By Fraser                                              S.B. No. 844
         77R2056 MXM-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to assessment of the impact of proposed health care
 1-3     benefit mandates and offer of coverage mandates.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Title 1, Insurance Code, is amended by adding
 1-6     Chapter 28 to read as follows:
 1-7         CHAPTER 28.  ASSESSMENT OF HEALTH CARE BENEFIT AND OFFER OF
 1-8                              COVERAGE MANDATES
 1-9                      SUBCHAPTER A.  GENERAL PROVISIONS
1-10           Art. 28.001.  GENERAL DEFINITIONS. In this chapter:
1-11                 (1)  "Certified actuary" means:
1-12                       (A)  a fellow of the Society of Actuaries;
1-13                       (B)  a fellow of the Casualty Actuarial Society;
1-14     or
1-15                       (C)  a member of the American Academy of
1-16     Actuaries.
1-17                 (2)  "Health care benefit mandate" means a state law
1-18     that requires a health benefit plan to provide coverage or
1-19     reimbursement for a specific health care service, treatment, or
1-20     procedure, a specific medical condition or illness, or a particular
1-21     group of people who would otherwise be excluded, or to reimburse a
1-22     specific type of health care provider directly or in a specific
1-23     amount.  The term does not include an offer of coverage mandate.
1-24                 (3)  "Offer of coverage mandate" means a state law that
 2-1     requires a health benefit plan to offer as part of the plan's
 2-2     benefit schedule coverage that may be rejected by the contract
 2-3     holder and for which an additional premium may be charged.
 2-4           Art. 28.002.  DEFINITION OF HEALTH BENEFIT PLAN. (a)  In this
 2-5     chapter, "health benefit plan" means a plan that provides benefits
 2-6     for medical or surgical expenses incurred as a result of a health
 2-7     condition, accident, or sickness, including an individual, group,
 2-8     blanket, or franchise insurance policy or insurance agreement, a
 2-9     group hospital service contract, or an individual or group evidence
2-10     of coverage or similar coverage document that is offered by:
2-11                 (1)  an insurance company;
2-12                 (2)  a group hospital service corporation operating
2-13     under Chapter 20 of this code;
2-14                 (3)  a fraternal benefit society operating under
2-15     Chapter 10 of this code;
2-16                 (4)  a stipulated premium insurance company operating
2-17     under Chapter 22 of this code;
2-18                 (5)  a reciprocal exchange operating under Chapter 19
2-19     of this code;
2-20                 (6)  a health maintenance organization operating under
2-21     the Texas Health Maintenance Organization Act (Chapter 20A,
2-22     Vernon's Texas Insurance Code);
2-23                 (7)  a multiple employer welfare arrangement that holds
2-24     a certificate of authority under Article 3.95-2 of this code; or
2-25                 (8)  an approved nonprofit health corporation that
2-26     holds a certificate of authority under Article 21.52F of this code.
2-27           (b)  "Health benefit plan" does not include:
 3-1                 (1)  a plan that provides coverage only:
 3-2                       (A)  for benefits for a specified disease or for
 3-3     another limited benefit other than for cancer;
 3-4                       (B)  for accidental death or dismemberment;
 3-5                       (C)  for wages or payments in lieu of wages for a
 3-6     period during which an employee is absent from work because of
 3-7     sickness or injury;
 3-8                       (D)  as a supplement to a liability insurance
 3-9     policy;
3-10                       (E)  for credit insurance;
3-11                       (F)  for dental or vision care; or
3-12                       (G)  for indemnity for hospital confinement;
3-13                 (2)  a Medicare supplemental policy as defined by
3-14     Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss),
3-15     as amended;
3-16                 (3)  a workers' compensation insurance policy;
3-17                 (4)  medical payment insurance coverage provided under
3-18     a motor vehicle insurance policy; or
3-19                 (5)  a long-term care insurance policy, including a
3-20     nursing home fixed indemnity policy, unless the commissioner
3-21     determines that the policy provides benefit coverage so
3-22     comprehensive that the policy is a health benefit plan as described
3-23     by Subsection (a) of this article.
3-24               (Articles 28.003-28.050 reserved for expansion
3-25            SUBCHAPTER B.  IMPACT ASSESSMENT OF PROPOSED MANDATE
3-26                         BY LEGISLATIVE BUDGET BOARD
3-27           Art. 28.051.  REQUEST FOR IMPACT ASSESSMENT. If the chair of
 4-1     a standing committee of the legislature determines that a bill
 4-2     would, if enacted, create a health care benefit mandate or an offer
 4-3     of coverage mandate, the chair shall send a copy of the bill to the
 4-4     Legislative Budget Board and request that an impact assessment of
 4-5     the mandate be prepared.
