Texas 2009 - 81st Regular

Texas House Bill HB2470 Compare Versions

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1	1	81R6860 KCR-D
2	2	By: Gattis H.B. No. 2470
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the establishment of the Texas Mutual Health Benefit
8	8	Plan Company.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Title 8, Insurance Code, is amended by adding
11	11	Subtitle K to read as follows:
12	12	SUBTITLE K. TEXAS MUTUAL HEALTH BENEFIT PLAN COMPANY
13	13	CHAPTER 1680. TEXAS MUTUAL HEALTH BENEFIT PLAN COMPANY
14	14	SUBCHAPTER A. GENERAL PROVISIONS
15	15	Sec. 1680.001. DEFINITIONS. In this chapter:
16	16	(1) "Board" means the board of directors of the
17	17	company.
18	18	(2) "Company" means the Texas Mutual Health Benefit
19	19	Plan Company.
20	20	(3) "Health benefit plan" means a plan that provides
21	21	benefits for medical, surgical, or other treatment expenses
22	22	incurred as a result of a physical health condition, a mental health
23	23	condition, an accident, a sickness, or substance abuse, including a
24	24	group, blanket, or franchise insurance policy, insurance
25	25	agreement, evidence of coverage, or a similar coverage document.
26	26	(4) "Health benefit plan issuer" means an entity
27	27	authorized by this code to issue health benefit plans in this state.
28	28	Sec. 1680.002. OPERATION AS DOMESTIC MUTUAL INSURANCE
29	29	COMPANY. (a) The company operates as a domestic mutual insurance
30	30	company under Chapter 883. The company is subject to that chapter,
31	31	but is not subject to Chapter 826.
32	32	(b) The company:
33	33	(1) has the legal rights of a mutual insurance company
34	34	operating under Chapter 883 and of an individual in this state; and
35	35	(2) may bring a suit in the company's own name without
36	36	any procedural prerequisites to the exercise of that power.
37	37	(c) The company is not a state agency or executive agency or
38	38	a governmental entity for any purpose.
39	39	Sec. 1680.003. APPLICABILITY OF CODE. The company is
40	40	subject to this code.
41	41	Sec. 1680.004. AUTHORITY OF COMMISSIONER AND DEPARTMENT.
42	42	(a) The commissioner may regulate the company:
43	43	(1) to the same extent that the commissioner may
44	44	regulate a mutual insurance company; and
45	45	(2) as provided by Section 1680.153.
46	46	(b) The company is subject to the jurisdiction of the
47	47	commissioner and department in the same manner as a private
48	48	insurance company.
49	49	Sec. 1680.005. OPEN MEETINGS LAW AND OPEN RECORDS LAW NOT
50	50	APPLICABLE. Notwithstanding any other state law, Chapters 551 and
51	51	552, Government Code, do not apply to the company.
52	52	Sec. 1680.006. CONFLICTS WITH CERTAIN INSURANCE LAWS. To
53	53	the extent of a conflict between this chapter and Chapter 883 or
54	54	another law of this state applicable to a nonlife mutual insurance
55	55	company, this chapter prevails.
56	56	[Sections 1680.007-1680.050 reserved for expansion]
57	57	SUBCHAPTER B. BOARD OF DIRECTORS
58	58	Sec. 1680.051. BOARD OF DIRECTORS; COMPOSITION. The
59	59	company is governed by a board composed of the following nine
60	60	members:
61	61	(1) one member who is appointed by the governor from a
62	62	list of three or more names provided to the governor by the
63	63	lieutenant governor, none of which may be senators or
64	64	representatives;
65	65	(2) one member who is appointed by the governor from a
66	66	list of three or more names provided to the governor by the speaker
67	67	of the house of representatives, none of which may be senators or
68	68	representatives;
69	69	(3) one member appointed by the governor who is a small
70	70	employer, as defined by Section 1501.002;
71	71	(4) one member appointed by the governor who is a large
72	72	employer, as defined by Section 1501.002;
73	73	(5) one member appointed by the governor who is a
74	74	practicing physician licensed in this state;
75	75	(6) one member appointed by the governor who
76	76	represents the interests of hospital or other institutional health
77	77	care providers;
78	78	(7) one member appointed by the governor who
79	79	represents the interests of political subdivisions in this state;
80	80	(8) the executive director of the Employees Retirement
81	81	System of Texas or the executive director's designee, who serves ex
82	82	officio; and
83	83	(9) the executive director of the Teacher Retirement
84	84	System of Texas or the executive director's designee, who serves ex
85	85	officio.
