1-1 By: Nelson S.B. No. 377 1-2 (In the Senate - Filed April 8, 1999; April 9, 1999, read 1-3 first time and referred to Committee on Health Services; 1-4 April 22, 1999, reported adversely, with favorable Committee 1-5 Substitute by the following vote: Yeas 5, Nays 0; April 22, 1999, 1-6 sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 377 By: Nelson 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to review and implementation of health care benefits 1-11 required to be provided under certain health benefit plans. 1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-13 SECTION 1. Chapter 3, Insurance Code, is amended by adding 1-14 Subchapter K to read as follows: 1-15 SUBCHAPTER K. REVIEW AND IMPLEMENTATION OF HEALTH CARE 1-16 BENEFIT MANDATES 1-17 Art. 3.97-1. APPLICATION OF SUBCHAPTER. (a) This 1-18 subchapter applies to a health benefit plan that provides benefits 1-19 for medical or surgical expenses incurred as a result of a health 1-20 condition, accident, or sickness, including an individual, group, 1-21 blanket, or franchise insurance policy or insurance agreement, a 1-22 group hospital service contract, or an individual or group evidence 1-23 of coverage or similar coverage document that is offered by: 1-24 (1) an insurance company; 1-25 (2) a group hospital service corporation operating 1-26 under Chapter 20 of this code; 1-27 (3) a fraternal benefit society operating under 1-28 Chapter 10 of this code; 1-29 (4) a stipulated premium insurance company operating 1-30 under Chapter 22 of this code; 1-31 (5) a reciprocal exchange operating under Chapter 19 1-32 of this code; 1-33 (6) a health maintenance organization operating under 1-34 the Texas Health Maintenance Organization Act (Chapter 20A, 1-35 Vernon's Texas Insurance Code); 1-36 (7) a multiple employer welfare arrangement that holds 1-37 a certificate of authority under Article 3.95-2 of this code; or 1-38 (8) an approved nonprofit health corporation that 1-39 holds a certificate of authority issued by the commissioner under 1-40 Article 21.52F of this code. 1-41 (b) This subchapter does not apply to: 1-42 (1) a plan that provides coverage: 1-43 (A) only for a specified disease, disability, or 1-44 other limited benefit; 1-45 (B) only for accidental death or dismemberment; 1-46 (C) for wages or payments in lieu of wages for a 1-47 period during which an employee is absent from work because of 1-48 sickness or injury; 1-49 (D) as a supplement to liability insurance; 1-50 (E) only for dental or vision care; 1-51 (F) only for hospital expenses; or 1-52 (G) only for indemnity for hospital confinement; 1-53 (2) a Medicare supplemental policy as defined by 1-54 Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss), 1-55 as amended; or 1-56 (3) a long-term care policy, including a nursing home 1-57 fixed indemnity policy, unless the commissioner determines that the 1-58 policy provides benefit coverage so comprehensive that the policy 1-59 is a health benefit plan as described by Subsection (a) of this 1-60 article. 1-61 Art. 3.97-2. DEFINITIONS. In this subchapter: 1-62 (1) "Health benefit plan" means a plan to which this 1-63 subchapter applies. 1-64 (2) "Health care benefit mandate" means a state or 2-1 federal law that requires a health benefit plan to cover or offer a 2-2 specific service, treatment, or practice or reimburse a specific 2-3 type of health care provider directly or in a specific amount. The 2-4 term does not include an offer of coverage mandate. 2-5 (3) "Offer of coverage mandate" means a state or 2-6 federal law that requires that a health benefit plan offer as part 2-7 of the plan's benefit schedule coverage that may be rejected by an 2-8 enrollee and for which an additional premium may be charged. 2-9 Art. 3.97-3. ANALYSIS BY COMPTROLLER. (a) The governor, 2-10 the lieutenant governor, the speaker of the house of 2-11 representatives, or a presiding officer of a standing committee of 2-12 the senate or house of representatives may request that the 2-13 comptroller provide a written analysis of a proposed health care 2-14 benefit mandate. The house of representatives and the senate may 2-15 adopt rules establishing procedures for requesting and considering 2-16 an analysis under this subsection. 