By Averitt, Thompson, et al. H.B. No. 949
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to premium rates for certain small employer health benefit
1-3 plans.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article 26.02, Insurance Code, is amended by
1-6 amending Subsections (28)-(32) and adding Subsections (33) and (34)
1-7 to read as follows:
1-8 (28) "Risk characteristic" means:
1-9 (A) a health status related factor;
1-10 (B) the duration of coverage; or
1-11 (C) any characteristic similar to a
1-12 characteristic described by Paragraph (A) or (B) of this
1-13 subdivision that is related to the health status or experience of a
1-14 small employer group or of any member of a small employer group.
1-15 (29) "Risk load" means the percentage above the
1-16 applicable base premium rate a small employer carrier charges to a
1-17 small employer to reflect the risk characteristics associated with
1-18 that particular small employer group.
1-19 (30) "Small employer" means an employer who employed
1-20 an average of at least two but not more than 50 eligible employees
1-21 on business days during the preceding calendar year and who employs
1-22 at least two eligible employees on the first day of the plan year.
1-23 For purposes of this definition, a partnership is the employer of a
1-24 partner. A small employer includes a governmental entity subject
2-1 to Section 1, Chapter 123, Acts of the 60th Legislature, Regular
2-2 Session, 1967 (Article 3.51-3, Vernon's Texas Insurance Code), or
2-3 Article 3.51-1, 3.51-2, 3.51-4, 3.51-5, or 3.51-5A of this code
2-4 that otherwise meets the requirements of this section and elects to
2-5 be treated as a small employer.
2-6 (31) [(29)] "Small employer carrier" means a health
2-7 carrier, to the extent that that carrier is offering, delivering,
2-8 issuing for delivery, or renewing health benefit plans subject to
2-9 Subchapters C-G of this chapter under Article 26.06(a) of this
2-10 code.
2-11 (32) [(30)] "Small employer health benefit plan" means
2-12 a plan developed by the commissioner under Subchapter E of this
2-13 chapter or any other health benefit plan offered to a small
2-14 employer in accordance with Article 26.42(c) or 26.48 of this code.
2-15 (33) [(31)] "System" means the Texas Health
2-16 Reinsurance System established under Subchapter F of this chapter.
2-17 (34) [(32)] "Waiting period" means a period
2-18 established by an employer that must pass before an individual who
2-19 is a potential enrollee in a health benefit plan is eligible to be
2-20 covered for benefits.
2-21 SECTION 2. Article 26.31, Insurance Code, is amended by
2-22 adding Subsection (g) to read as follows:
2-23 (g) A small employer carrier may not directly or indirectly
2-24 use as a criterion for establishing a separate class of business:
2-25 (1) the number of employees and dependents of a small
2-26 employer; or
2-27 (2) except as provided in Subsection (a)(3) of this
3-1 article, the trade or occupation of the employees of a small
3-2 employer or the industry or type of business of the small employer.
3-3 SECTION 3. Article 26.32, Insurance Code, is amended by
3-4 adding Subsections (d) and (e) to read as follows:
3-5 (d) Small employer carriers shall develop premium rates for
3-6 each small employer group in a two-step process. In the first
3-7 step, the small employer carrier shall develop a base premium rate
3-8 for each small employer group without regard to any risk
3-9 characteristic of the group. In the second step, the small
3-10 employer carrier may adjust the resulting base premium rate by the
3-11 risk load of the group, subject to the provisions of this
3-12 subchapter, to reflect the risk characteristics of the group.
3-13 (e) The risk load assessed to a particular group shall
3-14 reflect the risk characteristics of the particular group.
3-15 SECTION 4. Article 26.33, Insurance Code, is amended by
3-16 amending Subsection (d) and adding Subsection (e) to read as
3-17 follows:
3-18 (d) A small employer carrier may use the number of employees
3-19 and dependents of a small employer as a case characteristic in
3-20 establishing premium rates for the group. The highest rate factor
3-21 associated with a classification based on the number of employees
3-22 and dependents of a small employer may not exceed by more than 20
3-23 percent the lowest rate factor associated with a classification
3-24 based on the number of employees and dependents of a small
3-25 employer.
3-26 (e) A small employer carrier may establish premium
3-27 discounts, rebates, or a reduction in otherwise applicable
4-1 copayments or deductibles in return for adherence to programs of
4-2 health promotion and disease prevention. A discount, rebate, or
4-3 reduction established under this subsection does not violate
4-4 Section 4(8), Article 21.21, of this code.
4-5 SECTION 5. This Act takes effect September 1, 2001.
4-6 SECTION 6. The importance of this legislation and the crowded
4-7 condition of the calendars in both houses create an emergency and
4-8 an imperative public necessity that the constitutional rule
4-9 requiring bills to be read on three several days in each house be
4-10 suspended, and this rule is hereby suspended.