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By: Averitt, et al. S.B. No. 10
(In the Senate - Filed February 19, 2003; February 24, 2003,
read first time and referred to Committee on State Affairs;
April 3, 2003, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 7, Nays 0; April 3, 2003,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 10 By: Madla
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 by
amending Subdivisions (2) and (3) and adding Subdivision (5) to
read as follows:
(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.
(5) "Expanded service area" means any area larger than
one county in which a health group cooperative offers coverage.
SECTION 2. The heading to Article 26.14, Insurance Code, is
amended to read as follows:
Art. 26.14. PRIVATE PURCHASING COOPERATIVES AND HEALTH
GROUP COOPERATIVES [COOPERATIVE].
SECTION 3. Article 26.14, Insurance Code, is amended by
amending Subsections (a) and (d) and adding Subsections (e) and (f)
to read as follows:
(a) Two or more small or large employers may form a
purchasing cooperative for the purchase of small or large employer
health benefit plans. Subject to Subsection (f) of this article, a
person may form a health group cooperative for the purchase of
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, a health group cooperative,
or a member of the board of directors, the executive director, or an
employee or agent of a purchasing cooperative or a 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.
(f) A health carrier may not form, or be a member of, a
health group cooperative. A health carrier may associate with a
sponsoring entity, such as a business association, chamber of
commerce, or other organization representing employers or serving
an analogous function, to assist the sponsoring entity in forming a
health group cooperative.
SECTION 4. 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
may consist only of small employers or may, at the option of the
health group cooperative, consist of both small and large
employers. To participate as a member of a health group
cooperative, an employer must be a small or large employer as
described by this chapter.
(b) Subject to the requirements of Article 26.22 of this
code, a health group cooperative:
(1) shall allow a small employer to join the health
group cooperative and enroll in health benefit plan coverage; and
(2) may allow a large employer to join the health group
cooperative and enroll in health benefit plan coverage.
(c) A health group cooperative shall allow any small
employer to join the health group cooperative and enroll in the
cooperative's health benefit plan coverage during the initial
enrollment and annual open enrollment periods.
(d) A sponsoring entity of a health group cooperative may
inform the members of the entity about the cooperative and the
health benefit plans offered by the cooperative. Coverage issued
through the cooperative must be issued through a licensed agent
marketing the coverage in accordance with Article 26.15(a)(3) of
this code.
(e) The commissioner shall adopt rules that govern the
manner in which an employer may terminate, because of a financial
hardship affecting the employer, participation in a 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) shall use a standard presentation form, prescribed
by the commissioner by rule, to market health benefit plan coverage
through the health group cooperative;
(2) 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 additional health
group cooperatives if it is providing health benefit plan coverage
in an expanded service area in accordance with Subsection (l) of
this article;
(3) 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
(4) 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) The commissioner by rule shall determine who
constitutes an uninsured employee or dependent for purposes of
Subsection (g)(4) of this article.
(i) Notwithstanding any other law, a health benefit plan
issued by a health carrier to provide coverage with a health group
cooperative is not subject to a state law, including a rule, that:
(1) relates to a particular illness, disease, or
treatment; or
(2) regulates the differences in rates applicable to
services provided within a health benefit plan network or outside
the network.
(j) The commissioner by rule shall implement the exemption
authorized by Subsection (i) of this article.
(k) A health group cooperative may offer more than one
health benefit plan, but each plan offered must be made available to
all employees covered by the cooperative.
(l) 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 date the health carrier issues 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
application, 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 opportunity for
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 eligible employers in the state
or the expanded service area.
SECTION 5. The heading to Article 26.15, Insurance Code, is
amended to read as follows:
Art. 26.15. POWERS AND DUTIES OF TEXAS HEALTH BENEFITS
PURCHASING COOPERATIVE, [AND] PRIVATE PURCHASING COOPERATIVES, AND
HEALTH GROUP COOPERATIVES.
SECTION 6. Article 26.15, Insurance Code, is amended by
amending Subsection (d) and adding Subsection (e) to read as
follows:
(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 7. 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, subject to Article 26.14A(d)
of this code.
(b) A private purchasing cooperative is considered an
employer solely for the purposes of benefit elections under the
code. A health group cooperative that is composed only of small
employers is considered a single employer under this code and shall
be treated in the same manner as a small employer for the purposes
of this chapter, including for the purposes of any provision
relating to premium rates and issuance and renewal of coverage. A
health group cooperative that is composed of small and large
employers is considered a single employer under this code and, in
relation to the small employers that are members of the
cooperative, shall be treated in the same manner as a small
employer. A health group cooperative that is composed of small and
large employers may elect to extend the protections of this chapter
that are applicable to small employer groups to the large employer
groups that participate in the 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 8. Not later than January 1, 2004, the commissioner
of insurance shall adopt rules as necessary to implement the
changes in law made by this Act.
SECTION 9. 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.
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