|
|
|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to consumer labeling requirements for certain health |
|
benefit plans; providing penalties. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. PURPOSE AND FINDINGS. The legislature finds |
|
that health care coverage is one of the most important purchases |
|
many Texans make, yet basic information that allows comparison |
|
between health benefit plans is difficult to find, if the |
|
information is available at all. Further, the large number of |
|
health benefit plans available in Texas with differing benefits, |
|
exclusions, and costs creates a complex array of information that |
|
complicates consumer decision making. The legislature further |
|
finds that important information typically considered to be |
|
indecipherable in health benefit plan documents must be brought to |
|
consumers' attention. A standard labeling requirement is, |
|
therefore, necessary to allow consumers to gain the information |
|
needed to make reasoned health benefit plan purchases. |
|
SECTION 2. Chapter 541, Insurance Code, is amended by |
|
adding Subchapter K to read as follows: |
|
SUBCHAPTER K. REQUIRED LABELING FOR HEALTH BENEFIT PLANS |
|
Sec. 541.501. DEFINITIONS. In this subchapter: |
|
(1) "Direct losses incurred" means the sum of direct |
|
losses paid plus an estimate of losses to be paid in the future for |
|
all claims arising from all prior and current reporting periods, |
|
minus the corresponding estimate made at the close of business for |
|
the preceding period. This amount does not include home office and |
|
overhead costs, advertising costs, commissions and other |
|
acquisition costs, taxes, capital costs, administrative costs, |
|
utilization review costs, or claims processing costs. |
|
(2) "Direct losses paid" means the sum of all payments |
|
made during the reporting period for claimants before reinsurance |
|
has been ceded or assumed. This amount does not include home office |
|
and overhead costs, advertising costs, commissions and other |
|
acquisition costs, taxes, capital costs, administrative costs, |
|
utilization review costs, or claims processing costs. |
|
(3) "Direct premiums earned" means the amount of |
|
premium attributable to the coverage already provided in a given |
|
period before reinsurance has been ceded or assumed. |
|
(4) "Enrollee" means an individual who is eligible to |
|
receive health care services under a health benefit plan. |
|
(5) "Insurance facts label" means a notice that |
|
complies with the requirements of this subchapter. |
|
Sec. 541.502. APPLICABILITY OF SUBCHAPTER. This subchapter |
|
applies to any health benefit plan that: |
|
(1) provides benefits for medical or surgical expenses |
|
incurred as a result of a health condition, accident, or sickness, |
|
including an individual, group, blanket, or franchise insurance |
|
policy or insurance agreement, a group hospital service contract, |
|
or an individual or group evidence of coverage that is offered by: |
|
(A) an insurance company; |
|
(B) a group hospital service corporation |
|
operating under Chapter 842; |
|
(C) a fraternal benefit society operating under |
|
Chapter 885; |
|
(D) a stipulated premium company operating under |
|
Chapter 884; |
|
(E) a health maintenance organization operating |
|
under Chapter 843; |
|
(F) a multiple employer welfare arrangement that |
|
holds a certificate of authority under Chapter 846; |
|
(G) an approved nonprofit health corporation |
|
that holds a certificate of authority under Chapter 844; or |
|
(H) an entity not authorized under this code or |
|
another insurance law of this state that contracts directly for |
|
health care services on a risk-sharing basis, including a |
|
capitation basis; or |
|
(2) provides health and accident coverage through a |
|
risk pool created under Chapter 172, Local Government Code, |
|
notwithstanding Section 172.014, Local Government Code, or any |
|
other law. |
|
Sec. 541.503. INSURANCE FACTS LABEL REQUIRED; NOTICE OF |
|
LABEL REQUIRED. (a) The following written communications must |
|
contain an insurance facts label: |
|