 4-6           Art. 28.052.  PREPARATION OF IMPACT ASSESSMENT; ACTUARIAL
 4-7     ASSISTANCE REQUIRED. (a)  On receipt of a bill under Article 28.051
 4-8     of this code, the Legislative Budget Board shall prepare a written
 4-9     impact assessment of the mandate in accordance with this
4-10     subchapter.
4-11           (b)  In preparing an impact assessment, the director of the
4-12     Legislative Budget Board may:
4-13                 (1)  use any information supplied by any person,
4-14     agency, organization, or governmental unit that the director
4-15     determines is reliable; and
4-16                 (2)  obtain assistance in preparing the assessment from
4-17     any state agency or by contract with a private entity.
4-18           (c)  The Legislative Budget Board shall obtain the assistance
4-19     of at least one certified actuary who is qualified to provide an
4-20     opinion relating to an impact assessment under this subchapter.
4-21           (d)  An impact assessment prepared under this subchapter must
4-22     include:
4-23                 (1)  any report relating to the mandate produced by an
4-24     actuary or other expert retained by the Legislative Budget Board;
4-25     and
4-26                 (2)  a description of all underlying assumptions, data,
4-27     and studies on which the evaluation was based.
 5-1           (e)  The director of the Legislative Budget Board shall
 5-2     submit an impact assessment requested under Article 28.051 of this
 5-3     code not later than the 21st day after the date of the request.
 5-4           Art. 28.053.  CONTENTS OF IMPACT ASSESSMENT. (a)  An impact
 5-5     assessment of a health care benefit mandate or offer of coverage
 5-6     mandate prepared under this subchapter must include, as applicable:
 5-7                 (1)  the level of demand in the state for the coverage
 5-8     that is the subject of the mandate, including the number and
 5-9     percentage of individuals in the state who are affected by the
5-10     medical condition or illness that is the subject of the mandate or
5-11     who would be likely to use the coverage that is the subject of the
5-12     mandate;
5-13                 (2)  the extent to which the coverage is available
5-14     under health benefit plans that are in effect at the time the
5-15     impact assessment is made;
5-16                 (3)  the extent to which lack of the coverage causes
5-17     individuals to avoid necessary medical treatment; and
5-18                 (4)  the amount of support for including the coverage
5-19     in health benefit plan contracts.
5-20           (b)  For an offer of coverage mandate, the impact assessment
5-21     must also estimate the difference in the cost of a health benefit
5-22     plan that provides the coverage and a comparable health benefit
5-23     plan that does not provide the coverage.
5-24           (c)  For a health care benefit mandate, the impact assessment
5-25     must also estimate the impact of the mandate if the mandate was an
5-26     offer of coverage mandate.
5-27           Art. 28.054.  IMPACT ASSESSMENT IN CERTAIN CIRCUMSTANCES. If
 6-1     the director of the Legislative Budget Board determines that the
 6-2     impact of a proposed health benefit plan mandate or offer of
 6-3     coverage mandate cannot be fully ascertained or the director is
 6-4     unable to acquire or develop sufficient information to prepare a
 6-5     complete impact assessment within 21 days of receiving the bill
 6-6     from the chair of a committee, the director shall:
 6-7                 (1)  report that fact in writing to the chair of the
 6-8     committee; and
 6-9                 (2)  prepare an impact assessment that:
6-10                       (A)  complies as much as possible with the
6-11     requirements of Article 28.053 of this code; and
6-12                       (B)  explains which of the applicable
6-13     requirements of that article are not met and why they are not met.
6-14           Art. 28.055.  DISTRIBUTION OF IMPACT ASSESSMENT. Copies of an
6-15     impact assessment prepared under this subchapter must be
6-16     distributed to the members of the committee not later than the
6-17     first time the bill to which the assessment relates is laid out in
6-18     a committee meeting.  The assessment shall be attached to the bill
6-19     on first printing.  If the bill is amended by the committee in a
6-20     way that alters a mandate, the chair shall obtain an updated impact
6-21     assessment, which shall also be attached to the bill on first
6-22     printing.
6-23           Art. 28.056.  IMPACT ASSESSMENT REMAINS WITH BILL. An impact
6-24     assessment prepared under this subchapter shall remain with the
6-25     bill to which the assessment relates throughout the entire
6-26     legislative process, including submission to the governor.
