81R6860 KCR-D
By: Gattis H.B. No. 2470
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of the Texas Mutual Health Benefit
Plan Company.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 8, Insurance Code, is amended by adding
Subtitle K to read as follows:
SUBTITLE K. TEXAS MUTUAL HEALTH BENEFIT PLAN COMPANY
CHAPTER 1680. TEXAS MUTUAL HEALTH BENEFIT PLAN COMPANY
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1680.001. DEFINITIONS. In this chapter:
(1) "Board" means the board of directors of the
company.
(2) "Company" means the Texas Mutual Health Benefit
Plan Company.
(3) "Health benefit plan" means a plan that provides
benefits for medical, surgical, or other treatment expenses
incurred as a result of a physical health condition, a mental health
condition, an accident, a sickness, or substance abuse, including a
group, blanket, or franchise insurance policy, insurance
agreement, evidence of coverage, or a similar coverage document.
(4) "Health benefit plan issuer" means an entity
authorized by this code to issue health benefit plans in this state.
Sec. 1680.002. OPERATION AS DOMESTIC MUTUAL INSURANCE
COMPANY. (a) The company operates as a domestic mutual insurance
company under Chapter 883. The company is subject to that chapter,
but is not subject to Chapter 826.
(b) The company:
(1) has the legal rights of a mutual insurance company
operating under Chapter 883 and of an individual in this state; and
(2) may bring a suit in the company's own name without
any procedural prerequisites to the exercise of that power.
(c) The company is not a state agency or executive agency or
a governmental entity for any purpose.
Sec. 1680.003. APPLICABILITY OF CODE. The company is
subject to this code.
Sec. 1680.004. AUTHORITY OF COMMISSIONER AND DEPARTMENT.
(a) The commissioner may regulate the company:
(1) to the same extent that the commissioner may
regulate a mutual insurance company; and
(2) as provided by Section 1680.153.
(b) The company is subject to the jurisdiction of the
commissioner and department in the same manner as a private
insurance company.
Sec. 1680.005. OPEN MEETINGS LAW AND OPEN RECORDS LAW NOT
APPLICABLE. Notwithstanding any other state law, Chapters 551 and
552, Government Code, do not apply to the company.
Sec. 1680.006. CONFLICTS WITH CERTAIN INSURANCE LAWS. To
the extent of a conflict between this chapter and Chapter 883 or
another law of this state applicable to a nonlife mutual insurance
company, this chapter prevails.
[Sections 1680.007-1680.050 reserved for expansion]
SUBCHAPTER B. BOARD OF DIRECTORS
Sec. 1680.051. BOARD OF DIRECTORS; COMPOSITION. The
company is governed by a board composed of the following nine
members:
(1) one member who is appointed by the governor from a
list of three or more names provided to the governor by the
lieutenant governor, none of which may be senators or
representatives;
(2) one member who is appointed by the governor from a
list of three or more names provided to the governor by the speaker
of the house of representatives, none of which may be senators or
representatives;
(3) one member appointed by the governor who is a small
employer, as defined by Section 1501.002;
(4) one member appointed by the governor who is a large
employer, as defined by Section 1501.002;
(5) one member appointed by the governor who is a
practicing physician licensed in this state;
(6) one member appointed by the governor who
represents the interests of hospital or other institutional health
care providers;
(7) one member appointed by the governor who
represents the interests of political subdivisions in this state;
(8) the executive director of the Employees Retirement
System of Texas or the executive director's designee, who serves ex
officio; and
(9) the executive director of the Teacher Retirement
System of Texas or the executive director's designee, who serves ex
officio.
Sec. 1680.052. QUALIFICATIONS. (a) Each board member must
be a resident of this state.
(b) An individual may not serve as an appointed board member
if the individual, another individual related to the individual
within the second degree by consanguinity or affinity, or another
individual residing in the same household with the individual:
(1) is registered or licensed under this code or is
required to be registered or licensed under this code;
(2) is employed by or acts as a consultant to a person
registered or licensed under this code or required to be registered
or licensed under this code;
(3) owns, controls, has a financial interest in, or
participates in the management of an organization registered or
licensed under this code or required to be registered or licensed
under this code;
(4) receives a substantial tangible benefit from the
company or the department; or
(5) is an officer, employee, or consultant of an
association in the field of insurance.
