Texas 2009 - 81st Regular

Texas House Bill HB3120 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R4929 TJS-F
2	2	By: Alvarado H.B. No. 3120
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the maximum allowable premium rate increase for small
8	8	employer health benefit plans.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subchapter D, Chapter 501, Insurance Code, is
11	11	amended by amending Sections 501.151 and 501.153 and adding Section
12	12	501.160 to read as follows:
13	13	Sec. 501.151. POWERS AND DUTIES OF OFFICE. The office:
14	14	(1) may assess the impact of insurance rates, rules,
15	15	and forms on insurance consumers in this state; [and]
16	16	(2) shall advocate in the office's own name positions
17	17	determined by the public counsel to be most advantageous to a
18	18	substantial number of insurance consumers; and
19	19	(3) shall accept from a small employer, an eligible
20	20	employee, or an eligible employee's dependent and, if appropriate,
21	21	refer to the commissioner, a complaint described by Section
22	22	501.160.
23	23	Sec. 501.153. AUTHORITY TO APPEAR, INTERVENE, OR INITIATE.
24	24	The public counsel:
25	25	(1) may appear or intervene, as a party or otherwise,
26	26	as a matter of right before the commissioner or department on behalf
27	27	of insurance consumers, as a class, in matters involving:
28	28	(A) rates, rules, and forms affecting:
29	29	(i) property and casualty insurance;
30	30	(ii) title insurance;
31	31	(iii) credit life insurance;
32	32	(iv) credit accident and health insurance;
33	33	or
34	34	(v) any other line of insurance for which
35	35	the commissioner or department promulgates, sets, adopts, or
36	36	approves rates, rules, or forms;
37	37	(B) rules affecting life, health, or accident
38	38	insurance; or
39	39	(C) withdrawal of approval of policy forms:
40	40	(i) in proceedings initiated by the
41	41	department under Sections 1701.055 and 1701.057; or
42	42	(ii) if the public counsel presents
43	43	persuasive evidence to the department that the forms do not comply
44	44	with this code, a rule adopted under this code, or any other law;
45	45	(2) may initiate or intervene as a matter of right or
46	46	otherwise appear in a judicial proceeding involving or arising from
47	47	an action taken by an administrative agency in a proceeding in which
48	48	the public counsel previously appeared under the authority granted
49	49	by this chapter;
50	50	(3) may appear or intervene, as a party or otherwise,
51	51	as a matter of right on behalf of insurance consumers as a class in
52	52	any proceeding in which the public counsel determines that
53	53	insurance consumers are in need of representation, except that the
54	54	public counsel may not intervene in an enforcement or parens
55	55	patriae proceeding brought by the attorney general; [and]
56	56	(4) may appear or intervene before the commissioner or
57	57	department as a party or otherwise on behalf of small commercial
58	58	insurance consumers, as a class, in a matter involving rates,
59	59	rules, or forms affecting commercial insurance consumers, as a
60	60	class, in any proceeding in which the public counsel determines
61	61	that small commercial consumers are in need of representation; and
62	62	(5) may appear before the commissioner on behalf of a
63	63	small employer, eligible employee, or eligible employee's
64	64	dependent in a complaint the office refers to the commissioner
65	65	under Section 501.160.
66	66	Sec. 501.160. COMPLAINT RESOLUTION FOR CERTAIN PREMIUM RATE
67	67	INCREASES. (a) A small employer, an eligible employee, or an
68	68	eligible employee's dependent may file a complaint with the office
69	69	alleging that a rate is excessive for the risks to which the rate
70	70	applies, if the percentage increase in the premium rate charged to a
71	71	small employer under Subchapter E, Chapter 1501, for a new rating
72	72	period exceeds 10 percent.
73	73	(b) The office shall refer a complaint received under
74	74	Subsection (a) to the commissioner if the office determines that
75	75	the complaint substantially attests to a rate charged that is
76	76	excessive for the risks to which the rate applies.
77	77	(c) With respect to a complaint filed under Subsection (a),
78	78	the office may issue a subpoena applicable throughout the state
79	79	that requires the production of records.
80	80	(d) On application of the office in the case of disobedience
81	81	of a subpoena, a district court may issue an order requiring any
82	82	individual or person, including a small employer health benefit
83	83	plan issuer described by Section 1501.002, that is subpoenaed to
84	84	obey the subpoena and produce records, if the individual or person
85	85	has refused to do so. An application under this subsection must be
86	86	made in a district court in Travis County.
87	87	SECTION 2. Section 1501.204, Insurance Code, is amended to
88	88	read as follows:
89	89	Sec. 1501.204. INDEX RATES. Under a small employer health
90	90	benefit plan:
91	91	(1) the index rate for a class of business may not
92	92	exceed the index rate for any other class of business by more than
93	93	15 [20] percent; and
94	94	(2) premium rates charged during a rating period to
95	95	small employers in a class of business with similar case
96	96	characteristics for the same or similar coverage, or premium rates
97	97	that could be charged to those employers under the rating system for
98	98	that class of business, may not vary from the index rate by more
99	99	than 20 [25] percent.
100	100	SECTION 3. Section 1501.205, Insurance Code, is amended by
101	101	adding Subsection (d) to read as follows:
102	102	(d) A small employer health benefit plan issuer shall
103	103	disclose the risk load assessed to a small employer group to the
104	104	group, along with a description of the risk characteristics
105	105	material to the risk load assessment.
