1-1     By:  Maxey (Senate Sponsor - Cain)                    H.B. No. 1627
 1-2           (In the Senate - Received from the House May 10, 1999;
 1-3     May 10, 1999, read first time and referred to Committee on Economic
 1-4     Development; May 14, 1999, reported favorably by the following
 1-5     vote:  Yeas 5, Nays 0; May 14, 1999, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to certain requirements for insurers that contract with
 1-9     municipalities.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Subchapter E, Chapter 21, Insurance Code, is
1-12     amended by adding Article 21.49-16 to read as follows:
1-13           Art. 21.49-16.  BID REQUIREMENTS FOR INSURERS WHO CONTRACT
1-14     WITH MUNICIPALITIES
1-15           Sec. 1.  DEFINITIONS.  In this article:
1-16                 (1)  "Insurer" means:
1-17                       (A)  an insurance company, including a company
1-18     providing stop-loss or excess loss insurance;
1-19                       (B)  a health maintenance organization operating
1-20     under the Texas Health Maintenance Organization Act (Chapter 20A,
1-21     Vernon's Texas Insurance Code);
1-22                       (C)  an approved nonprofit health corporation
1-23     that holds a certificate of authority issued by the commissioner
1-24     under Article 21.52F of this code; or
1-25                       (D)  a third party administrator that holds a
1-26     certificate of authority under Article 21.07-6 of this code.
1-27                 (2)  "Municipality" has the meaning assigned by Section
1-28     1.005, Local Government Code.
1-29           Sec. 2.  REQUIREMENTS.  (a)  An insurer who bids on a
1-30     contract subject to the competitive bidding and competitive
1-31     proposal requirements adopted under Section 252.021, Local
1-32     Government Code, may not submit a bid for a contract to provide
1-33     stop-loss or other insurance coverage that is subject to any
1-34     qualification imposed by the insurer that permits the insurer to
1-35     modify or limit the terms of insurance coverage to be provided
1-36     after the contract has been made.  An insurer's bid submitted under
1-37     Section 252.021, Local Government Code, must contain the entire
1-38     offer made by the insurer.
1-39           (b)  An insurer who provides stop-loss or other insurance
1-40     coverage for health benefits under a contract subject to this
1-41     article may not, based on an individual's prior medical history,
1-42     exclude an individual who is otherwise eligible for the health
1-43     benefits coverage from coverage or assign a higher deductible to
1-44     the individual.
1-45           SECTION 2.  Article 21.49-16, Insurance Code, as added by
1-46     this Act, applies only to a contract entered into on or after the
1-47     effective date of this Act.  A contract entered into before that
1-48     date is governed by the law as it existed immediately before the
1-49     effective date of this Act, and that law is continued in effect for
1-50     that purpose.
1-51           SECTION 3.  This Act takes effect September 1, 1999.
1-52           SECTION 4.  The importance of this legislation and the
1-53     crowded condition of the calendars in both houses create an
1-54     emergency and an imperative public necessity that the
1-55     constitutional rule requiring bills to be read on three several
1-56     days in each house be suspended, and this rule is hereby suspended.
1-57                                  * * * * *