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2003S0297-1 02/14/03
By: Williams 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 or offer of coverage mandates.
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 and employers in this state to have the opportunity to
choose health insurance plans that are more affordable and flexible
than standard 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 provide state-mandated health benefits.
Sec. 2. DEFINITION. In this article, "nonstandard health
benefits plan" means an accident or sickness insurance policy that,
in whole or in part, does not offer state-mandated health benefits.
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 or a contract for
a health-related condition 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; and
(B) Section 2(C), Chapter 397, Acts of the 54th
Legislature, Regular Session, 1955 (Article 3.70–2, Vernon's Texas
Insurance Code);
(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) 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; and
(5) coverage for serious mental illness under Article
3.51-14 of this code.
Sec. 4. LIMITED HEALTH BENEFIT PLANS AUTHORIZED. An
insurer authorized to engage in the business of insurance in this
state may offer one or more nonstandard health benefit plans.
Sec. 5. NOTICE TO POLICYHOLDER. Each nonstandard health
benefits plan policy, written application for a participation in a
nonstandard health benefits plan, or contract in which a proposed
group or individual policyholder chooses a nonstandard health
benefits 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
nonstandard health benefits 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 nonstandard health benefits plan,
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
nonstandard health benefits plan must provide a proposed
policyholder or policyholder with a written disclosure statement
that:
(1) acknowledges that the nonstandard health benefits
plan being purchased does not provide some or all state-mandated
health benefits; and
(2) lists those state-mandated health benefits not
included under the nonstandard health benefits 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.
(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 nonstandard 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. The commissioner may determine and
prescribe appropriate rates to be charged for a nonstandard health
benefits plan offered under this article.
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 standard 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 evidences of coverage that, in whole or in part, do
not provide offer of coverage mandates.
(b) In this section, "limited offer of coverage plan" means
an evidence of coverage that, in whole or in part, does not provide
offer of coverage mandates.
(c) For purposes of this section, "offer of coverage
mandate" 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, "offer of coverage
mandate" does not include coverage that is mandated by federal law
or standard provisions or rights required by 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 26.23 and
26.86, Insurance Code;
(3) preexisting conditions under 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 illness under Article
3.51-14, Insurance Code.
(e) A health maintenance organization authorized to issue
an evidence of coverage in this state may offer one or more limited
offer of coverage plans.
(f) Each limited offer of coverage plan, written
application for enrollment in a limited offer of coverage plan, or
contract in which a proposed group or individual policyholder
chooses a limited offer of coverage 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 offer of coverage mandates normally
required in evidences of coverage in Texas. This
limited offer of coverage 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 offer of
coverage mandates in evidences of coverage in Texas.
If you choose this limited offer of coverage plan,
please consult with your insurance agent to discover
which offer of coverage mandates are excluded in this
evidence of coverage."
(g) A health maintenance organization providing a limited
offer of coverage plan must provide a proposed enrollee or an
enrollee with a written disclosure statement that:
(1) acknowledges that the limited offer of coverage
plan being purchased does not provide some or all offer of coverage
mandates; and
(2) lists those offer of coverage mandates not
included in the limited offer of coverage plan.
(h) Each applicant for initial enrollment and each enrollee
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.
(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 limited offer of coverage plans under this section must also
offer at least one evidence of coverage that provides offer of
coverage mandates and that is otherwise authorized by the Insurance
Code.
(l) The commissioner may determine and prescribe
appropriate rates to be charged for a limited offer of coverage plan
offered under this section.
SECTION 3. Subsection (a), Article 26.42, Insurance Code,
is amended to read as follows:
(a) A small employer carrier shall offer the following two
health benefit plans as filed with and approved [adopted] by the
commissioner:
(1) a [the] catastrophic care benefit plan; and
(2) a [the] basic coverage benefit plan.
SECTION 4. 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 5. Subsections (a), (b), and (c), Article 26.44A,
Insurance Code, are amended to read as follows:
(a) The commissioner shall review and approve catastrophic
and basic plans developed by a small employer carrier [by rule shall
establish the coverage requirements for the catastrophic care
benefit plan and the basic coverage benefit 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 the catastrophic care benefit plan must
be designed to provide necessary coverage in the event of
catastrophic illness or injury at an affordable price as determined
by the commissioner. [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
the basic coverage benefit plan must be designed to provide basic
hospital, medical, and surgical coverages at an affordable price as
determined by the commissioner. Benefits under the plan are
limited to basic care requirements for illness and injury.
SECTION 6. Subsection (a), Article 26.48, 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, 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 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; or
(4) a limited offer of coverage plan under Section 9N,
Texas Health Maintenance Organization Act (Article 20A.09N,
Vernon's Texas Insurance Code).
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. 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.