SRC-TBR S.B. 805 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 805
77R1154 PB-FBy: Van de Putte
Business & Commerce
2/27/2001
As Filed


DIGEST AND PURPOSE 

Currently, if an employee is disabled by a physical condition, long-term
disability insurance will provide benefits until that person obtains that
age of 65 while if that same person is disabled by a mental condition,
benefits are available for only 24 months.  As proposed, S.B. 805 amends
the Insurance Code to ensure mental health parity in long-term disability
insurance. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 21E, Insurance Code, by adding Article 21.530,
as follows, 

 Art. 21.530.  PARITY IN CERTAIN DISABILITY INSURANCE BENEFITS
Sec. 1.  APPLICATION.  Provides that this article applies to a disability
insurance policy or plan issued under certain policies. 

Sec. 2.  PARITY IS COVERAGE REQUIRED.  (a)  Prohibits an insurance policy
or evidence of coverage subject to this article from being delivered,
issued for delivery, or renewed in this state if the terms of the policy or
evidence of coverage exclude or reduce the payment of benefits to or on
behalf of an insured or enrollee because of a mental illness, disease, or
disorder, unless that exclusion or limitation is equally applicable to all
other physically disabling conditions.  Requires that each disability
policy or plan subject to this article to provide parity in benefits for
mental and physical disabilities. 

(b)  Provides that a provision in an insurance policy or evidence of
coverage that violates this section is void. 

Sec. 3.  VIOLATION; PENALTY.  (a)  Provides that a violation of this
article is an unfair and deceptive act or practice in the business of
insurance for purposes of Article 21.21 of this code and is subject to the
sanctions and penalties imposed under that article. 

(b)  Approval by the Commissioner of Insurance (commissioner) of the policy
or product form or other form used by the policy or plan issuer under any
law of this state, including Article 3.42 of this code or Section 9, Texas
Health Maintenance Organization Act (Article 20A.09, V.T.I.C.), is not a
defense to an action brought under Article 21.21 of this code with respect
to a violation of this article. 

SECTION 2.  Makes application of this Act prospective, to January 1, 2002.

SECTION 3.  Effective date: September 1, 2001.