(c) Subsection (b) does not prohibit an individual from
serving as an appointed board member if the individual is only a
policyholder or a consumer of insurance or insurance products.
(d) An individual who is ineligible to serve on the board
under Subsection (b) may not serve as a board member until the first
anniversary of the date the condition that makes the individual
ineligible ends.
Sec. 1680.053. PRESIDING OFFICER; OTHER OFFICERS. (a) The
executive director of the Employees Retirement System of Texas and
the executive director of the Teacher Retirement System of Texas
serve as co-presiding officers of the board.
(b) The board shall elect annually any other officers the
board considers necessary to perform the board's duties.
Sec. 1680.054. TERMS. (a) Board members appointed under
Sections 1680.051(1)-(7) serve staggered six-year terms, with the
terms of three or four members expiring July 1 of each odd-numbered
year.
(b) A board member whose term has expired shall continue to
serve until the member's successor is appointed by the governor.
Sec. 1680.055. VACANCIES. (a) The governor shall fill a
vacancy on the board as soon as possible after the vacancy occurs.
(b) If a vacancy occurs before the date the vacating
member's term expires, the successor member shall be appointed or
elected for a term that expires on the same date as the vacating
member's term.
Sec. 1680.056. GROUNDS FOR REMOVAL. (a) It is a ground for
removal from the board if a member:
(1) does not have at the time of appointment or
election the qualifications required by Section 1680.052;
(2) does not maintain during service on the board the
qualifications required by Section 1680.052;
(3) cannot because of illness or disability discharge
the member's duties for a substantial part of the term for which the
member is appointed or elected; or
(4) is absent from more than half of the regularly
scheduled board meetings that the member is eligible to attend
during a calendar year.
(b) The validity of a board action is not affected by the
fact that it is taken when a ground for removal of a board member
exists.
Sec. 1680.057. PROCEDURES FOR REMOVAL. (a) If a member of
the board or an officer or employee of a management company with
whom the board contracts under Section 1680.152 has knowledge that
a potential ground for removal of a board member exists, the board
member or officer or employee of the management company shall
notify the co-presiding officers of the board of the potential
ground.
(b) One of the presiding officers shall notify the governor
and the attorney general that a potential ground for removal
exists.
(c) If the potential ground for removal involves either of
the co-presiding officers, the board member or officer or employee
of a management company with whom the board contracts under Section
1680.152 shall notify the next highest board officer, who shall
notify the governor and the attorney general that a potential
ground for removal exists.
Sec. 1680.058. COMMITTEES AND SUBCOMMITTEES. The board may
create committees and subcommittees.
Sec. 1680.059. MEETINGS. (a) The board shall hold a
meeting at least once each calendar quarter, at other times at the
call of either of the co-presiding officers, and at times
established by the company's bylaws.
(b) A special meeting may be called by any two board members
on two days' notice.
Sec. 1680.060. COMPENSATION. An appointed board member is
not entitled to compensation but is entitled to reimbursement for
actual and necessary expenses incurred in attending meetings of the
board or performing other official duties authorized by either or
both of the co-presiding officers.
Sec. 1680.061. PERSONAL LIABILITY OF BOARD MEMBERS,
OFFICERS, AND EMPLOYEES. In connection with the administration,
management, or conduct of the company, or the company's business or
a related matter, a board member or an officer or employee of the
company or a management company with whom the board contracts under
Section 1680.152 is not personally liable in the individual's
private capacity for an act performed or a contract or other
obligation entered into or undertaken in the individual's official
capacity in good faith and without intent to defraud.
[Sections 1680.062-1680.100 reserved for expansion]
SUBCHAPTER C. MANAGEMENT OF COMPANY
Sec. 1680.101. GENERAL POWERS OF BOARD. The board has full
authority over the company and may:
(1) perform any act necessary or convenient to
administer the company or in connection with the company's
insurance business; and
(2) function in all aspects as the governing body of a
domestic mutual insurance company.
