By Averitt H.B. No. 1440
77R3815 DLF-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the eligibility of certain children for certain health
1-3 benefit coverage.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 1(b), Article 3.51-6, Insurance Code, is
1-6 amended to read as follows:
1-7 (b) The spouse and dependents of employees or members
1-8 described by Subsections (a)(1)-(6) of this section, including an
1-9 unmarried child under a specified age, which may not be less than
1-10 attainment of 25 years of age and a [dependent] grandchild
1-11 described by Section 3E of this article [of an employee or member
1-12 who is less than 21 years old and living with and in the household
1-13 of the employee or member, referred to in Subdivisions (a)(1)
1-14 through (a)(6) of this section] may be included within the coverage
1-15 provided in a group policy.
1-16 SECTION 2. Section 3E(b), Article 3.51-6, Insurance Code, is
1-17 amended to read as follows:
1-18 (b) A health insurance policy that provides coverage for a
1-19 child of the policyholder must upon payment of a premium provide
1-20 coverage for any unmarried child [children] of the policyholder's
1-21 child if the child is younger than 25 years of age and is a
1-22 dependent [those children are dependents] of the policyholder for
1-23 federal income tax purposes at the time application for coverage of
1-24 the child is made. Coverage for a child of the policyholder's
2-1 child under this subsection may not be terminated solely because
2-2 the covered child is no longer a dependent of the policyholder for
2-3 federal income tax purposes.
2-4 SECTION 3. Sections 2(A), (C), (L), and (M), Chapter 397,
2-5 Acts of the 54th Legislature, Regular Session, 1955 (Article
2-6 3.70-2, Vernon's Texas Insurance Code), are amended to read as
2-7 follows:
2-8 (A) No policy of accident and sickness insurance shall be
2-9 delivered or issued for delivery to any person in this state
2-10 unless:
2-11 (1) the entire money and other consideration therefor
2-12 are expressed therein or in the application, if it is made a part
2-13 of the policy; and
2-14 (2) the time at which the insurance takes effect and
2-15 terminates is expressed therein; and
2-16 (3) it purports to insure only one person, except that
2-17 a policy may insure, originally or by subsequent amendment, upon
2-18 the application of an adult member of a family who shall be deemed
2-19 the policy holder, any two or more eligible members of that family,
2-20 including husband, wife, unmarried [dependent] children under a
2-21 specified age, which may not be less than attainment of 25 years of
2-22 age, including a [dependent] grandchild of the policy holder as
2-23 described by Section (L) of this article [who is less than 21 years
2-24 old and living with and in the household of the policy holder, or
2-25 any children under a specified age which shall not exceed
2-26 twenty-five years], a child the policy holder is required to insure
2-27 under a medical support order issued under Chapter 154 [Section
3-1 14.061], Family Code, or enforceable by a court in this state, and
3-2 any other person dependent upon the policy holder; and
3-3 (4) the style, arrangement and over-all appearance of
3-4 the policy gives no undue prominence to any portion of the text,
3-5 and unless every printed portion of the text of the policy and of
3-6 any endorsements or attached papers (except copies of applications
3-7 and identification cards) are plainly printed in lightfaced type of
3-8 a style in general use, the size of which shall be uniform and not
3-9 less than ten-point with a lower-case unspaced alphabet length not
3-10 less than one hundred and twenty-point (the "text" shall include
3-11 all printed matter except the name and address of the insurer, name
3-12 or title of the policy, the brief description, if any, and captions
3-13 and subcaptions); and
3-14 (5) the exceptions and reductions of indemnity are set
3-15 forth in the policy and, except those which are set forth in
3-16 Section 3 of this Act, are printed, at the insurer's option, either
3-17 included with the benefit provision to which they apply, or under
3-18 an appropriate caption such as "Exceptions" or "Exceptions and
3-19 Reductions"; provided that if an exception or reduction
3-20 specifically applies only to a particular benefit of the policy, a
3-21 statement of such exception or reduction shall be included with the
3-22 benefit provision to which it applies; and
3-23 (6) each such form, including riders and endorsements,
3-24 shall be identified by a form number in the lower left-hand corner
3-25 of the first page thereof; and
3-26 (7) it contains no provision purporting to make any
3-27 portion of the charter, rules, constitution, or bylaws of the
4-1 insurer a part of the policy unless such portion is set forth in
4-2 full in the policy, except in the case of the incorporation of, or
4-3 reference to, a statement of rates or classification of risks, or
4-4 shortrate table filed with the Board; and
4-5 (8) it shall have printed thereon or attached thereto
4-6 a notice stating in substance that the person to whom the policy is
4-7 issued shall be permitted to return the policy within ten (10) days
4-8 of its delivery to such person and to have the premium paid
4-9 refunded if, after examination of the policy, such person is not
4-10 satisfied with it for any reason. If such person pursuant to such
4-11 notice, returns the policy to the insurer at its home or branch
4-12 office or to the agent through whom it was purchased, it shall be
4-13 void from the beginning and the parties shall be in the same
4-14 position as if no policy had been issued. This subdivision shall
4-15 not apply to single premium nonrenewable policies.
