Texas 2009 - 81st Regular

Texas Senate Bill SB2024 Compare Versions

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

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1	1	By: Watson S.B. No. 2024
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the maximum allowable premium rate increase for small
7	7	employer health benefit plans.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Subchapter D, Chapter 501, Insurance Code, is
10	10	amended by amending Sections 501.151 and 501.153 and adding Section
11	11	501.160 to read as follows:
12	12	Sec. 501.151. POWERS AND DUTIES OF OFFICE. The office:
13	13	(1) may assess the impact of insurance rates, rules,
14	14	and forms on insurance consumers in this state; [and]
15	15	(2) shall advocate in the office's own name positions
16	16	determined by the public counsel to be most advantageous to a
17	17	substantial number of insurance consumers; and
18	18	(3) shall accept from a small employer, an eligible
19	19	employee, or an eligible employee's dependent and, if appropriate,
20	20	refer to the commissioner, a complaint described by Section
21	21	501.160.
22	22	Sec. 501.153. AUTHORITY TO APPEAR, INTERVENE, OR INITIATE.
23	23	The public counsel:
24	24	(1) may appear or intervene, as a party or otherwise,
25	25	as a matter of right before the commissioner or department on behalf
26	26	of insurance consumers, as a class, in matters involving:
27	27	(A) rates, rules, and forms affecting:
28	28	(i) property and casualty insurance;
29	29	(ii) title insurance;
30	30	(iii) credit life insurance;
31	31	(iv) credit accident and health insurance;
32	32	or
33	33	(v) any other line of insurance for which
34	34	the commissioner or department promulgates, sets, adopts, or
35	35	approves rates, rules, or forms;
36	36	(B) rules affecting life, health, or accident
37	37	insurance; or
38	38	(C) withdrawal of approval of policy forms:
39	39	(i) in proceedings initiated by the
40	40	department under Sections 1701.055 and 1701.057; or
41	41	(ii) if the public counsel presents
42	42	persuasive evidence to the department that the forms do not comply
43	43	with this code, a rule adopted under this code, or any other law;
44	44	(2) may initiate or intervene as a matter of right or
45	45	otherwise appear in a judicial proceeding involving or arising from
46	46	an action taken by an administrative agency in a proceeding in which
47	47	the public counsel previously appeared under the authority granted
48	48	by this chapter;
49	49	(3) may appear or intervene, as a party or otherwise,
50	50	as a matter of right on behalf of insurance consumers as a class in
51	51	any proceeding in which the public counsel determines that
52	52	insurance consumers are in need of representation, except that the
53	53	public counsel may not intervene in an enforcement or parens
54	54	patriae proceeding brought by the attorney general; [and]
55	55	(4) may appear or intervene before the commissioner or
56	56	department as a party or otherwise on behalf of small commercial
57	57	insurance consumers, as a class, in a matter involving rates,
58	58	rules, or forms affecting commercial insurance consumers, as a
59	59	class, in any proceeding in which the public counsel determines
60	60	that small commercial consumers are in need of representation; and
61	61	(5) may appear before the commissioner on behalf of a
62	62	small employer, eligible employee, or eligible employee's
63	63	dependent in a complaint the office refers to the commissioner
64	64	under Section 501.160.
65	65	Sec. 501.160. COMPLAINT RESOLUTION FOR CERTAIN PREMIUM RATE
66	66	INCREASES. (a) A small employer, an eligible employee, or an
67	67	eligible employee's dependent may file a complaint with the office
68	68	alleging that a rate is excessive for the risks to which the rate
69	69	applies, if the percentage increase in the premium rate charged to a
70	70	small employer under Subchapter E, Chapter 1501, for a new rating
71	71	period exceeds 10 percent.
72	72	(b) The office shall refer a complaint received under
73	73	Subsection (a) to the commissioner if the office determines that
74	74	the complaint substantially attests to a rate charged that is
75	75	excessive for the risks to which the rate applies.
76	76	(c) With respect to a complaint filed under Subsection (a),
77	77	the office may issue a subpoena applicable throughout the state
78	78	that requires the production of records.
79	79	(d) On application of the office in the case of disobedience
80	80	of a subpoena, a district court may issue an order requiring any
81	81	individual or person, including a small employer health benefit
82	82	plan issuer described by Section 1501.002, that is subpoenaed to
83	83	obey the subpoena and produce records, if the individual or person
84	84	has refused to do so. An application under this subsection must be
85	85	made in a district court in Travis County.
86	86	SECTION 2. Section 1501.204, Insurance Code, is amended to
87	87	read as follows:
88	88	Sec. 1501.204. INDEX RATES. Under a small employer health
89	89	benefit plan:
90	90	(1) the index rate for a class of business may not
91	91	exceed the index rate for any other class of business by more than
92	92	15 [20] percent; and
93	93	(2) premium rates charged during a rating period to
94	94	small employers in a class of business with similar case
95	95	characteristics for the same or similar coverage, or premium rates
96	96	that could be charged to those employers under the rating system for
97	97	that class of business, may not vary from the index rate by more
98	98	than 20 [25] percent.
99	99	SECTION 3. Section 1501.205, Insurance Code, is amended by
100	100	adding Subsection (d) to read as follows:
101	101	(d) A small employer health benefit plan issuer shall
102	102	disclose the risk load assessed to a small employer group to the
103	103	group, along with a description of the risk characteristics
104	104	material to the risk load assessment.
105	105	SECTION 4. Section 1501.206(a), Insurance Code, is amended
106	106	to read as follows:
107	107	(a) The percentage increase in the premium rate charged to a
108	108	small employer for a new rating period may not exceed the sum of:
109	109	(1) the percentage change in the new business premium
110	110	rate, measured from the first day of the preceding rating period to
111	111	the first day of the new rating period;
112	112	(2) any adjustment, not to exceed 10 [15] percent
113	113	annually and adjusted pro rata for a rating period of less than one
114	114	year, due to the claims experience, health status, or duration of
115	115	coverage of the employees or dependents of employees of the small
116	116	employer, as determined under the small employer health benefit
117	117	plan issuer's rate manual for the class of business; and
118	118	(3) any adjustment, not to exceed five percent
119	119	annually and adjusted pro rata for a rating period of less than one
120	120	year, due to change in coverage or change in the case
121	121	characteristics of the small employer, as determined under the
122	122	issuer's rate manual for the class of business.
123	123	SECTION 5. Subchapter E, Chapter 1501, Insurance Code, is
124	124	amended by adding Section 1501.2131 and amending Section 1501.214
125	125	to read as follows:
126	126	Sec. 1501.2131. COMPLAINT FACILITATION FOR PREMIUM RATE
127	127	ADJUSTMENTS. If the percentage increase in the premium rate
128	128	charged to a small employer for a new rating period exceeds 10
129	129	percent, the small employer, an eligible employee, or an eligible
130	130	employee's dependent may file a complaint with the office of public
131	131	insurance counsel as provided by Section 501.160.
132	132	Sec. 1501.214. ENFORCEMENT. (a) Subject to Subsection
133	133	(b), if [If] the commissioner determines that a small employer
134	134	health benefit plan issuer subject to this chapter exceeds the
135	135	applicable premium rate established under this subchapter, the
136	136	commissioner may order restitution and assess penalties as provided
137	137	by Chapter 82.
138	138	(b) The commissioner shall enter an order under this section
139	139	if the commissioner makes the finding described by Section
140	140	1501.653.
141	141	SECTION 6. Chapter 1501, Insurance Code, is amended by
142	142	adding Subchapter N to read as follows:
143	143	SUBCHAPTER N. RESOLUTION OF CERTAIN COMPLAINTS AGAINST SMALL
144	144	EMPLOYER HEALTH BENEFIT PLAN ISSUERS
145	145	Sec. 1501.651. DEFINITIONS. In this chapter:
146	146	(1) "Honesty-in-premium account" means the account
147	147	established under Section 1501.656.
148	148	(2) "Office" means the office of public insurance
149	149	counsel.
150	150	Sec. 1501.652. COMPLAINT RESOLUTION PROCEDURE. (a) On the
151	151	receipt of a referral of a complaint from the office of public
152	152	insurance counsel under Section 501.160, the commissioner shall
153	153	request written memoranda from the office and the small employer
154	154	health benefit plan issuer that is the subject of the complaint.
155	155	(b) After receiving the initial memoranda described by
156	156	Subsection (a), the commissioner may request one rebuttal
157	157	memorandum from the office.
158	158	(c) The commissioner may by rule limit the number of
159	159	exhibits submitted with or the time frame allowed for the submittal
160	160	of the memoranda described by Subsection (a) or (b).
161	161	Sec. 1501.653. ORDER; FINDINGS. The commissioner shall
162	162	issue an order under Section 1501.214(b), if the commissioner
163	163	determines that the rate complained of is excessive for the risks to
164	164	which the rate applies.
165	165	Sec. 1501.654. COSTS. The office may request, and the
166	166	commissioner may award to the office, reasonable costs and fees
167	167	associated with the investigation and resolution of a complaint
168	168	filed under Section 501.160 and disposed of in accordance with this
169	169	subchapter.
170	170	Sec. 1501.655. ASSESSMENT. (a) The commissioner may make
171	171	an assessment against each small employer health benefit plan
172	172	issuer in an amount that is sufficient to cover the costs of
173	173	investigating and resolving a complaint filed under Section 501.160
174	174	and disposed of in accordance with this subchapter.
175	175	(b) The commissioner shall deposit assessments collected
176	176	under this section to the credit of the honesty-in-premium account.
177	177	Sec. 1501.656. HONESTY-IN-PREMIUM ACCOUNT. (a) The
178	178	honesty-in-premium account is an account in the general revenue
179	179	fund that may be appropriated only to cover the cost associated with
180	180	the investigation and resolution of a complaint filed under Section
181	181	501.160 and disposed of in accordance with this subchapter.
182	182	(b) Interest earned on the honesty-in-premium account shall
183	183	be credited to the account. The account is exempt from the
184	184	application of Section 403.095, Government Code.
185	185	Sec. 1501.657. RATE REDUCTION NOT PROHIBITED. Nothing in
186	186	this subchapter prohibits a small employer health benefit plan
187	187	issuer from, at any time, offering a different rate to the group
188	188	whose rate is the subject of a complaint.
189	189	SECTION 7. The change in law made by Chapter 1501, Insurance
190	190	Code, as amended by this Act, applies only to a small employer
191	191	health benefit plan that is delivered, issued for delivery, or
192	192	renewed on or after January 1, 2010. A small employer health
193	193	benefit plan that is delivered, issued for delivery, or renewed
194	194	before January 1, 2010, is covered by the law in effect at the time
195	195	the health benefit plan was delivered, issued for delivery, or
196	196	renewed, and that law is continued in effect for that purpose.
197	197	SECTION 8. This Act takes effect immediately if it receives
198	198	a vote of two-thirds of all the members elected to each house, as
199	199	provided by Section 39, Article III, Texas Constitution. If this
200	200	Act does not receive the vote necessary for immediate effect, this
201	201	Act takes effect September 1, 2009.