81R1637 KCR-D
By: Ellis S.B. No. 107
A BILL TO BE ENTITLED
AN ACT
relating to the creation of the Texas Health Benefit Plan Security
Program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle G, Title 8, Insurance Code, is amended
by adding Chapter 1510 to read as follows:
CHAPTER 1510. TEXAS HEALTH BENEFIT PLAN SECURITY ACT
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1510.001. SHORT TITLE. This chapter may be cited as
the Texas Health Benefit Plan Security Act.
Sec. 1510.002. DEFINITIONS. In this chapter:
(1) "Dependent" means:
(A) a spouse of an enrollee;
(B) an unmarried child who is under 19 years of
age and is the child of an enrollee;
(C) a child who is a student under 23 years of
age, is the child of an enrollee, and is financially dependent on
the enrollee; or
(D) a child of any age who is the child of an
enrollee, is disabled, and is dependent on the enrollee.
(2) "Eligible employee" means an individual employed
by a small employer who works at least 20 hours per week for that
employer. The term does not include an employee who works on a
temporary or substitute basis or who works fewer than 26 weeks
annually.
(3) "Eligible individual" means:
(A) a self-employed individual who works and
resides in this state and is organized as a sole proprietorship or
in any other legally recognized manner in which a self-employed
individual may organize, a substantial part of whose income derives
from a trade or business through which the individual has attempted
to earn taxable income;
(B) an individual who does not work more than 20
hours a week for any single employer; or
(C) an individual employed by a small employer
who does not offer health benefit plan coverage.
(4) "Employer" includes the owner or responsible agent
of an employing business who is authorized to sign contracts on
behalf of the business.
(5) "Enrollee" means an eligible individual or
eligible employee who enrolls in the program.
(6) "Health benefit plan" has the meaning assigned by
Section 1501.002(5).
(7) "Health benefit plan issuer" means any of the
following entities, if the entity issues a health benefit plan in
this state:
(A) an insurance company;
(B) a group hospital service corporation
operating under Chapter 842;
(C) a fraternal benefit society operating under
Chapter 885;
(D) a stipulated premium company operating under
Chapter 884;
(E) a reciprocal exchange operating under
Chapter 942;
(F) a Lloyd's plan operating under Chapter 941;
(G) a health maintenance organization operating
under Chapter 843;
(H) a multiple employer welfare arrangement that
holds a certificate of authority under Chapter 846; or
(I) an approved nonprofit health corporation
that holds a certificate of authority under Chapter 844.
(8) "Participating employer" means a small employer
who contracts with the department through the program.
(9) "Program" means the Health Benefit Plan Security
Program established and operated under this chapter.
(10) "Provider" means any person, organization,
corporation, or association who provides health care services and
products and is authorized to provide those services and products
under the laws of this state.
(11) "Small employer" has the meaning assigned by
Section 1501.002(14). The commissioner, on or after September 1,
2011, by rule may expand the definition of "small employer" for the
purposes of this chapter to include other employers not described
by Section 1501.002(14).
(12) "Third-party administrator" means an
administrator regulated under Chapter 4151.
Sec. 1510.003. DISCLOSURE OF CERTAIN INFORMATION IN
CONTRACT NEGOTIATIONS. During any negotiation with a health
benefit plan issuer relating to a provider's reimbursement
agreement with that issuer, the provider shall provide data
relating to any reduction in or avoidance of bad debt or charity
care costs by the provider as a result of the operation of the
program.
Sec. 1510.004. CONSTRUCTION WITH OTHER LAW. (a)
Notwithstanding any other law, including any otherwise applicable
provision of Chapter 552, Government Code, any personally
identifiable financial information, supporting data, or tax return
of any individual obtained by the department under this chapter is
confidential and not open to public inspection.
(b) Any health information obtained by the department under
this chapter that is covered by the Health Insurance Portability
and Accountability Act of 1996 (42 U.S.C. Section 1320d et seq.) or
Chapter 181, Health and Safety Code, is confidential and not open to
public inspection.
Sec. 1510.005. RULES. The commissioner shall adopt rules
as necessary to implement this chapter, including rules relating to
criteria for small employer and enrollee participation in the
program.
SUBCHAPTER B. PROGRAM ESTABLISHMENT AND OPERATION
Sec. 1510.051. PROGRAM ESTABLISHED; PURPOSE OF PROGRAM.
(a) The Health Benefit Plan Security Program is established in the
department.
(b) The purpose of the program is to provide comprehensive,
affordable health care coverage to eligible individuals and
employees of small employers, and the dependents of eligible
individuals and employees, on a voluntary basis.
