81R24697 E
By: Smithee H.B. No. 2586
Substitute the following for H.B. No. 2586:
By: Smithee C.S.H.B. No. 2586
A BILL TO BE ENTITLED
AN ACT
relating to small and large employer health group cooperatives.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1501.051, Insurance Code, is amended by
amending Subdivision (3-a) and adding Subdivision (3-b) to read as
follows:
(3-a) "Eligible single-employee business" means a
business entity that:
(A) is owned and operated by a sole proprietor;
(B) employed an average of fewer than two
employees on business days during the preceding calendar year; and
(C) is eligible to participate in a cooperative
under this subchapter in accordance with Section 1501.066.
(3-b) "Expanded service area" means any area larger
than one county in which a health group cooperative offers
coverage.
SECTION 2. Section 1501.058(a), Insurance Code, is amended
to read as follows:
(a) A cooperative shall:
(1) arrange for small or large employer health benefit
plan coverage for small employer groups, [or] large employer
groups, and, subject to Sections 1501.0581(q)-(x), eligible
single-employee businesses that participate in the cooperative by
contracting with small or large employer health benefit plan
issuers that meet the requirements established by Section 1501.061;
(2) collect premiums to cover the cost of:
(A) small or large employer health benefit plan
coverage purchased through the cooperative; and
(B) the cooperative's administrative expenses;
(3) establish administrative and accounting
procedures for the operation of the cooperative;
(4) establish procedures under which an applicant for
or participant in coverage issued through the cooperative may have
a grievance reviewed by an impartial person;
(5) contract with small or large employer health
benefit plan issuers to provide services to small or large
employers covered through the cooperative; and
(6) develop and implement a plan to maintain public
awareness of the cooperative and publicize the eligibility
requirements for, and the procedures for enrollment in, coverage
through the cooperative.
SECTION 3. Section 1501.0581, Insurance Code, is amended by
amending Subsections (a), (b), and (k) and adding Subsections (q)
through (x) to read as follows:
(a) [The membership of a health group cooperative may
consist of only small employers, only large employers, or both
small and large employers.] To participate as a member of a health
group cooperative, an employer must be a small or large employer as
described by this chapter or an eligible single-employee business
as defined by Section 1501.051. The membership of a health group
cooperative may consist of the following:
(1) only small employers;
(2) only large employers;
(3) both small and large employers;
(4) both small employers and eligible single-employee
businesses;
(5) both large employers and eligible single-employee
businesses; or
(6) a combination of small employers, large employers,
and eligible single-employee businesses.
(b) Subject to the requirements imposed on small employer
health benefit plan issuers under Section 1501.101 and subject to
Subsections (a-1) and (o), a health group cooperative:
(1) shall allow a small employer to join a health group
cooperative, other than a health group cooperative consisting of
only [small employers or both small and] large employers, and
enroll in health benefit plan coverage; [and]
(2) subject to Subsection (t), may allow eligible
single-employee businesses to join a health group cooperative and
enroll in health benefit plan coverage; and
(3) may allow a large employer to join the health group
cooperative and enroll in health benefit plan coverage.
(k) A health group cooperative may offer more than one
health benefit plan, but each plan offered must be made available to
all employers participating in [employees covered by] the
cooperative.
(q) Except as provided by Subsection (t), a health group
cooperative may file an election with the commissioner, on a form
and in the manner prescribed by the commissioner, to permit
eligible single-employee businesses to join the cooperative and
enroll in health benefit plan coverage. The election must be filed
not later than the 90th day before the date coverage for eligible
single-employee businesses is to become effective.
(r) A health group cooperative may file an election under
Subsection (q) only if a small or large employer health benefit plan
issuer has agreed in writing to offer to issue coverage to the
cooperative based on its membership after the election to permit
eligible single-employee businesses to participate in the
cooperative has become effective.
(s) On the date an election under Subsection (q) becomes
effective and until the election is rescinded, the provisions of
this subchapter relating to guaranteed issuance of plans, to rating
requirements, and to mandated benefits that are applicable to small
employers apply to eligible single-employee businesses that are
members of the health group cooperative.
(t) A health group cooperative that files an election with
the commissioner to permit an eligible single-employee business to
join the health group cooperative and enroll in health benefit plan
coverage must permit participation and enrollment in the
cooperative's health benefit plan coverage during the initial
enrollment and annual open enrollment periods by each eligible
single-employee business that elects to participate and agrees to
satisfy requirements associated with participation in and coverage
through the cooperative. For purposes of this subsection, the
provisions of Subsections (a-1) and (o) applicable to small
employers apply to eligible single-employee businesses.
