By: Sibley S.B. No. 992
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to coverage and assessments under the Texas Health
1-3 Insurance Risk Pool.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subdivision (17), Section 2, Article 3.77,
1-6 Insurance Code, is amended to read as follows:
1-7 (17) "Resident" means:
1-8 (A) an individual who has been legally domiciled
1-9 in Texas for a minimum of 30 days for persons eligible for
1-10 enrollment in the pool under Section 10(b) [10(a)(1), (2), (3), or
1-11 (5)] of this article; or
1-12 (B) an individual who is legally domiciled in
1-13 Texas for persons eligible for enrollment in the pool under Section
1-14 10(a) [10(a)(4)] of this article.
1-15 SECTION 2. Section 10, Article 3.77, Insurance Code, is
1-16 amended to read as follows:
1-17 Sec. 10. ELIGIBILITY FOR COVERAGE. (a) An individual
1-18 person who is a resident of Texas as defined in Section 2(17)(B) of
1-19 this article and who continues to be a resident of Texas shall be
1-20 eligible for coverage from the pool if the individual provides to
1-21 the pool evidence of:
1-22 (1) the individual's maintenance of health insurance
1-23 coverage for the previous 18 months, with no gap in coverage
1-24 greater than 63 days, of which the most recent coverage was through
1-25 an employer-sponsored plan, a church plan, or a government plan; or
2-1 (2) the individual's coverage under another state's
2-2 qualified Health Insurance Portability and Accountability Act
2-3 health program, if:
2-4 (A) coverage under that other state's program
2-5 was terminated because of nonresidence; and
2-6 (B) the individual person submits an application
2-7 for pool coverage within 63 days after termination of such prior
2-8 state plan coverage.
2-9 (b) Any individual person who is and continues to be a
2-10 resident of Texas as defined in Section 2(17)(A) of this article
2-11 and a citizen of the United States or a resident of Texas as
2-12 defined in Section 2(17)(A) of this article and a permanent
2-13 resident of the United States for at least three continuous years
2-14 shall be eligible for coverage from the pool if the individual
2-15 provides to the pool:
2-16 (1) a notice of rejection or refusal to issue
2-17 substantially similar individual insurance for health reasons by
2-18 one insurer, other than a rejection or refusal by an insurer
2-19 offering only stop-loss, excess loss, or reinsurance coverage;
2-20 (2) a certification from an agent or salaried
2-21 representative of an insurer, on a form developed by the board and
2-22 approved by the commissioner, that states that the agent or
2-23 salaried representative is unable to obtain substantially similar
2-24 individual insurance for the individual with any state-licensed
2-25 insurer that the agent or salaried representative represents
2-26 because the individual will be declined for coverage as a result of
3-1 a medical condition of the individual under the underwriting
3-2 guidelines of the insurer;
3-3 (3) an offer to issue substantially similar individual
3-4 insurance only with conditional riders;
3-5 (4) a refusal by an insurer to issue substantially
3-6 similar individual insurance except at a rate exceeding the pool
3-7 rate; or
3-8 (5) [evidence of the individual's maintenance of
3-9 health insurance coverage for the previous 18 months with no gap in
3-10 coverage greater than 63 days of which the most recent coverage was
3-11 through an employer sponsored plan; or]
3-12 [(6)] diagnosis of the individual with one of the
3-13 medical or health conditions listed by the board under Section 6(c)
3-14 of this article and for which a person shall be eligible for pool
3-15 coverage.
3-16 (c) [(b)] Each dependent of a person who is eligible for
3-17 coverage from the pool shall also be eligible for coverage from the
3-18 pool. In the instance of a child who is the primary insured,
3-19 resident family members shall also be eligible for coverage.
3-20 (d) [(c)] A person may maintain pool coverage for the period
3-21 of time the person is satisfying a preexisting waiting period under
3-22 another health insurance policy or insurance arrangement intended
3-23 to replace the pool policy.
