86R28295 SMT-F
 
  By: Lucio III H.B. No. 2507
 
  Substitute the following for H.B. No. 2507:
 
  By:  Lucio III C.S.H.B. No. 2507
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the regulation of short-term limited-duration
  insurance policies providing health insurance coverage.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 1201.104(a), Insurance Code, is amended
  to read as follows:
         (a)  For individual accident and health insurance policies,
  the commissioner shall adopt rules establishing minimum standards
  for benefits under each of the following categories of coverage:
               (1)  basic hospital expense;
               (2)  basic medical-surgical expense;
               (3)  hospital indemnity or other fixed indemnity;
               (4)  major medical expense;
               (5)  disability income protection;
               (6)  accident only;
               (7)  specified disease;
               (8)  specified accident; [and]
               (9)  limited benefit; and
               (10)  short-term limited-duration insurance.
         SECTION 2.  Chapter 1201, Insurance Code, is amended by
  adding Subchapter G to read as follows:
  SUBCHAPTER G.  SHORT-TERM LIMITED-DURATION INSURANCE
         Sec. 1201.301.  DEFINITIONS.  In this subchapter:
               (1)  "Health benefit exchange" has the meaning assigned
  by Section 1369.201.
               (2)  "Short-term limited-duration insurance" has the
  meaning assigned by 26 C.F.R. Section 54.9801-2.
         Sec. 1201.302.  ADVERTISING DISCLOSURES REQUIRED. (a)  An
  insurer issuing a short-term limited-duration insurance policy
  shall display, on all sales and marketing materials, including any
  Internet websites advertising or selling the policy, the applicable
  notice under 26 C.F.R. Section 54.9801-2, including any
  modifications to the notice prescribed by the commissioner under
  Subsection (d).
         (b)  An agent selling a short-term limited-duration
  insurance policy in person or through the telephone shall read out
  loud the disclosure required by Subsection (a) to a prospective
  purchaser.
         (c)  The commissioner shall by rule prescribe a procedure to
  communicate the disclosure required by Subsection (a) to a
  prospective purchaser of a short-term limited-duration insurance
  policy on an Internet website that is substantially equivalent to
  an agent reading the disclosure aloud.
         (d)  The commissioner may by rule prescribe modifications to
  the notice under 26 C.F.R. Section 54.9801-2 for the purpose of
  making the notice more readable.
         Sec. 1201.303.  POLICY DISCLOSURE FORM. (a)  The
  commissioner by rule shall prescribe a disclosure form to be
  provided with the short-term limited-duration insurance policy and
  the application. 
         (b)  The disclosure form must be in an easily readable font
  at least 14-point in size and include:
               (1)  the duration of coverage;
               (2)  a statement that:
                     (A)  the policy may be renewed only [x] times/may
  not be renewed;
                     (B)  the expiration of short-term coverage is not
  a qualifying life event that would make a person eligible for a
  special enrollment period; and
                     (C)  the policy may expire outside of the open
  enrollment period;
               (3)  to the extent the information is available, the
  dates of the next three open enrollment periods under the federal
  Affordable Care Act following the date the policy expires;
               (4)  whether the policy contains any limitations or
  exclusions to preexisting conditions;
               (5)  the maximum dollar amount payable under the
  policy;
               (6)  the deductibles under the policy and the health
  care services to which the deductibles apply;
               (7)  whether the following health care services are
  covered, including:
                     (A)  prescription drug coverage;
                     (B)  mental health services;
                     (C)  substance abuse treatment;
                     (D)  maternity care;
                     (E)  hospitalization;
                     (F)  surgery;
                     (G)  emergency health care; and
                     (H)  preventive health care; and
               (8)  any other information the commissioner determines
  is important for a purchaser of a short-term limited-duration
  insurance policy.
         (c)  An insurer issuing a short-term limited-duration
  insurance policy shall adopt procedures in accordance with
  commissioner rule to obtain a signed form from the insured
  acknowledging receipt of the disclosure form described by this
  section. The rule must allow for electronic acknowledgment.  The
  insurer shall retain an acknowledgment form until the fifth
  anniversary of the date the insurer receives the form, and the
  insurer shall make the form available to the department on request. 
         Sec. 1201.304.  RENEWAL LIMITATION.  (a)  An insurer may not
  advertise or describe a short-term limited-duration insurance
  policy as renewable unless:
               (1)  the policy provides that during the initial term
  and any renewal period, the insurer may not change a material term
  in the policy without the consent of the policyholder; and
               (2)  the policy is renewable at the sole option of the
  policyholder. 
         (b)  This subsection does not limit the right of an insurer
  to make changes in premium rates by class. 
         Sec. 1201.305.  TERMINATION. (a)  Except as provided by
  Subsection (b), an insurer issuing a short-term limited-duration
  insurance policy may not terminate the policy before the policy's
  expiration date except:
               (1)  for nonpayment of premiums; or
               (2)  because the policyholder has performed an act or
  practice that constitutes fraud or has made an intentional
  misrepresentation of a material fact relating to the policy.
         (b)  An insurer issuing a short-term limited-duration
  insurance policy shall provide an option under the policy for the
  insured to cancel the policy effective after each 30-day interval
  after the effective date of coverage. 
         SECTION 3.  Not later than January 1, 2020, the commissioner
  of insurance shall adopt rules necessary to implement Section
  1201.104, Insurance Code, as amended by this Act, and Subchapter G,
  Chapter 1201, Insurance Code, as added by this Act.
         SECTION 4.  Subchapter G, Chapter 1201, Insurance Code, as
  added by this Act, applies only to an insurance policy delivered,
  issued for delivery, or renewed on or after January 1, 2020. An
  insurance policy delivered, issued for delivery, or renewed before
  January 1, 2020, is governed by the law as it existed immediately
  before the effective date of this Act, and that law is continued in
  effect for that purpose.
         SECTION 5.  This Act takes effect September 1, 2019.