Sec. 1510.052. DEPARTMENT PROGRAM POWERS AND DUTIES. (a)
The department shall:
(1) determine the comprehensive services and benefits
to be included by the program and develop the specifications for the
health benefit plan coverage provided through the program;
(2) establish administrative and accounting
procedures as recommended by the comptroller for the operation of
the program;
(3) develop and implement a plan to publicize the
existence of the program, including program eligibility
requirements and enrollment procedures;
(4) arrange for the provision of health benefit plan
coverage to eligible individuals and eligible employees through
contracts with one or more qualified health benefit plan issuers;
and
(5) develop a high-risk pool for enrollees in
accordance with Section 1510.102.
(b) The department may:
(1) enter into contracts with qualified third parties,
both private and public, for any service necessary to implement and
operate the program;
(2) take any legal actions necessary to:
(A) avoid the payment of improper claims against
the coverage provided by the program;
(B) recover any amounts erroneously or
improperly paid by the program;
(C) recover any amounts paid by the program as a
result of mistake of fact or law;
(D) recover or collect savings offset payments
due to the program under Subchapter F for the proper administration
of the program; and
(E) recover other amounts due the program;
(3) establish and administer a revolving loan fund to
assist providers in the purchase of computer hardware and software
necessary to implement any program requirements relating to the
electronic submission of claims and solicit matching contributions
to the fund from each health benefit plan issuer;
(4) apply for and receive funds, grants, or contracts
from public and private sources; and
(5) conduct studies and analyses related to the
provision of health care, health care costs, and quality.
Sec. 1510.053. PROGRAM AUDIT. The state auditor shall
annually audit the program and provide a written copy of the audit
to the commissioner and the legislative committees having primary
jurisdiction over the department.
SUBCHAPTER C. COVERAGE PROVIDED BY PROGRAM; REQUIREMENTS FOR
HEALTH BENEFIT PLAN ISSUERS
Sec. 1510.101. PROVISION OF HEALTH BENEFIT PLAN COVERAGE.
(a) The department, through the program, shall provide health
benefit plan coverage through one or more health benefit plan
issuers not later than September 1, 2010, by:
(1) issuing requests for proposals from health benefit
plan issuers;
(2) requiring health benefit plan issuers that wish to
participate in the program to offer at least one health benefit plan
that complies with the program's minimum requirements; and
(3) making payments to health benefit plan issuers
that provide health benefit plan coverage to enrollees.
(b) The department, in order to provide health benefit plan
coverage through the program, may:
(1) notwithstanding any other provision of this code,
set allowable rates for administration and underwriting gains for
health benefit plan issuers;
(2) require quality improvement, disease prevention,
disease management, and cost-containment provisions in the
contracts with participating health benefit plan issuers or may
arrange for the provision of those services through contracts with
other entities;
(3) administer continuation benefits for eligible
individuals from employers with 20 or more employees who have
purchased health benefit plan coverage through the program for the
duration of their eligibility periods for continuation benefits
under Title X, Consolidated Omnibus Budget Reconciliation Act of
1985 (29 U.S.C. Section 1161 et seq.); and
(4) administer or contract to administer plans under
Section 125, Internal Revenue Code of 1986, for employers and
employees participating in the program, including medical expense
reimbursement accounts and dependent care reimbursement accounts.
Sec. 1510.102. HEALTH HIGH-RISK POOL. (a) The department
shall establish a health high-risk pool for enrollees.
(b) An enrollee must be included in the high-risk pool if:
(1) the total cost of health care services for the
enrollee exceeds $100,000 in any 12-month period; or
(2) the enrollee has been diagnosed with acquired
immune deficiency syndrome (HIV/AIDS), angina pectoris, cirrhosis
of the liver, coronary occlusion, cystic fibrosis, Friedreich's
ataxia, hemophilia, Hodgkin's disease, Huntington's chorea,
juvenile diabetes, leukemia, metastatic cancer, motor or sensory
aphasia, multiple sclerosis, muscular dystrophy, myasthenia
gravis, myotonia, heart disease requiring open-heart surgery,
Parkinson's disease, polycystic kidney disease, psychotic
disorders, quadriplegia, stroke, syringomyelia, or Wilson's
disease.
(c) The department shall develop appropriate disease
management protocols, develop procedures for implementing those
protocols, and determine the manner in which disease management
must be provided to enrollees in the high-risk pool. The program may
include disease management in its contract with health benefit plan
issuers participating in the program, contract separately with
another entity for disease management services, or provide disease
management services directly through the program.
