1-1 By: Averitt, Thompson, et al. H.B. No. 949
1-2 (Senate Sponsor - Fraser)
1-3 (In the Senate - Received from the House May 11, 2001;
1-4 May 11, 2001, read first time and referred to Committee on Business
1-5 and Commerce; May 11, 2001, reported favorably by the following
1-6 vote: Yeas 5, Nays 0; May 11, 2001, sent to printer.)
1-7 A BILL TO BE ENTITLED
1-8 AN ACT
1-9 relating to premium rates for certain small employer health benefit
1-10 plans.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Article 26.02, Insurance Code, is amended by
1-13 amending Subsections (28)-(32) and adding Subsections (33) and (34)
1-14 to read as follows:
1-15 (28) "Risk characteristic" means:
1-16 (A) a health status related factor;
1-17 (B) the duration of coverage; or
1-18 (C) any characteristic similar to a
1-19 characteristic described by Paragraph (A) or (B) of this
1-20 subdivision that is related to the health status or experience of a
1-21 small employer group or of any member of a small employer group.
1-22 (29) "Risk load" means the percentage above the
1-23 applicable base premium rate a small employer carrier charges to a
1-24 small employer to reflect the risk characteristics associated with
1-25 that particular small employer group.
1-26 (30) "Small employer" means an employer who employed
1-27 an average of at least two but not more than 50 eligible employees
1-28 on business days during the preceding calendar year and who employs
1-29 at least two eligible employees on the first day of the plan year.
1-30 For purposes of this definition, a partnership is the employer of a
1-31 partner. A small employer includes a governmental entity subject
1-32 to Section 1, Chapter 123, Acts of the 60th Legislature, Regular
1-33 Session, 1967 (Article 3.51-3, Vernon's Texas Insurance Code), or
1-34 Article 3.51-1, 3.51-2, 3.51-4, 3.51-5, or 3.51-5A of this code
1-35 that otherwise meets the requirements of this section and elects to
1-36 be treated as a small employer.
1-37 (31) [(29)] "Small employer carrier" means a health
1-38 carrier, to the extent that that carrier is offering, delivering,
1-39 issuing for delivery, or renewing health benefit plans subject to
1-40 Subchapters C-G of this chapter under Article 26.06(a) of this
1-41 code.
1-42 (32) [(30)] "Small employer health benefit plan" means
1-43 a plan developed by the commissioner under Subchapter E of this
1-44 chapter or any other health benefit plan offered to a small
1-45 employer in accordance with Article 26.42(c) or 26.48 of this code.
1-46 (33) [(31)] "System" means the Texas Health
1-47 Reinsurance System established under Subchapter F of this chapter.
1-48 (34) [(32)] "Waiting period" means a period
1-49 established by an employer that must pass before an individual who
1-50 is a potential enrollee in a health benefit plan is eligible to be
1-51 covered for benefits.
1-52 SECTION 2. Article 26.31, Insurance Code, is amended by
1-53 adding Subsection (g) to read as follows:
1-54 (g) A small employer carrier may not directly or indirectly
1-55 use as a criterion for establishing a separate class of business:
1-56 (1) the number of employees and dependents of a small
1-57 employer; or
1-58 (2) except as provided in Subsection (a)(3) of this
1-59 article, the trade or occupation of the employees of a small
1-60 employer or the industry or type of business of the small employer.
1-61 SECTION 3. Article 26.32, Insurance Code, is amended by
1-62 adding Subsections (d) and (e) to read as follows:
1-63 (d) Small employer carriers shall develop premium rates for
1-64 each small employer group in a two-step process. In the first
2-1 step, the small employer carrier shall develop a base premium rate
2-2 for each small employer group without regard to any risk
2-3 characteristic of the group. In the second step, the small
2-4 employer carrier may adjust the resulting base premium rate by the
2-5 risk load of the group, subject to the provisions of this
2-6 subchapter, to reflect the risk characteristics of the group.
2-7 (e) The risk load assessed to a particular group shall
2-8 reflect the risk characteristics of the particular group.
2-9 SECTION 4. Article 26.33, Insurance Code, is amended by
2-10 amending Subsection (d) and adding Subsection (e) to read as
2-11 follows:
2-12 (d) A small employer carrier may use the number of employees
2-13 and dependents of a small employer as a case characteristic in
2-14 establishing premium rates for the group. The highest rate factor
2-15 associated with a classification based on the number of employees
2-16 and dependents of a small employer may not exceed by more than 20
2-17 percent the lowest rate factor associated with a classification
2-18 based on the number of employees and dependents of a small
2-19 employer.
2-20 (e) A small employer carrier may establish premium
2-21 discounts, rebates, or a reduction in otherwise applicable
2-22 copayments or deductibles in return for adherence to programs of
2-23 health promotion and disease prevention. A discount, rebate, or
2-24 reduction established under this subsection does not violate
2-25 Section 4(8), Article 21.21, of this code.
2-26 SECTION 5. This Act takes effect September 1, 2001.
2-27 SECTION 6. The importance of this legislation and the crowded
2-28 condition of the calendars in both houses create an emergency and
2-29 an imperative public necessity that the constitutional rule
2-30 requiring bills to be read on three several days in each house be
2-31 suspended, and this rule is hereby suspended.
2-32 * * * * *