Texas 2009 - 81st Regular

Texas Senate Bill SB107 Compare Versions

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

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1	1	81R1637 KCR-D
2	2	By: Ellis S.B. No. 107
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the creation of the Texas Health Benefit Plan Security
8	8	Program.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subtitle G, Title 8, Insurance Code, is amended
11	11	by adding Chapter 1510 to read as follows:
12	12	CHAPTER 1510. TEXAS HEALTH BENEFIT PLAN SECURITY ACT
13	13	SUBCHAPTER A. GENERAL PROVISIONS
14	14	Sec. 1510.001. SHORT TITLE. This chapter may be cited as
15	15	the Texas Health Benefit Plan Security Act.
16	16	Sec. 1510.002. DEFINITIONS. In this chapter:
17	17	(1) "Dependent" means:
18	18	(A) a spouse of an enrollee;
19	19	(B) an unmarried child who is under 19 years of
20	20	age and is the child of an enrollee;
21	21	(C) a child who is a student under 23 years of
22	22	age, is the child of an enrollee, and is financially dependent on
23	23	the enrollee; or
24	24	(D) a child of any age who is the child of an
25	25	enrollee, is disabled, and is dependent on the enrollee.
26	26	(2) "Eligible employee" means an individual employed
27	27	by a small employer who works at least 20 hours per week for that
28	28	employer. The term does not include an employee who works on a
29	29	temporary or substitute basis or who works fewer than 26 weeks
30	30	annually.
31	31	(3) "Eligible individual" means:
32	32	(A) a self-employed individual who works and
33	33	resides in this state and is organized as a sole proprietorship or
34	34	in any other legally recognized manner in which a self-employed
35	35	individual may organize, a substantial part of whose income derives
36	36	from a trade or business through which the individual has attempted
37	37	to earn taxable income;
38	38	(B) an individual who does not work more than 20
39	39	hours a week for any single employer; or
40	40	(C) an individual employed by a small employer
41	41	who does not offer health benefit plan coverage.
42	42	(4) "Employer" includes the owner or responsible agent
43	43	of an employing business who is authorized to sign contracts on
44	44	behalf of the business.
45	45	(5) "Enrollee" means an eligible individual or
46	46	eligible employee who enrolls in the program.
47	47	(6) "Health benefit plan" has the meaning assigned by
48	48	Section 1501.002(5).
49	49	(7) "Health benefit plan issuer" means any of the
50	50	following entities, if the entity issues a health benefit plan in
51	51	this state:
52	52	(A) an insurance company;
53	53	(B) a group hospital service corporation
54	54	operating under Chapter 842;
55	55	(C) a fraternal benefit society operating under
56	56	Chapter 885;
57	57	(D) a stipulated premium company operating under
58	58	Chapter 884;
59	59	(E) a reciprocal exchange operating under
60	60	Chapter 942;
61	61	(F) a Lloyd's plan operating under Chapter 941;
62	62	(G) a health maintenance organization operating
63	63	under Chapter 843;
64	64	(H) a multiple employer welfare arrangement that
65	65	holds a certificate of authority under Chapter 846; or
66	66	(I) an approved nonprofit health corporation
67	67	that holds a certificate of authority under Chapter 844.
68	68	(8) "Participating employer" means a small employer
69	69	who contracts with the department through the program.
70	70	(9) "Program" means the Health Benefit Plan Security
71	71	Program established and operated under this chapter.
72	72	(10) "Provider" means any person, organization,
73	73	corporation, or association who provides health care services and
74	74	products and is authorized to provide those services and products
75	75	under the laws of this state.
76	76	(11) "Small employer" has the meaning assigned by
77	77	Section 1501.002(14). The commissioner, on or after September 1,
78	78	2011, by rule may expand the definition of "small employer" for the
79	79	purposes of this chapter to include other employers not described
80	80	by Section 1501.002(14).
