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By: Williams, et al. S.B. No. 541
A BILL TO BE ENTITLED
AN ACT
relating to authorizing insurers and health maintenance
organizations to issue plans that do not include state-mandated
health benefits.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter G, Chapter 3, Insurance Code, is
amended by adding Article 3.80 to read as follows:
Art. 3.80. TEXAS CONSUMER CHOICE OF BENEFITS HEALTH
INSURANCE PLAN ACT
Sec. 1. PURPOSE. The legislature recognizes the need for
individuals, employers, and other purchasers of coverage in this
state to have the opportunity to choose health insurance plans that
are more affordable and flexible than existing market policies
offering accident and sickness insurance coverage. The
legislature, therefore, seeks to increase the availability of
health insurance coverage by allowing insurers authorized to engage
in the business of insurance in this state to issue accident and
sickness policies that, in whole or in part, do not offer or provide
state-mandated health benefits.
Sec. 2. DEFINITIONS. In this article:
(1) "Health carrier" means any entity authorized under
this code or another insurance law of this state that provides
health insurance or health benefits in this state, including an
insurance company, a group hospital service corporation under
Chapter 842 of this code, and a stipulated premium company under
Chapter 884 of this code.
(2) "Standard health benefit plan" means an accident
or sickness insurance policy that, in whole or in part, does not
offer or provide state-mandated health benefits, but that provides
creditable coverage as defined by Article 26.035(a) of this code or
Section 1(H)(4)(b), Chapter 397, Acts of the 54th Legislature,
Regular Session, 1955 (Article 3.70-1, Vernon's Texas Insurance
Code).
Sec. 3. STATE-MANDATED HEALTH BENEFITS. (a) For purposes
of this article, "state-mandated health benefits" means coverage
required under this code or other laws of this state to be provided
in an individual, blanket, or 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.
(b) For purposes of this article, "state-mandated health
benefits" does not include benefits that are mandated by federal
law or standard provisions or rights required under this code or
other laws of this state to be provided in an individual, blanket,
or group policy for accident and health insurance that are
unrelated to specific health illnesses, injuries, or conditions of
an insured, including provisions 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 3C, Article 3.51-6 of this code, as
added by Section 10, Chapter 1041, Acts of the 71st Legislature,
Regular Session, 1989;
(2) termination of coverage under Articles 3.70-1A,
26.23, and 26.86 of this code;
(3) preexisting conditions under Section 1(H),
Chapter 397, Acts of the 54th Legislature, Regular Session, 1955
(Article 3.70-1, Vernon's Texas Insurance Code), and 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) Sections 2(A), (E), (K), and (M), Chapter
397, Acts of the 54th Legislature, Regular Session, 1955 (Article
3.70-2, Vernon's Texas Insurance Code);
(C) Subchapter J, Chapter 3 of this code;
(D) Article 21.24-2 of this code;
(E) Article 26.21(n) of this code;
(F) Article 26.21A of this code; and
(G) Article 26.84 of this code;
(5) supplies and services associated with the
treatment of diabetes under Article 21.53G of this code; and
(6) coverage for serious mental illness under Article
3.51-14 of this code if the standard health benefit plan is issued
to a large employer as defined by Article 26.02 of this code.
Sec. 4. STANDARD HEALTH BENEFIT PLANS AUTHORIZED. A health
carrier may offer one or more standard health benefit plans.
Sec. 5. NOTICE TO POLICYHOLDER. (a) Each written
application for participation in a standard health benefit plan
must contain the following language at the beginning of the
document in bold type:
"You have the option to choose this Consumer
Choice of Benefits Health Insurance Plan that, either
in whole or in part, does not provide state-mandated
health benefits normally required in accident and
sickness insurance policies in Texas. This standard
health benefit plan may provide a more affordable
health insurance policy for you although, at the same
time, it may provide you with fewer health benefits
than those normally included as state-mandated health
benefits in policies in Texas. If you choose this
standard health benefit plan, please consult with your
insurance agent to discover which state-mandated
health benefits are excluded in this policy."
(b) Each standard health benefit plan must contain the
following language at the beginning of the document in bold type:
"This Consumer Choice of Benefits Health
Insurance Plan, either in whole or in part, does not
provide state-mandated health benefits normally
required in accident and sickness insurance policies
in Texas. This standard health benefit plan may
provide a more affordable health insurance policy for
you although, at the same time, it may provide you with
fewer health benefits than those normally included as
state-mandated health benefits in policies in Texas.
Please consult with your insurance agent to discover
which state-mandated health benefits are excluded in
this policy."
