By: Sibley S.B. No. 990
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the applicability of the Health Insurance Portability
1-3 and Availability Act.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subdivisions (10) through (32), Article 26.02,
1-6 Insurance Code, are amended to read as follows:
1-7 (10) "Employee" means any individual employed by an
1-8 employer.
1-9 (11) "Health benefit plan" means a group, blanket, or
1-10 franchise insurance policy, a certificate issued under a group
1-11 policy, a group hospital service contract, or a group subscriber
1-12 contract or evidence of coverage issued by a health maintenance
1-13 organization that provides benefits for health care services. The
1-14 term does not include:
1-15 (A) accident-only or disability income insurance
1-16 or a combination of accident-only and disability income insurance;
1-17 (B) credit-only insurance;
1-18 (C) disability insurance coverage;
1-19 (D) coverage for a specified disease or illness;
1-20 (E) Medicare services under a federal contract;
1-21 (F) Medicare supplement and Medicare Select
1-22 policies regulated in accordance with federal law;
1-23 (G) long-term care coverage or benefits, nursing
1-24 home care coverage or benefits, home health care coverage or
1-25 benefits, community-based care coverage or benefits, or any
2-1 combination of those coverages or benefits;
2-2 (H) coverage that provides limited-scope dental
2-3 or vision benefits;
2-4 (I) coverage provided by a single service health
2-5 maintenance organization;
2-6 (J) coverage issued as a supplement to liability
2-7 insurance;
2-8 (K) workers' compensation or similar insurance;
2-9 (L) automobile medical payment insurance
2-10 coverage;
2-11 (M) jointly managed trusts authorized under 29
2-12 U.S.C. Section 141 et seq. that contain a plan of benefits for
2-13 employees that is negotiated in a collective bargaining agreement
2-14 governing wages, hours, and working conditions of the employees
2-15 that is authorized under 29 U.S.C. Section 157;
2-16 (N) hospital indemnity or other fixed indemnity
2-17 insurance;
2-18 (O) reinsurance contracts issued on a stop-loss,
2-19 quota-share, or similar basis;
2-20 (P) short-term major medical contracts;
2-21 (Q) liability insurance, including general
2-22 liability insurance and automobile liability insurance;
2-23 (R) other coverage that is:
2-24 (i) similar to the coverage described by
2-25 this subdivision under which benefits for medical care are
2-26 secondary or incidental to other insurance benefits; and
3-1 (ii) specified in federal regulations;
3-2 (S) coverage for on-site medical clinics; or
3-3 (T) coverage that provides other limited
3-4 benefits specified by federal regulations.
3-5 (12) [(11)] "Health carrier" means any entity
3-6 authorized under this code or another insurance law of this state
3-7 that provides health insurance or health benefits in this state,
3-8 including an insurance company, a group hospital service
3-9 corporation under Chapter 20 of this code, a health maintenance
3-10 organization under the Texas Health Maintenance Organization Act
3-11 (Chapter 20A, Vernon's Texas Insurance Code), and a stipulated
3-12 premium company under Chapter 22 of this code.
3-13 (13) [(12)] "Health status related factor" means:
3-14 (A) health status;
3-15 (B) medical condition, including both physical
3-16 and mental illness;
3-17 (C) claims experience;
3-18 (D) receipt of health care;
3-19 (E) medical history;
3-20 (F) genetic information;
3-21 (G) evidence of insurability, including
3-22 conditions arising out of acts of family violence; and
3-23 (H) disability.
3-24 (14) [(13)] "Index rate" means, for each class of
3-25 business as to a rating period for small employers with similar
3-26 case characteristics, the arithmetic average of the applicable base
4-1 premium rate and corresponding highest premium rate.
4-2 (15) [(14)] "Large employer" means an employer who
4-3 employed an average of at least 51 eligible employees on business
4-4 days during the preceding calendar year and who employs at least
4-5 two [eligible] employees on the first day of the plan year. For
4-6 purposes of this definition, a partnership is the employer of a
4-7 partner. A large employer includes a governmental entity subject
4-8 to Section 1, Chapter 123, Acts of the 60th Legislature, Regular
4-9 Session, 1967 (Article 3.51-3, Vernon's Texas Insurance Code), or
4-10 Article 3.51-1, 3.51-2, 3.51-4, 3.51-5, or 3.51-5A of this code
4-11 that otherwise meets the requirements of this section [and elects
4-12 to be treated as a large employer].
4-13 (16) [(15)] "Large employer carrier" means a health
4-14 carrier, to the extent that carrier is offering, delivering,
4-15 issuing for delivery, or renewing health benefit plans subject to
4-16 Subchapter H of this chapter.
