| |
| |
|
|
A BILL TO BE ENTITLED
|
|
|
AN ACT
|
|
|
relating to creation of the Texas Health Insurance Exchange; |
|
|
authorizing a fee. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Subtitle G, Title 8, Insurance Code, is amended |
|
|
by adding Chapter 1511 to read as follows: |
|
|
CHAPTER 1511. TEXAS HEALTH INSURANCE EXCHANGE |
|
|
SUBCHAPTER A. GENERAL PROVISIONS |
|
|
Sec. 1511.001. DEFINITIONS. In this chapter: |
|
|
(1) "Board" means the board of directors of the |
|
|
exchange. |
|
|
(2) "Exchange" means the Texas Health Insurance |
|
|
Exchange. |
|
|
(3) "Executive commissioner" means the executive |
|
|
commissioner of the Health and Human Services Commission. |
|
|
(4) "Qualified health plan" means a health benefit |
|
|
plan that has been certified by the board as meeting the criteria |
|
|
established under Section 1311(c), Patient Protection and |
|
|
Affordable Care Act (42 U.S.C. Section 18031(c)). |
|
|
(5) "Secretary" means the secretary of the United |
|
|
States Department of Health and Human Services. |
|
|
Sec. 1511.002. PURPOSE. The purpose of this chapter is to |
|
|
create, manage, and maintain the exchange to: |
|
|
(1) benefit the state health insurance market and |
|
|
individuals enrolling in health benefit plans; |
|
|
(2) facilitate or assist in facilitating the |
|
|
purchasing of qualified health plans on the exchange by qualified |
|
|
enrollees in the individual market or the individual and small |
|
|
group markets; and |
|
|
(3) minimize barriers to enrollment in qualified |
|
|
health plans offered on the exchange. |
|
|
Sec. 1511.003. TREATMENT OF EMPLOYERS. (a) For purposes of |
|
|
this chapter, "small employer" means a person who employed at least |
|
|
two, and an average of not more than 50 employees during the |
|
|
preceding calendar year. |
|
|
(b) All persons treated as a single employer under Section |
|
|
414(b), (c), (m), or (o), Internal Revenue Code of 1986, are single |
|
|
employers for purposes of this chapter. |
|
|
(c) An employer and any predecessor employer are a single |
|
|
employer for purposes of this chapter. |
|
|
(d) In determining the number of employees of an employer |
|
|
under this section, the number of employees: |
|
|
(1) includes part-time employees and employees who are |
|
|
not eligible for coverage through the employer; and |
|
|
(2) for an employer that did not have employees during |
|
|
the entire preceding calendar year, is the average number of |
|
|
employees that the employer is reasonably expected to employ on |
|
|
business days in the current calendar year. |
|
|
(e) A small employer that makes enrollment in qualified |
|
|
health plans available to its employees through the exchange and |
|
|
ceases to be a small employer by reason of an increase in the number |
|
|
of its employees continues to be a small employer for purposes of |
|
|
this chapter as long as it continuously makes enrollment through |
|
|
the exchange available to its employees. |
|
|
Sec. 1511.004. RULEMAKING AUTHORITY. The board may adopt |
|
|
rules necessary and proper to implement this chapter. Rules adopted |
|
|
under this section may not conflict with or prevent the application |
|
|
of regulations promulgated by the secretary under the Patient |
|
|
Protection and Affordable Care Act (Pub. L. No. 111-148). |
|
|
Sec. 1511.005. AGENCY COOPERATION. (a) The exchange, the |
|
|
department, and the Health and Human Services Commission shall |
|
|
cooperate fully in performing their respective duties under this |
|
|
code or another law of this state relating to the operation of the |
|
|
exchange. |
|
|
(b) The Health and Human Services Commission shall |
|
|
cooperate and coordinate with the exchange to ensure eligibility |
|
|
systems are able to communicate and are sufficiently integrated to |
|
|
facilitate a seamless user experience. |
|
|
Sec. 1511.006. THIRD PARTY AUDIT OF EXCHANGE SYSTEM. (a) |
|
|
Before the initial open enrollment period for the exchange, the |
|
|
board shall engage an independent third party audit team that |
|
|
specializes in exchange system technology to: |
|
|
(1) verify and validate new technology functionality |
|
|
throughout the design, development, and implementation phases of |
|
|
the exchange system to ensure the system is working as designed and |
|
|
intended; and |
|
|
(2) provide to the board a report on the team's |
|
|
findings. |
|
|
(b) The earliest initial enrollment period for the exchange |
|
|
may not begin until after the board receives the audit team's report |
|
|
under Subsection (a). |
|
|
Sec. 1511.007. EXEMPTION FROM STATE TAXES AND FEES. The |
|
|
exchange is not subject to any state tax, regulatory fee, or |