81	81	(12) "Third-party administrator" means an
82	82	administrator regulated under Chapter 4151.
83	83	Sec. 1510.003. DISCLOSURE OF CERTAIN INFORMATION IN
84	84	CONTRACT NEGOTIATIONS. During any negotiation with a health
85	85	benefit plan issuer relating to a provider's reimbursement
86	86	agreement with that issuer, the provider shall provide data
87	87	relating to any reduction in or avoidance of bad debt or charity
88	88	care costs by the provider as a result of the operation of the
89	89	program.
90	90	Sec. 1510.004. CONSTRUCTION WITH OTHER LAW. (a)
91	91	Notwithstanding any other law, including any otherwise applicable
92	92	provision of Chapter 552, Government Code, any personally
93	93	identifiable financial information, supporting data, or tax return
94	94	of any individual obtained by the department under this chapter is
95	95	confidential and not open to public inspection.
96	96	(b) Any health information obtained by the department under
97	97	this chapter that is covered by the Health Insurance Portability
98	98	and Accountability Act of 1996 (42 U.S.C. Section 1320d et seq.) or
99	99	Chapter 181, Health and Safety Code, is confidential and not open to
100	100	public inspection.
101	101	Sec. 1510.005. RULES. The commissioner shall adopt rules
102	102	as necessary to implement this chapter, including rules relating to
103	103	criteria for small employer and enrollee participation in the
104	104	program.
105	105	SUBCHAPTER B. PROGRAM ESTABLISHMENT AND OPERATION
106	106	Sec. 1510.051. PROGRAM ESTABLISHED; PURPOSE OF PROGRAM.
107	107	(a) The Health Benefit Plan Security Program is established in the
108	108	department.
109	109	(b) The purpose of the program is to provide comprehensive,
110	110	affordable health care coverage to eligible individuals and
111	111	employees of small employers, and the dependents of eligible
112	112	individuals and employees, on a voluntary basis.
113	113	Sec. 1510.052. DEPARTMENT PROGRAM POWERS AND DUTIES. (a)
114	114	The department shall:
115	115	(1) determine the comprehensive services and benefits
116	116	to be included by the program and develop the specifications for the
117	117	health benefit plan coverage provided through the program;
118	118	(2) establish administrative and accounting
119	119	procedures as recommended by the comptroller for the operation of
120	120	the program;
121	121	(3) develop and implement a plan to publicize the
122	122	existence of the program, including program eligibility
123	123	requirements and enrollment procedures;
124	124	(4) arrange for the provision of health benefit plan
125	125	coverage to eligible individuals and eligible employees through
126	126	contracts with one or more qualified health benefit plan issuers;
127	127	and
128	128	(5) develop a high-risk pool for enrollees in
129	129	accordance with Section 1510.102.
130	130	(b) The department may:
131	131	(1) enter into contracts with qualified third parties,
132	132	both private and public, for any service necessary to implement and
133	133	operate the program;
134	134	(2) take any legal actions necessary to:
135	135	(A) avoid the payment of improper claims against
136	136	the coverage provided by the program;
137	137	(B) recover any amounts erroneously or
138	138	improperly paid by the program;
139	139	(C) recover any amounts paid by the program as a
140	140	result of mistake of fact or law;
141	141	(D) recover or collect savings offset payments
142	142	due to the program under Subchapter F for the proper administration
143	143	of the program; and
144	144	(E) recover other amounts due the program;
145	145	(3) establish and administer a revolving loan fund to
146	146	assist providers in the purchase of computer hardware and software
147	147	necessary to implement any program requirements relating to the
148	148	electronic submission of claims and solicit matching contributions
149	149	to the fund from each health benefit plan issuer;
150	150	(4) apply for and receive funds, grants, or contracts
151	151	from public and private sources; and
152	152	(5) conduct studies and analyses related to the
153	153	provision of health care, health care costs, and quality.