(u) A health group cooperative may rescind its election to
permit eligible single-employee businesses to join the cooperative
and enroll in health benefit plan coverage only if:
(1) the election has been effective for at least two
years, except as provided by Subsection (v);
(2) the health group cooperative files notice of the
rescission with the commissioner not later than the 180th day
before the effective date of the rescission; and
(3) the health group cooperative provides written
notice of termination of coverage to all eligible single-employee
business members of the cooperative not later than the 180th day
before the effective date of the termination.
(v) The commissioner shall adopt rules under which a health
group cooperative may rescind an election described by Subsection
(u) before the second anniversary of the effective date of the
election.
(w) Notwithstanding Subsection (u), a health group
cooperative that files notice of rescission may choose to permit
existing eligible single-employee businesses to remain active,
covered members of the cooperative, but only if all such members of
the cooperative are provided the same opportunity.
(x) A health group cooperative that has rescinded an
election under Subsection (u) may not file a subsequent election to
permit eligible single-employee businesses to join the cooperative
and enroll in health benefit plan coverage before the fifth
anniversary of the effective date of the rescission.
SECTION 4. Section 1501.063(b-3), Insurance Code, is
amended to read as follows:
(b-3) Except as provided by Section 1501.0581(k), a [A]
health group cooperative shall have sole authority to make benefit
elections and perform other administrative functions under this
code for the cooperative's participating employers.
SECTION 5. Section 1501.065, Insurance Code, is amended to
read as follows:
Sec. 1501.065. CERTAIN ACTIONS BASED ON RISK
CHARACTERISTICS OR HEALTH STATUS PROHIBITED. A cooperative may not
limit, restrict, or condition an employer's or employee's
membership in a cooperative or, except as provided by Section
1501.0581(k), an employer's or employee's choice among benefit
plans based on:
(1) risk characteristics of a group or of any member of
a group; or
(2) health status related factors, duration of
coverage, or any similar characteristic related to the health
status or experience of a group or of any member of a group.
SECTION 6. Subchapter B, Chapter 1501, Insurance Code, is
amended by adding Sections 1501.066 and 1501.067 to read as
follows:
Sec. 1501.066. ELECTION TO TREAT PARTICIPATING EMPLOYERS
SEPARATELY FOR RATING PURPOSES. (a) Notwithstanding Section
1501.063, a health group cooperative may file with the
commissioner, on a form and in the manner prescribed by the
commissioner, an election to treat participating employers within
the cooperative as separate employers for purposes of rating small
and large employer health benefit plans, subject to the rating
requirements of this code applicable to those plans. An existing
health group cooperative must file the election with the department
not later than the 90th day before the date on which the election is
to become effective.
(b) A health group cooperative must provide to all
participating and prospective employers, in a manner prescribed by
the commissioner, a written notice of its election to treat
participating employers within the cooperative as separate
employers for purposes of rating small and large employer health
benefit plans. Employers participating in the cooperative when
such an election is made must be provided notice of the election not
later than the 90th day before the date the election is to become
effective. For a participating employer, the notice must contain
the quote for the premium rate applicable to the employer as of the
date the plan is renewed. An employer who applies to become a
participating employer in the health group cooperative must be
provided notice of the election when the prospective employer
applies to become a participating employer.
(c) An election under this section takes effect on the date
the plan to which the election applies is initially issued or on the
date the plan is renewed, and must remain in effect until at least
the first anniversary of that effective date.
Sec. 1501.067. ELIGIBLE SINGLE-EMPLOYEE BUSINESS. The
commissioner shall adopt rules governing the eligibility of a
single-employee business to participate in a health group
cooperative under this subchapter. The rules must include
provisions to ensure that each eligible single-employee business
has a business purpose and was not formed solely to obtain health
benefit plan coverage under this subchapter.
SECTION 7. Chapter 1501, Insurance Code, as amended by this
Act, applies only to an insurance policy, or contract, or evidence
of coverage delivered, issued for delivery, or renewed by a health
group cooperative that first delivers, issues for delivery, or
renews on or after the effective date of this Act. Any policy,
contract, or evidence of coverage delivered, issued for delivery,
or renewed by a health group cooperative that first delivered,
issued for delivery, or renewed an insurance policy, or contract,
or evidence of coverage prior to the effective date of this Act is
governed by the law as it existed immediately before the effective
date of this Act, and that law is continued in effect for that
purpose.
SECTION 8. 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, 2009.