SRC-JEC H.B. 1267 78(R)   BILL ANALYSIS


Senate Research Center   H.B. 1267
By: Seaman (Staples)
State Affairs
5/20/2003
Engrossed


DIGEST AND PURPOSE 

In the early 1990s, two health benefit plans were developed for sale to
small employers: catastrophic care and basic coverage benefit plans.
Certain state and federal requirements and restrictions exist on the sale
of these plans.  Some small employee carriers face difficulty
incorporating state and federal requirements into the plans they have
developed and marketed, and claim that the requirements produce
administrative inefficiencies and reduce availability of plans.  H.B. 1267
requires small employee carriers to offer a catastrophic care and basic
coverage benefit plan filed with and approved by the commissioner of
insurance.  

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 26.42(a), Insurance Code, to require a small
employer carrier to offer the following two health benefit plans filed
with and approved by, rather than as adopted by, the commissioner of
insurance:  a, rather than the, catastrophic care benefit plan; and a,
rather than the, basic coverage benefit plan. 

SECTION 2.  Amends Article 26.43(a), Insurance Code, to require a small
employer carrier to comply with Article 3.42 of this code as it relates to
policy form approval and with Chapter 843 of this code, rather than the
Texas Health Maintenance Organization Act (Article 20A.01 et seq.,
Vernon's Texas Insurance Code), as it relates to approval of an evidence
of coverage.  Deletes a requirement that the commissioner promulgate the
benefits section of the catastrophic care benefit plan and the basic
coverage benefit plan policy forms in accordance with Article 26.44A of
this code and develop prototype policies for each of the benefit plans.
Deletes a prohibition against a small employer carrier offering these
benefit plans through a policy form or evidence of coverage that does not
comply with this chapter. 

SECTION 3.  Amends Article 26.44A, Insurance Code, by amending Subsections
(a), (b), and (c) and adding Subsections (e), (f), and (g), as follows: 

(a)  Requires the commissioner to review for approval, rather than by rule
to establish the coverage requirements for, catastrophic care benefit
plans and basic coverage benefit plans developed by a small employer
carrier under Article 26.42 of this code.  Deletes a requirement that the
commissioner develop prototype policies for use by small employer carriers
that include all contractual provisions required to produce an entire
contract in accordance with this article and this code. 

(b)  Requires coverage under a catastrophic care benefit plan to be
designed to provide necessary coverage in the event of catastrophic
illness or injury.  Deletes a requirement that the commissioner establish
deductibles and coinsurance requirements at levels that permit options
for the insured to obtain affordable catastrophic coverage. 

(c)  Requires coverage under a basic coverage benefit plan to be designed
to provide basic hospital, medical, and surgical coverages. Deletes a
requirement that the commissioner by rule establish coverage requirements
for the basic coverage benefit plan. 

(e)  Authorizes a basic coverage benefit plan or catastrophic care benefit
plan to exclude any state-mandated health benefit. 

(f)  Defines "state-mandated health benefit." 

(g)  Sets forth a benefit or standard provision or right required under
federal law, this code, or other laws of this state, not included in
"state-mandated health benefit." 

SECTION 4.  Amends Article 26.48(a), Insurance Code, to authorize a health
maintenance organization to offer certain health benefit plans. 

SECTION 5.  Amends Article 26.72, Insurance Code, by amending Subsection
(c) and adding Subsection (e), as follows: 

(c)  Provides that Subsection (b) of this article does not apply to an
arrangement that provides compensation to an agent on the basis of
percentage of premium, provided that certain conditions apply. 

(e)  Prohibits a small employer carrier from using an agent compensation
schedule that provides compensation in a specific dollar amount for each
individual covered during a specified period or for each group of
individuals covered during a specified period. 

SECTION 6.  Amends Section 843.002(2), Insurance Code, to redefine "basic
health care services." 

SECTION 7.  (a)  Effective date:  September 1, 2003, 
       Makes application of this Act prospective to January 1, 2004.

  (b)  Makes application of this Act prospective to January 1, 2004.