77R8432 DLF-F
By Averitt, et al. H.B. No. 1865
Substitute the following for H.B. No. 1865:
By Averitt C.S.H.B. No. 1865
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to enrollment in certain health benefit plans.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Article 26.02, Insurance Code, is amended by
1-5 amending Subdivision (9) and adding Subdivisions (33) and (34) to
1-6 read as follows:
1-7 (9) "Eligible employee" means an employee who works on
1-8 a full-time basis and who usually works at least 30 hours a week.
1-9 The term also includes a sole proprietor, a partner, and an
1-10 independent contractor, if the sole proprietor, partner, or
1-11 independent contractor is included as an employee under a health
1-12 benefit plan of a small or large employer. The term does not
1-13 include:
1-14 (A) an employee who works on a part-time,
1-15 temporary, seasonal, or substitute basis; or
1-16 (B) an employee who is covered under:
1-17 (i) any other [another] health benefit
1-18 plan, including a health benefit plan issued to or sponsored by the
1-19 employer of the employee, the employer of the employee's spouse, or
1-20 a former employer of the employee;
1-21 (ii) a self-funded or self-insured
1-22 employee welfare benefit plan that provides health benefits and
1-23 that is established in accordance with the Employee Retirement
1-24 Income Security Act of 1974 (29 U.S.C. Section 1001 et seq.);
2-1 (iii) the Medicaid program if the employee
2-2 elects not to be covered;
2-3 (iv) another federal program, including
2-4 the CHAMPUS program or Medicare program, if the employee elects not
2-5 to be covered; or
2-6 (v) a benefit plan established in another
2-7 country if the employee elects not to be covered.
2-8 (33) "Collective enrollment" means the total number of
2-9 all employees enrolled in a health benefit plan offered by a small
2-10 or large employer divided by the collective number of eligible
2-11 employees.
2-12 (34) "Collective number of eligible employees" of a
2-13 small or large employer means the total number of eligible
2-14 employees plus the number of employees who are not eligible because
2-15 they are covered under another health benefit plan issued to or
2-16 sponsored by the small or large employer.
2-17 SECTION 2. Article 26.06(a), Insurance Code, is amended to
2-18 read as follows:
2-19 (a) An individual or group health benefit plan is subject to
2-20 Subchapters A-G [C-G] of this chapter if it provides health care
2-21 benefits covering two or more eligible employees of a small
2-22 employer and if:
2-23 (1) a portion of the premium or benefits is paid by a
2-24 small employer; or
2-25 (2) the health benefit plan is treated by the employer
2-26 or by a covered individual as part of a plan or program for the
2-27 purposes of Section 106 or 162, Internal Revenue Code of 1986 (26
3-1 U.S.C. Section 106 or 162).
3-2 SECTION 3. Article 26.21, Insurance Code, is amended by
3-3 amending Subsection (c) and adding Subsection (p) to read as
3-4 follows:
3-5 (c) If a small employer offers multiple health benefit
3-6 plans, the collective enrollment of all of those plans must be at
3-7 least 75 percent of the collective number of the small employer's
3-8 eligible employees or, if applicable, the lower participation level
3-9 offered by the small employer carrier under Subsection (d) of this
3-10 article. A small employer carrier may elect not to offer health
3-11 benefit plans to a small employer who offers multiple health
3-12 benefit plans if such plans are to be provided by more than one
3-13 carrier and the small employer carrier would have less than 75
3-14 percent of the small employer's eligible employees, excluding any
3-15 employee who is enrolled in another health benefit plan offered by
3-16 the employer or who is not otherwise an eligible employee, enrolled
3-17 in the small employer carrier's health benefit plan unless the
3-18 coverage is provided through a purchasing cooperative. A small
3-19 employer who elects to make contributions for payment of the
3-20 premium is not required to pay any amount with respect to an
3-21 employee who elects not to be covered. The small employer may
3-22 elect to pay the premium cost for additional coverage. This
3-23 chapter does not require a small employer to purchase health
3-24 insurance coverage for the employer's employees.
3-25 (p) In this article, "eligible employee" does not include an
3-26 employee who does not reside or work in a geographic service area
3-27 of the small employer carrier that is filed under Article 26.22(c)
4-1 of this code.
4-2 SECTION 4. This Act takes effect September 1, 2001, and
4-3 applies only to a health benefit plan that is delivered, issued for
4-4 delivery, or renewed on or after January 1, 2002. A health benefit
4-5 plan that is delivered, issued for delivery, or renewed before
4-6 January 1, 2002, is governed by the law as it existed immediately
4-7 before the effective date of this Act, and that law is continued in
4-8 effect for that purpose.