4-16 (C) Any policy of accident and sickness insurance, including
4-17 policies issued by companies subject to Chapter 20, Texas Insurance
4-18 Code, as amended, delivered or issued for delivery in this state,
4-19 which provides that coverage of a [dependent] child shall terminate
4-20 upon attainment of the limiting age for [dependent] children
4-21 specified in the policy shall also provide in substance that
4-22 attainment of the limiting age shall not operate to terminate the
4-23 coverage of the child while the child is both (1) incapable of
4-24 self-sustaining employment by reason of mental retardation or
4-25 physical handicap and (2) chiefly dependent upon the insured for
4-26 support and maintenance. Proof of the incapacity and dependency
4-27 shall be furnished to the insurer by the insured within 31 days of
5-1 the child's attainment of the limiting age and subsequently as may
5-2 be required by the insurer but not more frequently than annually
5-3 after the two-year period following the child's attainment of the
5-4 limiting age.
5-5 (L) An individual or group policy of accident and sickness
5-6 insurance that is delivered, issued for delivery, or renewed in
5-7 this state, including a policy issued by a company subject to
5-8 Chapter 20, Insurance Code, evidence of coverage issued by a health
5-9 maintenance organization subject to the Texas Health Maintenance
5-10 Organization Act (Chapter 20A, Vernon's Texas Insurance Code), and
5-11 a self-funded or self-insured welfare or benefit plan or program to
5-12 the extent that regulation of the plan or program is not preempted
5-13 by federal law that provides coverage for a child of the
5-14 policyholder, must provide coverage upon payment of a premium for
5-15 any unmarried child [children] of the policyholder's child if the
5-16 child is younger than 25 years of age and is a dependent [those
5-17 children are dependents] of the policyholder for federal income tax
5-18 purposes at the time application for coverage of the child of the
5-19 policyholder's child is made or for a child for whom the group
5-20 member or insured must provide medical support under an order
5-21 issued under Chapter 154 [Section 14.061], Family Code, or
5-22 enforceable by a court in this state. Coverage for a child of the
5-23 policyholder's child may not be terminated solely because the
5-24 covered child is no longer a dependent of the policyholder for
5-25 federal income tax purposes.
5-26 (M)(1) A group or individual accident and sickness insurance
5-27 policy that provides coverage for [dependent] children of a group
6-1 member or a person insured under the policy may not exclude from or
6-2 discontinue coverage or set a different premium for the natural
6-3 born or adopted child of the group member or person insured or for
6-4 a child for whom the group member or insured must provide medical
6-5 support under an order issued under Chapter 154 [Section 14.061],
6-6 Family Code, or enforceable by a court in this state for either of
6-7 the following reasons:
6-8 (a) the child does not reside with the group
6-9 member or insured; or
6-10 (b) the group member or insured does not claim
6-11 the child as an exemption for federal income tax purposes under
6-12 Section 151(c)(1)(B), Internal Revenue Code of 1986 (26 U.S.C.
6-13 Section 151(c)(1)(B)).
6-14 (2) A group or individual accident and sickness
6-15 insurance policy that provides coverage for [dependent] children of
6-16 a group member or a person insured under the policy may not exclude
6-17 from or discontinue coverage or set a different premium for the
6-18 natural born or adopted child of the spouse of the group member or
6-19 person insured[, provided that the child resides with the group
6-20 member or person insured].