106	106	SECTION 4. Section 1501.206(a), Insurance Code, is amended
107	107	to read as follows:
108	108	(a) The percentage increase in the premium rate charged to a
109	109	small employer for a new rating period may not exceed the sum of:
110	110	(1) the percentage change in the new business premium
111	111	rate, measured from the first day of the preceding rating period to
112	112	the first day of the new rating period;
113	113	(2) any adjustment, not to exceed 10 [15] percent
114	114	annually and adjusted pro rata for a rating period of less than one
115	115	year, due to the claims experience, health status, or duration of
116	116	coverage of the employees or dependents of employees of the small
117	117	employer, as determined under the small employer health benefit
118	118	plan issuer's rate manual for the class of business; and
119	119	(3) any adjustment, not to exceed five percent
120	120	annually and adjusted pro rata for a rating period of less than one
121	121	year, due to change in coverage or change in the case
122	122	characteristics of the small employer, as determined under the
123	123	issuer's rate manual for the class of business.
124	124	SECTION 5. Subchapter E, Chapter 1501, Insurance Code, is
125	125	amended by adding Section 1501.2131 and amending Section 1501.214
126	126	to read as follows:
127	127	Sec. 1501.2131. COMPLAINT FACILITATION FOR PREMIUM RATE
128	128	ADJUSTMENTS. If the percentage increase in the premium rate
129	129	charged to a small employer for a new rating period exceeds 10
130	130	percent, the small employer, an eligible employee, or an eligible
131	131	employee's dependent may file a complaint with the office of public
132	132	insurance counsel as provided by Section 501.160.
133	133	Sec. 1501.214. ENFORCEMENT. (a) Subject to Subsection
134	134	(b), if [If] the commissioner determines that a small employer
135	135	health benefit plan issuer subject to this chapter exceeds the
136	136	applicable premium rate established under this subchapter, the
137	137	commissioner may order restitution and assess penalties as provided
138	138	by Chapter 82.
139	139	(b) The commissioner shall enter an order under this section
140	140	if the commissioner makes the finding described by Section
141	141	1501.653.
142	142	SECTION 6. Chapter 1501, Insurance Code, is amended by
143	143	adding Subchapter N to read as follows:
144	144	SUBCHAPTER N. RESOLUTION OF CERTAIN COMPLAINTS AGAINST SMALL
145	145	EMPLOYER HEALTH BENEFIT PLAN ISSUERS
146	146	Sec. 1501.651. DEFINITIONS. In this chapter:
147	147	(1) "Honesty-in-premium account" means the account
148	148	established under Section 1501.656.
149	149	(2) "Office" means the office of public insurance
150	150	counsel.
151	151	Sec. 1501.652. COMPLAINT RESOLUTION PROCEDURE. (a) On the
152	152	receipt of a referral of a complaint from the office of public
153	153	insurance counsel under Section 501.160, the commissioner shall
154	154	request written memoranda from the office and the small employer
155	155	health benefit plan issuer that is the subject of the complaint.
156	156	(b) After receiving the initial memoranda described by
157	157	Subsection (a), the commissioner may request one rebuttal
158	158	memorandum from the office.
159	159	(c) The commissioner may by rule limit the number of
160	160	exhibits submitted with or the time frame allowed for the submittal
161	161	of the memoranda described by Subsection (a) or (b).
162	162	Sec. 1501.653. ORDER; FINDINGS. The commissioner shall
163	163	issue an order under Section 1501.214(b), if the commissioner
164	164	determines that the rate complained of is excessive for the risks to
165	165	which the rate applies.
166	166	Sec. 1501.654. COSTS. The office may request, and the
167	167	commissioner may award to the office, reasonable costs and fees
168	168	associated with the investigation and resolution of a complaint
169	169	filed under Section 501.160 and disposed of in accordance with this
170	170	subchapter.
171	171	Sec. 1501.655. ASSESSMENT. (a) The commissioner may make
172	172	an assessment against each small employer health benefit plan
173	173	issuer in an amount that is sufficient to cover the costs of
174	174	investigating and resolving a complaint filed under Section 501.160
175	175	and disposed of in accordance with this subchapter.
176	176	(b) The commissioner shall deposit assessments collected
177	177	under this section to the credit of the honesty-in-premium account.
178	178	Sec. 1501.656. HONESTY-IN-PREMIUM ACCOUNT. (a) The
179	179	honesty-in-premium account is an account in the general revenue
180	180	fund that may be appropriated only to cover the cost associated with
181	181	the investigation and resolution of a complaint filed under Section
182	182	501.160 and disposed of in accordance with this subchapter.
183	183	(b) Interest earned on the honesty-in-premium account shall
184	184	be credited to the account. The account is exempt from the
185	185	application of Section 403.095, Government Code.
186	186	Sec. 1501.657. RATE REDUCTION NOT PROHIBITED. Nothing in
187	187	this subchapter prohibits a small employer health benefit plan
188	188	issuer from, at any time, offering a different rate to the group
189	189	whose rate is the subject of a complaint.
190	190	SECTION 7. The change in law made by Chapter 1501, Insurance
191	191	Code, as amended by this Act, applies only to a small employer
192	192	health benefit plan that is delivered, issued for delivery, or
193	193	renewed on or after January 1, 2010. A small employer health
194	194	benefit plan that is delivered, issued for delivery, or renewed
195	195	before January 1, 2010, is covered by the law in effect at the time
196	196	the health benefit plan was delivered, issued for delivery, or
197	197	renewed, and that law is continued in effect for that purpose.
198	198	SECTION 8. This Act takes effect immediately if it receives
199	199	a vote of two-thirds of all the members elected to each house, as
200	200	provided by Section 39, Article III, Texas Constitution. If this
201	201	Act does not receive the vote necessary for immediate effect, this
202	202	Act takes effect September 1, 2009.