2003S0125-2 01/28/03
By: Smithee H.B. No. 1086
A BILL TO BE ENTITLED
AN ACT
relating to the creation of employer health benefit plan groups.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Article 26.11, Insurance Code, is amended to
read as follows:
Art. 26.11. DEFINITIONS. In this subchapter:
(1) "Board of trustees" means the board of trustees of
the Texas cooperative.
(2) "Board of directors" means the board of directors
elected by a private purchasing cooperative or a health group
cooperative.
(3) "Cooperative" means a private purchasing
cooperative or a health group cooperative established under this
subchapter.
(4) "Expanded service area" means any area larger than
one county in which a health group cooperative offers coverage.
(5) "Texas cooperative" means the Texas Health
Benefits Purchasing Cooperative, a nonprofit corporation,
established under Article 26.13 of this code.
SECTION 2. Article 26.14, Insurance Code, is amended by
amending the section heading and Subsections (a) and (d) and by
adding Subsection (e) to read as follows:
Art. 26.14. PRIVATE PURCHASING COOPERATIVES AND HEALTH
GROUP COOPERATIVES [COOPERATIVE].
(a) Two or more small or large employers may form a
cooperative for the purchase of small or large employer health
benefit plans. Any person may form a health group cooperative for
the purchase of small employer health benefit plans. A cooperative
must be organized as a nonprofit corporation and has the rights and
duties provided by the Texas Non-Profit Corporation Act (Article
1396-1.01 et seq., Vernon's Texas Civil Statutes).
(d) A purchasing cooperative, health group cooperative, or
a member of the board of directors, the executive director, or an
employee or agent of a purchasing cooperative or health group
cooperative is not liable for:
(1) an act performed in good faith in the execution of
duties in connection with the purchasing cooperative or health
group cooperative; or
(2) an independent action of a small or large employer
insurance carrier or a person who provides health care services
under a health benefit plan.
(e) A health group cooperative or a member of the board of
directors, the executive director, or an employee or agent of a
health group cooperative is not liable for failure to arrange for
coverage of any particular illness, disease, or health condition.
SECTION 3. Subchapter B, Chapter 26, Insurance Code, is
amended by adding Article 26.14A to read as follows:
Art. 26.14A. SPECIAL PROVISIONS RELATING TO HEALTH GROUP
COOPERATIVES. (a) The membership of a health group cooperative
shall consist solely of employers, which shall be small employers,
large employers, or both small and large employers at the option of
the health group cooperative.
(b) A health group cooperative shall allow any employer to
join the health group cooperative and enroll in health benefit plan
coverage, subject to the requirements of Article 26.22 of this code
and any restriction the health group cooperative has placed on
employer group size under Subsection (a) of this article.
(c) A health group cooperative shall allow employers to join
the health group cooperative and enroll in its health benefit plan
coverage during its initial enrollment and annual open enrollment
periods. A health group cooperative may allow employers to join the
cooperative and to enroll in health benefit plan coverage at
additional times.
(d) In addition to contracting with agents to market
membership in and coverage issued through the cooperative as
authorized by Article 26.15(a)(3) of this code, a health group
cooperative may directly market membership and coverage.
(e) A health group cooperative shall specify circumstances,
which shall include experiencing a substantial financial hardship,
that would allow an employer the option of terminating its
participation in the health group cooperative.
(f) An employer's participation in a health group
cooperative is voluntary, but an employer electing to participate
in a health group cooperative must commit to purchasing coverage
through the health group cooperative for two years, except as
provided by Subsection (e) of this article.
