79(R) SB 805 - Senate Committee Report version


                                                                                


By:  Averitt                                                      S.B. No. 805
	(In the Senate - Filed February 28, 2005; March 10, 2005, 
read first time and referred to Committee on State Affairs; 
April 13, 2005, reported adversely, with favorable Committee 
Substitute by the following vote:  Yeas 8, Nays 0; April 13, 2005, 
sent to printer.)


COMMITTEE SUBSTITUTE FOR S.B. No. 805                                    By:  Armbrister


A BILL TO BE ENTITLED

AN ACT


relating to certain small and large employer health cooperatives.           
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter B, Chapter 1501, Insurance Code, as 
effective April 1, 2005, and as amended by the Act of the 79th 
Legislature, Regular Session, 2005, relating to nonsubstantive 
additions to and corrections in enacted codes (the general code 
update bill), is amended by adding Section 1501.0575 to read as 
follows:
	Sec. 1501.0575.  VOLUNTARY PARTICIPATION BY ISSUER IN 
COOPERATIVE.  A health benefit plan issuer may elect not to 
participate in a health group cooperative.  The health benefit plan 
issuer may elect to participate in one or more health group 
cooperatives and may select the cooperatives in which the issuer 
will participate.
	SECTION 2.  Section 1501.0581, Insurance Code, as added by 
the Act of the 79th Legislature, Regular Session, 2005, relating to 
nonsubstantive additions to and corrections in enacted codes (the 
general code update bill), is amended by amending Subsections (a), 
(b), and (c) and adding Subsections (o) and (p) to read as follows:
	(a)  The membership of a health group cooperative may consist 
only of small employers or may consist only of large employers, but 
may not[, 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 imposed on small employer 
health benefit plan issuers under Section 1501.101, a health group 
cooperative:
		(1)  shall allow a small employer to join a [the] health 
group cooperative consisting only of small employers and enroll in 
health benefit plan coverage, subject to Subsection (o); and
		(2)  may allow a large employer to join a [the] health 
group cooperative consisting only of large employers and enroll in 
health benefit plan coverage.
	(c)  Subject to Subsection (o), a [A] health group 
cooperative consisting only of small employers 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.
	(o)  A health group cooperative consisting only of small 
employers is not required to allow a small employer to join the 
health group cooperative under Subsection (c) if:
		(1)  the cooperative has elected to restrict membership 
in the cooperative in accordance with this subsection and 
Subsection (p); and
		(2)  after the small employer has joined the 
cooperative, the total number of eligible employees employed on 
business days during the preceding calendar year by all small 
employers participating in the cooperative would exceed 50.
	(p)  A health group cooperative must make the election 
described by Subsection (o) at the time the cooperative is 
initially formed.  Evidence of the election must be filed in writing 
with the commissioner in the form and at the time prescribed by the 
commissioner by rule.
	SECTION 3.  Section 1501.063, Insurance Code, as effective 
April 1, 2005, and as amended by the Act of the 79th Legislature, 
Regular Session, 2005, relating to nonsubstantive additions to and 
corrections in enacted codes (the general code update bill), is 
amended by amending Subsection (b) and adding Subsections (b-1), 
(b-2), and (b-3) to read as follows:
	(b)  A health group cooperative [that is composed only of 
small employers] is considered a single employer under this code.
	(b-1)   A health group cooperative that is composed only of 
small employers and that has made the election described by Section 
1501.0581(o)(1) in accordance with Subsection (p) of that section
[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.
	(b-2)  A health group cooperative that is composed only of 
small [and large] employers and that has not made the election 
described by Section 1501.0581(o)(1) in accordance with Subsection 
(p) of that section, or a health group cooperative that is composed 
only of large employers, shall be treated in the same manner as a 
large employer for the purposes of this chapter, including for the 
purposes of any provision relating to premium rates and issuance 
and renewal of coverage.
	(b-3)  [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 this code for the 
cooperative's participating employers.
	SECTION 4.  Notwithstanding Subsection (p), Section 
1501.0581, Insurance Code, as added by this Act, a health group 
cooperative in existence on the effective date of this Act may make 
the election described by Subsection (o), Section 1501.0581, 
Insurance Code, as added by this Act, not later than December 31, 
2005.
	SECTION 5.  Not later than January 1, 2006, the commissioner 
of insurance shall adopt rules under Section 1501.010, Insurance 
Code, as necessary to implement the change in law made by this Act.
	SECTION 6.  This Act takes effect only if S.B. No. 979 or 
H.B. No. 2018 or another Act of the 79th Legislature, Regular 
Session, 2005, relating to nonsubstantive additions to and 
corrections in enacted codes becomes law.  If S.B. No. 979 or H.B. 
No. 2018 or another Act of the 79th Legislature, Regular Session, 
2005, relating to nonsubstantive additions to and corrections in 
enacted codes does not become law, this Act has no effect.
	SECTION 7.  To the extent of any conflict, this Act prevails 
over another Act of the 79th Legislature, Regular Session, 2005, 
relating to nonsubstantive additions to and corrections in enacted 
codes.
	SECTION 8.  This Act takes effect September 1, 2005.                           



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