By: Woolley, Giddings, et al. H.B. No. 897
(Senate Sponsor - Nelson)
(In the Senate - Received from the House April 24, 2003;
April 25, 2003, read first time and referred to Committee on State
Affairs; May 20, 2003, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 8, Nays 0;
May 20, 2003, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 897 By: Nelson
A BILL TO BE ENTITLED
AN ACT
relating to the operation of certain employer coalitions and
cooperatives established for the provision of health benefits
coverage.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Article 26.02, Insurance Code, is amended by
adding Subdivision (32-a) to read as follows:
(32-a) "Small employer health coalition" means a
private purchasing cooperative composed solely of small employers
that is formed under Subchapter B of this chapter.
SECTION 2. The heading to Subchapter B, Chapter 26,
Insurance Code, is amended to read as follows:
SUBCHAPTER B. COALITIONS AND PURCHASING COOPERATIVES
SECTION 3. Article 26.15, Insurance Code, is amended by
amending Subsection (b) and adding Subsection (e) to read as
follows:
(b) A cooperative may contract only with small or large
employer carriers that [who desire to offer coverage through the
cooperative and who] demonstrate:
(1) that the carrier is a health carrier or health
maintenance organization licensed and in good standing with the
department;
(2) the capacity to administer the health benefit
plans;
(3) the ability to monitor and evaluate the quality
and cost effectiveness of care and applicable procedures;
(4) the ability to conduct utilization management and
applicable procedures and policies;
(5) the ability to assure enrollees adequate access to
health care providers, including adequate numbers and types of
providers;
(6) a satisfactory grievance procedure and the ability
to respond to enrollees' calls, questions, and complaints; and
(7) financial capacity, either through financial
solvency standards as applied by the commissioner or through
appropriate reinsurance or other risk-sharing mechanisms.
(e) A cooperative may not limit, restrict, or condition an
employer's or employee's membership in a cooperative or 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. Article 26.16(b), Insurance Code, is amended to
read as follows:
(b) 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 chapter. Any other cooperative
formed under this subchapter is considered an employer solely for
the purposes of benefit elections under this [the] code.
SECTION 5. Articles 26.21(b) and (c), Insurance Code, are
amended to read as follows:
(b) This article does not impose a statutory mandate of an
employer contribution to the premium paid to the small employer
carrier. However, the small employer carrier may require an
employer contribution in accordance with the carrier's usual and
customary practices on all employer group health insurance plans in
this state. The premium contribution level shall be applied
uniformly to each small employer offered or issued coverage by the
small employer carrier in this state. If two or more small employer
carriers participate in a purchasing cooperative established under
Article 26.14 of this code, the carrier may use the contribution
requirement established by the purchasing cooperative for policies
marketed by the cooperative. [Coverage is available under a small
employer health benefit plan if at least 75 percent of a small
employer's eligible employees elect to be covered.]
(c) Coverage is available under a small employer health
benefit plan if at least 75 percent of a small employer's eligible
employees, or, if applicable, the lower participation level offered
by the small employer carrier under Subsection (d) of this article,
elect to be covered. If a small employer offers multiple health
benefit plans, the collective enrollment of all of those plans must
be at least 75 percent of the small employer's eligible employees
or, if applicable, the lower participation level offered by the
small employer carrier under Subsection (d) of this article. A
small employer carrier may elect not to offer health benefit plans
to a small employer who offers multiple health benefit plans if such
plans are to be provided by more than one carrier and the small
employer carrier would have less than 75 percent of the small
employer's eligible employees enrolled in the small employer
carrier's health benefit plan [unless the coverage is provided
through a purchasing cooperative]. A small employer who elects to
make contributions for payment of the premium is not required to pay
any amount with respect to an employee who elects not to be covered.
The small employer may elect to pay the premium cost for additional
coverage. This chapter does not require a small employer to
purchase health insurance coverage for the employer's employees.
SECTION 6. Article 26.72(a), Insurance Code, is amended to
read as follows:
(a) A small employer carrier or agent may not, directly or
indirectly:
(1) encourage or direct a small employer to refrain
from applying for coverage with the small employer carrier because
of health status or claim experience of the eligible employees and
dependents of the small employer;
(2) encourage or direct a small employer to seek
coverage from another health carrier because of health status or
claim experience of the eligible employees and dependents of the
small employer; [or]
(3) encourage or direct a small employer to apply for a
particular small employer health benefit plan because of health
status or claim experience of the eligible employees and dependents
of the small employer; or
(4) encourage or direct a small employer to become a
member or not become a member of a particular small employer health
coalition because of the health status or claim experience of the
eligible employees and dependents of that small employer.
SECTION 7. This Act takes effect September 1, 2003.
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