By Maxey                                              H.B. No. 1627
         76R5053 PB-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to certain requirements for insurers that contract with
 1-3     municipalities.
 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 21.49-16 to read as follows:
 1-7           Art. 21.49-16.  BID REQUIREMENTS FOR INSURERS WHO CONTRACT
 1-8     WITH MUNICIPALITIES
 1-9           Sec. 1.  DEFINITIONS.  In this article:
1-10                 (1)  "Insurer" means:
1-11                       (A)  an insurance company, including a company
1-12     providing stop-loss or excess loss insurance;
1-13                       (B)  a health maintenance organization operating
1-14     under the Texas Health Maintenance Organization Act (Chapter 20A,
1-15     Vernon's Texas Insurance Code);
1-16                       (C)  an approved nonprofit health corporation
1-17     that holds a certificate of authority issued by the commissioner
1-18     under Article 21.52F of this code; or
1-19                       (D)  a third party administrator that holds a
1-20     certificate of authority under Article 21.07-6 of this code.
1-21                 (2)  "Municipality" has the meaning assigned by Section
1-22     1.005, Local Government Code.
1-23           Sec. 2.  REQUIREMENTS.  (a)  An insurer who bids on a
1-24     contract subject to the competitive bidding and competitive
 2-1     proposal requirements adopted under Section 252.021, Local
 2-2     Government Code, may not submit a bid for a contract to provide
 2-3     stop-loss or other insurance coverage that is subject to any
 2-4     qualification imposed by the insurer that permits the insurer to
 2-5     modify or limit the terms of insurance coverage to be provided
 2-6     after the contract has been made.  An insurer's bid submitted under
 2-7     Section 252.021, Local Government Code, must contain the entire
 2-8     offer made by the insurer.
 2-9           (b)  An insurer who provides stop-loss or other insurance
2-10     coverage for health benefits under a contract subject to this
2-11     article may not, based on an individual's prior medical history,
2-12     exclude an individual who is otherwise eligible for the health
2-13     benefits coverage from coverage or assign a higher deductible to
2-14     the individual.
2-15           SECTION 2.  Article 21.49-16, Insurance Code, as added by
2-16     this Act, applies only to a contract entered into on or after the
2-17     effective date of this Act.  A contract entered into before that
2-18     date is governed by the law as it existed immediately before the
2-19     effective date of this Act, and that law is continued in effect for
2-20     that purpose.
2-21           SECTION 3.  This Act takes effect September 1, 1999.
2-22           SECTION 4.  The importance of this legislation and the
2-23     crowded condition of the calendars in both houses create an
2-24     emergency and an imperative public necessity that the
2-25     constitutional rule requiring bills to be read on three several
2-26     days in each house be suspended, and this rule is hereby suspended.