6-27               (Articles 28.057-28.100 reserved for expansion
 7-1         SUBCHAPTER C.  ASSESSMENT OF ENACTED MANDATE BY LEGISLATIVE
 7-2                                BUDGET BOARD
 7-3           Art. 28.101.  APPLICABILITY OF SUBCHAPTER. This subchapter
 7-4     applies only to a health care benefit mandate or offer of coverage
 7-5     mandate provided for:
 7-6                 (1)  in a statute that:
 7-7                       (A)  specifically references this subchapter; and
 7-8                       (B)  will expire on a date provided in the law;
 7-9     or
7-10                 (2)  in a rule adopted by the commissioner.
7-11           Art. 28.102.  EXPIRATION DATE FOR RULE. (a)  The commissioner
7-12     shall assign an expiration date that complies with this article for
7-13     each health care benefit mandate or offer of coverage mandate that
7-14     the commissioner adopts by rule.
7-15           (b)  Except as provided by Subsection (c) of this article,
7-16     the expiration date must be September 1 of the odd-numbered year
7-17     following the sixth anniversary of the date the mandate is adopted.
7-18           (c)  The commissioner may assign an expiration date other
7-19     than the date provided by this article in order to allow a rule to
7-20     be assessed under this subchapter at the same time as a statute the
7-21     commissioner determines is related to the rule.
7-22           Art. 28.103.  ASSESSMENT OF MANDATE. Before September 1 of
7-23     the calendar year before the year a health care benefit mandate or
7-24     an offer of coverage mandate subject to this subchapter expires,
7-25     the Legislative Budget Board shall:
7-26                 (1)  conduct an assessment of the mandate based on the
7-27     criteria provided by Article 28.105 of this code; and
 8-1                 (2)  review any prior board recommendations relating to
 8-2     the mandate in reports presented to the legislature under this
 8-3     subchapter in a preceding legislative session.
 8-4           Art. 28.104.  REPORT; RECOMMENDATION. (a)  Not later than
 8-5     March 1 of the year of a regular legislative session, the
 8-6     Legislative Budget Board shall present to the legislature a report
 8-7     on each health care benefit mandate or offer of coverage mandate
 8-8     that is scheduled to expire that year.
 8-9           (b)  In the report, the Legislative Budget Board shall
8-10     include:
8-11                 (1)  the specific findings of the board regarding each
8-12     of the criteria considered under Article 28.105 of this code;
8-13                 (2)  recommendations of the board regarding whether the
8-14     mandate should be continued or modified; and
8-15                 (3)  any other information the board considers
8-16     necessary for a complete assessment of the mandate.
8-17           Art. 28.105.  CRITERIA FOR ASSESSMENT.  The Legislative
8-18     Budget Board, in determining whether a health care benefit mandate
8-19     or an offer of coverage mandate should be continued or modified,
8-20     shall consider:
8-21                 (1)  the level of demand in the state for the coverage
8-22     that is the subject of the mandate, including the number and
8-23     percentage of individuals, statewide and among distinct population
8-24     groups, who are affected by the medical condition or illness that
8-25     is the subject of the mandate or who use the coverage that is the
8-26     subject of the mandate;
8-27                 (2)  the extent to which it is likely that the coverage
 9-1     would be made available under health benefit plans if the mandate
 9-2     were not in effect;
 9-3                 (3)  the extent to which lack of the coverage would
 9-4     cause individuals to avoid necessary medical treatment; and
 9-5                 (4)  the amount of support for continuing to include
 9-6     the coverage in health benefit plan contracts.
 9-7           Art. 28.106.  CONTINUATION OF MANDATE BY LAW. (a)  During the
 9-8     regular session immediately before the expiration of a health care
 9-9     benefit mandate or an offer of coverage mandate, the legislature by
9-10     law may continue the mandate for a period that does not exceed six
9-11     years or, if applicable, authorize the commissioner to continue the
9-12     mandate for a period that does not exceed six years.  A mandate may
9-13     be modified at the time the mandate is continued.
9-14           (b)  This subchapter does not prohibit the legislature from:
9-15                 (1)  repealing a health care benefit mandate or offer
9-16     of coverage mandate on a date earlier than the date on which the
9-17     mandate expires under this subchapter; or
9-18                 (2)  considering any other legislation relating to a
9-19     mandate.
9-20           Art. 28.107.  EFFECT OF EXPIRATION OF MANDATE ON HEALTH
9-21     BENEFIT PLAN. A health care benefit mandate that has expired shall
9-22     continue to govern a health benefit plan issued, delivered, or
9-23     issued for delivery before the expiration date of the mandate until
9-24     the end of the contract period for the plan or, if the plan is a
9-25     guaranteed renewable plan, until the plan is terminated.
9-26           SECTION 2.  Article 28.102, Insurance Code, as added by this
9-27     Act, applies only to a rule adopted on or after the effective date
 10-1    of this Act.
 10-2          SECTION 3.  This Act takes effect September 1, 2001.