By: Smithee, et al. (Senate Sponsor - Averitt) H.B. No. 2064
(In the Senate - Received from the House April 8, 2009;
April 15, 2009, read first time and referred to Committee on State
Affairs; May 6, 2009, reported favorably by the following vote:
Yeas 9, Nays 0; May 6, 2009, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to premium discounts for certain participants in the Texas
Health Insurance Risk Pool and to related tax credits for health
benefit plan issuers.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1506.105, Insurance Code, is amended by
amending Subsection (e) and adding Subsections (e-1) and (e-2) to
read as follows:
(e) Premium rates shall be established to provide fully for
all of the expected costs of claims, including recovery of prior
losses, expenses of operation, investment income from claim
reserves, and any other cost factors, subject to the limitations
[limitation] described in this subsection and Subsection (e-1). In
no event may pool premium rates exceed 200 percent of the standard
risk rate described by Subsection (d) [rates applicable to
individual standard risks].
(e-1) Subject to Subsection (e-2), discounted premiums
shall be offered on a sliding scale, based on financial need, as
follows:
(1) for an individual whose household income is below
200 percent of the federal poverty measure, determined under the
United States Department of Health and Human Services poverty
guidelines in effect at the time coverage is provided, premium
rates shall equal the standard risk rate described by Subsection
(d); and
(2) for an individual whose household income is at or
below 300 percent, but not less than 200 percent, of the federal
poverty measure, determined under the United States Department of
Health and Human Services poverty guidelines in effect at the time
coverage is provided, premium rates shall equal 140 percent of the
standard risk rate described by Subsection (d).
(e-2) The aggregate premium discount under Subsection
(e-1), determined by subtracting the dollar amount of premiums
collected under Subsection (e-1) from the dollar amount that would
have been collected if a discount was not available under
Subsection (e-1), may not exceed $20 million in any two-year
period, beginning with the two-year period that begins January 1,
2010, and ends December 31, 2011.
SECTION 2. Subchapter F, Chapter 1506, Insurance Code, is
amended by adding Section 1506.260 to read as follows:
Sec. 1506.260. TAX CREDIT. (a) A health benefit plan
issuer is entitled to a credit against the issuer's premium tax
under Chapter 222 for premium discounts granted under Section
1506.105(e-1). Each issuer's share of the premium discounts is
based on the method described by Section 1506.253 as calculated by
the pool.
(b) The tax credit applies to the premium tax due in the
calendar year following the calendar year in which the assessment
is paid. An unused credit may be carried over to apply to the
premium tax due in the five consecutive calendar years that follow
the calendar year in which the credit may first be applied.
(c) The balance of a tax credit not claimed in a particular
calendar year may be reflected in the books and records of the
issuer as an admitted asset of the issuer.
(d) Available credit against premium tax allowed under this
section may be transferred or assigned among health benefit plan
issuers if:
(1) a merger, acquisition, or total assumption of
reinsurance among the issuers occurs; or
(2) the commissioner by order approves the transfer or
assignment.
SECTION 3. (a) This Act applies only to premium rates for
coverage through the Texas Health Insurance Risk Pool under Chapter
1506, Insurance Code, as amended by this Act, that is in effect on
or after January 1, 2010. Premium rates for coverage in effect
before January 1, 2010, are governed by the law in effect
immediately before the effective date of this Act, and the former
law is continued in effect for that purpose.
(b) A health benefit plan issuer may apply a tax credit
under Section 1506.260, Insurance Code, as added by this Act,
beginning with the first premium tax payment that is due on or after
January 1, 2012.
SECTION 4. This Act takes effect September 1, 2009.
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