Sec. 1510.103. REQUIREMENTS FOR HEALTH BENEFIT PLAN
ISSUERS. In order to participate in the program as a health benefit
plan issuer, a health benefit plan issuer must:
(1) provide the health services and benefits as
determined by the department, including a standard benefit package
that meets the requirements for mandated coverage for specific
health services, for specific diseases, and for providers of health
services under the Medicaid program, and any supplemental benefits
the department requires;
(2) ensure that providers contracting with a health
benefit plan issuer participating in the program do not charge
enrollees or third parties for covered health care services in
excess of the amount allowed by the contract, except for applicable
copayments, deductibles, or coinsurance;
(3) ensure that providers contracting with a health
benefit plan issuer participating in the program do not refuse to
provide coverage to an enrollee on the basis of health status,
medical condition, previous insurance status, race, color, creed,
age, national origin, citizenship status, gender, sexual
orientation, disability, or marital status; and
(4) ensure that a provider contracting with a health
benefit plan issuer participating in the program is reimbursed at
the rate negotiated between the health benefit plan issuer and the
contracting provider.
SUBCHAPTER D. PARTICIPATION BY SMALL EMPLOYERS AND ELIGIBLE
INDIVIDUALS
Sec. 1510.151. PARTICIPATION BY SMALL EMPLOYERS AND
ELIGIBLE INDIVIDUALS. (a) The department, through the program,
shall contract with small employers to provide for health benefit
coverage for employees and the dependents of employees.
(b) The department, through the program, may permit
eligible individuals to purchase the program's benefit plan
coverage for themselves and their dependents.
Sec. 1510.152. PREMIUMS, COSTS, AND CONTRIBUTIONS. (a)
The program shall collect payments from small employers with whom
the department has contracted under Section 1510.151(a) and
enrollees, including eligible individuals who have purchased
health benefit plan coverage from the program under Section
1510.151(b), to cover the costs of:
(1) health benefit plan coverage for enrollees and the
dependents of enrollees in contribution amounts determined by the
department;
(2) quality assurance, disease prevention, disease
management, and cost-containment programs;
(3) administrative services; and
(4) other health promotion costs.
(b) The commissioner shall establish the minimum required
contribution levels to be paid by a small employer toward the
employer's aggregate payment for the cost of coverage of the small
employer's employees. The minimum required contribution level to be
paid by a small employer:
(1) may not exceed 60 percent; and
(2) must be prorated for employees who work less than
the number of hours of a full-time equivalent employee.
(c) The commissioner may establish a separate minimum
contribution level to be paid by a small employer toward the
employer's aggregate payment for the cost of coverage of the
dependents of a small employer's employees.
Sec. 1510.153. CERTIFICATIONS. (a) The department shall
require small employers with whom the department has contracted
under Section 1510.151(a) to certify that:
(1) at least 75 percent of the employer's employees who
work 30 hours or more per week and who do not have other creditable
coverage are enrolled in a health benefit plan provided through the
program; and
(2) the small employer and each enrollee employed by
the employer otherwise meet the requirements of this chapter.
(b) The department may require an eligible individual to
certify that all of the individual's dependents are covered under a
health benefit plan issued by the program or another health benefit
plan that offers creditable coverage as defined by Section
1205.004(a) or 1501.102(a).
(c) The department may require an eligible individual who is
employed by a small employer who does not offer health benefit
coverage to certify that the employer did not provide access to an
employer-sponsored health benefit plan in the 12-month period
immediately preceding the eligible individual's application to the
program.
Sec. 1510.154. EFFECT OF SUBSIDIES. (a) The program shall
reduce the payment amounts for enrollees and eligible individuals
who are eligible for a subsidy.
(b) The program shall require small employers with whom the
department has contracted under Section 1510.151(a) to pass on any
subsidy to the enrollee qualifying for the subsidy, up to the full
amount of payments made by the enrollee.
SUBCHAPTER E. SUBSIDIES
Sec. 1510.201. ESTABLISHMENT OF SUBSIDIES. (a) The
department shall establish sliding-scale subsidies for the
purchase of insurance paid by enrollees whose income is less than
300 percent of the federal poverty level and who are not eligible
for coverage under the Medicaid program.
(b) The program may establish sliding-scale subsidies for
the purchase of employer-sponsored health coverage paid by
employees of businesses with more than 50 employees whose income is
less than 300 percent of the federal poverty level and who are not
eligible for coverage under the Medicaid program.
Sec. 1510.202. ELIGIBILITY REQUIREMENTS FOR SUBSIDY. To be
eligible for a subsidy established under Section 1510.201, an
enrollee must:
(1) have an income that is less than 300 percent of the
federal poverty level, be a resident of this state, be ineligible
for coverage under the Medicaid program, and be enrolled in a health
benefit plan provided by the program; or
(2) be enrolled in a health benefit plan of an employer
with more than 50 employees that meets any criteria established by
the department, including any additional eligibility criteria.