|
|
surcharge, including a premium or maintenance tax or fee. |
|
|
Sec. 1511.008. COMPLIANCE WITH FEDERAL LAW. The exchange |
|
|
shall comply with all applicable federal law and regulations. |
|
|
Sec. 1511.009. EXEMPTION FROM STATE PURCHASING PROCEDURES. |
|
|
The exchange is not subject to state purchasing or procurement |
|
|
requirements under Subtitle D, Title 10, Government Code, or any |
|
|
other law. |
|
|
SUBCHAPTER B. ESTABLISHMENT AND GOVERNANCE |
|
|
Sec. 1511.051. ESTABLISHMENT. The Texas Health Insurance |
|
|
Exchange is established as an American Health Benefit Exchange and |
|
|
a Small Business Health Options Program (SHOP) Exchange authorized |
|
|
and required by Section 1311, Patient Protection and Affordable |
|
|
Care Act (42 U.S.C. Section 18031). |
|
|
Sec. 1511.052. GOVERNANCE OF EXCHANGE; BOARD MEMBERSHIP. |
|
|
(a) The exchange is governed by a board of directors. |
|
|
(b) The board consists of the following 11 members: |
|
|
(1) nine members appointed as follows: |
|
|
(A) three members appointed by the governor; |
|
|
(B) three additional members appointed by the |
|
|
governor from a list of nominees submitted by the speaker of the |
|
|
house of representatives; and |
|
|
(C) three members appointed by the lieutenant |
|
|
governor; and |
|
|
(2) two ex officio, nonvoting members as follows: |
|
|
(A) the commissioner or the commissioner's |
|
|
designee; and |
|
|
(B) the executive commissioner or the executive |
|
|
commissioner's designee. |
|
|
(c) In making appointments or nominations under this |
|
|
section, the governor, lieutenant governor, and speaker of the |
|
|
house of representatives must include representation from |
|
|
participating health plans, consumers, small employers, brokers, |
|
|
or providers. |
|
|
Sec. 1511.053. PRESIDING OFFICER. The board shall annually |
|
|
designate one member of the board to serve as presiding officer. |
|
|
Sec. 1511.054. TERMS; VACANCY. (a) Appointed members of |
|
|
the board serve two-year terms, with the members' terms expiring |
|
|
February 1 of each odd-numbered year. |
|
|
(b) Members may be reappointed but may not serve more than |
|
|
three terms. |
|
|
(c) The appropriate appointing authority shall fill a |
|
|
vacancy on the board by appointing, for the unexpired term, an |
|
|
individual who has the appropriate qualifications to fill that |
|
|
position. |
|
|
Sec. 1511.055. CONFLICT OF INTEREST. (a) Any board member |
|
|
or a member of a committee formed by the board with a direct |
|
|
personal interest in a matter before the board shall abstain from |
|
|
deliberations and actions on the matter in which the conflict of |
|
|
interest arises and shall further abstain from any vote on the |
|
|
matter, and may not otherwise participate in a decision on the |
|
|
matter. |
|
|
(b) Each board member shall file a conflict of interest |
|
|
statement and a statement of ownership interests with the board to |
|
|
ensure disclosure of all existing and potential personal interests |
|
|
related to board business. |
|
|
Sec. 1511.056. GENERAL DUTIES OF BOARD MEMBERS. (a) Each |
|
|
board member has the responsibility and duty to meet the |
|
|
requirements of this title and applicable state and federal laws |
|
|
and regulations, to serve the public interest of the individuals |
|
|
and small businesses seeking health benefit plan coverage through |
|
|
the exchange, and to ensure the operational well-being and fiscal |
|
|
solvency of the exchange. |
|
|
(b) A member of the board may not make, participate in |
|
|
making, or in any way attempt to use the board member's official |
|
|
position to influence the making of any decision that the board |
|
|
member knows or has reason to know will have a material financial |
|
|
effect, distinguishable from its effect on the public generally, on |
|
|
the board member or the board member's immediate family, or on: |
|
|
(1) any source of income, other than gifts and loans by |
|
|
a commercial lending institution in the regular course of business |
|
|
on terms available to the public generally, aggregating $250 or |
|
|
more in value, provided or promised to the member within the 12 |
|
|
months immediately preceding the date the decision is made; or |
|
|
(2) any business entity in which the member is a |
|
|
director, officer, partner, trustee, or employee, or holds any |
|
|
position of management. |
|
|
Sec. 1511.057. REIMBURSEMENT. A member of the board is not |
|
|
entitled to compensation but is entitled to reimbursement for |
|
|
travel or other expenses incurred while performing duties as a |
|
|
board member in the amount provided by the General Appropriations |
|
|
