By: Taylor (Senate Sponsor - Averitt) H.B. No. 1977

(In the Senate - Received from the House May 8, 2007; May 10, 2007, read first time and referred to Committee on State Affairs; May 18, 2007, reported adversely, with favorable Committee Substitute by the following vote: Yeas 8, Nays 0; May 18, 2007, sent to printer.)

COMMITTEE SUBSTITUTE FOR H.B. No. 1977 By: Lucio

A BILL TO BE ENTITLED

AN ACT

relating to the Texas Health Insurance Risk Pool.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter A, Chapter 1506, Insurance Code, is amended by adding Sections 1506.008 and 1506.009 to read as follows:

Sec. 1506.008. EXEMPTION FROM STATE TAXES AND FEES. The pool is not subject to any state tax, regulatory fee, or surcharge, including a premium or maintenance tax or fee.

Sec. 1506.009. STUDY; REPORT. (a) The commissioner shall conduct a study concerning a program under which the pool would offer coverage to an individual who is also covered under a group health benefit plan that is provided or offered to the individual through an employer. Under the proposed program, pool coverage would be secondary to coverage provided under the group health benefit plan.

(b) The commissioner, using existing resources, may contract with actuaries and other experts as necessary to conduct the study.

(c) The commissioner shall report the results of the study in the biennial report under Section 32.022. The report must:

(1) include an analysis of the advantages and disadvantages of the proposed program and recommended minimum standards applicable to group health benefit plans that may be included in the program; and

(2) identify program components, requirements, or restrictions necessary for successful implementation of the program.

(d) This section expires September 1, 2009.

SECTION 2. Section 1506.251, Insurance Code, is amended by adding Subsection (c) to read as follows:

(c) The regular assessment is the amount determined by the board under Section 1506.252 and recovered from health benefit plan issuers under Section 1506.253.

SECTION 3. Subchapter F, Chapter 1506, Insurance Code, is amended by adding Section 1506.2523 to read as follows:

Sec. 1506.2523. ANNUAL REPORT TO BOARD: GROSS PREMIUMS. (a) Each health benefit plan issuer shall report to the board the gross premiums collected for the preceding calendar year for health benefit plans.

(b) For purposes of this section, gross health benefit plan premiums do not include premiums collected for:

(1) coverage under a Medicare supplement benefit plan subject to Chapter 1652;

(2) coverage under a small employer health benefit plan subject to Subchapters A-H, Chapter 1501; or

(3) coverage or insurance listed in Section 1506.002(b).

SECTION 4. Section 1506.253(b), Insurance Code, is amended to read as follows:

(b) The board shall use the total number of enrolled individuals reported by all health benefit plan issuers under Section 1506.2522 as of the preceding December 31 to [To] compute the amount of a health benefit plan issuer's assessment, if any, in accordance with this subsection. The [the] board shall allocate [:

[(1) divide] the total amount to be assessed based on [by] the total number of enrolled individuals covered by excess loss, stop-loss, or reinsurance policies and on the total number of other enrolled individuals as determined [reported by all health benefit plan issuers] under Section 1506.2522. To compute the amount of a health benefit plan issuer's assessment:

(1) for the issuer's enrolled individuals covered by an excess loss, stop-loss, or reinsurance policy, the board shall:

(A) divide the allocated amount to be assessed by the total number of enrolled individuals covered by excess loss, stop-loss, or reinsurance policies, as determined under Section 1506.2522, [as of the preceding December 31] to determine the per capita amount; and

(B) multiply the number of a health benefit plan issuer's enrolled individuals covered by an excess loss, stop-loss, or reinsurance policy, as determined under Section 1506.2522, by the per capita amount to determine the amount assessed to that health benefit plan issuer; and

(2) for the issuer's enrolled individuals not covered by excess loss, stop-loss, or reinsurance policies, the board, using the gross health benefit plan premiums reported for the preceding calendar year by health benefit plan issuers under Section 1506.2523, shall:

(A) divide the gross premium collected by a health benefit plan issuer by the gross premium collected by all health benefit plan issuers; and

(B) multiply the allocated amount to be assessed by the fraction computed under Paragraph (A) [number of enrolled individuals reported by the health benefit plan issuer under Section 1506.2522 as of the preceding December 31 by the per capita amount] to determine the amount assessed to that health benefit plan issuer.

SECTION 5. Section 1506.008, Insurance Code, as added by this Act, applies only to a state tax, regulatory fee, or surcharge that becomes due on or after the effective date of this Act.

SECTION 6. The change in law made by this Act to Section 1506.253, Insurance Code, applies to an assessment under Subchapter F, Chapter 1506, Insurance Code, for a calendar year or portion of a calendar year beginning on the effective date of this Act. An assessment for any portion of a calendar year before the effective date of this Act is governed by the law in effect during the period for which the assessment is made, and the former law is continued in effect for that purpose.

SECTION 7. This Act takes effect June 30, 2007, if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary to take effect on that date, this Act takes effect September 30, 2007.

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