4-17 (17) [(16)] "Large employer health benefit plan" means
4-18 a health benefit plan offered to a large employer.
4-19 (18) [(17)] "Late enrollee" means any employee or
4-20 dependent eligible for enrollment who requests enrollment in a
4-21 small or large employer's health benefit plan after the expiration
4-22 of the initial enrollment period established under the terms of the
4-23 first plan for which that employee or dependent was eligible
4-24 through the small or large employer or after the expiration of an
4-25 open enrollment period under Article 26.21(h) or 26.83 of this
4-26 code. An employee or dependent eligible for enrollment is not a
5-1 late enrollee if:
5-2 (A) the individual:
5-3 (i) was covered under another health
5-4 benefit plan or self-funded employer health benefit plan at the
5-5 time the individual was eligible to enroll;
5-6 (ii) declines in writing, at the time of
5-7 the initial eligibility, stating that coverage under another health
5-8 benefit plan or self-funded employer health benefit plan was the
5-9 reason for declining enrollment;
5-10 (iii) has lost coverage under another
5-11 health benefit plan or self-funded employer health benefit plan as
5-12 a result of:
5-13 (a) the termination of employment;
5-14 (b) the reduction in the number of
5-15 hours of employment;
5-16 (c) the termination of the other
5-17 plan's coverage;
5-18 (d) the termination of contributions
5-19 toward the premium made by the employer; or
5-20 (e) the death of a spouse or
5-21 divorce; and
5-22 (iv) requests enrollment not later than
5-23 the 31st day after the date on which coverage under the other
5-24 health benefit plan or self-funded employer health benefit plan
5-25 terminates;
5-26 (B) the individual is employed by an employer
6-1 who offers multiple health benefit plans and the individual elects
6-2 a different health benefit plan during an open enrollment period;
6-3 (C) a court has ordered coverage to be provided
6-4 for a spouse under a covered employee's plan and request for
6-5 enrollment is made not later than the 31st day after the date on
6-6 which the court order is issued; [or]
6-7 (D) a court has ordered coverage to be provided
6-8 for a child under a covered employee's plan and the request for
6-9 enrollment is made not later than the 31st day after the date on
6-10 which the employer receives the court order; or
6-11 (E) the individual is a child of a covered
6-12 employee who has lost coverage under Title XIX of the Social
6-13 Security Act (42 U.S.C. Section 1396 et seq.), other than coverage
6-14 consisting solely of benefits under Section 1928 of that Act (42
6-15 U.S.C. Section 1396s), or under Chapter 62, Health and Safety Code,
6-16 and the request for enrollment is made not later than the 31st day
6-17 after the date on which the child loses coverage.
6-18 (19) [(18)] "New business premium rate" means, for
6-19 each class of business as to a rating period, the lowest premium
6-20 rate that is charged or offered or that could be charged or offered
6-21 by the small employer carrier to small employers with similar case
6-22 characteristics for newly issued small employer health benefit
6-23 plans that provide the same or similar coverage.
6-24 (20) [(19)] "Participation criteria" means any
6-25 criteria or rules established by a large employer to determine the
6-26 employees who are eligible for enrollment, including continued
7-1 enrollment, under the terms of a health benefit plan. Such
7-2 criteria or rules may not be based on health status related
7-3 factors.
7-4 (21) [(20)] "Person" means an individual, corporation,
7-5 partnership, or other legal entity.
7-6 (22) [(21)] "Plan of operation" means the plan of
7-7 operation of the system established under Article 26.55 of this
7-8 code.
7-9 (23) [(22)] "Point-of-service contract" means a
7-10 benefit plan offered through a health maintenance organization
7-11 that:
7-12 (A) includes corresponding indemnity benefits in
7-13 addition to benefits relating to out-of-area or emergency services
7-14 provided through insurers or group hospital service corporations;
7-15 and
7-16 (B) permits the insured to obtain coverage under
7-17 either the health maintenance organization conventional plan or the
7-18 indemnity plan as determined in accordance with the terms of the
7-19 contract.
7-20 (24) [(23)] "Preexisting condition provision" means a
7-21 provision that denies, excludes, or limits coverage as to a disease
7-22 or condition for a specified period after the effective date of
7-23 coverage.
7-24 (25) [(24)] "Premium" means all amounts paid by a
7-25 small or large employer and eligible employees as a condition of
7-26 receiving coverage from a small or large employer carrier,
8-1 including any fees or other contributions associated with a health
8-2 benefit plan.