86	86	Sec. 1680.052. QUALIFICATIONS. (a) Each board member must
87	87	be a resident of this state.
88	88	(b) An individual may not serve as an appointed board member
89	89	if the individual, another individual related to the individual
90	90	within the second degree by consanguinity or affinity, or another
91	91	individual residing in the same household with the individual:
92	92	(1) is registered or licensed under this code or is
93	93	required to be registered or licensed under this code;
94	94	(2) is employed by or acts as a consultant to a person
95	95	registered or licensed under this code or required to be registered
96	96	or licensed under this code;
97	97	(3) owns, controls, has a financial interest in, or
98	98	participates in the management of an organization registered or
99	99	licensed under this code or required to be registered or licensed
100	100	under this code;
101	101	(4) receives a substantial tangible benefit from the
102	102	company or the department; or
103	103	(5) is an officer, employee, or consultant of an
104	104	association in the field of insurance.
105	105	(c) Subsection (b) does not prohibit an individual from
106	106	serving as an appointed board member if the individual is only a
107	107	policyholder or a consumer of insurance or insurance products.
108	108	(d) An individual who is ineligible to serve on the board
109	109	under Subsection (b) may not serve as a board member until the first
110	110	anniversary of the date the condition that makes the individual
111	111	ineligible ends.
112	112	Sec. 1680.053. PRESIDING OFFICER; OTHER OFFICERS. (a) The
113	113	executive director of the Employees Retirement System of Texas and
114	114	the executive director of the Teacher Retirement System of Texas
115	115	serve as co-presiding officers of the board.
116	116	(b) The board shall elect annually any other officers the
117	117	board considers necessary to perform the board's duties.
118	118	Sec. 1680.054. TERMS. (a) Board members appointed under
119	119	Sections 1680.051(1)-(7) serve staggered six-year terms, with the
120	120	terms of three or four members expiring July 1 of each odd-numbered
121	121	year.
122	122	(b) A board member whose term has expired shall continue to
123	123	serve until the member's successor is appointed by the governor.
124	124	Sec. 1680.055. VACANCIES. (a) The governor shall fill a
125	125	vacancy on the board as soon as possible after the vacancy occurs.
126	126	(b) If a vacancy occurs before the date the vacating
127	127	member's term expires, the successor member shall be appointed or
128	128	elected for a term that expires on the same date as the vacating
129	129	member's term.
130	130	Sec. 1680.056. GROUNDS FOR REMOVAL. (a) It is a ground for
131	131	removal from the board if a member:
132	132	(1) does not have at the time of appointment or
133	133	election the qualifications required by Section 1680.052;
134	134	(2) does not maintain during service on the board the
135	135	qualifications required by Section 1680.052;
136	136	(3) cannot because of illness or disability discharge
137	137	the member's duties for a substantial part of the term for which the
138	138	member is appointed or elected; or
139	139	(4) is absent from more than half of the regularly
140	140	scheduled board meetings that the member is eligible to attend
141	141	during a calendar year.
142	142	(b) The validity of a board action is not affected by the
143	143	fact that it is taken when a ground for removal of a board member
144	144	exists.
145	145	Sec. 1680.057. PROCEDURES FOR REMOVAL. (a) If a member of
146	146	the board or an officer or employee of a management company with
147	147	whom the board contracts under Section 1680.152 has knowledge that
148	148	a potential ground for removal of a board member exists, the board
149	149	member or officer or employee of the management company shall
150	150	notify the co-presiding officers of the board of the potential
151	151	ground.
152	152	(b) One of the presiding officers shall notify the governor
153	153	and the attorney general that a potential ground for removal
154	154	exists.
155	155	(c) If the potential ground for removal involves either of
156	156	the co-presiding officers, the board member or officer or employee
157	157	of a management company with whom the board contracts under Section
158	158	1680.152 shall notify the next highest board officer, who shall
159	159	notify the governor and the attorney general that a potential
160	160	ground for removal exists.