Sec. 1680.102. GENERAL DUTIES OF BOARD RELATING TO HEALTH
BENEFIT PLAN. The board shall:
(1) provide for engaging in the business of issuing
health benefit plans and for the delivery in this state of health
benefit plans to the same extent as any other health benefit plan
issuer in this state;
(2) propose rates for health benefit plans issued by
the company; and
(3) exercise any other authority necessary to engage
in the business of health benefit plans.
Sec. 1680.103. PRINCIPAL OFFICE. The board shall maintain
the company's principal office in Travis County.
Sec. 1680.104. CERTAIN RELATIONSHIPS WITH OTHER INSURERS
PROHIBITED. The company may not have:
(1) an affiliate, spin-off, or subsidiary that writes
a line or type of insurance other than health benefit plans; or
(2) interlocking boards of directors with an insurer
that writes a line or type of insurance other than health benefit
plans.
Sec. 1680.105. PROGRAM AND FACILITY ACCESSIBILITY. (a)
The company shall comply with federal and state laws that relate to
program and facility accessibility.
(b) The board shall prepare and maintain a written plan that
describes the manner in which an individual who does not speak
English can be provided reasonable access to the company's programs
and services.
(c) The board shall develop and implement policies that
provide the public with a reasonable opportunity to appear before
the board and to speak on any issue under the company's
jurisdiction.
[Sections 1680.106-1680.150 reserved for expansion]
SUBCHAPTER D. OPERATION OF COMPANY; FINANCIAL ADMINISTRATION
Sec. 1680.151. PURPOSES OF COMPANY. The company shall:
(1) serve as a competitive force in the marketplace;
and
(2) guarantee the availability of health benefit plans
in this state.
Sec. 1680.152. SELECTION OF MANAGEMENT COMPANY AND
INDEPENDENT AUDITOR. The board:
(1) may contract with an entity that is qualified to
administer, manage, and operate the company; and
(2) shall contract with an entity that is qualified to
audit the manner in which the company or the entity described by
Subdivision (1) administers, manages, and operates the company.
Sec. 1680.153. PLAN OF OPERATION. (a) The management
company shall submit to the commissioner a plan of operation and any
amendments to that plan necessary or suitable to ensure the fair,
reasonable, and equitable administration of the company.
(b) The commissioner, after notice and hearing, shall
approve the plan of operation if the commissioner determines the
plan:
(1) is suitable to ensure the fair, reasonable, and
equitable administration of the company; and
(2) provides adequately for the sharing of losses on
an equitable and proportionate basis.
(c) The plan of operation is effective on the written
approval of the commissioner.
Sec. 1680.154. DISSOLUTION PROHIBITED. The company may not
be dissolved except by statute.
[Sections 1680.155-1680.200 reserved for expansion]
SUBCHAPTER E. EXAMINATIONS, REPORTS, AND FILINGS
Sec. 1680.201. EXAMINATION BY DEPARTMENT. (a) The
department shall examine the company in the manner and under the
conditions specified by Chapter 401 for the examination of
insurers.
(b) The company shall pay the costs of the examination.
Sec. 1680.202. PROVIDING INFORMATION TO LEGISLATURE. The
company shall provide requested information to each appropriate
legislative committee in the manner requested by the committee.
Sec. 1680.203. ANNUAL ACCOUNTING OF MONEY RECEIVED AND
DISBURSED. Each year, the company shall prepare a complete and
detailed written report accounting for all money the company
received and disbursed during the preceding fiscal year.
Sec. 1680.204. ANNUAL STATEMENTS. (a) The company shall
file annual statements with the department in the same manner as is
required of other health benefit plan issuers.
(b) The department shall include in the department's annual
report under Section 32.021 a report on the company's condition.
Sec. 1680.205. PUBLICATION AND FILING OF AUDITED REPORT.
The board shall:
(1) publish an independently audited report analyzing
the company's activities and fiscal condition during the preceding
fiscal year; and
(2) file the audited report with the department for
submission simultaneously with its annual financial report.
