1-1 By: Sibley S.B. No. 992
1-2 (In the Senate - Filed February 28, 2001; March 1, 2001, read
1-3 first time and referred to Committee on Business and Commerce;
1-4 March 15, 2001, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 5, Nays 0; March 15, 2001,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 992 By: Sibley
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to coverage and assessments under the Texas Health
1-11 Insurance Risk Pool.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Subdivision (17), Section 2, Article 3.77,
1-14 Insurance Code, is amended to read as follows:
1-15 (17) "Resident" means:
1-16 (A) an individual who has been legally domiciled
1-17 in Texas for a minimum of 30 days for persons eligible for
1-18 enrollment in the pool under Section 10(b) [10(a)(1), (2), (3), or
1-19 (5)] of this article; or
1-20 (B) an individual who is legally domiciled in
1-21 Texas for persons eligible for enrollment in the pool under Section
1-22 10(a) [10(a)(4)] of this article.
1-23 SECTION 2. Section 10, Article 3.77, Insurance Code, is
1-24 amended to read as follows:
1-25 Sec. 10. ELIGIBILITY FOR COVERAGE. (a) An individual
1-26 person who is a resident of Texas as defined in Section 2(17)(B) of
1-27 this article and who continues to be a resident of Texas shall be
1-28 eligible for coverage from the pool if the individual provides to
1-29 the pool evidence of:
1-30 (1) the individual's maintenance of health insurance
1-31 coverage for the previous 18 months, with no gap in coverage
1-32 greater than 63 days, of which the most recent coverage was through
1-33 an employer-sponsored plan, a church plan, or a government plan; or
1-34 (2) the individual's coverage under another state's
1-35 qualified Health Insurance Portability and Accountability Act
1-36 health program, if:
1-37 (A) coverage under that other state's program
1-38 was terminated because of nonresidence; and
1-39 (B) the individual person submits an application
1-40 for pool coverage within 63 days after termination of such prior
1-41 state plan coverage.
1-42 (b) Any individual person who is and continues to be a
1-43 resident of Texas as defined in Section 2(17)(A) of this article
1-44 and a citizen of the United States or a resident of Texas as
1-45 defined in Section 2(17)(A) of this article and a permanent
1-46 resident of the United States for at least three continuous years
1-47 shall be eligible for coverage from the pool if the individual
1-48 provides to the pool:
1-49 (1) a notice of rejection or refusal to issue
1-50 substantially similar individual insurance for health reasons by
1-51 one insurer, other than a rejection or refusal by an insurer
1-52 offering only stop-loss, excess loss, or reinsurance coverage;
1-53 (2) a certification from an agent or salaried
1-54 representative of an insurer, on a form developed by the board and
1-55 approved by the commissioner, that states that the agent or
1-56 salaried representative is unable to obtain substantially similar
1-57 individual insurance for the individual with any state-licensed
1-58 insurer that the agent or salaried representative represents
1-59 because the individual will be declined for coverage as a result of
1-60 a medical condition of the individual under the underwriting
1-61 guidelines of the insurer;
1-62 (3) an offer to issue substantially similar individual
1-63 insurance only with conditional riders;
1-64 (4) a refusal by an insurer to issue substantially
2-1 similar individual insurance except at a rate exceeding the pool
2-2 rate; or
2-3 (5) [evidence of the individual's maintenance of
2-4 health insurance coverage for the previous 18 months with no gap in
2-5 coverage greater than 63 days of which the most recent coverage was
2-6 through an employer sponsored plan; or]
2-7 [(6)] diagnosis of the individual with one of the
2-8 medical or health conditions listed by the board under Section 6(c)
2-9 of this article and for which a person shall be eligible for pool
2-10 coverage.
2-11 (c) [(b)] Each dependent of a person who is eligible for
2-12 coverage from the pool shall also be eligible for coverage from the
2-13 pool. In the instance of a child who is the primary insured,
2-14 resident family members shall also be eligible for coverage.
2-15 (d) [(c)] A person may maintain pool coverage for the period
2-16 of time the person is satisfying a preexisting waiting period under
2-17 another health insurance policy or insurance arrangement intended
2-18 to replace the pool policy.