Sec. 1510.203. LIMITATIONS ON SUBSIDIES. (a) The
department shall limit the availability of subsidies to reflect
limitations of available funds.
(b) The department may limit a subsidy to 40 percent of the
payment made by an individual described by Section 1510.202(2) to
more closely parallel the subsidy received by enrollees under
Section 1510.202(1).
(c) A subsidy granted to an enrollee who is an eligible
individual who is not employed by a small employer may not exceed
the maximum subsidy level available to enrollees who are employed
by a small employer.
SUBCHAPTER F. SAVINGS OFFSET PAYMENTS
Sec. 1510.251. DETERMINATION OF COST SAVINGS. After notice
and a hearing, the commissioner shall determine annually:
(1) the aggregate measurable cost savings, including
any reduction or avoidance of bad debt and charity care costs, to
providers in this state as a result of the operation of the program;
and
(2) any increased coverage in the Medicaid program or
the state child health plan that is funded through the program.
Sec. 1510.252. ESTABLISHMENT OF OFFSET RATE AND AMOUNT. (a)
The commissioner shall establish annually, at a rate that does not
exceed the cost savings determined under Section 1510.251, a
savings offset amount, to be paid quarterly during the 12-month
period following the establishment of the offset amount by health
benefit plan issuers, employee benefit excess insurance carriers,
and third-party administrators other than health benefit plan
issuers and administrators for accidental injury, specified
disease, hospital indemnity, dental, vision, disability, income,
long-term care, Medicare supplement, or other limited benefit
health insurance.
(b) The commissioner shall make reasonable efforts to
ensure that premium revenue, or claims plus any administrative
expenses and fees with respect to third-party administrators, is
counted only once in any savings offset payment.
(c) The commissioner shall allow a health benefit plan
issuer to exclude from the issuer's gross premium revenue
reinsurance premiums that have been counted by the primary insurer
for the purpose of determining its savings offset payment. The
program shall allow each employee benefit excess insurance carrier
to exclude from its gross premium revenue the amount of claims that
have been counted by a third-party administrator for the purpose of
determining its savings offset payment.
(d) The program may verify each health benefit plan issuer,
employee benefit excess insurance carrier, and third-party
administrator's savings offset payment based on annual statements
and other reports.
Sec. 1510.253. PAYMENT OF OFFSET AMOUNT. (a) Each health
benefit plan issuer and employee benefit excess insurance carrier
shall pay a savings offset in an amount determined by the
commissioner, not to exceed four percent of annual health insurance
premiums and employee benefit excess insurance premiums on policies
that insure residents of this state. The savings offset payment may
not exceed the aggregate measurable cost savings under Section
1510.251.
(b) A health benefit plan issuer shall pay the first savings
offset amount on September 1, 2011, and subsequently each quarter.
(c) The quarterly savings offset payments are due 30 days
after written notice to the health benefit plan issuers, employee
benefit excess insurance carriers, and third-party administrators
of the amount due, and accrue interest at 12 percent annually on or
after that due date.
Sec. 1510.254. ANNUAL RECONCILIATION. The department shall
annually reconcile the aggregate amount of annual offset payments
paid by health benefit plan issuers to determine whether unused
payments may be returned to health benefit plan issuers, employee
benefit excess insurance carriers, and third-party administrators.
Sec. 1510.255. HEALTH BENEFIT PLAN ISSUER OBLIGATIONS. (a)
Each health benefit plan issuer and health care provider shall
demonstrate that best efforts have been made to ensure that an
issuer has recovered savings offset payments made in accordance
with this subchapter through negotiated reimbursement rates that
reflect providers' reductions or stabilization in the cost of bad
debt and charity care as a result of the operation of the program.
(b) A health benefit plan issuer shall use best efforts to
ensure health benefit plan premiums reflect any recovery of savings
offset payments as those savings offset payments are reflected
through incurred claims experience.
Sec. 1510.256. DEPOSIT AND USE OF OFFSET PAYMENTS. (a)
Savings offset payments collected under this subchapter shall be
deposited in the state treasury to the credit of the Texas
Department of Insurance operating account.
(b) Savings offset payments may be used only to fund the
subsidies authorized by Subchapter E and may not exceed savings
from reductions in growth of the state's health care spending and
bad debt and charity care.
SECTION 2. (a) The commissioner of insurance shall adopt
the rules necessary to implement Chapter 1510, Insurance Code, as
added by this Act, not later than January 1, 2010.
(b) The Texas Department of Insurance shall have the Texas
Health Benefit Plan Security Program established under Chapter
1510, Insurance Code, as added by this Act, fully operational and
able to provide health benefit coverage not later than September 1,
2010.
SECTION 3. 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.