8-3 (26) [(25)] "Rating period" means a calendar period
8-4 for which premium rates established by a small employer carrier are
8-5 assumed to be in effect.
8-6 (27) [(26)] "Reinsured carrier" means a small employer
8-7 carrier participating in the system.
8-8 (28) [(27)] "Risk-assuming carrier" means a small
8-9 employer carrier that elects not to participate in the system.
8-10 (29) [(28)] "Small employer" means an employer who
8-11 employed an average of at least two employees but not more than 50
8-12 eligible employees on business days during the preceding calendar
8-13 year and who employs at least two [eligible] employees on the first
8-14 day of the plan year. For purposes of this definition, a
8-15 partnership is the employer of a partner. A small employer
8-16 includes a governmental entity subject to Section 1, Chapter 123,
8-17 Acts of the 60th Legislature, Regular Session, 1967 (Article
8-18 3.51-3, Vernon's Texas Insurance Code), or Article 3.51-1, 3.51-2,
8-19 3.51-4, 3.51-5, or 3.51-5A of this code that otherwise meets the
8-20 requirements of this section [and elects to be treated as a small
8-21 employer].
8-22 (30) [(29)] "Small employer carrier" means a health
8-23 carrier, to the extent that that carrier is offering, delivering,
8-24 issuing for delivery, or renewing health benefit plans subject to
8-25 Subchapters C-G of this chapter under Article 26.06(a) of this
8-26 code.
9-1 (31) [(30)] "Small employer health benefit plan" means
9-2 a plan developed by the commissioner under Subchapter E of this
9-3 chapter or any other health benefit plan offered to a small
9-4 employer in accordance with Article 26.42(c) or 26.48 of this code.
9-5 (32) [(31)] "System" means the Texas Health
9-6 Reinsurance System established under Subchapter F of this chapter.
9-7 (33) [(32)] "Waiting period" means a period
9-8 established by an employer that must pass before an individual who
9-9 is a potential enrollee in a health benefit plan is eligible to be
9-10 covered for benefits.
9-11 SECTION 2. Subsection (a), Article 26.035, Insurance Code,
9-12 is amended to read as follows:
9-13 (a) An individual's coverage is creditable for purposes of
9-14 this chapter if the coverage is provided under:
9-15 (1) a self-funded or self-insured employee welfare
9-16 benefit plan that provides health benefits and that is established
9-17 in accordance with the Employee Retirement Income Security Act of
9-18 1974 (29 U.S.C. Section 1001 et seq.);
9-19 (2) a group health benefit plan provided by a health
9-20 insurance carrier or health maintenance organization;
9-21 (3) an individual health insurance policy or evidence
9-22 of coverage;
9-23 (4) Part A or Part B of Title XVIII of the Social
9-24 Security Act (42 U.S.C. Section 1395c et seq.);
9-25 (5) Title XIX of the Social Security Act (42 U.S.C.
9-26 Section 1396 et seq.), other than coverage consisting solely of
10-1 benefits under Section 1928 of that Act (42 U.S.C. Section 1396s);
10-2 (6) Chapter 55, Title 10, United States Code (10
10-3 U.S.C. Section 1071 et seq.);
10-4 (7) a medical care program of the Indian Health
10-5 Service or of a tribal organization;
10-6 (8) a state or political subdivision health benefits
10-7 risk pool;
10-8 (9) a health plan offered under Chapter 89, Title 5,
10-9 United States Code (5 U.S.C. Section 8901 et seq.);
10-10 (10) a public health plan as defined by federal
10-11 regulations; [or]
10-12 (11) a health benefit plan under Section 5(e), Peace
10-13 Corps Act (22 U.S.C. Section 2504(e)); or
10-14 (12) short term limited duration coverage.
10-15 SECTION 3. Subsections (a) and (b), Article 26.06, Insurance
10-16 Code, are amended to read as follows:
10-17 (a) An individual or group health benefit plan is subject to
10-18 Subchapters C-G of this chapter if it provides health care benefits
10-19 covering two or more eligible employees of a small employer and if:
10-20 (1) a portion of the premium or benefits is paid by a
10-21 small employer; [or]
10-22 (2) the health benefit plan is treated by the employer
10-23 or by a covered individual as part of a plan or program for the
10-24 purposes of Section 106 or 162, Internal Revenue Code of 1986 (26
10-25 U.S.C. Section 106 or 162); or
10-26 (3) the health benefit plan is an employee welfare
11-1 benefit plan under 29 C.F.R. Section 2510.3-1(j).
