SRC-JEC H.B. 897 78(R)   BILL ANALYSIS


Senate Research Center   H.B. 897
78R1453 PB-DBy: Woolley (Nelson)
State Affairs
5/12/2003
Engrossed


DIGEST AND PURPOSE 

In 1993, the 73rd Texas Legislature permitted small employers to join
together in private nonprofit health insurance purchasing alliances or
small employer health coalitions.  Some insurers have cancelled policies
with small employer health coalitions because they do not consider a
coalition to be a single employer.  H.B. 897 clarifies that a small
employer health coalition is a single small employer for all purposes
under the Insurance Code. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to
a state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Article 26.02, Insurance Code, by adding Subdivision
(32-a), to define "small employer health coalition." 

SECTION 2.  Amends the heading to Subchapter B, Chapter 26, Insurance
Code, to read as follows: 

SUBCHAPTER B.  COALITIONS AND PURCHASING COOPERATIVES

SECTION 3.  Amends Article 26.15, Insurance Code, by amending Subsection
(b) and adding Subsection (e), as follows: 

(b)  Authorizes a cooperative to contract only with small or large
employer carriers that demonstrate certain characteristics. 

(e)  Prohibits a cooperative from limiting, restricting, or conditioning
an employer's or employee's choice among benefit plans based on health
status related factors, duration of coverage, or any similar
characteristic related to the health status or experience of a group or of
any member of a group. 

SECTION 4.  Amends Article 26.16(b), Insurance Code, to provide that a
small employer health coalition that otherwise meets the description of a
small employer is considered a single small employer for all purposes
under this code.  Makes conforming changes. 

SECTION 5.  Amends Article 26.21(c), Insurance Code, to remove an
exception related to coverage provided through a purchasing cooperative. 

SECTION 6.   Effective date:  September 1, 2003.
  Makes application of this Act prospective to January 1, 2004.