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78R1453 PB-D

By:  Nelson                                                       S.B. No. 522



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 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 code. Any other cooperative 
formed under this subchapter is considered an employer solely for 
the purposes of benefit elections under this [the] code.
	SECTION 5.  Article 26.21(c), Insurance Code, is amended to 
read as follows: 
	(c)  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.  This Act takes effect September 1, 2003, and 
applies only to a health benefit plan delivered, issued for 
delivery, or renewed 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.