11-2 (b) For an employer who was not in existence throughout the
11-3 calendar year preceding the year in which the determination of
11-4 whether the employer is a small employer is made, the determination
11-5 is based on the average number of employees and eligible employees
11-6 the employer reasonably expects to employ on business days in the
11-7 calendar year in which the determination is made.
11-8 SECTION 4. Subsections (b) and (e), Article 26.22, Insurance
11-9 Code, are amended to read as follows:
11-10 (b) A small employer carrier that refuses to issue a small
11-11 employer health benefit plan in a geographic service area may not
11-12 offer a health benefit plan to a small employer [group of not more
11-13 than 50 individuals] in the affected service area before the fifth
11-14 anniversary of the date of the refusal.
11-15 (e) If the commissioner determines that requiring the
11-16 acceptance of small employers under this subchapter would place a
11-17 small employer carrier in a financially impaired condition and that
11-18 the small employer carrier is acting uniformly without regard to
11-19 the claims experience of the small employer or any health status
11-20 related factors of eligible employees or dependents or new
11-21 employees or dependents who may become eligible for the coverage,
11-22 the small employer carrier shall not offer coverage to small
11-23 employers until the later of:
11-24 (1) the 180th day after the date the commissioner
11-25 makes the determination; or
11-26 (2) the date the commissioner determines that
12-1 accepting small employers would not place the small employer
12-2 carrier in a financially impaired condition.
12-3 SECTION 5. Subsections (b) and (c), Article 26.23, Insurance
12-4 Code, are amended to read as follows:
12-5 (b) A small employer carrier may refuse to renew the
12-6 coverage of a covered [an eligible] employee or dependent for fraud
12-7 or intentional misrepresentation of a material fact by that
12-8 individual.
12-9 (c) A small employer carrier may not cancel a small employer
12-10 health benefit plan except for the reasons specified for refusal to
12-11 renew under Subsection (a) of this article. A small employer
12-12 carrier may not cancel the coverage of a covered [an eligible]
12-13 employee or dependent except for the reasons specified for refusal
12-14 to renew under Subsection (b) of this article.
12-15 SECTION 6. Subsection (a), Article 26.81, Insurance Code, is
12-16 amended to read as follows:
12-17 (a) An individual or group health benefit plan is subject to
12-18 this subchapter if the plan provides health care benefits to
12-19 eligible employees of a large employer and if:
12-20 (1) a portion of the premium or benefits is paid by a
12-21 large employer; [or]
12-22 (2) the health benefit plan is treated by the employer
12-23 or by a covered individual as part of a plan or program for the
12-24 purposes of Section 106 or 162, Internal Revenue Code of 1986 (26
12-25 U.S.C. Section 106 or 162); or
12-26 (3) the health benefit plan is an employee welfare
13-1 benefit plan under 29 C.F.R. Section 2510.3-1(j).
13-2 SECTION 7. Subsection (b), Section 3, Article 21.53F,
13-3 Insurance Code, as added by Chapter 832, Acts of the 75th
13-4 Legislature, Regular Session, 1997, is amended to read as follows:
13-5 (b) This article does not apply to:
13-6 (1) a plan that provides coverage:
13-7 (A) only for a specified disease or other
13-8 limited benefit;
13-9 (B) only for accidental death or dismemberment;
13-10 (C) for wages or payments in lieu of wages for a
13-11 period during which an employee is absent from work because of
13-12 sickness or injury;
13-13 (D) as a supplement to liability insurance;
13-14 (E) for credit insurance;
13-15 (F) only for dental or vision care; or
13-16 (G) only for indemnity for hospital confinement;
13-17 (2) [a small employer health benefit plan written
13-18 under Chapter 26 of this code;]
13-19 [(3)] a Medicare supplemental policy as defined by
13-20 Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss);
13-21 (3) [(4)] workers' compensation insurance coverage;
13-22 (4) [(5)] medical payment insurance issued as part of
13-23 a motor vehicle insurance policy; or
13-24 (5) [(6)] a long-term care policy, including a nursing
13-25 home fixed indemnity policy, unless the commissioner determines
13-26 that the policy provides benefit coverage so comprehensive that the
14-1 policy is a health benefit plan as described by Subsection (a) of
14-2 this section.
14-3 SECTION 8. This Act takes effect September 1, 2001, and
14-4 applies only to a health benefit plan that is delivered, issued for
14-5 delivery, or renewed on or after January 1, 2002. A plan that is
14-6 delivered, issued for delivery, or renewed before January 1, 2002,
14-7 is governed by the law as it existed immediately before the
14-8 effective date of this Act, and that law is continued in effect for
14-9 that purpose.