161	161	Sec. 1680.058. COMMITTEES AND SUBCOMMITTEES. The board may
162	162	create committees and subcommittees.
163	163	Sec. 1680.059. MEETINGS. (a) The board shall hold a
164	164	meeting at least once each calendar quarter, at other times at the
165	165	call of either of the co-presiding officers, and at times
166	166	established by the company's bylaws.
167	167	(b) A special meeting may be called by any two board members
168	168	on two days' notice.
169	169	Sec. 1680.060. COMPENSATION. An appointed board member is
170	170	not entitled to compensation but is entitled to reimbursement for
171	171	actual and necessary expenses incurred in attending meetings of the
172	172	board or performing other official duties authorized by either or
173	173	both of the co-presiding officers.
174	174	Sec. 1680.061. PERSONAL LIABILITY OF BOARD MEMBERS,
175	175	OFFICERS, AND EMPLOYEES. In connection with the administration,
176	176	management, or conduct of the company, or the company's business or
177	177	a related matter, a board member or an officer or employee of the
178	178	company or a management company with whom the board contracts under
179	179	Section 1680.152 is not personally liable in the individual's
180	180	private capacity for an act performed or a contract or other
181	181	obligation entered into or undertaken in the individual's official
182	182	capacity in good faith and without intent to defraud.
183	183	[Sections 1680.062-1680.100 reserved for expansion]
184	184	SUBCHAPTER C. MANAGEMENT OF COMPANY
185	185	Sec. 1680.101. GENERAL POWERS OF BOARD. The board has full
186	186	authority over the company and may:
187	187	(1) perform any act necessary or convenient to
188	188	administer the company or in connection with the company's
189	189	insurance business; and
190	190	(2) function in all aspects as the governing body of a
191	191	domestic mutual insurance company.
192	192	Sec. 1680.102. GENERAL DUTIES OF BOARD RELATING TO HEALTH
193	193	BENEFIT PLAN. The board shall:
194	194	(1) provide for engaging in the business of issuing
195	195	health benefit plans and for the delivery in this state of health
196	196	benefit plans to the same extent as any other health benefit plan
197	197	issuer in this state;
198	198	(2) propose rates for health benefit plans issued by
199	199	the company; and
200	200	(3) exercise any other authority necessary to engage
201	201	in the business of health benefit plans.
202	202	Sec. 1680.103. PRINCIPAL OFFICE. The board shall maintain
203	203	the company's principal office in Travis County.
204	204	Sec. 1680.104. CERTAIN RELATIONSHIPS WITH OTHER INSURERS
205	205	PROHIBITED. The company may not have:
206	206	(1) an affiliate, spin-off, or subsidiary that writes
207	207	a line or type of insurance other than health benefit plans; or
208	208	(2) interlocking boards of directors with an insurer
209	209	that writes a line or type of insurance other than health benefit
210	210	plans.
211	211	Sec. 1680.105. PROGRAM AND FACILITY ACCESSIBILITY. (a)
212	212	The company shall comply with federal and state laws that relate to
213	213	program and facility accessibility.
214	214	(b) The board shall prepare and maintain a written plan that
215	215	describes the manner in which an individual who does not speak
216	216	English can be provided reasonable access to the company's programs
217	217	and services.
218	218	(c) The board shall develop and implement policies that
219	219	provide the public with a reasonable opportunity to appear before
220	220	the board and to speak on any issue under the company's
221	221	jurisdiction.
222	222	[Sections 1680.106-1680.150 reserved for expansion]
223	223	SUBCHAPTER D. OPERATION OF COMPANY; FINANCIAL ADMINISTRATION
224	224	Sec. 1680.151. PURPOSES OF COMPANY. The company shall:
225	225	(1) serve as a competitive force in the marketplace;
226	226	and
227	227	(2) guarantee the availability of health benefit plans
228	228	in this state.
229	229	Sec. 1680.152. SELECTION OF MANAGEMENT COMPANY AND
230	230	INDEPENDENT AUDITOR. The board:
231	231	(1) may contract with an entity that is qualified to
232	232	administer, manage, and operate the company; and
233	233	(2) shall contract with an entity that is qualified to
234	234	audit the manner in which the company or the entity described by
235	235	Subdivision (1) administers, manages, and operates the company.