154	154	Sec. 1510.053. PROGRAM AUDIT. The state auditor shall
155	155	annually audit the program and provide a written copy of the audit
156	156	to the commissioner and the legislative committees having primary
157	157	jurisdiction over the department.
158	158	SUBCHAPTER C. COVERAGE PROVIDED BY PROGRAM; REQUIREMENTS FOR
159	159	HEALTH BENEFIT PLAN ISSUERS
160	160	Sec. 1510.101. PROVISION OF HEALTH BENEFIT PLAN COVERAGE.
161	161	(a) The department, through the program, shall provide health
162	162	benefit plan coverage through one or more health benefit plan
163	163	issuers not later than September 1, 2010, by:
164	164	(1) issuing requests for proposals from health benefit
165	165	plan issuers;
166	166	(2) requiring health benefit plan issuers that wish to
167	167	participate in the program to offer at least one health benefit plan
168	168	that complies with the program's minimum requirements; and
169	169	(3) making payments to health benefit plan issuers
170	170	that provide health benefit plan coverage to enrollees.
171	171	(b) The department, in order to provide health benefit plan
172	172	coverage through the program, may:
173	173	(1) notwithstanding any other provision of this code,
174	174	set allowable rates for administration and underwriting gains for
175	175	health benefit plan issuers;
176	176	(2) require quality improvement, disease prevention,
177	177	disease management, and cost-containment provisions in the
178	178	contracts with participating health benefit plan issuers or may
179	179	arrange for the provision of those services through contracts with
180	180	other entities;
181	181	(3) administer continuation benefits for eligible
182	182	individuals from employers with 20 or more employees who have
183	183	purchased health benefit plan coverage through the program for the
184	184	duration of their eligibility periods for continuation benefits
185	185	under Title X, Consolidated Omnibus Budget Reconciliation Act of
186	186	1985 (29 U.S.C. Section 1161 et seq.); and
187	187	(4) administer or contract to administer plans under
188	188	Section 125, Internal Revenue Code of 1986, for employers and
189	189	employees participating in the program, including medical expense
190	190	reimbursement accounts and dependent care reimbursement accounts.
191	191	Sec. 1510.102. HEALTH HIGH-RISK POOL. (a) The department
192	192	shall establish a health high-risk pool for enrollees.
193	193	(b) An enrollee must be included in the high-risk pool if:
194	194	(1) the total cost of health care services for the
195	195	enrollee exceeds $100,000 in any 12-month period; or
196	196	(2) the enrollee has been diagnosed with acquired
197	197	immune deficiency syndrome (HIV/AIDS), angina pectoris, cirrhosis
198	198	of the liver, coronary occlusion, cystic fibrosis, Friedreich's
199	199	ataxia, hemophilia, Hodgkin's disease, Huntington's chorea,
200	200	juvenile diabetes, leukemia, metastatic cancer, motor or sensory
201	201	aphasia, multiple sclerosis, muscular dystrophy, myasthenia
202	202	gravis, myotonia, heart disease requiring open-heart surgery,
203	203	Parkinson's disease, polycystic kidney disease, psychotic
204	204	disorders, quadriplegia, stroke, syringomyelia, or Wilson's
205	205	disease.
206	206	(c) The department shall develop appropriate disease
207	207	management protocols, develop procedures for implementing those
208	208	protocols, and determine the manner in which disease management
209	209	must be provided to enrollees in the high-risk pool. The program may
210	210	include disease management in its contract with health benefit plan
211	211	issuers participating in the program, contract separately with
212	212	another entity for disease management services, or provide disease
213	213	management services directly through the program.
