Texas 2009 - 81st Regular

Texas House Bill HB2586 Compare Versions

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1	1	81R24697 E
2	2	By: Smithee H.B. No. 2586
3	3	Substitute the following for H.B. No. 2586:
4	4	By: Smithee C.S.H.B. No. 2586
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to small and large employer health group cooperatives.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 1501.051, Insurance Code, is amended by
12	12	amending Subdivision (3-a) and adding Subdivision (3-b) to read as
13	13	follows:
14	14	(3-a) "Eligible single-employee business" means a
15	15	business entity that:
16	16	(A) is owned and operated by a sole proprietor;
17	17	(B) employed an average of fewer than two
18	18	employees on business days during the preceding calendar year; and
19	19	(C) is eligible to participate in a cooperative
20	20	under this subchapter in accordance with Section 1501.066.
21	21	(3-b) "Expanded service area" means any area larger
22	22	than one county in which a health group cooperative offers
23	23	coverage.
24	24	SECTION 2. Section 1501.058(a), Insurance Code, is amended
25	25	to read as follows:
26	26	(a) A cooperative shall:
27	27	(1) arrange for small or large employer health benefit
28	28	plan coverage for small employer groups, [or] large employer
29	29	groups, and, subject to Sections 1501.0581(q)-(x), eligible
30	30	single-employee businesses that participate in the cooperative by
31	31	contracting with small or large employer health benefit plan
32	32	issuers that meet the requirements established by Section 1501.061;
33	33	(2) collect premiums to cover the cost of:
34	34	(A) small or large employer health benefit plan
35	35	coverage purchased through the cooperative; and
36	36	(B) the cooperative's administrative expenses;
37	37	(3) establish administrative and accounting
38	38	procedures for the operation of the cooperative;
39	39	(4) establish procedures under which an applicant for
40	40	or participant in coverage issued through the cooperative may have
41	41	a grievance reviewed by an impartial person;
42	42	(5) contract with small or large employer health
43	43	benefit plan issuers to provide services to small or large
44	44	employers covered through the cooperative; and
45	45	(6) develop and implement a plan to maintain public
46	46	awareness of the cooperative and publicize the eligibility
47	47	requirements for, and the procedures for enrollment in, coverage
48	48	through the cooperative.
49	49	SECTION 3. Section 1501.0581, Insurance Code, is amended by
50	50	amending Subsections (a), (b), and (k) and adding Subsections (q)
51	51	through (x) to read as follows:
52	52	(a) [The membership of a health group cooperative may
53	53	consist of only small employers, only large employers, or both
54	54	small and large employers.] To participate as a member of a health
55	55	group cooperative, an employer must be a small or large employer as
56	56	described by this chapter or an eligible single-employee business
57	57	as defined by Section 1501.051. The membership of a health group
58	58	cooperative may consist of the following:
59	59	(1) only small employers;
60	60	(2) only large employers;
61	61	(3) both small and large employers;
62	62	(4) both small employers and eligible single-employee
63	63	businesses;
64	64	(5) both large employers and eligible single-employee
65	65	businesses; or
66	66	(6) a combination of small employers, large employers,
67	67	and eligible single-employee businesses.
68	68	(b) Subject to the requirements imposed on small employer
69	69	health benefit plan issuers under Section 1501.101 and subject to
70	70	Subsections (a-1) and (o), a health group cooperative:
71	71	(1) shall allow a small employer to join a health group
72	72	cooperative, other than a health group cooperative consisting of
73	73	only [small employers or both small and] large employers, and
74	74	enroll in health benefit plan coverage; [and]
75	75	(2) subject to Subsection (t), may allow eligible
76	76	single-employee businesses to join a health group cooperative and
77	77	enroll in health benefit plan coverage; and
78	78	(3) may allow a large employer to join the health group
79	79	cooperative and enroll in health benefit plan coverage.
80	80	(k) A health group cooperative may offer more than one
81	81	health benefit plan, but each plan offered must be made available to
82	82	all employers participating in [employees covered by] the
83	83	cooperative.
84	84	(q) Except as provided by Subsection (t), a health group
85	85	cooperative may file an election with the commissioner, on a form
86	86	and in the manner prescribed by the commissioner, to permit
87	87	eligible single-employee businesses to join the cooperative and
88	88	enroll in health benefit plan coverage. The election must be filed
89	89	not later than the 90th day before the date coverage for eligible
90	90	single-employee businesses is to become effective.
91	91	(r) A health group cooperative may file an election under
92	92	Subsection (q) only if a small or large employer health benefit plan
93	93	issuer has agreed in writing to offer to issue coverage to the
94	94	cooperative based on its membership after the election to permit
95	95	eligible single-employee businesses to participate in the
96	96	cooperative has become effective.
97	97	(s) On the date an election under Subsection (q) becomes
98	98	effective and until the election is rescinded, the provisions of
99	99	this subchapter relating to guaranteed issuance of plans, to rating
100	100	requirements, and to mandated benefits that are applicable to small
101	101	employers apply to eligible single-employee businesses that are
102	102	members of the health group cooperative.
103	103	(t) A health group cooperative that files an election with
104	104	the commissioner to permit an eligible single-employee business to
105	105	join the health group cooperative and enroll in health benefit plan
106	106	coverage must permit participation and enrollment in the
107	107	cooperative's health benefit plan coverage during the initial
108	108	enrollment and annual open enrollment periods by each eligible
109	109	single-employee business that elects to participate and agrees to
110	110	satisfy requirements associated with participation in and coverage
111	111	through the cooperative. For purposes of this subsection, the
112	112	provisions of Subsections (a-1) and (o) applicable to small
113	113	employers apply to eligible single-employee businesses.
