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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of short-term limited-duration health |
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insurance policies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 1201.104(a), Insurance Code, is amended |
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to read as follows: |
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(a) For individual accident and health insurance policies, |
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the commissioner shall adopt rules establishing minimum standards |
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for benefits under each of the following categories of coverage: |
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(1) basic hospital expense; |
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(2) basic medical-surgical expense; |
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(3) hospital indemnity or other fixed indemnity; |
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(4) major medical expense; |
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(5) disability income protection; |
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(6) accident only; |
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(7) specified disease; |
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(8) specified accident; [and] |
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(9) limited benefit; and |
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(10) short-term limited-duration health. |
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SECTION 2. Chapter 1201, Insurance Code, is amended by |
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adding Subchapter G to read as follows: |
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SUBCHAPTER G. SHORT-TERM LIMITED-DURATION HEALTH INSURANCE |
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Sec. 1201.301. DEFINITIONS. In this subchapter: |
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(1) "Health benefit exchange" has the meaning assigned |
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by Section 1369.201. |
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(2) "Short-term limited-duration health insurance |
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policy" means a health insurance policy under which coverage is |
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limited to fewer than 365 days in duration. |
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Sec. 1201.302. ADVERTISING DISCLOSURES REQUIRED. (a) An |
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insurer issuing a short-term limited-duration health insurance |
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policy shall display, on all sales and marketing materials, |
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including any Internet websites advertising or selling the policy, |
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the following statement in bold type at least 14-point in size: |
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"NOTICE: THIS SHORT-TERM LIMITED-DURATION INSURANCE POLICY |
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DOES NOT INCLUDE ALL ESSENTIAL HEALTH BENEFITS AS REQUIRED BY THE |
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AFFORDABLE CARE ACT. PREEXISTING CONDITIONS (ARE/ARE NOT) COVERED. |
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BE SURE TO CHECK YOUR POLICY CAREFULLY TO MAKE SURE YOU UNDERSTAND |
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WHAT THE POLICY DOES AND DOES NOT COVER. THIS POLICY CANNOT BE |
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RENEWED. WHEN THIS COVERAGE ENDS, YOU MIGHT HAVE TO WAIT UP TO A |
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YEAR UNTIL THE NEXT OPEN ENROLLMENT PERIOD TO GET OTHER HEALTH |
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COVERAGE. YOU MAY BE ABLE TO GET LONGER TERM INSURANCE WITH |
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ESSENTIAL HEALTH BENEFITS AND HELP TO PAY FOR IT AT (health benefit |
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exchange Internet website address)." |
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(b) An agent selling a short-term limited-duration health |
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insurance policy in person or through the telephone shall read out |
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loud the disclosure prescribed by Subsection (a) to a prospective |
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purchaser. |
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Sec. 1201.303. POLICY DISCLOSURE FORM. (a) The |
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commissioner by rule shall prescribe a disclosure form to be |
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provided with the short-term limited-duration health insurance |
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policy and the application. |
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(b) The disclosure form must be in an easily readable font |
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at least 14-point in size and include: |
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(1) the duration of coverage; |
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(2) a statement that: |
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(A) the policy may not be renewed; |
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(B) the expiration of short-term coverage does |
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not make a person eligible for a special enrollment period; and |
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(C) when the policy ends, the insured may have to |
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wait up to a year until the next open enrollment period; |
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(3) whether the policy covers preexisting conditions; |
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(4) the maximum dollar amount payable under the |
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policy; |
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(5) the deductibles under the policy and the health |
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care services to which the deductibles apply; |
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(6) whether common health care services are covered, |
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including: |
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(A) prescription drug coverage; |
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(B) mental health services; |
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(C) substance abuse treatment; |
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(D) maternity care; |
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(E) hospitalization; |
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(F) surgery; |
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(G) emergency health care; and |
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(H) preventive health care; and |
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(7) a statement that, before enrolling, an individual |
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should determine whether the individual is able to purchase |
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long-term health coverage through the health benefit exchange and |
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that the individual may be eligible for financial assistance to pay |
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for it. |
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(c) An insurer issuing a short-term limited-duration health |
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insurance policy shall adopt procedures in accordance with |
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commissioner rule to obtain a signed form from the insured |
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acknowledging receipt of the disclosure form described by this |
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section. The insurer shall retain the acknowledgment form until |
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the fifth anniversary of the date the insurer receives the form, and |
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the insurer shall make the form available to the department on |
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request. |
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Sec. 1201.304. DURATION. A short-term limited-duration |
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health insurance policy must expire not later than the 91st day |
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after the date the policy takes effect. |
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Sec. 1201.305. RENEWAL PROHIBITED; NEW POLICY LIMITATION. |
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(a) An insurer may not renew a short-term limited-duration health |
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insurance policy. |
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(b) An insurer may not issue a short-term limited-duration |
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health insurance policy to an individual covered by a short-term |
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limited-duration health insurance policy during the preceding 275 |
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days. |
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Sec. 1201.306. TERMINATION. (a) Except as provided by |
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Subsection (b), an insurer issuing a short-term limited-duration |
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health insurance policy may not terminate the policy before the |
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policy's expiration date except for nonpayment of premiums or |
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fraud. |
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(b) An insurer issuing a short-term limited-duration health |
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insurance policy shall provide an option under the policy for the |
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insured to cancel the policy effective after each 30-day interval |
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after the effective date of coverage. |
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Sec. 1201.307. ADVERTISING FILING REQUIREMENTS. An insurer |
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that advertises or issues a short-term limited-duration health |
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insurance policy shall file for informational purposes with the |
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department a copy of any sales or marketing materials for the policy |
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that the insurer intends to use in this state. |
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SECTION 3. Subchapter B, Chapter 1701, Insurance Code, is |
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amended by adding Section 1701.0525 to read as follows: |
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Sec. 1701.0525. APPROVAL REQUIRED FOR CERTAIN DOCUMENTS. |
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Notwithstanding Section 1701.052, an insurer may not use a document |
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described by Section 1701.002 until the document has been approved |
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by the commissioner if the document relates to a short-term |
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limited-duration health insurance policy as defined by Section |
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1201.301. |
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SECTION 4. Not later than January 1, 2020, the commissioner |
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of insurance shall adopt rules necessary to implement Section |
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1201.104, Insurance Code, as amended by this Act, and Subchapter G, |
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Chapter 1201, Insurance Code, as added by this Act. |
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SECTION 5. Subchapter G, Chapter 1201, and Section |
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1701.0525, Insurance Code, as added by this Act, apply only to an |
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insurance policy delivered, issued for delivery, or renewed on or |
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after January 1, 2020. An insurance policy delivered, issued for |
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delivery, or renewed before January 1, 2020, is governed by the law |
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as it existed immediately before the effective date of this Act, and |
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that law is continued in effect for that purpose. |
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SECTION 6. This Act takes effect September 1, 2019. |