Sec. 6. DISCLOSURE STATEMENT. (a) An insurer providing a
standard health benefit plan must provide a proposed policyholder
or policyholder with a written disclosure statement that:
(1) acknowledges that the standard health benefit plan
being purchased does not provide some or all state-mandated health
benefits;
(2) lists those state-mandated health benefits not
included under the standard health benefit plan; and
(3) if the standard health benefit plan is issued to an
individual policyholder, provides a notice that purchase of the
plan may limit the policyholder's future coverage options in the
event the policyholder's health changes and needed benefits are not
available under the standard health benefit plan.
(b) Each applicant for initial coverage and each
policyholder on renewal of coverage must sign the disclosure
statement provided by the insurer under Subsection (a) of this
section and return the statement to the insurer. Under a group
policy or contract, the term "applicant" means the employer.
(c) An insurer must:
(1) retain the signed disclosure statement in the
insurer's records; and
(2) on request from the commissioner, provide the
signed disclosure statement to the department.
Sec. 7. RULES. The commissioner shall adopt rules as
necessary to implement this article.
Sec. 8. ADDITIONAL POLICIES. An insurer that offers one or
more standard health benefit plans under this article must also
offer at least one accident or sickness insurance policy with
state-mandated health benefits that is otherwise authorized by this
code.
Sec. 9. RATES. A health carrier shall file for
informational purposes the rates to be used with a standard health
benefit plan. Nothing in this section shall be construed as
granting the commissioner any power or authority to determine, fix,
prescribe, or promulgate the rates to be charged for any individual
accident and sickness insurance policy or policies.
SECTION 2. The Texas Health Maintenance Organization Act
(Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
Section 9N to read as follows:
Sec. 9N. CHOICE OF BENEFITS PLAN. (a) The legislature
recognizes the need for individuals and employers in this state to
have the opportunity to choose health maintenance organization
plans that are more affordable and flexible than existing market
health care plans offered by health maintenance organizations. The
legislature, therefore, seeks to increase the availability of
health care plans by allowing health maintenance organizations
authorized to operate health maintenance organizations in this
state to issue group or individual evidences of coverage that, in
whole or in part, do not offer or provide mandated health benefits.
(b) In this section, "standard health benefit plan" means a
group or individual evidence of coverage that, in whole or in part,
does not offer or provide state-mandated health benefits, but that
provides creditable coverage as defined by Article 26.035(a) of
this code or Section 1(H)(4)(b), Chapter 397, Acts of the 54th
Legislature, Regular Session, 1955 (Article 3.70-1, Vernon's Texas
Insurance Code).
(c) For purposes of this section, "state-mandated health
benefits" means coverage required under the Insurance Code or other
laws of this state to be provided in an evidence of coverage 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 enrollee is entitled to receive
care.
(d) For purposes of this section, "state-mandated health
benefits" does not include coverage that is mandated by federal law
or standard provisions or rights required under the Insurance Code
or other law of this state to be provided in an evidence of coverage
that are unrelated to specific health illnesses, injuries, or
conditions of an insured, including provisions related to:
(1) continuation of coverage under Section 3B, Article
3.51-6, Insurance Code;
(2) termination of coverage under Articles 3.70-1A,
26.23, and 26.86, Insurance Code;
(3) preexisting conditions under Section 1(H),
Chapter 397, Acts of the 54th Legislature, Regular Session, 1955
(Article 3.70-1, Vernon's Texas Insurance Code), and Articles 26.49
and 26.90, Insurance Code;
(4) coverage of children, including newborn or adopted
children, under:
(A) Subchapter J, Chapter 3, Insurance Code;
(B) Article 21.24-2, Insurance Code;
(C) Article 26.21(n), Insurance Code;
(D) Article 26.21A, Insurance Code; and
(E) Article 26.84, Insurance Code; and
(5) coverage for serious mental health illness under
Article 3.51-14, Insurance Code, if the standard health benefit
plan is issued to a large employer as defined in Article 26.02,
Insurance Code.
(e) A health maintenance organization authorized to issue
an evidence of coverage in this state may offer one or more standard
health benefit plans.
(f)(1) Each written application for enrollment in a
standard health benefit plan must contain the following language at
the beginning of the document in bold type:
"You have the option to choose this Consumer
Choice of Benefits Health Maintenance Organization
health care plan that, either in whole or in part, does
not provide state-mandated health benefits normally
required in evidences of coverage in Texas. This
standard health benefit plan may provide a more
affordable health plan for you although, at the same
time, it may provide you with fewer health plan
benefits than those normally included as
state-mandated health benefits in Texas. If you
choose this standard health benefit plan, please
consult with your insurance agent to discover which
state-mandated health benefits are excluded in this
evidence of coverage."