Sec. 1680.206. ADDITIONAL REPORTS. The company shall file
with the department all reports required of other health benefit
plan issuers.
Sec. 1680.207. PERIODIC REPORTS TO BOARD. The management
company with whom the board contracts under Section 1680.152 shall
make periodic reports to the board regarding:
(1) the company's status; and
(2) the company's investments.
[Sections 1680.208-1680.250 reserved for expansion]
SUBCHAPTER F. GENERAL POWERS AND DUTIES RELATING TO INSURANCE
Sec. 1680.251. RATEMAKING AUTHORITY. (a) Except as
provided by this section, the board may propose rates to be charged
by the company for health benefit plans issued by the company.
(b) The board shall engage the services of an independent
actuary who is a member in good standing with a nationally
recognized accrediting entity to develop and recommend actuarially
sound rates.
[Sections 1680.252-1680.300 reserved for expansion]
SUBCHAPTER G. PURCHASE AND ISSUANCE OF COVERAGE
Sec. 1680.301. (a) The Employees Retirement System of
Texas shall apply to the company for the provision of health benefit
plan coverage for some or all of the individuals covered by the
group benefits program under Chapter 1551.
(b) The commissioner by rule may allow entities other than
the Employees Retirement System of Texas to apply to the company for
the provision of health benefit plan coverage, including:
(1) entities that provide health benefit plan coverage
under Subtitle H;
(2) political subdivisions of this state; and
(3) independent school districts.
(c) The company shall amend the company's plan of operation
under Section 1680.153 as necessary to comply with any rules
adopted by the commissioner under Subsection (b).
Sec. 1680.302. APPLICATION FOR COVERAGE. An application to
the company for health benefit plan coverage must be:
(1) made in the form prescribed by the company; and
(2) submitted directly by the applicant.
Sec. 1680.303. POLICY FORMS. The company shall use policy
forms that comply with the requirements of Chapter 1701.
Sec. 1680.304. CANCELLATION AND NONRENEWAL. The company
may cancel or refuse to renew a health benefit plan to the same
extent and in the same manner as another health benefit plan issuer
may cancel or refuse to renew that same type of health benefit plan.
[Sections 1680.305-1680.350 reserved for expansion]
SUBCHAPTER H. APPEALS
Sec. 1680.351. APPEAL OF CERTAIN ACTIONS AND DECISIONS.
(a) An act or decision by the company to deny, cancel, or refuse to
renew a health benefit plan may be appealed to the board not later
than the 30th day after the date the affected party receives actual
notice that the act occurred or the decision was made.
(b) The company shall:
(1) not later than the 30th day after the date the
request for hearing is made, hear the appeal; and
(2) not later than the 10th day before the date of the
hearing, notify the appellant in writing of the time and place of
the hearing.
(c) Not later than the 30th day after the last day of the
hearing, the board shall affirm, reverse, or modify the act or
decision appealed to the board.
(d) Unless the board specifically orders otherwise, a
hearing under this section does not suspend the operation of an act
or decision of the company.
Sec. 1680.352. REVIEW OF BOARD DECISION BY COMMISSIONER.
(a) A board decision under Section 1680.351 is subject to review by
the commissioner in the manner provided by Chapter 2001, Government
Code.
(b) The commissioner's review of a board decision does not
suspend the operation of an act or decision of the company unless
the commissioner specifically orders the suspension on a showing by
an aggrieved party of:
(1) immediate, irreparable injury, loss, or damage;
and
(2) probable success on the merits.
Sec. 1680.353. APPEAL OF COMMISSIONER'S DECISION. (a) A
person aggrieved by a decision of the commissioner under Section
1680.352 may appeal the decision to a district court.
(b) Judicial review under this section is governed by the
substantial evidence rule.
[Sections 1680.354-1680.400 reserved for expansion]
SUBCHAPTER I. PUBLIC INTEREST INFORMATION AND COMPLAINT PROCEDURES
Sec. 1680.401. PUBLIC INTEREST INFORMATION. (a) The
company shall prepare information of public interest describing the
functions of the company and the procedures by which complaints are
submitted to and resolved by the company.