3-24 (e) [(d)] A person is not eligible for coverage from the
3-25 pool if the person:
3-26 (1) has in effect on the date pool coverage takes
4-1 effect health insurance coverage from an insurer or insurance
4-2 arrangement;
4-3 (2) is eligible for other health care benefits at the
4-4 time application is made to the pool, including COBRA continuation,
4-5 except:
4-6 (A) coverage, including COBRA continuation,
4-7 other continuation or conversion coverage, maintained for the
4-8 period of time the person is satisfying any pre-existing condition
4-9 waiting period under a pool policy; or
4-10 (B) employer group coverage conditioned by the
4-11 type of limitations described by Subsection (b)(1) or (3)
4-12 [Subsections (a)(1) and (2)] of this section; or
4-13 (C) individual coverage conditioned by the
4-14 limitations described by Subsection (b)(3) or (4) [Subsections
4-15 (a)(1)-(3)] of this section;
4-16 (3) has terminated coverage in the pool within 12
4-17 months of the date that application is made to the pool, unless the
4-18 person demonstrates a good faith reason for the termination;
4-19 (4) is confined in a county jail or imprisoned in a
4-20 state prison;
4-21 (5) has premiums that are paid for or reimbursed under
4-22 any government sponsored program or by any government agency or
4-23 health care provider, except as an otherwise qualifying full-time
4-24 employee, or dependent thereof, of a government agency or health
4-25 care provider; or
4-26 (6) has [not] had prior coverage with the pool
5-1 terminated for nonpayment of premiums, within the 12 months
5-2 immediately preceding the date of application, or for fraud.
5-3 (f) [(e)] Pool coverage shall cease:
5-4 (1) on the date a person is no longer a resident of
5-5 this state, except for a child who is a student under the age of 23
5-6 years and who is financially dependent upon the parent, a child for
5-7 whom a person may be obligated to pay child support, or a child of
5-8 any age who is disabled and dependent upon the parent;
5-9 (2) on the date a person requests coverage to end;
5-10 (3) upon the death of the covered person;
5-11 (4) on the date state law requires cancellation of the
5-12 policy;
5-13 (5) at the option of the pool, 30 days after the pool
5-14 sends to the person any inquiry concerning the person's
5-15 eligibility, including an inquiry concerning the person's
5-16 residence, to which the person does not reply;
5-17 (6) on the 31st day after the day on which a premium
5-18 payment for pool coverage becomes due if the payment is not made
5-19 before that date; or
5-20 (7) at such time as the person ceases to meet the
5-21 eligibility requirements of this section.
5-22 (g) The coverage of a [(f) A] person who ceases to meet the
5-23 eligibility requirements of this section will be [may have his
5-24 coverage] terminated as of the earlier of the next premium due date
5-25 or the first day of the month following the date the pool
5-26 determines the person does not meet the eligibility requirements,
6-1 in the pool's sole discretion [at the end of the policy period].
6-2 (h) A person who is eligible for health insurance benefits
6-3 provided in connection with a policy, plan, or program paid for or
6-4 sponsored by an employer, even though such employer coverage is
6-5 declined, is not eligible for pool coverage. No insurer, agent,
6-6 third party administrator, or other person licensed under this code
6-7 may arrange or assist or attempt to arrange or assist in the
6-8 application or placement of such person in the pool for the purpose
6-9 of separating the person from health insurance benefits offered or
6-10 provided in connection with employment that would be available to
6-11 the person as an employee or as a dependent of an employee. A
6-12 violation of this subsection is an unfair method of competition and
6-13 an unfair or deceptive act or practice under Article 21.21 of this
6-14 code.
6-15 SECTION 3. Section 13, Article 3.77, Insurance Code, is
6-16 amended by amending Subsection (d) and adding Subsection (e) to
6-17 read as follows:
6-18 (d) The assessment imposed against each insurer shall be in
6-19 an amount that is equal to the ratio of the gross premiums
6-20 collected by the insurer for health insurance in this state during
6-21 the preceding calendar year, except for Medicare supplement
6-22 premiums subject to Article 3.74 and small group health insurance
6-23 premiums subject to Articles 26.01 through 26.76, to the gross
6-24 premiums collected by all insurers for health insurance, except for
6-25 Medicare supplement premiums subject to Article 3.74 and small
6-26 group health insurance premiums subject to Articles 26.01 through
7-1 26.76, in this state during the preceding calendar year. An
7-2 assessment is due on a date specified by the board that may not be
7-3 earlier than the 30th day after the date on which prior written
7-4 notice of the assessment due is transmitted to the insurer.
7-5 Interest accrues on the unpaid amount at a rate equal to the prime
7-6 lending rate plus three percent.
7-7 (e) An insurer may petition the commissioner for an
7-8 abatement or deferment of all or part of an assessment imposed by
7-9 the board. The commissioner may abate or defer, in whole or in
7-10 part, such assessment if the commissioner determines that the
7-11 payment of the assessment would endanger the ability of the
7-12 participating insurer to fulfill its contractual obligations. If
7-13 an assessment against an insurer is abated or deferred in whole or
7-14 in part, the amount by which such assessment is abated or deferred
7-15 shall be assessed against the other insurers in a manner consistent
7-16 with the basis for assessments set forth in this section. The
7-17 insurer receiving such abatement or deferment shall remain liable
7-18 to the pool for the deficiency.
7-19 SECTION 4. This Act takes effect September 1, 2001.