By: Seaman, Christian H.B. No. 1267
A BILL TO BE ENTITLED
AN ACT
relating to small employer health benefit plans.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Article 26.42(a), Insurance Code, is amended to
read as follows:
(a) A small employer carrier shall offer the following two
health benefit plans filed with and approved [as adopted] by the
commissioner:
(1) a [the] catastrophic care benefit plan; and
(2) a [the] basic coverage benefit plan.
SECTION 2. Article 26.43(a), Insurance Code, is amended to
read as follows:
(a) A [The commissioner shall 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 shall develop prototype policies for each of
the benefit plans. For all other portions of these policy forms, a]
small employer carrier shall comply with Article 3.42 of this code
as it relates to policy form approval and with Chapter 843 of this
code [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. [A small employer carrier may not offer
these benefit plans through a policy form or evidence of coverage
that does not comply with this chapter.]
SECTION 3. Article 26.44A, Insurance Code, is amended by
amending Subsections (a), (b), and (c) and adding Subsections (e),
(f), and (g) to read as follows:
(a) The commissioner shall review for approval [by rule
shall establish the coverage requirements for the] catastrophic
care benefit plans [plan] and [the] basic coverage benefit plans
developed by a small employer carrier under Article 26.42 of this
code [plan. The commissioner shall 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) Coverage under a [the] catastrophic care benefit plan
must be designed to provide necessary coverage in the event of
catastrophic illness or injury. [The commissioner shall establish
deductibles and coinsurance requirements at levels that permit
options for the insured to obtain affordable catastrophic
coverage.]
(c) [The commissioner by rule shall establish coverage
requirements for the basic coverage benefit plan.] Coverage under
a [the] basic coverage benefit plan must be designed to provide
basic hospital, medical, and surgical coverages. Benefits under
the plan are limited to basic care requirements for illness and
injury.
(e) A basic coverage benefit plan or catastrophic care
benefit plan may exclude any state-mandated health benefit.
(f) For purposes of this article, "state-mandated health
benefit" means coverage required under this code or other laws of
this state to be provided in a group policy for accident and health
insurance or a contract for a health-related condition that:
(1) includes coverage for specific health care
services or benefits;
(2) places limitations or restrictions on
deductibles, coinsurance, copayments, or any annual or lifetime
maximum benefit amounts; or
(3) includes a specific category of licensed health
care practitioner from whom an insured is entitled to receive care.
(g) For purposes of this article, "state-mandated health
benefit" does not include a benefit or standard provision or right
required under federal law, this code, or other laws of this state
to be provided in a group policy for accident and health insurance
or a contract for a health-related condition that is unrelated to a
specific health illness, injury, or condition of an insured,
including a provision related to:
(1) continuation of coverage under:
(A) Section 1(d)(3) and Section 3B, Article
3.51-6, of this code;
(B) Section 2(C), Chapter 397, Acts of the 54th
Legislature, Regular Session, 1955 (Article 3.70-2, Vernon's Texas
Insurance Code);
(C) Article 3.51-8 of this code; and
(D) Section 9(k), Texas Health Maintenance
Organization Act (Article 20A.09, Vernon's Texas Insurance Code),
as added by Chapter 837, Acts of the 75th Legislature, Regular
Session, 1997;
(2) termination of coverage under Articles 26.23 and
26.86 of this code;
(3) preexisting conditions under Articles 26.49 and
26.90 of this code;
(4) coverage of children, including newborn or adopted
children, under:
(A) Sections 1, 3D, and 3E, Article 3.51-6, of
this code;
(B) Section 2(A), Chapter 397, Acts of the 54th
Legislature, Regular Session, 1955 (Article 3.70-2, Vernon's Texas
Insurance Code), as amended by Chapters 396 and 1027, Acts of the
77th Legislature, Regular Session, 2001;
(C) Sections 2(E), (K), and (M), Chapter 397,
Acts of the 54th Legislature, Regular Session, 1955 (Article
3.70-2, Vernon's Texas Insurance Code);
(D) Subchapter J, Chapter 3, of this code;
(E) Article 21.24-2 of this code;
(F) Article 26.21(n) of this code;
(G) Article 26.21A of this code; and
(H) Article 26.84 of this code; and
(5) coverage of grandchildren under the benefit
provisions of the health maintenance organization laws of this
state.
SECTION 4. Article 26.48(a), Insurance Code, is amended to
read as follows:
(a) A health maintenance organization may offer:
(1) a state-approved health benefit plan that complies
with this chapter, Chapter 843 of this code [the Texas Health
Maintenance Organization Act (Chapter 20A, Vernon's Texas
Insurance Code), Title XIII, Public Health Service Act (42 U.S.C.
Section 300e et seq.), and its subsequent amendments], and rules
adopted under these laws;
(2) a plan developed by a health maintenance
organization [the commissioner] under Article 26.44A of this code
and additional benefit riders to the plan; or
(3) a point-of-service contract in connection with an
insurance carrier that includes optional coverage for out-of-area
services, emergency care, or out-of-network care.
SECTION 5. Article 26.72, Insurance Code, is amended by
amending Subsection (c) and adding Subsection (e) to read as
follows:
(c) 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:
(1) the percentage may not vary because of health
status or claim experience; and
(2) the small employer carrier does not:
(A) exclude any additional premium charged to the
small employer because of health status or claims experience from
the premium amount to which the percentage is applied; or
(B) apply a smaller percentage to any additional
premium charged to the small employer because of health status or
claims experience than is applied to other premiums charged to the
small employer.
(e) A small employer carrier may not use 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. Section 843.002(2), Insurance Code, is amended
to read as follows:
(2) "Basic health care services" means health care
services that the commissioner determines an enrolled population
might reasonably need to be maintained in good health[, including,
at a minimum, services designated as basic health services under
Section 1302, Title XIII, Public Health Service Act (42 U.S.C.
Section 300e-1(1))].
SECTION 7. (a) This Act takes effect September 1, 2003,
and applies only to an insurance policy or evidence of coverage that
is delivered, issued for delivery, or renewed on or after January 1,
2004. An insurance policy or evidence of coverage that is
delivered, issued for delivery, or renewed before January 1, 2004,
is governed by the law as it existed immediately before the
effective date of this Act, and the former law is continued in
effect for that purpose.
(b) Article 26.72, Insurance Code, as amended by this Act,
applies only to a small employer health benefit plan that is
delivered, renewed, or issued for delivery on or after January 1,
2004. A health benefit plan delivered, issued for delivery, 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.