236	236	Sec. 1680.153. PLAN OF OPERATION. (a) The management
237	237	company shall submit to the commissioner a plan of operation and any
238	238	amendments to that plan necessary or suitable to ensure the fair,
239	239	reasonable, and equitable administration of the company.
240	240	(b) The commissioner, after notice and hearing, shall
241	241	approve the plan of operation if the commissioner determines the
242	242	plan:
243	243	(1) is suitable to ensure the fair, reasonable, and
244	244	equitable administration of the company; and
245	245	(2) provides adequately for the sharing of losses on
246	246	an equitable and proportionate basis.
247	247	(c) The plan of operation is effective on the written
248	248	approval of the commissioner.
249	249	Sec. 1680.154. DISSOLUTION PROHIBITED. The company may not
250	250	be dissolved except by statute.
251	251	[Sections 1680.155-1680.200 reserved for expansion]
252	252	SUBCHAPTER E. EXAMINATIONS, REPORTS, AND FILINGS
253	253	Sec. 1680.201. EXAMINATION BY DEPARTMENT. (a) The
254	254	department shall examine the company in the manner and under the
255	255	conditions specified by Chapter 401 for the examination of
256	256	insurers.
257	257	(b) The company shall pay the costs of the examination.
258	258	Sec. 1680.202. PROVIDING INFORMATION TO LEGISLATURE. The
259	259	company shall provide requested information to each appropriate
260	260	legislative committee in the manner requested by the committee.
261	261	Sec. 1680.203. ANNUAL ACCOUNTING OF MONEY RECEIVED AND
262	262	DISBURSED. Each year, the company shall prepare a complete and
263	263	detailed written report accounting for all money the company
264	264	received and disbursed during the preceding fiscal year.
265	265	Sec. 1680.204. ANNUAL STATEMENTS. (a) The company shall
266	266	file annual statements with the department in the same manner as is
267	267	required of other health benefit plan issuers.
268	268	(b) The department shall include in the department's annual
269	269	report under Section 32.021 a report on the company's condition.
270	270	Sec. 1680.205. PUBLICATION AND FILING OF AUDITED REPORT.
271	271	The board shall:
272	272	(1) publish an independently audited report analyzing
273	273	the company's activities and fiscal condition during the preceding
274	274	fiscal year; and
275	275	(2) file the audited report with the department for
276	276	submission simultaneously with its annual financial report.
277	277	Sec. 1680.206. ADDITIONAL REPORTS. The company shall file
278	278	with the department all reports required of other health benefit
279	279	plan issuers.
280	280	Sec. 1680.207. PERIODIC REPORTS TO BOARD. The management
281	281	company with whom the board contracts under Section 1680.152 shall
282	282	make periodic reports to the board regarding:
283	283	(1) the company's status; and
284	284	(2) the company's investments.
285	285	[Sections 1680.208-1680.250 reserved for expansion]
286	286	SUBCHAPTER F. GENERAL POWERS AND DUTIES RELATING TO INSURANCE
287	287	Sec. 1680.251. RATEMAKING AUTHORITY. (a) Except as
288	288	provided by this section, the board may propose rates to be charged
289	289	by the company for health benefit plans issued by the company.
290	290	(b) The board shall engage the services of an independent
291	291	actuary who is a member in good standing with a nationally
292	292	recognized accrediting entity to develop and recommend actuarially
293	293	sound rates.
294	294	[Sections 1680.252-1680.300 reserved for expansion]
295	295	SUBCHAPTER G. PURCHASE AND ISSUANCE OF COVERAGE
296	296	Sec. 1680.301. (a) The Employees Retirement System of
297	297	Texas shall apply to the company for the provision of health benefit
298	298	plan coverage for some or all of the individuals covered by the
299	299	group benefits program under Chapter 1551.
300	300	(b) The commissioner by rule may allow entities other than
301	301	the Employees Retirement System of Texas to apply to the company for
302	302	the provision of health benefit plan coverage, including:
303	303	(1) entities that provide health benefit plan coverage
304	304	under Subtitle H;
305	305	(2) political subdivisions of this state; and
306	306	(3) independent school districts.
