Texas 2009 - 81st Regular

Texas Senate Bill SB303 Compare Versions

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

Old	New	Differences
1	1	81R2457 AJA-D
2	2	By: Shapleigh S.B. No. 303
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to application for and cancellation or rescission of
8	8	health benefit plan coverage.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subtitle A, Title 8, Insurance Code, is amended
11	11	by adding Chapters 1220 and 1221 to read as follows:
12	12	CHAPTER 1220. APPLICATION FOR AND ISSUANCE OF HEALTH BENEFIT PLAN
13	13	COVERAGE
14	14	SUBCHAPTER A. APPLICATION FOR INDIVIDUAL HEALTH BENEFIT PLAN
15	15	COVERAGE
16	16	Sec. 1220.001. DEFINITION. In this subchapter, "individual
17	17	health benefit plan" means:
18	18	(1) an individual accident and health insurance policy
19	19	to which Chapter 1201 applies; or
20	20	(2) individual health maintenance organization
21	21	coverage.
22	22	Sec. 1220.002. UNIFORM APPLICATION QUESTIONS. (a) The
23	23	commissioner by rule shall establish uniform information and health
24	24	history questions for use in all individual health benefit plan
25	25	application forms.
26	26	(b) An application for individual health benefit plan
27	27	coverage may only contain questions adopted under this section.
28	28	(c) The standard information and health history questions
29	29	adopted under this section must:
30	30	(1) contain clear and unambiguous information and
31	31	questions designed to ascertain the applicant's health history; and
32	32	(2) be based on the medical information that is
33	33	reasonable and necessary for medical underwriting purposes.
34	34	(d) A question adopted under this section regarding whether
35	35	an applicant has been diagnosed or treated for a specific health
36	36	condition must also specify an amount of time before the date of the
37	37	application during which an occurrence of the diagnosis or
38	38	treatment must be disclosed and before which an occurrence of the
39	39	diagnosis or treatment is not required to be disclosed.
40	40	Sec. 1220.003. FILING AND APPROVAL OF APPLICATION FORM.
41	41	(a) An individual health benefit plan issuer may not use an
42	42	application form for individual health benefit plan coverage unless
43	43	the form has been filed with the department and approved by the
44	44	commissioner.
45	45	(b) The commissioner shall, not later than the 30th day
46	46	after the date an application form is submitted for approval under
47	47	this section, approve or deny approval for the form. The
48	48	commissioner shall approve the form if it meets the requirements of
49	49	this chapter and other applicable provisions of this code.
50	50	(c) The commissioner by rule shall adopt procedures for
51	51	filing and approval of application forms under this section.
52	52	[Sections 1220.004-1220.050 reserved for expansion]
53	53	SUBCHAPTER B. ISSUANCE AND UNDERWRITING OF INDIVIDUAL AND GROUP
54	54	HEALTH BENEFIT PLAN COVERAGE
55	55	Sec. 1220.051. APPLICABILITY OF SUBCHAPTER. (a) This
56	56	subchapter applies only to a health benefit plan that provides
57	57	benefits for medical or surgical expenses incurred as a result of a
58	58	health condition, accident, or sickness, including an individual,
59	59	group, blanket, or franchise insurance policy or insurance
60	60	agreement, a group hospital service contract, or an individual or
61	61	group evidence of coverage or similar coverage document that is
62	62	offered by:
63	63	(1) an insurance company;
64	64	(2) a group hospital service corporation operating
65	65	under Chapter 842;
66	66	(3) a fraternal benefit society operating under
67	67	Chapter 885;
68	68	(4) a stipulated premium company operating under
69	69	Chapter 884;
70	70	(5) an exchange operating under Chapter 942;
71	71	(6) a health maintenance organization operating under
72	72	Chapter 843;
73	73	(7) a multiple employer welfare arrangement that holds
74	74	a certificate of authority under Chapter 846; or
75	75	(8) an approved nonprofit health corporation that
76	76	holds a certificate of authority under Chapter 844.
77	77	(b) Notwithstanding any provision in Chapter 1551, 1575,
78	78	1579, or 1601 or any other law, this chapter applies, to the extent
79	79	the plan or coverage is individually underwritten, to a health
80	80	benefit plan issuer with respect to:
81	81	(1) a basic coverage plan under Chapter 1551;
82	82	(2) a basic plan under Chapter 1575;
83	83	(3) a primary care coverage plan under Chapter 1579;
84	84	and
85	85	(4) basic coverage under Chapter 1601.
86	86	(c) Notwithstanding any other law, this chapter applies to a
87	87	health benefit plan issuer with respect to a standard health
88	88	benefit plan provided under Chapter 1507.
89	89	Sec. 1220.052. EXCEPTION. This subchapter does not apply
90	90	with respect to:
91	91	(1) a plan that provides coverage:
92	92	(A) for wages or payments in lieu of wages for a
93	93	period during which an employee is absent from work because of
94	94	sickness or injury;
95	95	(B) as a supplement to a liability insurance
96	96	policy;
97	97	(C) for credit insurance;
98	98	(D) only for dental or vision care;
99	99	(E) only for hospital expenses; or
100	100	(F) only for indemnity for hospital confinement;
101	101	(2) a Medicare supplemental policy as defined by
102	102	Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss);
103	103	(3) a workers' compensation insurance policy; or