6-21 (3) Other policy provisions relating to maximum
6-22 limiting attained age and enrollment in school may be used to
6-23 establish continued eligibility for coverage of a [dependent] child
6-24 who is 25 years of age or older. In the event of late enrollment,
6-25 the insurance company may require evidence of insurability
6-26 satisfactory to the company before inclusion of the [dependent]
6-27 child for coverage under the policy.
7-1 SECTION 4. Section 2(5), Article 3.77, Insurance Code, is
7-2 amended to read as follows:
7-3 (5) "Dependent" means a resident spouse or unmarried
7-4 child younger than 25 years of [under the] age [of 18 years], a
7-5 child who is a full-time student 25 [under the age of 23] years of
7-6 age or older and who is financially dependent upon the parent, a
7-7 child who is [over] 18 years of age or older and for whom a person
7-8 may be obligated to pay child support, or a child of any age who is
7-9 disabled and dependent upon the parent.
7-10 SECTION 5. Section 10(e), Article 3.77, Insurance Code, is
7-11 amended to read as follows:
7-12 (e) Pool coverage shall cease:
7-13 (1) on the date a person is no longer a resident of
7-14 this state, except for a child who is a student 25 [under the age
7-15 of 23] years of age or older and who is financially dependent upon
7-16 the parent, a child for whom a person may be obligated to pay child
7-17 support, or a child of any age who is disabled and dependent upon
7-18 the parent;
7-19 (2) on the date a person requests coverage to end;
7-20 (3) upon the death of the covered person;
7-21 (4) on the date state law requires cancellation of the
7-22 policy;
7-23 (5) at the option of the pool, 30 days after the pool
7-24 sends to the person any inquiry concerning the person's
7-25 eligibility, including an inquiry concerning the person's
7-26 residence, to which the person does not reply;
7-27 (6) on the 31st day after the day on which a premium
8-1 payment for pool coverage becomes due if the payment is not made
8-2 before that date; or
8-3 (7) at such time as the person ceases to meet the
8-4 eligibility requirements of this section.
8-5 SECTION 6. Article 3.95-4.2, Insurance Code, is amended to
8-6 read as follows:
8-7 Art. 3.95-4.2. [DEPENDENT] CHILDREN. (a) A multiple
8-8 employer welfare arrangement's plan document may not limit or
8-9 exclude initial coverage of a newborn child of a participating
8-10 employee. Any coverage of a newborn child of a participating
8-11 employee under this subsection terminates on the 32nd day after the
8-12 date of the birth of the child unless:
8-13 (1) [dependent] children are eligible for coverage
8-14 under the multiple employer welfare arrangement's plan document;
8-15 and
8-16 (2) notification of the birth and any required
8-17 additional premium are received by the multiple employer welfare
8-18 arrangement not later than the 31st day after the date of birth.
8-19 (b) If [dependent] children are eligible for coverage under
8-20 the terms of a multiple employer welfare arrangement's plan
8-21 document, the plan document may not limit or exclude initial
8-22 coverage of an adopted child of a participating employee. A child
8-23 is considered to be the child of a participating employee if the
8-24 participating employee is a party in a suit in which the adoption
8-25 of the child by the participating employee is sought.
8-26 (c) If [dependent] children are eligible for coverage under
8-27 the terms of a multiple employer welfare arrangement's plan
9-1 document, an adopted child of a participating employee may be
9-2 enrolled, at the option of the participating employee, within
9-3 either:
9-4 (1) 31 days after the participating employee is a
9-5 party in a suit for adoption; or
9-6 (2) 31 days of the date the adoption is final.
9-7 (d) Coverage of an adopted child of an employee under this
9-8 article terminates unless notification of the adoption and any
9-9 required additional premiums are received by the multiple employer
9-10 welfare arrangement not later than either:
9-11 (1) the 31st day after the participating employee
9-12 becomes a party in a suit in which the adoption of the child by the
9-13 participating employee is sought; or
9-14 (2) the 31st day after the date of the adoption.
9-15 (e) If children are eligible for coverage under the terms of
9-16 a multiple employer welfare arrangement's plan document, any
9-17 limiting age applicable to an unmarried child of an enrollee may
9-18 not be less than attainment of 25 years of age.
