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.