C.S.H.B. 1267 78(R)    BILL ANALYSIS


C.S.H.B. 1267
By: Seaman
Insurance
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

In the early 1990's, two health benefit plans were developed for sale to
small employers: the 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 these state and federal requirements into the plans they
have developed and marketed. As a result, small employer carriers claim
that the requirements produce administrative inefficiencies and reduce
availability of plans.  C.S.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

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 

ANALYSIS

C.S.H.B. 1267 amends the Insurance Code to require a small employer
carrier to offer a catastrophic care and a basic coverage benefit plan
filed with and approved by the Commissioner of Insurance (Commissioner).
The bill deletes provisions relating to the adoption of catastrophic care
and basic coverage benefit plans by the Commissioner.  The bill deletes
the provision prohibiting a small employer carrier from offering
catastrophic care and basic coverage benefit plans through a policy form
or evidence of coverage that does not comply with Health Insurance
Availability provisions. The bill authorizes a basic coverage or
catastrophic care benefit plan to exclude any state-mandated health
benefits, as defined.   

The bill deletes certain federal standards from the provisions with which
a health benefit plan offered by a health maintenance organization is to
comply.  The bill deletes certain federal minimum standards from the
definition of basic health care services under health maintenance
organization provisions.    

EFFECTIVE DATE

September 1, 2003.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 1267 modifies the original by requiring small employer carriers
to file with and have approved by the Commissioner a basic coverage and
catastrophic care benefit plan, rather than requiring the Commissioner to
adopt these plans.  The substitute adds that a basic coverage or
catastrophic care benefit plan may exclude any state-mandated health
benefit.  The substitute deletes certain federal standards from the
provisions with which a health benefit plan offered by a health
maintenance organization is to comply.  The substitute deletes certain
federal minimum standards from the definition of basic health care
services under health maintenance organization provisions.