2-17 (b) The comptroller shall analyze the existing or proposed 2-18 health care benefit mandate considering: 2-19 (1) the impact of the mandate on: 2-20 (A) maintaining and improving the health of 2-21 residents of this state; 2-22 (B) reducing unnecessary consumption of health 2-23 care services in this state; and 2-24 (C) the affordability of health benefit plan 2-25 coverage for residents of this state; 2-26 (2) the number of health benefit plans subject to the 2-27 mandate that have been sold or are anticipated to be sold; 2-28 (3) the actual or projected increase in the cost of 2-29 the premium of a health benefit plan as a result of the mandate; 2-30 (4) the number of residents of this state that have 2-31 made or are anticipated to make a claim for the benefit provided by 2-32 the mandate; 2-33 (5) the types of providers that have rendered or will 2-34 render services in delivering care under the mandate; 2-35 (6) the average cost to the health benefit plan for 2-36 the delivery of the mandate, including all related services; 2-37 (7) whether the actual or potential benefit of the 2-38 mandate to the residents of this state outweighs the potential cost 2-39 to the residents of this state; 2-40 (8) the impact of the conversion of the health care 2-41 benefit mandate to an offer of coverage mandate; 2-42 (9) the impact of the elimination of the benefit from 2-43 a health benefit plan; and 2-44 (10) any other criteria the comptroller may adopt. 2-45 Art. 3.97-4. REPORT ON EXISTING HEALTH CARE BENEFIT 2-46 MANDATES. (a) Not later than January 1, 2001, the comptroller 2-47 shall review and analyze each health care benefit mandate that will 2-48 be in effect on January 1, 2001, in accordance with Subsection (b), 2-49 Article 3.97-3, of this code. 2-50 (b) The comptroller shall issue a written report of the 2-51 comptroller's findings under this article and distribute the report 2-52 to the governor, the lieutenant governor, the speaker of the house 2-53 of representatives, and the commissioner of insurance. The 2-54 comptroller shall also publish the report on the Internet. 2-55 (c) This article expires December 31, 2001. 2-56 Art. 3.97-5. ASSESSMENTS. (a) Not later than January 1 of 2-57 each year, the comptroller shall determine a rate of assessment to 2-58 cover the reasonable and necessary expenses that will be incurred 2-59 that year as a result of analyzing and preparing the written 2-60 analysis required by this subchapter. The assessment shall be paid 2-61 on an annual, semiannual, or other periodic basis, as determined by 2-62 the comptroller, by each entity that provides health benefit plans 2-63 in this state. The assessment shall be based on gross premiums or 2-64 the correctly reported gross revenues for the issuance of health 2-65 maintenance certificates or contracts under the Texas Health 2-66 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance 2-67 Code), not including premiums or gross revenues received from this 2-68 state or the federal government for: 2-69 (1) health benefit plan coverage contracted for by 3-1 this state or the federal government to provide welfare benefits to 3-2 designated welfare recipients; or 3-3 (2) health benefit plan coverage contracted for by 3-4 this state or the federal government in accordance with Title 2, 3-5 Human Resources Code, or the Social Security Act (42 U.S.C. Section 3-6 301 et seq.). 3-7 (b) The assessment required by this article is in addition 3-8 to other taxes imposed before, on, or after September 1, 1999, and 3-9 not in conflict with this article. 3-10 (c) The comptroller, after taking into account the 3-11 unexpended funds produced by this assessment, if any, shall adjust 3-12 the rate of assessment each year to produce the amount of funds 3-13 that the comptroller estimates will be necessary to pay all the 3-14 expenses expected to be incurred in providing a written analysis 3-15 required by this subchapter during the succeeding year. 3-16 (d) The assessments collected under this article shall be 3-17 deposited in the state treasury to the credit of the general 3-18 revenue fund and shall be spent as authorized by legislative 3-19 appropriation on warrants issued by the comptroller. 3-20 (e) This article expires September 1, 2003. 3-21 Art. 3.97-6. IMPLEMENTATION BY COMMISSIONER. (a) The 3-22 commissioner shall strictly construe a health care benefit mandate 3-23 and shall adopt rules to implement a health care benefit mandate in 3-24 strict compliance with the state or federal law. 3-25 (b) The commissioner shall request the comptroller to 3-26 prepare a written analysis of a health care benefit mandate in 3-27 accordance with this subchapter before publishing proposed rules 3-28 that implement the mandate and shall take the comptroller's 3-29 analysis into consideration in adopting the proposed rules. 3-30 SECTION 2. This Act takes effect September 1, 1999. 3-31 SECTION 3. The importance of this legislation and the 3-32 crowded condition of the calendars in both houses create an 3-33 emergency and an imperative public necessity that the 3-34 constitutional rule requiring bills to be read on three several 3-35 days in each house be suspended, and this rule is hereby suspended. 3-36 * * * * *