(1) a document used by a health benefit plan issuer to |
|
advertise a health benefit plan; |
|
(2) a written communication, other than an explanation |
|
of benefits, from a health benefit plan issuer to an enrollee; and |
|
(3) a written communication from a health benefit plan |
|
issuer to a potential enrollee. |
|
(b) The following communications, if made for the purpose of |
|
advertising a health benefit plan, must include the phrase "Check |
|
our label at:" followed by the Internet website address where a |
|
health benefit plan issuer's insurance facts label can be viewed: |
|
(1) a television or radio advertisement; |
|
(2) a billboard advertisement; |
|
(3) an advertisement published or posted on the |
|
Internet; and |
|
(4) any nonwritten media not otherwise described in |
|
this section. |
|
Sec. 541.504. GENERAL FORMAT OF INSURANCE FACTS LABEL. (a) |
|
An insurance facts label must include a box outline that contains |
|
only white background. |
|
(b) An insurance facts label must: |
|
(1) be conspicuous and not less than three inches in |
|
height and two inches in width; |
|
(2) be enclosed by a one-half point box rule within |
|
three points of text measure; and |
|
(3) separate all lines of text by two points, leading |
|
above and below. |
|
(c) The phrase "Insurance Facts" must: |
|
(1) appear in a widely used sans serif font that is no |
|
smaller than 13 point; and |
|
(2) be located inside and at the top of the box to fit |
|
the width of the label flush left and right. |
|
(d) The health benefit plan name and the name of the company |
|
must: |
|
(1) appear in a widely used sans serif font that is no |
|
smaller than 10 point; and |
|
(2) be located immediately below the phrase "Insurance |
|
Facts" and separated from the phrase "Insurance Facts" by a |
|
seven-point rule. |
|
(e) Any disclaimer or other information not otherwise |
|
required to appear at a specific location on the label by this |
|
subchapter must appear in a widely used sans serif font that is no |
|
smaller than six point and located at the bottom of the label box. |
|
Sec. 541.505. REQUIRED HEADINGS; FORMAT. (a) An insurance |
|
facts label must contain the following headings: |
|
(1) "Monthly Premium"; |
|
(2) "Percent of Expense Paid by Plan In-Network"; |
|
(3) "Percent of Expense Paid by Plan Out-of-Network"; |
|
(4) "Annual Out-of-Pocket Expense (est.)"; |
|
(5) "Your Total Annual Cost (est.)"; |
|
(6) "Justified Complaints"; |
|
(7) "Premium to Direct Patient Care Ratio"; |
|
(8) "Expected Profit"; and |
|
(9) "Benefit Levels." |
|
(b) The headings described by this section must be flush |
|
left in the label box and appear in a widely used sans serif font |
|
that is no smaller than eight point. |
|
(c) "Monthly Premium" must be the first heading and must be: |
|
(1) located immediately below the health benefit plan |
|
and health benefit plan issuer name; and |
|
(2) separated from all other headings by a three-point |
|
rule. |
|
(d) A numeric value that corresponds to a heading must |
|
appear flush right in a widely used sans serif font that is no |
|
smaller than eight point. |
|
(e) Any heading that is immediately followed by a disclaimer |
|
or information other than another heading or a subheading must be |
|
separated from the disclaimer or other information by a seven-point |
|
rule. |
|
(f) Each heading must be separated from another heading and |
|
any applicable subheadings by a one-quarter-point rule. |
|
Sec. 541.506. REQUIRED HEADINGS; DEFINITIONS. For the |
|
purposes of Section 541.505, the following terms have the following |
|
meanings: |
|
(1) "Monthly Premium" means the average dollar amount |
|
an enrollee pays each month for coverage under a health benefit |
|
plan. |
|
(2) "Percent of Expense Paid by Plan In-Network" means |
|
the percentage of a submitted charge for an in-network service that |
|
a health benefit plan pays. |
|
(3) "Percent of Expense Paid by Plan Out-of-Network" |
|
means the percentage of a submitted charge a health benefit plan |
|
pays for services provided out-of-network. |
|
(4) "Annual Out-of-Pocket Expense (est.)" means the |
|
estimated dollar amount of the cost incurred by a consumer with |