114	114	(u) A health group cooperative may rescind its election to
115	115	permit eligible single-employee businesses to join the cooperative
116	116	and enroll in health benefit plan coverage only if:
117	117	(1) the election has been effective for at least two
118	118	years, except as provided by Subsection (v);
119	119	(2) the health group cooperative files notice of the
120	120	rescission with the commissioner not later than the 180th day
121	121	before the effective date of the rescission; and
122	122	(3) the health group cooperative provides written
123	123	notice of termination of coverage to all eligible single-employee
124	124	business members of the cooperative not later than the 180th day
125	125	before the effective date of the termination.
126	126	(v) The commissioner shall adopt rules under which a health
127	127	group cooperative may rescind an election described by Subsection
128	128	(u) before the second anniversary of the effective date of the
129	129	election.
130	130	(w) Notwithstanding Subsection (u), a health group
131	131	cooperative that files notice of rescission may choose to permit
132	132	existing eligible single-employee businesses to remain active,
133	133	covered members of the cooperative, but only if all such members of
134	134	the cooperative are provided the same opportunity.
135	135	(x) A health group cooperative that has rescinded an
136	136	election under Subsection (u) may not file a subsequent election to
137	137	permit eligible single-employee businesses to join the cooperative
138	138	and enroll in health benefit plan coverage before the fifth
139	139	anniversary of the effective date of the rescission.
140	140	SECTION 4. Section 1501.063(b-3), Insurance Code, is
141	141	amended to read as follows:
142	142	(b-3) Except as provided by Section 1501.0581(k), a [A]
143	143	health group cooperative shall have sole authority to make benefit
144	144	elections and perform other administrative functions under this
145	145	code for the cooperative's participating employers.
146	146	SECTION 5. Section 1501.065, Insurance Code, is amended to
147	147	read as follows:
148	148	Sec. 1501.065. CERTAIN ACTIONS BASED ON RISK
149	149	CHARACTERISTICS OR HEALTH STATUS PROHIBITED. A cooperative may not
150	150	limit, restrict, or condition an employer's or employee's
151	151	membership in a cooperative or, except as provided by Section
152	152	1501.0581(k), an employer's or employee's choice among benefit
153	153	plans based on:
154	154	(1) risk characteristics of a group or of any member of
155	155	a group; or
156	156	(2) health status related factors, duration of
157	157	coverage, or any similar characteristic related to the health
158	158	status or experience of a group or of any member of a group.
159	159	SECTION 6. Subchapter B, Chapter 1501, Insurance Code, is
160	160	amended by adding Sections 1501.066 and 1501.067 to read as
161	161	follows:
162	162	Sec. 1501.066. ELECTION TO TREAT PARTICIPATING EMPLOYERS
163	163	SEPARATELY FOR RATING PURPOSES. (a) Notwithstanding Section
164	164	1501.063, a health group cooperative may file with the
165	165	commissioner, on a form and in the manner prescribed by the
166	166	commissioner, an election to treat participating employers within
167	167	the cooperative as separate employers for purposes of rating small
168	168	and large employer health benefit plans, subject to the rating
169	169	requirements of this code applicable to those plans. An existing
170	170	health group cooperative must file the election with the department
171	171	not later than the 90th day before the date on which the election is
172	172	to become effective.
173	173	(b) A health group cooperative must provide to all
174	174	participating and prospective employers, in a manner prescribed by
175	175	the commissioner, a written notice of its election to treat
176	176	participating employers within the cooperative as separate
177	177	employers for purposes of rating small and large employer health
178	178	benefit plans. Employers participating in the cooperative when
179	179	such an election is made must be provided notice of the election not
180	180	later than the 90th day before the date the election is to become
181	181	effective. For a participating employer, the notice must contain
182	182	the quote for the premium rate applicable to the employer as of the
183	183	date the plan is renewed. An employer who applies to become a
184	184	participating employer in the health group cooperative must be
185	185	provided notice of the election when the prospective employer
186	186	applies to become a participating employer.
187	187	(c) An election under this section takes effect on the date
188	188	the plan to which the election applies is initially issued or on the
189	189	date the plan is renewed, and must remain in effect until at least
190	190	the first anniversary of that effective date.
191	191	Sec. 1501.067. ELIGIBLE SINGLE-EMPLOYEE BUSINESS. The
192	192	commissioner shall adopt rules governing the eligibility of a
193	193	single-employee business to participate in a health group
194	194	cooperative under this subchapter. The rules must include
195	195	provisions to ensure that each eligible single-employee business
196	196	has a business purpose and was not formed solely to obtain health
197	197	benefit plan coverage under this subchapter.
198	198	SECTION 7. Chapter 1501, Insurance Code, as amended by this
199	199	Act, applies only to an insurance policy, or contract, or evidence
200	200	of coverage delivered, issued for delivery, or renewed by a health
201	201	group cooperative that first delivers, issues for delivery, or
202	202	renews on or after the effective date of this Act. Any policy,
203	203	contract, or evidence of coverage delivered, issued for delivery,
204	204	or renewed by a health group cooperative that first delivered,
205	205	issued for delivery, or renewed an insurance policy, or contract,
206	206	or evidence of coverage prior to the effective date of this Act is
207	207	governed by the law as it existed immediately before the effective
208	208	date of this Act, and that law is continued in effect for that
209	209	purpose.
210	210	SECTION 8. This Act takes effect immediately if it receives
211	211	a vote of two-thirds of all the members elected to each house, as
212	212	provided by Section 39, Article III, Texas Constitution. If this
213	213	Act does not receive the vote necessary for immediate effect, this
214	214	Act takes effect September 1, 2009.