214	214	Sec. 1510.103. REQUIREMENTS FOR HEALTH BENEFIT PLAN
215	215	ISSUERS. In order to participate in the program as a health benefit
216	216	plan issuer, a health benefit plan issuer must:
217	217	(1) provide the health services and benefits as
218	218	determined by the department, including a standard benefit package
219	219	that meets the requirements for mandated coverage for specific
220	220	health services, for specific diseases, and for providers of health
221	221	services under the Medicaid program, and any supplemental benefits
222	222	the department requires;
223	223	(2) ensure that providers contracting with a health
224	224	benefit plan issuer participating in the program do not charge
225	225	enrollees or third parties for covered health care services in
226	226	excess of the amount allowed by the contract, except for applicable
227	227	copayments, deductibles, or coinsurance;
228	228	(3) ensure that providers contracting with a health
229	229	benefit plan issuer participating in the program do not refuse to
230	230	provide coverage to an enrollee on the basis of health status,
231	231	medical condition, previous insurance status, race, color, creed,
232	232	age, national origin, citizenship status, gender, sexual
233	233	orientation, disability, or marital status; and
234	234	(4) ensure that a provider contracting with a health
235	235	benefit plan issuer participating in the program is reimbursed at
236	236	the rate negotiated between the health benefit plan issuer and the
237	237	contracting provider.
238	238	SUBCHAPTER D. PARTICIPATION BY SMALL EMPLOYERS AND ELIGIBLE
239	239	INDIVIDUALS
240	240	Sec. 1510.151. PARTICIPATION BY SMALL EMPLOYERS AND
241	241	ELIGIBLE INDIVIDUALS. (a) The department, through the program,
242	242	shall contract with small employers to provide for health benefit
243	243	coverage for employees and the dependents of employees.
244	244	(b) The department, through the program, may permit
245	245	eligible individuals to purchase the program's benefit plan
246	246	coverage for themselves and their dependents.
247	247	Sec. 1510.152. PREMIUMS, COSTS, AND CONTRIBUTIONS. (a)
248	248	The program shall collect payments from small employers with whom
249	249	the department has contracted under Section 1510.151(a) and
250	250	enrollees, including eligible individuals who have purchased
251	251	health benefit plan coverage from the program under Section
252	252	1510.151(b), to cover the costs of:
253	253	(1) health benefit plan coverage for enrollees and the
254	254	dependents of enrollees in contribution amounts determined by the
255	255	department;
256	256	(2) quality assurance, disease prevention, disease
257	257	management, and cost-containment programs;
258	258	(3) administrative services; and
259	259	(4) other health promotion costs.
260	260	(b) The commissioner shall establish the minimum required
261	261	contribution levels to be paid by a small employer toward the
262	262	employer's aggregate payment for the cost of coverage of the small
263	263	employer's employees. The minimum required contribution level to be
264	264	paid by a small employer:
265	265	(1) may not exceed 60 percent; and
266	266	(2) must be prorated for employees who work less than
267	267	the number of hours of a full-time equivalent employee.
268	268	(c) The commissioner may establish a separate minimum
269	269	contribution level to be paid by a small employer toward the
270	270	employer's aggregate payment for the cost of coverage of the
271	271	dependents of a small employer's employees.
272	272	Sec. 1510.153. CERTIFICATIONS. (a) The department shall
273	273	require small employers with whom the department has contracted
274	274	under Section 1510.151(a) to certify that:
275	275	(1) at least 75 percent of the employer's employees who
276	276	work 30 hours or more per week and who do not have other creditable
277	277	coverage are enrolled in a health benefit plan provided through the
278	278	program; and
279	279	(2) the small employer and each enrollee employed by
280	280	the employer otherwise meet the requirements of this chapter.
281	281	(b) The department may require an eligible individual to
282	282	certify that all of the individual's dependents are covered under a
283	283	health benefit plan issued by the program or another health benefit
284	284	plan that offers creditable coverage as defined by Section
285	285	1205.004(a) or 1501.102(a).
286	286	(c) The department may require an eligible individual who is
287	287	employed by a small employer who does not offer health benefit
288	288	coverage to certify that the employer did not provide access to an
289	289	employer-sponsored health benefit plan in the 12-month period
290	290	immediately preceding the eligible individual's application to the
291	291	program.