|
average health care needs over 12 months. "Average health care |
|
need" means health care service required by a health benefit plan's |
|
enrollees under 60 years of age who: |
|
(A) were not required to pass a medical |
|
examination for coverage; or |
|
(B) were required to pass a medical examination |
|
by the health benefit plan, if the plan requires all enrollees to |
|
pass a medical examination. |
|
(5) "Your Total Annual Cost (est.)" is the dollar |
|
amount of the sum of annual out-of-pocket expense estimate and |
|
annual premium. |
|
(6) "Justified Complaints" means complaints for the |
|
previous two years submitted to the department against a health |
|
benefit plan issuer for which the department determined that: |
|
(A) after examination and investigation, a |
|
violation of a policy provision, contract provision, rule, or |
|
statute occurred; or |
|
(B) a prudent layperson may regard a practice or |
|
service below customary business practice. |
|
(7) "Premium to Direct Patient Care Ratio" means the |
|
ratio of a health benefit plan's direct losses incurred to the |
|
direct premiums earned. |
|
(8) "Expected Profit" means the actuarially set |
|
percentage of premium allowed for profit. |
|
(9) "Benefit Levels" means the dollar value of the |
|
items listed in Section 541.507(a)(1)-(13). |
|
Sec. 541.507. REQUIRED SUBHEADINGS; FORMAT. (a) |
|
Subheadings under the "Benefit Levels" heading must disclose the |
|
dollar value provided by the underlying certificate, policy, or |
|
contract, and must be as follows: |
|
(1) "Annual Deductible"; |
|
(2) "Annual Family Deductible"; |
|
(3) "Annual In-Network Deductible"; |
|
(4) "Annual Out-of-Network Deductible"; |
|
(5) "Out-of-Pocket Maximum"; |
|
(6) "Office Visit Copayment" listed separately for |
|
primary care providers and specialists; |
|
(7) "Prescription Copayment"; |
|
(8) "Lifetime Maximum Benefit"; |
|
(9) "Emergency Room Visit Copayment"; |
|
(10) "Number of Electric Wheelchairs per Lifetime"; |
|
(11) "Outpatient Surgery Copayment"; |
|
(12) "Inpatient Cost Sharing"; and |
|
(13) "Number of Justified Complaints." |
|
(b) Each subheading required by this section must be |
|
indented six points from the left and appear in a widely used sans |
|
serif font that is no smaller than eight point. |
|
(c) A numeric value that corresponds to a subheading must |
|
appear flush right in a widely used sans serif font that is no |
|
smaller than eight point. |
|
(d) Each subheading must be separated from another |
|
subheading and the heading "Monthly Premium" by a one-quarter-point |
|
rule. |
|
Sec. 541.508. RULES. (a) The commissioner may: |
|
(1) require differing titles, headings, and |
|
subheadings as may otherwise be required by this subchapter as |
|
necessary to prevent confusion between insurance and noninsurance |
|
products; and |
|
(2) adopt rules as necessary to implement and |
|
administer this subchapter. |
|
(b) The commissioner shall adopt rules regulating: |
|
(1) the use of insurance and noninsurance terms in the |
|
insurance facts label to prevent confusion in the marketplace |
|
between insurance and noninsurance products; |
|
(2) the manner in which a health benefit plan may use |
|
space available in the label box after disclosure of the consumer |
|
information required by this subchapter; |
|
(3) allowable disclaimers below the headings and |
|
subheadings on the label; and |
|
(4) the format for a label containing information |
|
about a multiple health benefit plan. |
|
Sec. 541.509. REMEDIES AND ENFORCEMENT. (a) A violation of |
|
this subchapter is an unfair and deceptive act or practice in the |
|
business of insurance under this chapter. |
|
(b) The department may examine records and investigate to |
|
determine whether a violation of this subchapter has occurred. |
|
(c) All procedures, settlements, sanctions, and penalties |
|
provided under Subchapters C, E, G, and H are available under this |
|
subchapter. |
|
SECTION 3. This Act takes effect immediately 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 for immediate effect, this |
|
Act takes effect September 1, 2009. |