(b) The company shall make the information available to the
public and appropriate state agencies.
Sec. 1680.402. COMPLAINTS. (a) The company shall
establish methods by which consumers and service recipients are
notified of the name, mailing address, and telephone number of the
company for the purpose of directing a complaint to the company.
(b) The company may provide for the notice:
(1) by a supplement or endorsement to a written
policy; and
(2) in each bill for services provided by the company.
Sec. 1680.403. COMPLAINT RECORD. (a) The company shall
keep information about each written complaint filed with the
company. The information must include:
(1) the date the complaint is received;
(2) the name of the complainant;
(3) the subject matter of the complaint;
(4) a record of each person contacted in relation to
the complaint;
(5) a summary of the results of the review or
investigation of the complaint; and
(6) for a complaint for which the company takes no
action, an explanation of the reason the complaint was closed
without action.
(b) For each written complaint the company receives and has
authority to resolve, the company shall:
(1) provide the company's policies and procedures
relating to complaint investigation and resolution to the person
filing the complaint and each person or entity that is a subject of
the complaint; and
(2) at least quarterly and until final disposition of
the complaint, notify the person filing the complaint and each
person or entity that is a subject of the complaint of the status of
the complaint unless the notification would jeopardize an
undercover investigation.
SECTION 2. (a) In this section:
(1) "Committee" means the Texas Mutual Health Benefit
Plan Company Implementation Committee established under Subsection
(b).
(2) "Company" means the Texas Mutual Health Benefit
Plan Company.
(b) The Texas Mutual Health Benefit Plan Company
Implementation Committee is established to evaluate and make
recommendations concerning the establishment and operation of the
Texas Mutual Health Benefit Plan Company under Chapter 1680,
Insurance Code, as added by this Act.
(c) The committee is composed of:
(1) the commissioner of insurance;
(2) the executive director of the Employees Retirement
System of Texas or the executive director's designee;
(3) the executive director of the Teacher Retirement
System of Texas or the executive director's designee;
(4) the executive commissioner of the Health and
Human Services Commission;
(5) a representative of The University of Texas
System, chosen by the governing board of that system; and
(6) a representative of The Texas A&M University
System, chosen by the governing board of that system.
(d) The commissioner of insurance serves as the presiding
officer of the committee and may, with the advice and consent of the
other members of the committee, request other individuals to assist
or become members of the committee.
(e) The committee shall examine the efficacy of the Texas
Mutual Health Benefit Plan Company, including examining:
(1) health benefit plan design and delivery;
(2) operational aspects of the operation of the
company, including any impacts on separately evaluated
classifications of costs borne by the company;
(3) the applicable interplay between federal and state
law, and various provisions of state law, in relation to entities
required or potentially allowed to apply for coverage from the
company;
(4) the economic impact the operation of the company
will have on the economy of this state; and
(5) the impact the provision of health benefit plan
coverage by the company would have on the quality and capacity for
the delivery of health care services in this state.
(f) The committee shall prepare a report containing:
(1) any findings made after examination under
Subsection (e); and
(2) any recommendations for statutory amendments
necessary for the effective and efficient operation of the company.
(g) Not later than November 1, 2010, the committee shall
deliver the report prepared under Subsection (f) to the following
individuals or entities:
(1) the governor;
(2) the lieutenant governor;
(3) the speaker of the house of representatives; and
(4) each standing committee of the senate and the
house of representatives with primary jurisdiction over insurance
or the delivery of health care in this state.
(h) The committee is abolished September 1, 2011.
SECTION 3. (a) The governor shall make the appointments
described by Section 1680.051, Insurance Code, as added by this
Act, as soon as possible after September 1, 2009, and in no event
later than September 1, 2010.
(b) The governing boards of The University of Texas System
and The Texas A&M University System shall make the selections
described by Sections 2(c)(5) and (6) of this Act not later than
November 1, 2009.
SECTION 4. The Texas Mutual Health Benefit Plan Company
shall be fully operational and capable of accepting applications
for coverage not later than January 1, 2012.
SECTION 5. This Act takes effect September 1, 2009.