BILL ANALYSIS
Senate Research Center S.B. 842
81R4286 PMO-F By: Averitt
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Health care sharing organizations exist that allow participants of similar faith and sincere religious beliefs to voluntarily assist fellow participants with the payment of medical expenses. In many instances, participants of a health care sharing organization provide assistance to individuals who are without health insurance coverage and, in doing so, provide important services that the state would otherwise have to provide.
There has been some debate regarding whether these health care sharing organizations are subject to insurance laws and discount health care program laws. Some believe that these laws would interfere with the religious practices of participants in health care sharing organizations, and that Due to their beneficial work and religious nature, health care sharing organizations should be statutorily recognized as religious organizations helping to fulfill the religious beliefs of organization participants and should not be treated in the same manner as secular health care coverages, including insurance. In addition, the Texas Religious Freedom Restoration Act, Chapter 110 (Religious Freedom), Texas Civil Practice and Remedies Code, protects participants' free exercise of religion and states that a government agency may not substantially burden a person's free exercise of religion. Similar legislation already exists in Florida, Iowa, Kansas, Kentucky, Maryland, Missouri, Oklahoma, Pennsylvania, Utah, Virginia, and Wisconsin. The American Legislative Exchange Council also has adopted a model act called the "Health Care Sharing Ministries Freedom to Share Act."
As proposed, S.B. 842 provides for the operation of health care sharing organizations in Texas to provide noninsurance health coverages.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Provides that participants of a health care sharing organization voluntarily assist fellow participants with the payment of medical expenses. Provides that in many instances, participants of a health care sharing organization provide assistance to individuals who are without health insurance coverage and, in doing so, provide important services that the state would otherwise have to provide. Provides that due to their beneficial work and religious nature, health care sharing organizations should be statutorily recognized as religious organizations helping to fulfill the religious beliefs of organization participants and should not be treated in the same manner as secular health care coverages, including insurance.
SECTION 2. Amends Title 8, Insurance Code, by adding Subtitle K, as follows:
SUBTITLE K. NONINSURANCE HEALTH COVERAGES
CHAPTER 1680. HEALTH CARE SHARING ORGANIZATIONS
Sec. 1680.001. SHORT TITLE. Authorizes this chapter to be cited as the Health Care Sharing Organizations Freedom to Share Act.
Sec. 1680.002. DEFINITION. Defines "health care sharing organization."
Sec. 1680.003. POWERS. Authorizes a health care sharing organization to act as a facilitator among participants who have financial or medical-related needs and participants with the present ability to assist those with financial or medical-related needs, all in accordance with the health care sharing organization's criteria, through payments from one participant to another; notify a participant of sharing amounts; establish additional qualifications of participation in the health care sharing arrangement; limit the financial or medical-related needs that may be eligible for payment among the participants; cancel a participant's participation in the health care sharing arrangement if the participant fails to make a specific payment to another participant before the 60th day after the date payment is due; and provide a written monthly statement to all participants listing the total dollar amount of qualified needs submitted to the organization as well as the total dollar amount actually assigned to participants for sharing.
Sec. 1680.004. NOTICE. Requires that each application for participation in a health care sharing arrangement distributed directly or on behalf of the health care sharing organization include a notice that is printed in no smaller than 12-point font and that reads substantially as follows, "This health care sharing organization is not offering an insurance product and the health care sharing arrangement is not being offered by or through an insurance company. This health care sharing organization is also not offering a discount health care program. Whether anyone who chooses to assist you with your medical bills is voluntary, as no other participant may be compelled to share payment of your medical bills. This health care share arrangement is not insurance or a substitute for insurance. Whether you receive any payments for medical expenses and whether this health care sharing organization or arrangement continues to operate, you remain, to the extent allowable under law, personally and fully responsible for the payment of your own medical bills."
Sec. 1680.005. DUTIES. (a) Requires a health care sharing organization to require any adult member to sign on behalf of the participant or, in the case of a minor or dependent child, an acknowledgment that the member has read and understands the notice described by Section 1680.004.
(b) Requires a health care sharing organization to retain the signed acknowledgment described by Subsection (a) until the second anniversary of the last date of the participant's participation in the health care sharing arrangement.
Sec. 1680.006. CONSTRUCTION WITH OTHER LAW. (a) Provides that Chapter 76 (Discount Health Care Programs), Health and Safety Code, does not apply to a health care sharing organization.
(b) Provides that notwithstanding any other provision of this code, a health care sharing organization is exempt from the operation of the insurance laws of this state and is not subject to the oversight of the commissioner of insurance.
Sec. 1680.007. ENFORCEMENT BY ATTORNEY GENERAL. Provides that, notwithstanding any other law, the office of the attorney general (OAG) has jurisdiction over health care sharing organizations to ensure compliance with this chapter and for the prevention and prosecution of deceptive trade practices and fraud, and consumer protection.
Sec. 1680.008. NO ASSUMPTION OF RISK. Provides that participants in a health care sharing arrangement and the health care sharing organization do not assume any risk or make any promise to pay the financial or medical-related needs of other participants, and none of the activities in this chapter give rise to an assumption of risk or promise to pay by either the participants or the health care sharing organization.
Sec. 1680.009. PAYMENT AMONG PARTICIPANTS. Authorizes the means of payment among participants to include an electronic transfer or a distribution from a trust established solely for the participants' benefit and that is audited annually by an independent auditing firm.
Sec. 1680.010. COLLATERAL SHARING ACTIVITIES. Authorizes a health care sharing organization to arrange for participants to share bills when a participant experiences disability and provide health counseling, education, and resources to participants in the health care sharing arrangement.
Sec. 1680.011. CONTRACTUAL ARRANGEMENTS WITH OTHER ENTITIES. Authorizes a health care sharing organization to contract with an administrator as defined by Chapter 4151 (Third-Party Administrators), Insurance Code, or a preferred provider organization or similar entity to facilitate the operation of the organization.
SECTION 3. Amends Section 101.055(a), Insurance Code, as follows:
(a) Provides that Section 101.051(b)(7) (regarding contracting to provide indemnification or expense reimbursement for a medical expense by direct payment, reimbursement, or otherwise to a person domiciled in this state or for a risk located in this state, whether as an insurer, agent, administrator, trust, or funding mechanism or by another method) does not apply to a health care sharing organization operated under Chapter 1680. Makes nonsubstantive changes.
SECTION 4. Amends Section 76.002, Health and Safety Code, as follows:
Sec. 76.002. New heading: CONSTRUCTION WITH OTHER LAW. (a) Creates this subsection from existing text.
(b) Provides that this chapter does not apply to a health care sharing organization operated under Chapter 1680, Insurance Code.
SECTION 5. Effective date: upon passage or September 1, 2009.