By Averitt H.B. No. 1865
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to participation requirements for small employer health
1-3 benefit plans and certain definitions relating to health benefit
1-4 plans.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. SUBCHAPTER A., Chapter 26, Article 26.02,
1-7 Insurance Code, is amended to read as follows:
1-8 (9) "Collective enrollment" means the total number of
1-9 all employees enrolled in a health benefit plan offered by a small
1-10 or large employer divided by the collective number of eligible
1-11 employees.
1-12 (10) "Collective number of eligible employees" of a
1-13 small or large employer means the total number of eligible
1-14 employees plus the number of employees not eligible because they
1-15 are covered under another health benefit plan issued to or
1-16 sponsored by the small or large employer.
1-17 [(9)] (11) "Eligible employee" means an employee who
1-18 works on a full-time basis and who usually works at least 30 hours
1-19 a week. The term also includes a sole proprietor, a partner, and
1-20 an independent contractor, if the sole proprietor, partner, or
1-21 independent contractor is included as an employee under a health
1-22 benefit plan of a small or large employer. The term does not
2-1 include:
2-2 (A) an employee who works on a part-time,
2-3 temporary, seasonal, or substitute basis; or
2-4 (B) an employee who is covered under:
2-5 (i) another health benefit plan, which
2-6 includes but is not limited to another health benefit plan issued
2-7 to or sponsored by the employee's spouse's employer, the employee's
2-8 former employer, the employee's current employer or any other
2-9 health benefit plan the employee is covered under;
2-10 (ii) a self-funded or self-insured
2-11 employee welfare benefit plan that provides health benefits and
2-12 that is established in accordance with the Employee Retirement
2-13 Income Security Act of 1974 (29 U.S.C. Section 1001 et seq.);
2-14 (iii) the Medicaid program if the employee
2-15 elects not to be covered;
2-16 (iv) another federal program, including
2-17 the CHAMPUS program or Medicare program, if the employee elects not
2-18 to be covered; or
2-19 (v) a benefit plan established in another
2-20 country if the employee elects not to be covered.
2-21 SECTION 2. Chapter 26, Subchapter A, Insurance Code, Section
2-22 (a), Article 26.06 is amended to read as follows.
2-23 (a) An individual or group health benefit plan is subject to
2-24 Subchapters A[C]-G of this chapter if it provides health care
2-25 benefits covering two or more eligible employees of a small
2-26 employer and if:
3-1 (1) a portion of the premium or benefits is paid by a
3-2 small employer; or
3-3 (2) the health benefit plan is treated by the employer
3-4 or by a covered individual as part of a plan or program for the
3-5 purposes of Section 106 or 162, Internal Revenue Code of 1986 (26
3-6 U.S.C. Section 106 or 162).
3-7 SECTION 3. Chapter 26, Subchapter C., Insurance Code,
3-8 Subsection (b) and Subsection (c), Article 26.21 are amended to
3-9 read as follows:
3-10 (b) This article does not impose a statutory mandate of an
3-11 employer contribution to the premium paid to the small employer
3-12 carrier. However, the small employer carrier may require an
3-13 employer contribution in accordance with the carrier's usual and
3-14 customary practices on all employer group health insurance plans in
3-15 this state. The premium contribution level shall be applied
3-16 uniformly to each small employer offered or issued coverage by the
3-17 small employer carrier in this state. If two or more small
3-18 employer carriers participate in a purchasing cooperative
3-19 established under Article 26.14 of this code, the carrier may use
3-20 the contribution requirement established by the purchasing
3-21 cooperative for policies marketed by the cooperative. Coverage is
3-22 available under a small employer health benefit plan if at least 75
3-23 percent of a small employer's eligible employees elect to be
3-24 covered. In this article, "eligible employee" does not include an
3-25 employee who neither resides nor works in a geographic service
3-26 area, filed pursuant to Article 26.22(c) of this code, of the small
4-1 employer carrier.
4-2 (c) If a small employer offers multiple health benefit
4-3 plans, the collective enrollment of all of those plans must be at
4-4 least 75 percent of the collective number of the small employer's
4-5 eligible employees or, if applicable, the lower participation level
4-6 offered by the small employer carrier under Subsection (d) of this
4-7 article. A small employer carrier may elect not to offer health
4-8 benefit plans to a small employer who offers multiple health
4-9 benefit plans if such plans are to be provided by more than one
4-10 carrier and the small employer carrier would have less than 75
4-11 percent of the small employer's eligible employees, excluding the
4-12 employer's employees enrolled in another health benefit plan
4-13 offered by the employer or not otherwise an eligible employee,
4-14 enrolled in the small employer carrier's health benefit plan unless
4-15 the coverage is provided through a purchasing cooperative. A small
4-16 employer who elects to make contributions for payment of the
4-17 premium is not required to pay any amount with respect to an
4-18 employee who elects not to be covered. The small employer may
4-19 elect to pay the premium cost for additional coverage. This
4-20 chapter does not require a small employer to purchase health
4-21 insurance coverage for the employer's employees.
4-22 SECTION 4. This Act takes effect September 1, 2001, and
4-23 applies only to a health benefit plan that is delivered, issued for
4-24 delivery, or renewed on or after January 1, 2002. A health benefit
4-25 plan that is delivered, issued for delivery, or renewed before
4-26 January 1, 2002, is governed by the law as it existed immediately
5-1 before the effective date of this Act, and that law is continued in
5-2 effect for that purpose.