Texas 2009 - 81st Regular

Texas Senate Bill SB207 Compare Versions

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1	1	By: Shapleigh S.B. No. 207
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to prohibition of certain business practices related to
7	7	rescission of coverage under health benefit plans.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Subtitle C, Title 6, Insurance Code, is amended
10	10	by adding Chapter 848 to read as follows:
11	11	CHAPTER 848. PROHIBITED PRACTICES RELATED TO RESCISSION
12	12	Sec. 848.001. APPLICABILITY. (a) This chapter applies to
13	13	a health benefit plan that provides benefits in this state for
14	14	medical or surgical expenses incurred as a result of a health
15	15	condition, accident, or sickness, including an individual, group,
16	16	blanket, or franchise insurance policy or insurance agreement, a
17	17	group hospital service contract, or an individual or group evidence
18	18	of coverage or similar coverage document that is offered by:
19	19	(1) an insurance company;
20	20	(2) a group hospital service corporation operating
21	21	under Chapter 842;
22	22	(3) a fraternal benefit society operating under
23	23	Chapter 885;
24	24	(4) a stipulated premium company operating under
25	25	Chapter 884;
26	26	(5) a reciprocal exchange operating under Chapter 942;
27	27	(6) a health maintenance organization operating under
28	28	Chapter 843;
29	29	(7) a multiple employer welfare arrangement that holds
30	30	a certificate of authority under Chapter 846; or
31	31	(8) an approved nonprofit health corporation that
32	32	holds a certificate of authority under Chapter 844.
33	33	(b) This chapter does not apply to:
34	34	(1) a health benefit plan that provides coverage only:
35	35	(A) for a specified disease or diseases or under
36	36	an individual limited benefit policy;
37	37	(B) for accidental death or dismemberment;
38	38	(C) as a supplement to a liability insurance
39	39	policy; or
40	40	(D) for dental or vision care;
41	41	(2) disability income insurance coverage or a
42	42	combination of accident-only and disability income insurance
43	43	coverage;
44	44	(3) credit insurance coverage;
45	45	(4) a hospital confinement indemnity policy;
46	46	(5) a Medicare supplemental policy as defined by
47	47	Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss);
48	48	(6) a workers' compensation insurance policy;
49	49	(7) medical payment insurance coverage provided under
50	50	a motor vehicle insurance policy; or
51	51	(8) a long-term care insurance policy, including a
52	52	nursing home fixed indemnity policy, unless the commissioner
53	53	determines that the policy provides benefits so comprehensive that
54	54	the policy is a health benefit plan and should not be subject to the
55	55	exemption provided under this section.
56	56	Sec. 848.002. BAD FAITH RESCISSION. (a) It is an unfair
57	57	method of competition or an unfair or deceptive act or practice for
58	58	purposes of Chapter 541 for a health benefit plan issuer to:
59	59	(1) set rescission goals, quotas, or targets;
60	60	(2) pay compensation of any kind, including a bonus or
61	61	award, that varies according to the number of rescissions;
62	62	(3) set, as a condition of employment, a number or
63	63	volume of rescissions to be achieved; or
64	64	(4) set a performance standard, for employees or by
65	65	contract with another entity, based on the number or volume of
66	66	rescissions.
67	67	(b) For purposes of this chapter, "rescission" means the
68	68	termination of an insurance agreement, contract, evidence of
69	69	coverage, insurance policy, or other similar coverage document in
70	70	which the health benefit plan issuer refunds premium payments or,
71	71	if applicable, demands the restitution of any benefit paid under
72	72	the plan, on the ground the issuer is entitled to restoration of the
73	73	issuer's precontractual position.
74	74	SECTION 2. This Act takes effect September 1, 2009.