By Burnam                                             H.B. No. 3096
         76R8082 DLF-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to exclusions and limitations applied under certain health
 1-3     benefit plans.
 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 21.52L to read as follows:
 1-7           Art. 21.52L.  ACTUARIAL SUPPORT FOR LIMITATIONS AND
 1-8     EXCLUSIONS APPLIED IN HEALTH BENEFIT PLANS
 1-9           Sec. 1.  DEFINITION.  In this article, "health benefit plan"
1-10     means a health benefit plan described by Section 2 of this article.
1-11           Sec. 2.  SCOPE OF ARTICLE.  This article applies only to a
1-12     health benefit plan that provides benefits for medical or surgical
1-13     expenses incurred as a result of a health condition, accident, or
1-14     sickness, including an individual, group, blanket, or franchise
1-15     insurance policy or insurance agreement, a group hospital service
1-16     contract, or an individual or group evidence of coverage or similar
1-17     coverage document that is offered by:
1-18                 (1)  an insurance company;
1-19                 (2)  a group hospital service corporation operating
1-20     under Chapter 20 of this code;
1-21                 (3)  a fraternal benefit society operating under
1-22     Chapter 10 of this code;
1-23                 (4)  a stipulated premium insurance company operating
1-24     under Chapter 22 of this code;
 2-1                 (5)  a reciprocal exchange operating under Chapter 19
 2-2     of this code;
 2-3                 (6)  a health maintenance organization operating under
 2-4     the Texas Health Maintenance Organization Act (Chapter 20A,
 2-5     Vernon's Texas Insurance Code);
 2-6                 (7)  a multiple employer welfare arrangement that holds
 2-7     a certificate of authority under Article 3.95-2 of this code;
 2-8                 (8)  an approved nonprofit health corporation that
 2-9     holds a certificate of authority issued by the commissioner under
2-10     Article 21.52F of this code; or
2-11                 (9)  a small employer carrier or a large employer
2-12     carrier operating under Chapter 26 of this code.
2-13           Sec. 3.  USE OF CERTAIN EXCLUSIONS OR LIMITATIONS PROHIBITED.
2-14     (a)  An issuer of a health benefit plan may not exclude from
2-15     coverage under the plan, or limit the amount, type, or extent of
2-16     coverage under the plan for, a specified health condition, injury,
2-17     sickness, or disability unless the exclusion or limitation is based
2-18     on sound actuarial principles or actual or reasonably anticipated
2-19     loss experience.
2-20           (b)  In complying with this article, an issuer of a health
2-21     benefit plan shall use actuarial data or loss experience data that
2-22     is accurate, reliable, geographically specific, and current at the
2-23     time of use.
2-24           (c)  The commissioner may adopt rules to implement this
2-25     article.
2-26           Sec. 4.  CONDUCT OF OTHER PERSONS.  (a)  An insurance agent,
2-27     third party administrator, or life insurance counselor may not
 3-1     offer, recommend, sell, administer, or participate in the offering,
 3-2     recommendation, sale, or administration of, a health benefit plan
 3-3     that violates Section 3 of this article.
 3-4           (b)  An actuary who certifies a health benefit plan as
 3-5     complying with Section 3 of this article violates this article if
 3-6     the actuary knows, at the time the certification is made, that the
 3-7     certification is false.
 3-8           Sec. 5.  VIOLATION; PENALTY.  (a)  A violation of this
 3-9     article is an unfair and deceptive act or practice in the business
3-10     of insurance for purposes of Article 21.21 of this code and is
3-11     subject to the sanctions and penalties imposed under that article.
3-12           (b)  Approval by the commissioner of the policy form or other
3-13     form used by the health benefit plan issuer under any law of this
3-14     state, including Article 3.42 of this code and Section 9, Texas
3-15     Health Maintenance Organization Act (Article 20A.09, Vernon's Texas
3-16     Insurance Code), is not a defense to an action brought under
3-17     Article 21.21 of this code with respect to a violation of this
3-18     article.
3-19           SECTION 2.  This Act takes effect September 1, 1999.
3-20           SECTION 3.  This Act applies only to a health benefit plan
3-21     that is delivered, issued for delivery, or renewed on or after
3-22     January 1, 2000.  A health benefit plan that is delivered, issued
3-23     for delivery, or renewed before January 1, 2000, is governed by the
3-24     law as it existed immediately before the effective date of this
3-25     Act, and that law is continued in effect for this purpose.
3-26           SECTION 4.  The importance of this legislation and the
3-27     crowded condition of the calendars in both houses create an
 4-1     emergency and an imperative public necessity that the
 4-2     constitutional rule requiring bills to be read on three several
 4-3     days in each house be suspended, and this rule is hereby suspended.