(g) A health carrier issuing coverage to a health group
cooperative:
(1) is exempt from the application of any laws of this
state requiring the health carrier to cover or offer to cover
specific mandated health benefits, which exemption the
commissioner shall adopt by rule;
(2) shall use a standard presentation form, prescribed
by the commissioner by rule, to market health benefit plan coverage
through the health group cooperative;
(3) may contract to provide health benefit plan
coverage with only one health group cooperative in any county,
except that a health carrier may contract with a second health group
cooperative if it is providing health benefit plan coverage in an
expanded service area in accordance with Subsection (h) of this
article;
(4) shall allow enrollment in health benefit plan
coverage in compliance with Subsection (c) of this article and with
the health carrier's agreement with the health group cooperative;
and
(5) on application, is entitled to receive a premium
tax credit for two years for each uninsured employee and dependent
who receives coverage through the health group cooperative.
(h) A health carrier may, with notice to the commissioner,
provide health benefit plan coverage to an expanded service area
that includes the entire state. A health carrier may apply for
approval of an expanded service area that comprises less than the
entire state by filing with the commissioner an application, in a
form and manner prescribed by the commissioner, at least 60 days
before the health carrier's issuance of coverage to the health
group cooperative in the expanded service area. At the expiration
of 60 days after the date of receipt by the department of a filed
form, contract, or policy, the application shall be deemed approved
by the department unless, before that date, the application was
either affirmatively approved or disapproved by written order of
the commissioner. The commissioner, after notice and hearing, may
rescind an approval granted to a health carrier under this
subsection if the commissioner finds that the health carrier has
failed to market fairly to all small employers in the state or the
expanded service area.
SECTION 4. Article 26.15, Insurance Code, is amended by
amending the section heading and Subsection (d) and by adding
Subsection (e) to read as follows:
Art. 26.15. POWERS AND DUTIES OF TEXAS HEALTH BENEFITS
PURCHASING COOPERATIVE, [AND] PRIVATE PURCHASING COOPERATIVES, AND
HEALTH GROUP COOPERATIVES.
(d) A cooperative shall comply with federal laws applicable
to cooperatives and health benefit plans issued through
cooperatives, to the extent required by state law or rules adopted
by the commissioner of insurance. A cooperative shall comply with
state laws applicable to cooperatives and health benefit plans
issued through cooperatives. A cooperative may not limit,
restrict, or condition an employer's or employee's membership in
the cooperative or choice among benefit plans based on the risk
characteristics of a group or of any member of a group.
(e) To be eligible to exercise the authority granted under
Subsection (a)(1) of this article, a health group cooperative must
have at least 10 participating employers.
SECTION 5. Subsections (a), (b), and (d), Article 26.16,
Insurance Code, are amended to read as follows:
(a) A cooperative is not an insurer and the employees of the
cooperative are not required to be licensed under Section 15 or 15A,
Texas Health Maintenance Organization Act (Article 20A.15 or
20A.15A, Vernon's Texas Insurance Code), or Subchapter A, Chapter
21, of this code. This exemption from licensure includes a health
group cooperative that acts to provide information about and to
solicit membership in the cooperative.
(b) A private purchasing cooperative is considered an
employer solely for the purposes of benefit elections under the
code. A health group cooperative is considered a single small
employer under this code, including for the purposes of developing
and adjusting premium rates and with regard to all provisions
relating to premium rates, except that a health carrier is not
obligated to guarantee issuance of coverage to a health group
cooperative. A health group cooperative shall have sole authority
to make benefit elections and perform other administrative
functions under the code for the cooperative's participating
employers. The department shall develop an expedited approval
process for health benefit plan coverage arranged by a health group
cooperative.
(d) A licensed agent used and compensated by the cooperative
need not be appointed by each small or large employer carrier
participating in the cooperative in order to market the products
and services sponsored by the cooperative. However, a licensed
agent may not market any other non-sponsored product or service of a
participating small or large employer carrier without first being
appointed by the small or large employer carrier.
SECTION 6. This Act takes effect September 1, 2003, and
applies to a health benefit plan that is delivered, issued for
delivery, amended, or renewed on or after January 1, 2004. A plan
that is delivered, issued for delivery, amended, or renewed before
January 1, 2004, is governed by the law as it existed immediately
before the effective date of this Act, and that law is continued in
effect for that purpose.