9-19 SECTION 7. Section 9(k), Texas Health Maintenance
9-20 Organization Act (Article 20A.09, Vernon's Texas Insurance Code)
9-21 (former Subsection (j)), as amended by Chapters 905 and 1026, Acts
9-22 of the 75th Legislature, Regular Session, 1997, is redesignated as
9-23 Section 9H, Texas Health Maintenance Organization Act (Chapter 20A,
9-24 Vernon's Texas Insurance Code), and amended to read as follows:
9-25 Sec. 9H. CHILDREN AND GRANDCHILDREN. (a) If children are
9-26 eligible for coverage under the terms of an evidence of coverage,
9-27 any limiting age applicable to an unmarried child of an enrollee,
10-1 including an unmarried grandchild of an enrollee, may not be less
10-2 than attainment of 25 years of age. The limiting age applicable to
10-3 a child must be stated in the evidence of coverage.
10-4 (b) [(k) (r)] A health maintenance organization may provide
10-5 benefits under a health care plan to a dependent grandchild of an
10-6 enrollee who is [when the dependent grandchild is less than 21
10-7 years old and] living with and in the household of the enrollee.
10-8 SECTION 8. Article 21.24-2, Insurance Code, is amended to
10-9 read as follows:
10-10 Art. 21.24-2. [GROUP] COVERAGE OF CERTAIN STUDENTS
10-11 Sec. 1. In this article, "health benefit plan" means a
10-12 [group] plan described by Section 2 of this article.
10-13 Sec. 2. (a) This article applies to a health benefit plan
10-14 that:
10-15 (1) provides [group] benefits for medical or surgical
10-16 expenses incurred as a result of a health condition, accident, or
10-17 sickness, including:
10-18 (A) an individual, [a] group, blanket, or
10-19 franchise insurance policy or insurance agreement, a group hospital
10-20 service contract, or an individual or [a] group evidence of
10-21 coverage that is offered by:
10-22 (i) an insurance company;
10-23 (ii) a group hospital service corporation
10-24 operating under Chapter 20 of this code;
10-25 (iii) a fraternal benefit society
10-26 operating under Chapter 10 of this code;
10-27 (iv) a stipulated premium insurance
11-1 company operating under Chapter 22 of this code; or
11-2 (v) a health maintenance organization
11-3 operating under the Texas Health Maintenance Organization Act
11-4 (Chapter 20A, Vernon's Texas Insurance Code); or
11-5 (B) to the extent permitted by the Employee
11-6 Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et
11-7 seq.), a health benefit plan that is offered by:
11-8 (i) a multiple employer welfare
11-9 arrangement as defined by Section 3, Employee Retirement Income
11-10 Security Act of 1974 (29 U.S.C. Section 1002); or
11-11 (ii) another analogous benefit
11-12 arrangement;
11-13 (2) is offered by an approved nonprofit health
11-14 corporation that is certified under Section 162.001, Occupations
11-15 Code [5.01(a), Medical Practice Act (Article 4495b, Vernon's Texas
11-16 Civil Statutes)], and that holds a certificate of authority issued
11-17 by the commissioner under Article 21.52F of this code; or
11-18 (3) is offered by any other entity not licensed under
11-19 this code or another insurance law of this state that contracts
11-20 directly for health care services on a risk-sharing basis,
11-21 including an entity that contracts for health care services on a
11-22 capitation basis.
11-23 (b) This article does not apply to:
11-24 (1) a plan that provides coverage:
11-25 (A) only for a specified disease;
11-26 (B) only for accidental death or dismemberment;
11-27 (C) for wages or payments in lieu of wages for a
12-1 period during which an employee is absent from work because of
12-2 sickness or injury; or
12-3 (D) as a supplement to liability insurance;
12-4 (2) a small employer health benefit plan written under
12-5 Chapter 26 of this code;
12-6 (3) a Medicare supplemental policy as defined by
12-7 Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss);
12-8 (4) workers' compensation insurance coverage;
12-9 (5) medical payment insurance issued as part of a
12-10 motor vehicle insurance policy; or
12-11 (6) a long-term care policy, including a nursing home
12-12 fixed indemnity policy, unless the commissioner determines that the
12-13 policy provides benefit coverage so comprehensive that the policy
12-14 is a health benefit plan as described by Subsection (a) of this
12-15 section.