104	104	(4) medical payment insurance coverage provided under
105	105	a motor vehicle insurance policy.
106	106	Sec. 1220.053. ISSUANCE OF COVERAGE: COMPLETION OF
107	107	UNDERWRITING REQUIRED. Before issuing a health benefit plan
108	108	policy, contract, or evidence of coverage, the health benefit plan
109	109	issuer must complete a reasonable investigation of the applicant's
110	110	health history information, including:
111	111	(1) ensuring that the information submitted on the
112	112	application form and the material submitted with the application
113	113	form is complete and accurate; and
114	114	(2) resolving all reasonable questions arising from
115	115	the application form or materials submitted with the application
116	116	form or any information obtained by the health benefit plan issuer
117	117	as part of the plan issuer's verification of the accuracy and
118	118	completeness of the application form.
119	119	Sec. 1220.054. DOCUMENTATION OF UNDERWRITING REQUIRED. A
120	120	health benefit plan issuer shall document all information collected
121	121	during an underwriting review process.
122	122	Sec. 1220.055. WRITTEN UNDERWRITING STANDARDS REQUIRED. A
123	123	health benefit plan issuer shall adopt and implement written
124	124	medical underwriting policies and procedures and file those written
125	125	policies and procedures with the department.
126	126	Sec. 1220.056. PROVISION OF APPLICATION INFORMATION
127	127	REQUIRED; SUPPLEMENTAL UNDERWRITING. (a) Not later than the 10th
128	128	day after the date a health benefit plan issuer issues a health
129	129	benefit plan policy, contract, or evidence of coverage to an
130	130	applicant for coverage under the plan, the plan issuer shall send to
131	131	the applicant:
132	132	(1) a copy of the applicant's application;
133	133	(2) a copy of the policy, contract, or evidence of
134	134	coverage issued to the applicant; and
135	135	(3) a notice that states that:
136	136	(A) the applicant should review the completed
137	137	application carefully and notify the plan issuer not later than the
138	138	30th day after the date the applicant receives the notice of any
139	139	inaccuracy in the application;
140	140	(B) any intentional material misrepresentation
141	141	or intentional material omission in the information submitted in
142	142	the application may result in the cancellation or rescission of the
143	143	applicant's health benefit plan coverage; and
144	144	(C) the applicant should retain a copy of the
145	145	completed written application for the applicant's records.
146	146	(b) If an applicant submits new health history information
147	147	within the 30-day period prescribed by Subsection (a), the health
148	148	benefit plan issuer shall complete a reasonable investigation of
149	149	the applicant's health history information with respect to that new
150	150	information, including:
151	151	(1) ensuring that the new information submitted by the
152	152	applicant, in conjunction with the material submitted with the
153	153	application form, is complete and accurate; and
154	154	(2) resolving all reasonable questions arising from
155	155	the new information submitted by the applicant or any information
156	156	obtained by the plan issuer as part of the plan issuer's
157	157	verification of the accuracy and completeness of the new
158	158	information.
159	159	CHAPTER 1221. CANCELLATION OR RESCISSION OF INDIVIDUAL HEALTH
160	160	BENEFIT PLAN COVERAGE
161	161	Sec. 1221.001. DEFINITION. In this chapter, "individual
162	162	health benefit plan" has the meaning assigned by Section 1220.001.
163	163	Sec. 1221.002. GROUNDS FOR CANCELLATION OR RESCISSION. An
164	164	issuer of an individual health benefit plan policy or contract may
165	165	not cancel or rescind the coverage under the policy or contract
166	166	unless:
167	167	(1) there was a material misrepresentation or material
168	168	omission in the information submitted by the applicant in the
169	169	written application to the health benefit plan issuer before the
170	170	issuance of the policy or contract that would prevent the policy or
171	171	contract from being issued;
172	172	(2) the health benefit plan issuer completed the
173	173	investigation of the applicant's health history information in
174	174	accordance with Sections 1220.053 and 1220.056(b);
175	175	(3) the health benefit plan issuer demonstrates that
176	176	the applicant intentionally misrepresented or intentionally
177	177	omitted material information on the application to obtain health
178	178	benefit plan coverage;
179	179	(4) the application form was approved by the
180	180	commissioner under Section 1220.003; and
181	181	(5) the health benefit plan issuer sent the applicant
182	182	a copy of the completed application with a copy of the policy or
183	183	contract issued in connection with the application with the notice
184	184	required by Section 1220.056(a).
185	185	SECTION 2. The change in law made by this Act applies only
186	186	to a health benefit plan policy, contract, or evidence of coverage
187	187	delivered or issued for delivery on or after January 1, 2010. A
188	188	policy, contract, or evidence of coverage delivered or issued for
189	189	delivery before that date is governed by the law in effect
190	190	immediately before the effective date of this Act, and that law is
191	191	continued in effect for that purpose.
192	192	SECTION 3. This Act takes effect September 1, 2009.