Act for state officials. |
|
|
Sec. 1511.058. MEMBER'S IMMUNITY. (a) A member of the |
|
|
board is not liable for an act or omission made in good faith in the |
|
|
performance of powers and duties under this chapter. |
|
|
(b) A cause of action does not arise against a member of the |
|
|
board for an act or omission described by Subsection (a). |
|
|
Sec. 1511.059. OPEN RECORDS AND OPEN MEETINGS. The board is |
|
|
subject to Chapters 551 and 552, Government Code. |
|
|
Sec. 1511.060. RECORDS. The board shall keep records of the |
|
|
board's proceedings for at least seven years. |
|
|
SUBCHAPTER C. POWERS AND DUTIES OF EXCHANGE |
|
|
Sec. 1511.101. EMPLOYEES; WORKING GROUPS. (a) The board |
|
|
may employ an executive director and any other agents and employees |
|
|
that the board considers necessary to assist the exchange in |
|
|
carrying out its responsibilities and functions. |
|
|
(b) The executive director shall organize, administer, and |
|
|
manage the operations of the exchange. The executive director may |
|
|
hire other employees as necessary to carry out the responsibilities |
|
|
of the exchange. |
|
|
(c) The exchange may appoint appropriate legal, actuarial, |
|
|
technology, and other working groups necessary to provide |
|
|
assistance in operating the exchange and performing any of the |
|
|
functions of the exchange. |
|
|
(d) The exchange shall on a regular basis make exchange |
|
|
enrollment data available through public use files. |
|
|
Sec. 1511.102. ADVISORY COMMITTEE. The board shall appoint |
|
|
an advisory committee to allow for the involvement of key |
|
|
stakeholders in the operation of the exchange. The advisory |
|
|
committee may provide expertise and recommendations to the board |
|
|
but may not adopt rules or enter into contracts on behalf of the |
|
|
exchange. |
|
|
Sec. 1511.103. CONTRACTS. (a) Except as provided by |
|
|
Subsection (b), the exchange may enter into any contract that the |
|
|
exchange considers necessary to implement or administer this |
|
|
chapter, including a contract with the department, the Health and |
|
|
Human Services Commission, or an entity that has experience in |
|
|
individual and small group health insurance, benefit |
|
|
administration, or other experience relevant to the |
|
|
responsibilities assumed by the entity, to perform functions or |
|
|
provide services in connection with the operation of the exchange. |
|
|
(b) The exchange may not enter into a contract with a health |
|
|
benefit plan issuer under this section. |
|
|
(c) The exchange shall develop and adopt a competitive |
|
|
procurement process that promotes fairness and efficiency and |
|
|
best-in-class performance for each functional component of the |
|
|
exchange. |
|
|
Sec. 1511.104. INFORMATION SHARING AND CONFIDENTIALITY. |
|
|
(a) The exchange may enter into information-sharing agreements |
|
|
with federal and state agencies to carry out the exchange's |
|
|
responsibilities under this chapter. An agreement entered into |
|
|
under this section must include adequate protection with respect to |
|
|
the confidentiality of any information shared and comply with all |
|
|
applicable state and federal law. |
|
|
(b) The exchange shall protect personally identifiable |
|
|
health and financial information in accordance with all applicable |
|
|
state and federal laws and regulations. |
|
|
Sec. 1511.105. MEMORANDUM OF UNDERSTANDING. The exchange |
|
|
shall enter into a memorandum of understanding with the department |
|
|
and the Health and Human Services Commission regarding the exchange |
|
|
of information and the division of regulatory functions among the |
|
|
exchange, the department, and the commission. |
|
|
Sec. 1511.106. LEGAL ACTION. (a) The exchange may sue or |
|
|
be sued. |
|
|
(b) The exchange may take any legal action necessary to |
|
|
recover or collect amounts due the exchange, including: |
|
|
(1) fees due the exchange; |
|
|
(2) amounts erroneously or improperly paid by the |
|
|
exchange; and |
|
|
(3) amounts paid by the exchange as a mistake of fact |
|
|
or law. |
|
|
Sec. 1511.107. FUNCTIONS. (a) The exchange shall perform |
|
|
all functions and duties related to state-based exchanges required |
|
|
by applicable state and federal law, except for functions and |
|
|
duties related to the federal risk adjustment program. |
|
|
(b) The exchange shall replicate, to the extent feasible, |
|
|
the processes and enrollment formats used by the federal health |
|
|
insurance exchange to ensure a successful implementation and |
|
|
encourage health plan participation on the exchange. |
|
|
Sec. 1511.108. HEALTH CARE PROVIDER DIRECTORY AND |
|
|