307	307	(c) The company shall amend the company's plan of operation
308	308	under Section 1680.153 as necessary to comply with any rules
309	309	adopted by the commissioner under Subsection (b).
310	310	Sec. 1680.302. APPLICATION FOR COVERAGE. An application to
311	311	the company for health benefit plan coverage must be:
312	312	(1) made in the form prescribed by the company; and
313	313	(2) submitted directly by the applicant.
314	314	Sec. 1680.303. POLICY FORMS. The company shall use policy
315	315	forms that comply with the requirements of Chapter 1701.
316	316	Sec. 1680.304. CANCELLATION AND NONRENEWAL. The company
317	317	may cancel or refuse to renew a health benefit plan to the same
318	318	extent and in the same manner as another health benefit plan issuer
319	319	may cancel or refuse to renew that same type of health benefit plan.
320	320	[Sections 1680.305-1680.350 reserved for expansion]
321	321	SUBCHAPTER H. APPEALS
322	322	Sec. 1680.351. APPEAL OF CERTAIN ACTIONS AND DECISIONS.
323	323	(a) An act or decision by the company to deny, cancel, or refuse to
324	324	renew a health benefit plan may be appealed to the board not later
325	325	than the 30th day after the date the affected party receives actual
326	326	notice that the act occurred or the decision was made.
327	327	(b) The company shall:
328	328	(1) not later than the 30th day after the date the
329	329	request for hearing is made, hear the appeal; and
330	330	(2) not later than the 10th day before the date of the
331	331	hearing, notify the appellant in writing of the time and place of
332	332	the hearing.
333	333	(c) Not later than the 30th day after the last day of the
334	334	hearing, the board shall affirm, reverse, or modify the act or
335	335	decision appealed to the board.
336	336	(d) Unless the board specifically orders otherwise, a
337	337	hearing under this section does not suspend the operation of an act
338	338	or decision of the company.
339	339	Sec. 1680.352. REVIEW OF BOARD DECISION BY COMMISSIONER.
340	340	(a) A board decision under Section 1680.351 is subject to review by
341	341	the commissioner in the manner provided by Chapter 2001, Government
342	342	Code.
343	343	(b) The commissioner's review of a board decision does not
344	344	suspend the operation of an act or decision of the company unless
345	345	the commissioner specifically orders the suspension on a showing by
346	346	an aggrieved party of:
347	347	(1) immediate, irreparable injury, loss, or damage;
348	348	and
349	349	(2) probable success on the merits.
350	350	Sec. 1680.353. APPEAL OF COMMISSIONER'S DECISION. (a) A
351	351	person aggrieved by a decision of the commissioner under Section
352	352	1680.352 may appeal the decision to a district court.
353	353	(b) Judicial review under this section is governed by the
354	354	substantial evidence rule.
355	355	[Sections 1680.354-1680.400 reserved for expansion]
356	356	SUBCHAPTER I. PUBLIC INTEREST INFORMATION AND COMPLAINT PROCEDURES
357	357	Sec. 1680.401. PUBLIC INTEREST INFORMATION. (a) The
358	358	company shall prepare information of public interest describing the
359	359	functions of the company and the procedures by which complaints are
360	360	submitted to and resolved by the company.
361	361	(b) The company shall make the information available to the
362	362	public and appropriate state agencies.
363	363	Sec. 1680.402. COMPLAINTS. (a) The company shall
364	364	establish methods by which consumers and service recipients are
365	365	notified of the name, mailing address, and telephone number of the
366	366	company for the purpose of directing a complaint to the company.
367	367	(b) The company may provide for the notice:
368	368	(1) by a supplement or endorsement to a written
369	369	policy; and
370	370	(2) in each bill for services provided by the company.
371	371	Sec. 1680.403. COMPLAINT RECORD. (a) The company shall
372	372	keep information about each written complaint filed with the
373	373	company. The information must include:
374	374	(1) the date the complaint is received;
375	375	(2) the name of the complainant;
376	376	(3) the subject matter of the complaint;
377	377	(4) a record of each person contacted in relation to
378	378	the complaint;
379	379	(5) a summary of the results of the review or
380	380	investigation of the complaint; and
381	381	(6) for a complaint for which the company takes no
382	382	action, an explanation of the reason the complaint was closed
383	383	without action.
