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.