By Smithee H.B. No. 3018
76R6852 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to enrollee coverage and charges under a health
1-3 maintenance organization health care plan.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 9(k), Texas Health Maintenance
1-6 Organization Act (Article 20A.09, Vernon's Texas Insurance Code),
1-7 as added by Section 4.01, Chapter 837, Acts of the 75th
1-8 Legislature, Regular Session, 1997, is redesignated as Section 9C,
1-9 Texas Health Maintenance Organization Act, and amended to read as
1-10 follows:
1-11 Sec. 9C. [(k)] CONTINUATION OF COVERAGE AND CONVERSION. (a)
1-12 [(A)] A health maintenance organization shall provide a group
1-13 continuation privilege as required by this section [subsection].
1-14 Any enrollee whose coverage under the group contract has been
1-15 terminated for any reason except involuntary termination for
1-16 cause, and who has been continuously insured under the group
1-17 contract and under any group contract providing similar services
1-18 and benefits which it replaces for at least three consecutive
1-19 months immediately prior to termination shall be entitled to such
1-20 privilege as outlined below. Involuntary termination for cause
1-21 does not include termination for any health-related cause. Health
1-22 maintenance organization contracts subject to this Act [section]
1-23 shall provide continuation of group coverage for enrollees subject
1-24 to the eligibility provisions of this section.
2-1 (b) [below: (1)] Continuation of group coverage must be
2-2 requested in writing within 31 days following the later of:
2-3 (1) [(aa)] the date the group coverage would otherwise
2-4 terminate; or
2-5 (2) [(bb)] the date the enrollee is given notice of
2-6 the right of continuation by either the employer or the group
2-7 contract holder.
2-8 (c) [(2)] An enrollee electing continuation must pay to the
2-9 group contract holder or employer on a monthly basis, in advance,
2-10 the amount of contribution required by the contract holder or
2-11 employer, plus two percent of the group rate for the coverage being
2-12 continued under the group contract, on the due date of each
2-13 payment.
2-14 (d) [(3)] The enrollee's written election of continuation,
2-15 together with the first contribution required to establish
2-16 contributions on a monthly basis, in advance, must be given to the
2-17 contract holder or employer within 31 days following the later of:
2-18 (1) [(aa)] the date the group coverage would otherwise
2-19 terminate; or
2-20 (2) [(bb)] the date the enrollee is given notice of
2-21 the right of continuation by either the employer or the group
2-22 contract holder.
2-23 (e) [(4)] Continuation may not terminate until the earliest
2-24 of:
2-25 (1) [(aa)] six months after the date the election is
2-26 made;
2-27 (2) [(bb)] the date on which failure to make timely
3-1 payments would terminate coverage;
3-2 (3) [(cc)] the date on which the covered person is
3-3 covered for similar services and benefits by another hospital,
3-4 surgical, medical, or major medical expense insurance policy or
3-5 hospital or medical service subscriber contract or medical practice
3-6 or other prepayment plan or any other plan or program; or
3-7 (4) [(dd)] the date on which the group coverage
3-8 terminates in its entirety.
3-9 (f) [(5)] Not less than 30 days before the end of the six
3-10 months after the date the enrollee elects continuation of the
3-11 contract, the health maintenance organization shall notify the
3-12 enrollee that the enrollee [he/she] may be eligible for coverage
3-13 under the Texas Health Insurance Risk Pool, as provided under
3-14 Article 3.77, Insurance Code, and the health maintenance
3-15 organization shall provide the address for applying to such pool to
3-16 the enrollee.
3-17 (g) [(B)] A health maintenance organization may offer to
3-18 each enrollee a conversion contract. Such conversion contract
3-19 shall be issued without evidence of insurability if written
3-20 application for and payment of the first premium is made not later
3-21 than the 31st day after the date of termination. The conversion
3-22 contract shall meet the minimum standards for services and benefits
3-23 for conversion contracts. The commissioner shall issue rules and
3-24 regulations to establish minimum standards for services and
3-25 benefits under contracts issued pursuant to this subsection
3-26 [subdivision].
3-27 (h) [(C)] The premium for a conversion contract issued under
4-1 this Act shall be determined in accordance with the health
4-2 maintenance organization's premium rates for coverage that were
4-3 provided under the group contract or plan. The premium may be
4-4 based on geographic location of each person to be covered and the
4-5 type of conversion contract and coverage provided. The premium for
4-6 the same coverage under a conversion contract may not exceed 200
4-7 percent of the premium determined in accordance with this
4-8 subsection [subdivision]. The premium must be based on the type of
4-9 conversion contract and the coverage provided by contract.
4-10 SECTION 2. Section 9(k), Texas Health Maintenance
4-11 Organization Act (Article 20A.09, Vernon's Texas Insurance Code),
4-12 as redesignated by Section 1, Chapter 905, Acts of the 75th
4-13 Legislature, Regular Session, 1997, is redesignated as Section 9D,
4-14 Texas Health Maintenance Organization Act, and amended to read as
4-15 follows:
4-16 Sec. 9D. COMPUTATION OF SCHEDULE OF CHARGES FOR ENROLLEE
4-17 COVERAGE; INCREASES IN CHARGES. (a) [(k)] The formula or method
4-18 for calculating the schedule of charges for enrollee coverage for
4-19 medical services or health care services must be filed with the
4-20 commissioner before it is used in conjunction with any health care
4-21 plan.
4-22 (b) The formula or method must be established in accordance
4-23 with actuarial principles for the various categories of enrollees.
4-24 The charges resulting from the application of the formula or method
4-25 may not be altered for an individual enrollee based on the status
4-26 of that enrollee's health. The formula or method must produce
4-27 charges that are not excessive, inadequate, or unfairly
5-1 discriminatory, and benefits must be reasonable with respect to the
5-2 rates produced by the formula or method.
5-3 (c) A statement by a qualified actuary that certifies the
5-4 appropriateness of the formula or method must accompany the filing
5-5 together with supporting information considered adequate by the
5-6 commissioner.
5-7 (d) A proposed increase in the charges for enrollee coverage
5-8 for medical services or health care services that is more than 10
5-9 percent of the charges for that coverage under the evidence of
5-10 coverage applicable in the preceding contract year must be filed
5-11 with the commissioner and be accompanied by an actuarial statement
5-12 that states the reasons why the increase is justified. The
5-13 actuarial statement must meet the requirements adopted under
5-14 Subsection (c) of this section. If, after review of the actuarial
5-15 statement, the commissioner determines that the proposed increase
5-16 is not actuarially justified, the commissioner by order may limit
5-17 the increase to 10 percent.
5-18 SECTION 3. Section 9D, Texas Health Maintenance Organization
5-19 Act (Chapter 20A, Vernon's Texas Insurance Code), as added by this
5-20 Act, applies only to an evidence of coverage delivered, issued for
5-21 delivery, or renewed on or after January 1, 2000. An evidence of
5-22 coverage delivered, issued for delivery, or renewed before January
5-23 1, 2000, is governed by the law as it existed immediately before
5-24 the effective date of this Act, and that law is continued in effect
5-25 for that purpose.
5-26 SECTION 4. This Act takes effect September 1, 1999.
5-27 SECTION 5. The importance of this legislation and the
6-1 crowded condition of the calendars in both houses create an
6-2 emergency and an imperative public necessity that the
6-3 constitutional rule requiring bills to be read on three several
6-4 days in each house be suspended, and this rule is hereby suspended.