INFORMATION. (a) The exchange may provide an integrated and |
|
|
uniform consumer directory of health care providers indicating |
|
|
which health benefit plan issuers the providers contract with and |
|
|
whether the providers are currently accepting new patients. |
|
|
(b) The exchange may establish methods by which health care |
|
|
providers may transmit relevant information directly to the |
|
|
exchange, rather than through an issuer. |
|
|
Sec. 1511.109. STATE-ADMINISTERED SUBSIDY PROGRAM. (a) |
|
|
Not later than July 1, 2026, the exchange, in coordination with the |
|
|
department, shall review and make recommendations to the Senate |
|
|
Business and Commerce Committee and the House of Representatives |
|
|
Insurance Committee regarding the feasibility of implementing a |
|
|
state-administered subsidy program for individuals, families, and |
|
|
small employers to purchase health benefit plan coverage. The |
|
|
recommendations must include considerations regarding the best use |
|
|
for any savings generated from the transition to a state-based |
|
|
health insurance exchange. |
|
|
(b) With the input and approval of the Senate Business and |
|
|
Commerce Committee and the House of Representatives Insurance |
|
|
Committee, the exchange may develop and implement a |
|
|
state-administered subsidy program. |
|
|
Sec. 1511.110. ENHANCED DIRECT ENROLLMENT PATHWAY. (a) |
|
|
The exchange shall create a pathway for web brokers, insurers, and |
|
|
licensed health insurance agents and brokers to enroll individuals |
|
|
in subsidized coverage in a manner that is consistent with |
|
|
enrolling those individuals in coverage through the exchange. |
|
|
(b) The exchange shall model the pathway created under |
|
|
Subsection (a) after the enhanced direct enrollment pathway |
|
|
operated by the federal Centers for Medicare and Medicaid Services |
|
|
for the federal health insurance exchange. |
|
|
(c) To the extent practicable and consistent with sound |
|
|
policy and the goals of the exchange, the pathway created under |
|
|
Subsection (a) shall establish standards and requirements for the |
|
|
certification of web brokers, insurers, and licensed health |
|
|
insurance agents and brokers that are consistent with the standards |
|
|
and requirements for certification established for the federal |
|
|
health insurance exchange. |
|
|
(d) In an effort to minimize duplication of effort and waste |
|
|
and to promote sound policy and the goals of the exchange, the |
|
|
technical requirements, connection protocols, and security |
|
|
standards for the pathway created under Subsection (a) shall be |
|
|
consistent with the requirements, protocols, and standards |
|
|
developed for the federal health insurance exchange. |
|
|
(e) The exchange must create the pathway under Subsection |
|
|
(a) as part of the initial development of the exchange and may not |
|
|
delay creation of the pathway to a later date. |
|
|
Sec. 1511.111. FEDERAL WAIVERS. (a) Not later than July 1, |
|
|
2026, the exchange, in coordination with the department, shall |
|
|
review and make recommendations to the Senate Business and Commerce |
|
|
Committee and the House of Representatives Insurance Committee |
|
|
regarding the submission of a state innovation waiver that may be |
|
|
granted under Section 1332, Patient Protection and Affordable Care |
|
|
Act (42 U.S.C. Section 18052), with respect to health benefit plan |
|
|
coverage or health insurance products in this state, including |
|
|
recommendations on: |
|
|
(1) risk stabilization strategies aimed at addressing |
|
|
risk associated with individuals with high health care costs; |
|
|
(2) individual coverage health reimbursement |
|
|
arrangements for employees of large and small businesses in this |
|
|
state; |
|
|
(3) financial assistance for different types of health |
|
|
benefit plan coverage, including non-qualified health plans for |
|
|
individuals purchasing coverage; and |
|
|
(4) the establishment of account-based premium |
|
|
credits for individuals and families enrolled in coverage through |
|
|
the exchange. |
|
|
(b) With the input of the Senate Business and Commerce |
|
|
Committee and the House of Representatives Insurance Committee, the |
|
|
exchange may submit one or more applications to the secretary to |
|
|
obtain a waiver of any applicable provisions of the Patient |
|
|
Protection and Affordable Care Act (Pub. L. No. 111-148). |
|
|
(c) On approval by the secretary of a waiver under |
|
|
Subsection (b), the exchange may implement the approved waiver. |
|
|
SUBCHAPTER D. FUNDING FOR OPERATION OF EXCHANGE |
|
|
Sec. 1511.151. USER FEES. (a) The exchange may charge a |
|
|