(2) Each standard health benefit plan must contain the
following language at the beginning of the document in bold type:
"This Consumer Choice of Benefits Health
Maintenance Organization health care plan, either in
whole or in part, does not provide state-mandated
health benefits normally required in evidences of
coverage in Texas. This standard health benefit plan
may provide a more affordable health plan for you
although, at the same time, it may provide you with
fewer health plan benefits than those normally
included as state-mandated health benefits in Texas.
Please consult with your insurance agent to discover
which state-mandated health benefits are excluded in
this evidence of coverage."
(g) A health maintenance organization providing a standard
health benefit plan must provide a proposed contract holder or a
contract holder with a written disclosure statement that:
(1) acknowledges that the standard health benefit plan
being purchased does not provide some or all state-mandated health
benefits;
(2) lists those state-mandated health benefits not
included in the standard health benefit plan; and
(3) if the standard health benefit plan is issued to an
individual certificate holder, provides a notice that purchase of
the plan may limit the certificate holder's future coverage options
in the event the certificate holder's health changes and needed
benefits are not available under the standard health benefit plan.
(h) Each applicant for initial enrollment and each contract
holder on renewal must sign the disclosure statement provided by
the health maintenance organization under Subsection (g) of this
section and return the statement to the health maintenance
organization. Under a group evidence of coverage, the term
"applicant" means the employer.
(i) A health maintenance organization must:
(1) retain the signed disclosure statement in the
organization's records; and
(2) on request from the commissioner, provide the
signed disclosure statement to the department.
(j) The commissioner shall adopt rules as necessary to
implement this section.
(k) A health maintenance organization that offers one or
more standard health benefit plans under this section must also
offer at least one evidence of coverage that provides
state-mandated health benefits and that is otherwise authorized by
the Insurance Code.
(l) A health maintenance organization shall file for
informational purposes the rates to be used with a standard health
benefit plan. Nothing in this section shall be construed as
granting the commissioner any power or authority to determine, fix,
prescribe, or promulgate the rates to be charged for any evidence of
coverage.
SECTION 3. Subsection (b), Article 26.38, Insurance Code,
is amended to read as follows:
(b) A health maintenance organization that participates in
a purchasing cooperative that provides employees of small employers
a choice of benefit plans, that has established a separate class of
business as provided by Article 26.31 of this code, and that has
established a separate line of business as provided under Article
26.48(a) of this code [and Title XIII, Public Health Service Act (42
U.S.C. Section 300e et seq.)] may use rating methods in accordance
with this subchapter that are used by other small employer carriers
participating in the same cooperative, including rating by age and
gender.
SECTION 4. Article 26.42, Insurance Code, is amended to
read as follows:
Art. 26.42. SMALL EMPLOYER HEALTH BENEFIT PLANS. (a) A
small employer carrier shall offer a standard health benefit plan
as authorized by Article 3.80 of this code and Section 9N, Texas
Health Maintenance Organization Act (Article 20A.09N, Vernon's
Texas Insurance Code) [the following two health benefit plans as
adopted by the commissioner:
[(1) the catastrophic care benefit plan; and
[(2) the basic coverage benefit plan].
(b) A small employer carrier may offer to a small employer
additional benefit riders to the standard health benefit plan or
may design and offer standard health benefit plans with additional
mandatory benefits [either of the benefit plans].
(c) Subject to the provisions of this chapter, a small
employer carrier shall [may] also offer to small employers at least
one [any] other health benefit plan authorized under this code that
provides state-mandated health benefits. Article 26.06(c) does not
apply to a health benefit plan offered to a small employer under
this subsection.
SECTION 5. Subsection (a), Article 26.43, 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 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 6. Subsection (a), Article 26.48, Insurance Code,
is amended to read as follows:
(a) A health maintenance organization [may offer]:
(1) shall offer at least one [a] state-approved basic
health care [benefit] plan that complies with this chapter, 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 and may offer additional such plans;
(2) shall offer a standard health benefit plan under
Section 9N, Texas Health Maintenance Organization Act (Article
20A.09N, Vernon's Texas Insurance Code), and may offer additional
benefit riders to the standard health benefit plan or offer
standard health benefit plans with additional mandatory benefits
[developed by the commissioner under Article 26.44A of this code
and additional benefit riders to the plan]; and [or]
(3) may offer 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 7. Subdivision (2), Section 843.002, Insurance
Code, as effective June 1, 2003, 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 8. Article 26.44A, Insurance Code, is repealed.
SECTION 9. This Act takes effect September 1, 2003, and
applies only to an insurance policy, contract, or evidence of
coverage delivered, issued for delivery, or renewed on or after
January 1, 2004.