By: Duncan S.B. No. 1367

A BILL TO BE ENTITLED

AN ACT

relating to abolishing the Texas Health Insurance Pool.

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

SECTION 1. DEFINITIONS. In this Act:

(1) "Board" means the board of directors of the pool.

(2) "Commissioner" means the commissioner of insurance.

(3) "Department" means the Texas Department of Insurance.

(4) "Health benefit exchange" has the meaning assigned by Section 1369.201, Insurance Code.

(5) "Pool" means the Texas Health Insurance Pool established under Chapter 1506, Insurance Code, as that chapter existed before its repeal by this Act.

SECTION 2. PLAN FOR DISSOLUTION. As soon as practicable after the effective date of this Act, the board shall:

(1) develop a plan for:

(A) dissolving the board and the pool after the pool's obligations to issue and continue health benefit coverage terminate under Sections 3 and 4 of this Act; and

(B) transferring to the commissioner and the department:

(i) any continuing obligations of the board and the pool;

(ii) any assets of the pool;

(iii) any rights of the board or the pool that accrued before the dissolution of the board or the pool or that accrue with respect to coverage issued by the pool before the pool's dissolution; and

(iv) any authority previously held by the board the continuation of which is necessary or appropriate; and

(2) submit the plan to the commissioner for the commissioner's approval.

SECTION 3. ACCEPTANCE OF ENROLLEES. (a) The latest date on which the pool may issue health benefit coverage is the later of:

(1) December 31, 2013; or

(2) the earliest date on which health benefit coverage is reasonably available on a guaranteed issue basis through a health benefit exchange to each class of individuals eligible for health benefit coverage through the pool immediately before the effective date of this Act, as determined by the commissioner.

(b) Notwithstanding Section 1251.255(b), Section 1271.305, and Sections 1506.007(a-1) and (a-2), Insurance Code, an insurer, health maintenance organization, or other health benefit plan issuer is not required to give notice under those sections on or after the date on which the pool is no longer required to issue health benefit coverage.

SECTION 4. TERMINATION OF POOL COVERAGE. Health benefit coverage that is issued to an individual by the pool and that is otherwise in force terminates on the later of:

(1) January 1, 2014; or

(2) the earliest date on which the individual:

(A) is enrolled in comparable health benefit coverage, as determined by the commissioner; or

(B) could reasonably be expected to have obtained health benefit coverage on a guaranteed issue basis through a health benefit exchange, as determined by the commissioner.

SECTION 5. SATISFACTION OF COVERAGE OBLIGATIONS INCURRED UNDER PREVIOUS POOL COVERAGE. The department shall, on dissolution of the pool, accept and process claims for payment of obligations incurred under health benefit coverage previously issued by the pool and pay any obligations of the pool incurred under that coverage.

SECTION 6. EXERCISE OF POOL'S RECOVERY RIGHTS. The department may exercise any authority to recover overpayments or other amounts the pool would have been authorized to recover or collect had the pool not been dissolved, including amounts recoverable under the pool's subrogation rights.

SECTION 7. TRANSFER OF CERTAIN FUNDS; ASSESSMENT AUTHORITY CONTINUED. (a) Any fund in which money belonging to the pool is kept and any other assets of the pool shall be transferred to the department on dissolution of the pool. That money and any other money recovered or otherwise collected by the department under this Act on behalf of the pool shall be used by the department to satisfy obligations of the pool in accordance with this Act, Chapter 1506, Insurance Code, as that chapter existed before its repeal by this Act, and the dissolution plan.

(b) The authority of the board to make assessments under Subchapter F, Chapter 1506, Insurance Code, as that subchapter existed before its repeal by this Act, is continued and may be exercised by the commissioner until the commissioner determines that all financial obligations of the board and the pool have been satisfied.

(c) When the commissioner determines that all financial obligations of the board and the pool have been satisfied, the commissioner shall make a final accounting with respect to pool finances and:

(1) make any necessary final assessment under this section; or

(2) refund any surplus assessments or other surplus money collected on behalf of the pool, other than money described by Subsection (d) of this section:

(A) on a pro rata basis to the health benefit plan issuers that paid the assessments to the extent possible; or

(B) on another equitable basis to the extent pro rata refunds are not possible.

(d) If money paid or payable under Sections 843.342(m) and 1301.137(l), Insurance Code, is no longer necessary to finance premium discounts as prescribed by Section 1506.260, Insurance Code, as that section existed immediately before the effective date of this Act, and no other use is prescribed for that money by another Act of the legislature, the money shall be directed, at the commissioner's discretion, to the fund established under Subchapter F, Chapter 1508, Insurance Code, for a purpose provided by that subchapter or to the corporation established under Chapter 182, Health and Safety Code, for a purpose provided by that chapter.

SECTION 8. DELAYED IMPLEMENTATION. The commissioner by rule may delay the implementation of any part of Sections 1-7 of this Act or the pool dissolution plan established under this Act if:

(1) the guaranteed issue of health benefit coverage is delayed;

(2) the operation of a health benefit exchange in this state is delayed; or

(3) the commissioner determines that health benefit coverage expected to be available on a guaranteed issue basis to a class of individuals eligible for coverage under Chapter 1506, Insurance Code, immediately before the effective date of this Act, is not reasonably available to those individuals in this state.

SECTION 9. REPEALER. Effective September 1, 2015, the following laws are repealed:

(1) Chapter 1506, Insurance Code;

(2) Section 1251.255(b), Insurance Code; and

(3) Section 1271.305, Insurance Code.

SECTION 10. EFFECTIVE DATE. 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, 2013.