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                                  * * * * *