12-16 Sec. 3. (a) Each health benefit plan that conditions
12-17 [dependent] coverage for a child 25 [21] years of age or older on
12-18 the child's being a full-time student at an educational institution
12-19 shall provide the coverage for an entire academic term during which
12-20 the child begins as a full-time student and remains enrolled,
12-21 regardless of whether the number of hours of instruction for which
12-22 the child is enrolled is reduced to a level that changes the
12-23 child's academic status to less than that of a full-time student.
12-24 Additionally, the health benefit plan shall provide the coverage
12-25 continuously until the 10th day of instruction of the subsequent
12-26 academic term on which date the health benefit plan may terminate
12-27 coverage of the child if the child does not return to full-time
13-1 student status before that date. A health benefit plan may not
13-2 condition coverage for a child younger than 25 years of age on the
13-3 child's being enrolled at an educational institution.
13-4 (b) For purposes of this section, determination of the
13-5 full-time student status of a child subject to this article is made
13-6 in the manner provided by the educational institution at which the
13-7 child is enrolled.
13-8 SECTION 9. Article 26.02(8), Insurance Code, is amended to
13-9 read as follows:
13-10 (8) "Dependent" means:
13-11 (A) a spouse;
13-12 (B) a newborn child;
13-13 (C) a child younger than 25 [under the age of
13-14 19] years of age;
13-15 (D) [a child who is a full-time student under
13-16 the age of 23 years and who is financially dependent on the parent;]
13-17 [(E)] a child of any age who is medically
13-18 certified as disabled and dependent on the parent;
13-19 (E) [(F)] any person who must be covered under:
13-20 (i) Section 3D or 3E, Article 3.51-6, of
13-21 this code; or
13-22 (ii) Section 2(L), Chapter 397, Acts of
13-23 the 54th Legislature, Regular Session, 1955 (Article 3.70-2,
13-24 Vernon's Texas Insurance Code); and
13-25 (F) [(G)] any other child [included as an]
13-26 eligible [dependent] under an employer's benefit plan, including a
13-27 child described by Section 3, Article 21.24-2, of this code.
14-1 SECTION 10. Article 26.84, Insurance Code, is amended to read
14-2 as follows:
14-3 Art. 26.84. [DEPENDENT] CHILDREN. (a) A large employer
14-4 health benefit plan may not limit or exclude initial coverage of a
14-5 newborn child of a covered employee. Any coverage of a newborn
14-6 child of a covered employee under this subsection terminates on the
14-7 32nd day after the date of the birth of the child unless:
14-8 (1) [dependent] children are eligible for coverage
14-9 under the large employer health benefit plan; and
14-10 (2) notification of the birth and any required
14-11 additional premium are received by the large employer carrier not
14-12 later than the 31st day after the date of birth.
14-13 (b) If [dependent] children are eligible for coverage under
14-14 the large employer health benefit plan, a large employer health
14-15 benefit plan may not limit or exclude initial coverage of an
14-16 adopted child of an insured. A child is considered to be the child
14-17 of an insured if the insured is a party in a suit in which the
14-18 adoption of the child by the insured is sought.
14-19 (c) If [dependent] children are eligible for coverage under
14-20 the large employer health benefit plan an adopted child of an
14-21 insured may be enrolled, at the option of the insured, within
14-22 either:
14-23 (1) 31 days after the insured is a party in a suit for
14-24 adoption; or
14-25 (2) 31 days of the date the adoption is final.
14-26 (d) Coverage of an adopted child of an employee under this
14-27 article terminates unless notification of the adoption and any
15-1 required additional premiums are received by the large employer
15-2 carrier not later than either:
15-3 (1) the 31st day after the insured becomes a party in
15-4 a suit in which the adoption of the child by the insured is sought;
15-5 or
15-6 (2) the 31st day after the date of the adoption.
15-7 (e) If children are eligible for coverage under the terms of
15-8 a large employer health benefit plan, any limiting age applicable
15-9 to an unmarried child of an enrollee may not be less than
15-10 attainment of 25 years of age.
15-11 SECTION 11. This Act applies only to a policy, plan,
15-12 contract, or evidence of coverage delivered, issued for delivery,
15-13 or renewed on or after January 1, 2002. A policy, plan, contract,
15-14 or evidence of coverage delivered, issued for delivery, or renewed
15-15 before January 1, 2002, is governed by the law as it existed
15-16 immediately before the effective date of this Act, and that law is
15-17 continued in effect for that purpose.
15-18 SECTION 12. This Act takes effect September 1, 2001.