384	384	(b) For each written complaint the company receives and has
385	385	authority to resolve, the company shall:
386	386	(1) provide the company's policies and procedures
387	387	relating to complaint investigation and resolution to the person
388	388	filing the complaint and each person or entity that is a subject of
389	389	the complaint; and
390	390	(2) at least quarterly and until final disposition of
391	391	the complaint, notify the person filing the complaint and each
392	392	person or entity that is a subject of the complaint of the status of
393	393	the complaint unless the notification would jeopardize an
394	394	undercover investigation.
395	395	SECTION 2. (a) In this section:
396	396	(1) "Committee" means the Texas Mutual Health Benefit
397	397	Plan Company Implementation Committee established under Subsection
398	398	(b).
399	399	(2) "Company" means the Texas Mutual Health Benefit
400	400	Plan Company.
401	401	(b) The Texas Mutual Health Benefit Plan Company
402	402	Implementation Committee is established to evaluate and make
403	403	recommendations concerning the establishment and operation of the
404	404	Texas Mutual Health Benefit Plan Company under Chapter 1680,
405	405	Insurance Code, as added by this Act.
406	406	(c) The committee is composed of:
407	407	(1) the commissioner of insurance;
408	408	(2) the executive director of the Employees Retirement
409	409	System of Texas or the executive director's designee;
410	410	(3) the executive director of the Teacher Retirement
411	411	System of Texas or the executive director's designee;
412	412	(4) the executive commissioner of the Health and
413	413	Human Services Commission;
414	414	(5) a representative of The University of Texas
415	415	System, chosen by the governing board of that system; and
416	416	(6) a representative of The Texas A&M University
417	417	System, chosen by the governing board of that system.
418	418	(d) The commissioner of insurance serves as the presiding
419	419	officer of the committee and may, with the advice and consent of the
420	420	other members of the committee, request other individuals to assist
421	421	or become members of the committee.
422	422	(e) The committee shall examine the efficacy of the Texas
423	423	Mutual Health Benefit Plan Company, including examining:
424	424	(1) health benefit plan design and delivery;
425	425	(2) operational aspects of the operation of the
426	426	company, including any impacts on separately evaluated
427	427	classifications of costs borne by the company;
428	428	(3) the applicable interplay between federal and state
429	429	law, and various provisions of state law, in relation to entities
430	430	required or potentially allowed to apply for coverage from the
431	431	company;
432	432	(4) the economic impact the operation of the company
433	433	will have on the economy of this state; and
434	434	(5) the impact the provision of health benefit plan
435	435	coverage by the company would have on the quality and capacity for
436	436	the delivery of health care services in this state.
437	437	(f) The committee shall prepare a report containing:
438	438	(1) any findings made after examination under
439	439	Subsection (e); and
440	440	(2) any recommendations for statutory amendments
441	441	necessary for the effective and efficient operation of the company.
442	442	(g) Not later than November 1, 2010, the committee shall
443	443	deliver the report prepared under Subsection (f) to the following
444	444	individuals or entities:
445	445	(1) the governor;
446	446	(2) the lieutenant governor;
447	447	(3) the speaker of the house of representatives; and
448	448	(4) each standing committee of the senate and the
449	449	house of representatives with primary jurisdiction over insurance
450	450	or the delivery of health care in this state.
451	451	(h) The committee is abolished September 1, 2011.
452	452	SECTION 3. (a) The governor shall make the appointments
453	453	described by Section 1680.051, Insurance Code, as added by this
454	454	Act, as soon as possible after September 1, 2009, and in no event
455	455	later than September 1, 2010.
456	456	(b) The governing boards of The University of Texas System
457	457	and The Texas A&M University System shall make the selections
458	458	described by Sections 2(c)(5) and (6) of this Act not later than
459	459	November 1, 2009.
460	460	SECTION 4. The Texas Mutual Health Benefit Plan Company
461	461	shall be fully operational and capable of accepting applications
462	462	for coverage not later than January 1, 2012.
463	463	SECTION 5. This Act takes effect September 1, 2009.