing provisions may be imposed for the 2-18 point of service option. Those cost sharing provisions may be 2-19 higher than cost sharing provisions for in network health 2-20 maintenance organization coverage. 2-21 (d) Any additional costs for the non-network plan are the 2-22 responsibility of the employee who chooses the non-network plan, 2-23 and the employer may impose a reasonable administrative cost for 2-24 providing the non-network plan option. 2-25 (e) This article does not apply to a small employer as 3-1 defined in Texas Insurance Code Article 26.02(28). 3-2 SECTION 3. Subchapter F, Chapter 3, Insurance Code, is 3-3 amended by adding Article 3.64 to read as follows: 3-4 Art. 3.64. INSURERS CONTRACTING WITH HEALTH MAINTENANCE 3-5 ORGANIZATIONS. (a) DEFINITIONS. In this article: 3-6 (1) "Insurance Carrier" means an insurance company, 3-7 group hospital service corporation, association, or organization 3-8 authorized to do business in this state under this chapter or 3-9 Chapter 8, 10, 11, 12, 13, 14, 15, 18, 19, 20, or 22 of this code. 3-10 (2) "Health maintenance organization" has the meaning 3-11 assigned by Section 2, Texas Health Maintenance Organization Act 3-12 (Article 20A.02, Vernon's Texas Insurance Code). 3-13 (3) "Point of Service Plan" means an arrangement under 3-14 which: 3-15 (A) an enrollee may choose to obtain benefits 3-16 and services, or both benefits and services through either a health 3-17 maintenance organization delivery network or through a non-network 3-18 delivery system outside the health maintenance organization's 3-19 health care delivery network, and which are administered through an 3-20 indemnity benefit arrangement for the cost of health care services. 3-21 (B) indemnity benefits for the cost of the 3-22 health care services may be provided by an insurer or group 3-23 hospital service corporation in conjunction with network benefits 3-24 arranged or provided by a health maintenance organization. 3-25 (4) "Blended contract" means a single document, 4-1 including a single contract policy, certificate, or evidence of 4-2 coverage, that provides a combination of indemnity and health 4-3 maintenance organization benefits. 4-4 (b) An insurance carrier may contract with a health 4-5 maintenance organization to provide a point of service benefit, 4-6 including optional coverage for out-of-area services or 4-7 out-of-network care. 4-8 (c) An insurance carrier and a health maintenance 4-9 organization may offer a blended contract if indemnity benefits are 4-10 combined with health maintenance organization benefits. The use of 4-11 a blended contract is limited to point of service arrangements 4-12 between an insurance carrier and a health maintenance organization. 4-13 (d) A blended contract delivered, issued, or used in this 4-14 state is subject to and must be filed with the department for 4-15 approval as provided by 3.42 of this code and Article 20A.09(a)(5). 4-16 (e) Indemnity benefits and services provided under a point 4-17 of service plan may be limited to those services as defined by the 4-18 blended contract and may be subject to different cost sharing 4-19 provisions. The cost sharing provisions for the indemnity benefits 4-20 may be higher than cost sharing provisions for in network health 4-21 maintenance organization coverage. 4-22 (f) The commissioner may adopt rules to implement this 4-23 article. 4-24 SECTION 4. Section 2, Texas Health Maintenance Organization 4-25 Act, (Article 20A.02, Vernon's Texas Insurance Code) is amended by 5-1 amending subsection (i) and by adding Subsections (aa) and (bb) to 5-2 read as follows. 5-3 (i) "Evidence of Coverage" means any certificate, agreement, 5-4 or contract, including a blended contract, issued to an enrollee 5-5 setting out the coverage to which the enrollee is entitled. 5-6 (aa) "Blended contract" means a single document, including a 5-7 single contract policy, certificate, or evidence of coverage, that 5-8 provides a combination of indemnity and health maintenance 5-9 organization benefits. 5-10 (bb) "Point of Service Plan" means an arrangement under 5-11 which: 5-12 (A) an enrollee may choose to obtain benefits 5-13 and services, or both benefits and services through either a health 5-14 maintenance organization delivery network or through a non-network 5-15 delivery system outside the health maintenance organization's 5-16 health care delivery network, and which are administered through an 5-17 indemnity benefit arrangement for the cost of health care services. 5-18 (B) indemnity benefits for the cost of the 5-19 health care services may be provided by an insurer or group 5-20 hospital service corporation in conjunction with corresponding 5-21 benefits arranged or provided by a health maintenance organization 5-22 or indemnity benefits for the cost of the health care services 5-23 provided by a health maintenance organization through a point of 5-24 service rider as provided by Article 20A.06(6)(D) in conjunction 5-25 with corresponding benefits arranged or provided by a health 6-1 maintenance organization. 6-2 SECTION 5. This act takes effect September 1, 1999, and 6-3 applies only to an evidence of coverage for a health benefit plan 6-4 that is delivered, issued for delivery, or renewed on or after 6-5 January 1, 2000. An evidence of coverage for a health benefit plan 6-6 that is delivered, issued for delivery, or renewed before January 6-7 1, 2000, is governed by the law as it existed immediately before 6-8 the effective date of this Act, and that law is continued in effect 6-9 for this purpose. 6-10 SECTION 6. The importance of this legislation and the 6-11 crowded condition of the calendars in both houses create an 6-12 emergency and an imperative public necessity that the 6-13 constitutional rule requiring bills to be read on three several 6-14 days in each house be suspended, and this rule is hereby suspended.