user fee to issuers offering qualified health plans on the exchange |
|
|
as reasonable and necessary to cover the exchange's organizational |
|
|
and operating expenses and expenses related to health coverage |
|
|
programs associated with the exchange. User fees must be |
|
|
determined annually. The exchange may charge interest for late |
|
|
user fees. User fees may not exceed three percent of total premiums |
|
|
for qualified health plans on the exchange. |
|
|
(b) The commissioner shall adopt rules to implement and |
|
|
enforce the assessment of user fees for health benefit plan issuers |
|
|
offering coverage on the exchange as authorized under this section. |
|
|
Sec. 1511.152. GRANTS AND FEDERAL MONEY. (a) The exchange |
|
|
may accept a grant from a public or private organization and may |
|
|
spend that money to pay the costs of program administration and |
|
|
operations. |
|
|
(b) The exchange may accept federal money and shall use that |
|
|
money in compliance with applicable federal law, regulations, and |
|
|
guidelines. |
|
|
Sec. 1511.153. USE OF EXCHANGE ASSETS; ANNUAL REPORT. (a) |
|
|
The assets of the exchange may be used only to pay the costs: |
|
|
(1) of the administration and operation of the |
|
|
exchange; and |
|
|
(2) associated with any health coverage programs |
|
|
associated with the exchange. |
|
|
(b) The exchange shall prepare annually a complete and |
|
|
detailed written report accounting for all money received and |
|
|
disbursed by the exchange during the preceding fiscal year. The |
|
|
report must meet any reporting requirements provided in the General |
|
|
Appropriations Act, regardless of whether the exchange receives any |
|
|
money under that Act. The exchange shall submit the report to the |
|
|
governor, the legislature, the commissioner, and the executive |
|
|
commissioner not later than January 31 of each year. |
|
|
(c) General revenue may not be appropriated for the |
|
|
exchange. |
|
|
Sec. 1511.154. PUBLICATION OF FINANCIAL INFORMATION. The |
|
|
exchange shall publish the average costs of licensing, regulatory |
|
|
fees, and any other payments required by the exchange, and the |
|
|
administrative costs of the exchange, on an Internet website to |
|
|
educate consumers on those costs. This information must include |
|
|
information on losses due to waste, fraud, and abuse. |
|
|
SUBCHAPTER E. TRUST FUND |
|
|
Sec. 1511.201. TRUST FUND. (a) The exchange fund is |
|
|
established as a special trust fund outside of the state treasury in |
|
|
the custody of the comptroller separate and apart from all public |
|
|
money or funds of this state. |
|
|
(b) The exchange may deposit fees, gifts or donations, and |
|
|
any federal funding obtained by the exchange in the exchange fund in |
|
|
accordance with procedures established by the comptroller. |
|
|
(c) Interest or other income from the investment of the fund |
|
|
shall be deposited to the credit of the fund. |
|
|
SECTION 2. (a) As soon as practicable after the effective |
|
|
date of this Act, but not later than October 31, 2025, the governor |
|
|
and lieutenant governor shall appoint the initial members of the |
|
|
board of directors of the Texas Health Insurance Exchange. |
|
|
(b) As soon as practicable after the appointments required |
|
|
by Subsection (a) of this section are made, but not later than |
|
|
November 30, 2025, the board of directors of the Texas Health |
|
|
Insurance Exchange shall hold a special meeting to discuss the |
|
|
adoption of rules and procedures necessary to implement Chapter |
|
|
1511, Insurance Code, as added by this Act. |
|
|
(c) As soon as practicable after the effective date of this |
|
|
Act, but not later than July 1, 2026, the board of directors of the |
|
|
Texas Health Insurance Exchange shall adopt rules and procedures |
|
|
necessary to implement Chapter 1511, Insurance Code, as added by |
|
|
this Act. |
|
|
(d) If, after the effective date of this Act but before the |
|
|
initial members of the board of directors of the Texas Health |
|
|
Insurance Exchange have been appointed as required by Subsection |
|
|
(a) of this section, the Texas Department of Insurance becomes |
|
|
aware of any planning and establishment grants as described by |
|
|
Section 1311, Patient Protection and Affordable Care Act (42 U.S.C. |
|
|
Section 18031), or any other public or private funding source, the |
|
|
department may apply for funding from that source. |
|
|
(e) The exchange may not begin operations without adequate |
|
|
funding. |
|
|
(f) The initial coverage period for coverage on the exchange |
|
|
may not begin before January 1, 2028. |
|
|
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, 2025. |