292	292	Sec. 1510.154. EFFECT OF SUBSIDIES. (a) The program shall
293	293	reduce the payment amounts for enrollees and eligible individuals
294	294	who are eligible for a subsidy.
295	295	(b) The program shall require small employers with whom the
296	296	department has contracted under Section 1510.151(a) to pass on any
297	297	subsidy to the enrollee qualifying for the subsidy, up to the full
298	298	amount of payments made by the enrollee.
299	299	SUBCHAPTER E. SUBSIDIES
300	300	Sec. 1510.201. ESTABLISHMENT OF SUBSIDIES. (a) The
301	301	department shall establish sliding-scale subsidies for the
302	302	purchase of insurance paid by enrollees whose income is less than
303	303	300 percent of the federal poverty level and who are not eligible
304	304	for coverage under the Medicaid program.
305	305	(b) The program may establish sliding-scale subsidies for
306	306	the purchase of employer-sponsored health coverage paid by
307	307	employees of businesses with more than 50 employees whose income is
308	308	less than 300 percent of the federal poverty level and who are not
309	309	eligible for coverage under the Medicaid program.
310	310	Sec. 1510.202. ELIGIBILITY REQUIREMENTS FOR SUBSIDY. To be
311	311	eligible for a subsidy established under Section 1510.201, an
312	312	enrollee must:
313	313	(1) have an income that is less than 300 percent of the
314	314	federal poverty level, be a resident of this state, be ineligible
315	315	for coverage under the Medicaid program, and be enrolled in a health
316	316	benefit plan provided by the program; or
317	317	(2) be enrolled in a health benefit plan of an employer
318	318	with more than 50 employees that meets any criteria established by
319	319	the department, including any additional eligibility criteria.
320	320	Sec. 1510.203. LIMITATIONS ON SUBSIDIES. (a) The
321	321	department shall limit the availability of subsidies to reflect
322	322	limitations of available funds.
323	323	(b) The department may limit a subsidy to 40 percent of the
324	324	payment made by an individual described by Section 1510.202(2) to
325	325	more closely parallel the subsidy received by enrollees under
326	326	Section 1510.202(1).
327	327	(c) A subsidy granted to an enrollee who is an eligible
328	328	individual who is not employed by a small employer may not exceed
329	329	the maximum subsidy level available to enrollees who are employed
330	330	by a small employer.
331	331	SUBCHAPTER F. SAVINGS OFFSET PAYMENTS
332	332	Sec. 1510.251. DETERMINATION OF COST SAVINGS. After notice
333	333	and a hearing, the commissioner shall determine annually:
334	334	(1) the aggregate measurable cost savings, including
335	335	any reduction or avoidance of bad debt and charity care costs, to
336	336	providers in this state as a result of the operation of the program;
337	337	and
338	338	(2) any increased coverage in the Medicaid program or
339	339	the state child health plan that is funded through the program.
340	340	Sec. 1510.252. ESTABLISHMENT OF OFFSET RATE AND AMOUNT. (a)
341	341	The commissioner shall establish annually, at a rate that does not
342	342	exceed the cost savings determined under Section 1510.251, a
343	343	savings offset amount, to be paid quarterly during the 12-month
344	344	period following the establishment of the offset amount by health
345	345	benefit plan issuers, employee benefit excess insurance carriers,
346	346	and third-party administrators other than health benefit plan
347	347	issuers and administrators for accidental injury, specified
348	348	disease, hospital indemnity, dental, vision, disability, income,
349	349	long-term care, Medicare supplement, or other limited benefit
350	350	health insurance.
351	351	(b) The commissioner shall make reasonable efforts to
352	352	ensure that premium revenue, or claims plus any administrative
353	353	expenses and fees with respect to third-party administrators, is
354	354	counted only once in any savings offset payment.