2-19 (e) [(d)] A person is not eligible for coverage from the
2-20 pool if the person:
2-21 (1) has in effect on the date pool coverage takes
2-22 effect health insurance coverage from an insurer or insurance
2-23 arrangement;
2-24 (2) is eligible for other health care benefits at the
2-25 time application is made to the pool, including COBRA continuation,
2-26 except:
2-27 (A) coverage, including COBRA continuation,
2-28 other continuation or conversion coverage, maintained for the
2-29 period of time the person is satisfying any pre-existing condition
2-30 waiting period under a pool policy; or
2-31 (B) employer group coverage conditioned by the
2-32 type of limitations described by Subsection (b)(1) or (3)
2-33 [Subsections (a)(1) and (2)] of this section; or
2-34 (C) individual coverage conditioned by the
2-35 limitations described by Subsection (b)(3) or (4) [Subsections
2-36 (a)(1)-(3)] of this section;
2-37 (3) has terminated coverage in the pool within 12
2-38 months of the date that application is made to the pool, unless the
2-39 person demonstrates a good faith reason for the termination;
2-40 (4) is confined in a county jail or imprisoned in a
2-41 state prison;
2-42 (5) has premiums that are paid for or reimbursed under
2-43 any government sponsored program or by any government agency or
2-44 health care provider, except as an otherwise qualifying full-time
2-45 employee, or dependent thereof, of a government agency or health
2-46 care provider; or
2-47 (6) has [not] had prior coverage with the pool
2-48 terminated for nonpayment of premiums, within the 12 months
2-49 immediately preceding the date of application, or for fraud.
2-50 (f) [(e)] Pool coverage shall cease:
2-51 (1) on the date a person is no longer a resident of
2-52 this state, except for a child who is a student under the age of 23
2-53 years and who is financially dependent upon the parent, a child for
2-54 whom a person may be obligated to pay child support, or a child of
2-55 any age who is disabled and dependent upon the parent;
2-56 (2) on the date a person requests coverage to end;
2-57 (3) upon the death of the covered person;
2-58 (4) on the date state law requires cancellation of the
2-59 policy;
2-60 (5) at the option of the pool, 30 days after the pool
2-61 sends to the person any inquiry concerning the person's
2-62 eligibility, including an inquiry concerning the person's
2-63 residence, to which the person does not reply;
2-64 (6) on the 31st day after the day on which a premium
2-65 payment for pool coverage becomes due if the payment is not made
2-66 before that date; or
2-67 (7) at such time as the person ceases to meet the
2-68 eligibility requirements of this section.
2-69 (g) The coverage of a [(f) A] person who ceases to meet the
3-1 eligibility requirements of this section will be [may have his
3-2 coverage] terminated as of the earlier of the next premium due date
3-3 or the first day of the month following the date the pool
3-4 determines the person does not meet the eligibility requirements,
3-5 in the pool's sole discretion [at the end of the policy period].
3-6 (h) A person who is eligible for health insurance benefits
3-7 provided in connection with a policy, plan, or program paid for or
3-8 sponsored by an employer, even though such employer coverage is
3-9 declined, is not eligible for pool coverage. No insurer, agent,
3-10 third party administrator, or other person licensed under this code
3-11 may arrange or assist or attempt to arrange or assist in the
3-12 application or placement of such person in the pool for the purpose
3-13 of separating the person from health insurance benefits offered or
3-14 provided in connection with employment that would be available to
3-15 the person as an employee or as a dependent of an employee. A
3-16 violation of this subsection is an unfair method of competition and
3-17 an unfair or deceptive act or practice under Article 21.21 of this
3-18 code.
3-19 SECTION 3. Section 13, Article 3.77, Insurance Code, is
3-20 amended by amending Subsection (d) and adding Subsection (e) to
3-21 read as follows:
3-22 (d) The assessment imposed against each insurer shall be in
3-23 an amount that is equal to the ratio of the gross premiums
3-24 collected by the insurer for health insurance in this state during
3-25 the preceding calendar year, except for Medicare supplement
3-26 premiums subject to Article 3.74 and small group health insurance
3-27 premiums subject to Articles 26.01 through 26.76, to the gross
3-28 premiums collected by all insurers for health insurance, except for
3-29 Medicare supplement premiums subject to Article 3.74 and small
3-30 group health insurance premiums subject to Articles 26.01 through
3-31 26.76, in this state during the preceding calendar year. An
3-32 assessment is due on a date specified by the board that may not be
3-33 earlier than the 30th day after the date on which prior written
3-34 notice of the assessment due is transmitted to the insurer.
3-35 Interest accrues on the unpaid amount at a rate equal to the prime
3-36 lending rate plus three percent.
3-37 (e) An insurer may petition the commissioner for an
3-38 abatement or deferment of all or part of an assessment imposed by
3-39 the board. The commissioner may abate or defer, in whole or in
3-40 part, such assessment if the commissioner determines that the
3-41 payment of the assessment would endanger the ability of the
3-42 participating insurer to fulfill its contractual obligations. If
3-43 an assessment against an insurer is abated or deferred in whole or
3-44 in part, the amount by which such assessment is abated or deferred
3-45 shall be assessed against the other insurers in a manner consistent
3-46 with the basis for assessments set forth in this section. The
3-47 insurer receiving such abatement or deferment shall remain liable
3-48 to the pool for the deficiency.
3-49 SECTION 4. This Act takes effect September 1, 2001.
3-50 * * * * *