355	355	(c) The commissioner shall allow a health benefit plan
356	356	issuer to exclude from the issuer's gross premium revenue
357	357	reinsurance premiums that have been counted by the primary insurer
358	358	for the purpose of determining its savings offset payment. The
359	359	program shall allow each employee benefit excess insurance carrier
360	360	to exclude from its gross premium revenue the amount of claims that
361	361	have been counted by a third-party administrator for the purpose of
362	362	determining its savings offset payment.
363	363	(d) The program may verify each health benefit plan issuer,
364	364	employee benefit excess insurance carrier, and third-party
365	365	administrator's savings offset payment based on annual statements
366	366	and other reports.
367	367	Sec. 1510.253. PAYMENT OF OFFSET AMOUNT. (a) Each health
368	368	benefit plan issuer and employee benefit excess insurance carrier
369	369	shall pay a savings offset in an amount determined by the
370	370	commissioner, not to exceed four percent of annual health insurance
371	371	premiums and employee benefit excess insurance premiums on policies
372	372	that insure residents of this state. The savings offset payment may
373	373	not exceed the aggregate measurable cost savings under Section
374	374	1510.251.
375	375	(b) A health benefit plan issuer shall pay the first savings
376	376	offset amount on September 1, 2011, and subsequently each quarter.
377	377	(c) The quarterly savings offset payments are due 30 days
378	378	after written notice to the health benefit plan issuers, employee
379	379	benefit excess insurance carriers, and third-party administrators
380	380	of the amount due, and accrue interest at 12 percent annually on or
381	381	after that due date.
382	382	Sec. 1510.254. ANNUAL RECONCILIATION. The department shall
383	383	annually reconcile the aggregate amount of annual offset payments
384	384	paid by health benefit plan issuers to determine whether unused
385	385	payments may be returned to health benefit plan issuers, employee
386	386	benefit excess insurance carriers, and third-party administrators.
387	387	Sec. 1510.255. HEALTH BENEFIT PLAN ISSUER OBLIGATIONS. (a)
388	388	Each health benefit plan issuer and health care provider shall
389	389	demonstrate that best efforts have been made to ensure that an
390	390	issuer has recovered savings offset payments made in accordance
391	391	with this subchapter through negotiated reimbursement rates that
392	392	reflect providers' reductions or stabilization in the cost of bad
393	393	debt and charity care as a result of the operation of the program.
394	394	(b) A health benefit plan issuer shall use best efforts to
395	395	ensure health benefit plan premiums reflect any recovery of savings
396	396	offset payments as those savings offset payments are reflected
397	397	through incurred claims experience.
398	398	Sec. 1510.256. DEPOSIT AND USE OF OFFSET PAYMENTS. (a)
399	399	Savings offset payments collected under this subchapter shall be
400	400	deposited in the state treasury to the credit of the Texas
401	401	Department of Insurance operating account.
402	402	(b) Savings offset payments may be used only to fund the
403	403	subsidies authorized by Subchapter E and may not exceed savings
404	404	from reductions in growth of the state's health care spending and
405	405	bad debt and charity care.
406	406	SECTION 2. (a) The commissioner of insurance shall adopt
407	407	the rules necessary to implement Chapter 1510, Insurance Code, as
408	408	added by this Act, not later than January 1, 2010.
409	409	(b) The Texas Department of Insurance shall have the Texas
410	410	Health Benefit Plan Security Program established under Chapter
411	411	1510, Insurance Code, as added by this Act, fully operational and
412	412	able to provide health benefit coverage not later than September 1,
413	413	2010.
414	414	SECTION 3. This Act takes effect immediately if it receives
415	415	a vote of two-thirds of all the members elected to each house, as
416	416	provided by Section 39, Article III, Texas Constitution. If this
417	417	Act does not receive the vote necessary for immediate effect, this
418	418	Act takes effect September 1, 2009.