By: Duncan, Nelson S.B. No. 6
A BILL TO BE ENTITLED
AN ACT
relating to the creation of the Healthy Texas 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 1508 to read as follows:
CHAPTER 1508. HEALTHY TEXAS PROGRAM
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1508.001. PURPOSE. (a) The purposes of the Healthy
Texas Program are to:
(1) provide access to quality small employer health
benefit plans at an affordable price;
(2) encourage small employers to offer health benefit
plan coverage to employees and the dependents of employees; and
(3) maximize reliance on proven managed care
strategies and procedures.
(b) The Healthy Texas Program is not intended to diminish
the availability of traditional small employer health benefit plan
coverage under Chapter 1501.
Sec. 1508.002. DEFINITIONS. In this chapter:
(1) "Dependent" has the meaning assigned by Section
1501.002(2).
(2) "Eligible employee" has the meaning assigned by
Section 1501.002(3).
(3) "Fund" means the healthy Texas small employer
premium stabilization fund established under Subchapter F.
(4) "Health benefit plan" and "health benefit plan
issuer" have the meanings assigned by Sections 1501.002(5) and
1501.002(6), respectively.
(5) "Program" means the Healthy Texas Program
established under this chapter.
(6) "Qualifying health benefit plan" means a health
benefit plan that provides benefits for health care services in the
manner described by this chapter.
(7) "Small employer" has the meaning assigned by
Section 1501.002(14).
Sec. 1508.003. RULES. The commissioner may adopt rules as
necessary to implement this chapter.
[Sections 1508.004-1508.050 reserved for expansion]
SUBCHAPTER B. EMPLOYER ELIGIBILITY; CONTRIBUTIONS
Sec. 1508.051. EMPLOYER ELIGIBILITY TO PARTICIPATE. (a) A
small employer may participate in the program if:
(1) during the 12-month period immediately preceding
the date of application for a qualifying health benefit plan, the
small employer does not offer employees group health benefits on an
expense-reimbursed or prepaid basis; and
(2) at least 30 percent of the small employer's
eligible employees receive annual wages from the employer in an
amount that is equal to or less than 300 percent of the poverty
guidelines for an individual, as defined and updated annually by
the United States Department of Health and Human Services.
(b) A small employer ceases to be eligible to participate in
the program if any health benefit plan that provides employee
benefits on an expense-reimbursed or prepaid basis, other than
another qualifying health benefit plan, is purchased or otherwise
takes effect after the purchase of a qualifying health benefit
plan.
Sec. 1508.052. COMMISSIONER ADJUSTMENTS AUTHORIZED.
(a) The commissioner by rule may adjust the 12-month period
described by Section 1508.051(a)(1) to an 18-month period if the
commissioner determines that the 12-month period is insufficient to
prevent inappropriate substitution of other health benefit plans
for qualifying health benefit plan coverage under this chapter.
(b) The commissioner by rule may adjust the percentage of
the poverty guidelines described by Section 1508.051(a)(2) to a
higher or lower percentage if the commissioner determines that the
adjustment is necessary to fulfill the purposes of this chapter. An
adjustment made by the commissioner under this subsection takes
effect on the first July 1 following the adjustment.
Sec. 1508.053. MINIMUM EMPLOYER PARTICIPATION
REQUIREMENTS. A small employer that meets the eligibility
requirements described by Section 1508.051(a) may apply to purchase
a qualifying health benefit plan if 60 percent or more of the
employer's eligible employees elect to participate in the plan.
Sec. 1508.054. EMPLOYER CONTRIBUTION REQUIREMENTS. (a) A
small employer that purchases a qualifying health benefit plan
must:
(1) pay 50 percent or more of the premium for each
employee covered under the qualifying health benefit plan;
(2) offer coverage to all eligible employees receiving
annual wages from the employer in an amount described by Section
1508.051(a)(2) or 1508.052(b), as applicable; and
(3) contribute the same percentage of premium for each
covered employee.
(b) A small employer that purchases a qualifying health
benefit plan under the program may elect to pay, but is not required
to pay, all or any portion of the premium paid for dependent
coverage under the qualifying health benefit plan.
[Sections 1508.055-1508.100 reserved for expansion]
SUBCHAPTER C. PROGRAM PARTICIPATION; REQUIRED COVERAGE AND
BENEFITS
Sec. 1508.101. PARTICIPATING PLAN ISSUERS. (a) Subject to
Subsection (b), any health benefit plan issuer may participate in
the program.
(b) The commissioner by rule may limit which health benefit
plan issuers may participate in the program if the commissioner
determines that the limitation is necessary to achieve the purposes
of this chapter.
(c) If the commissioner limits participation in the program
under Subsection (b), the commissioner shall contract on a
competitive procurement basis with one or more health benefit plan
issuers to provide qualifying health benefit plan coverage under
the program.
(d) Nothing in this chapter prohibits a regional or local
health care program described by Chapter 75, Health and Safety
Code, from participating in the program. The commissioner by rule
shall establish participation requirements applicable to regional
and local health care programs that consider the unique plan
designs, benefit levels, and participation criteria of each
program.
Sec. 1508.102. PREEXISTING CONDITION PROVISION REQUIRED. A
health benefit plan offered under the program must include a
preexisting condition provision that meets the requirements
described by Section 1501.102.
Sec. 1508.103. EXCEPTION FROM MANDATED BENEFIT
REQUIREMENTS. Except as expressly provided by this chapter, a
small employer health benefit plan issued under the program is not
subject to a law of this state that requires coverage or the offer
of coverage of a health care service or benefit.
Sec. 1508.104. CERTAIN COVERAGE PROHIBITED OR REQUIRED.
(a) A qualifying health benefit plan may only provide coverage for
in-plan services and benefits, except for:
(1) emergency care; or
(2) other services not available through a plan
provider.
(b) In-plan services and benefits provided under a
qualifying health benefit plan must include the following:
(1) inpatient hospital services;
(2) outpatient hospital services;
(3) physician services; and
(4) prescription drug benefits.
(c) The commissioner may approve in-plan benefits other
than those required under Subsection (b) or emergency care or other
services not available through a plan provider if the commissioner
determines the inclusion to be essential to achieve the purposes of
this chapter.
(d) The commissioner may, with respect to the categories of
services and benefits described by Subsections (b) and (c):
(1) prepare specifications for a coverage provided
under this chapter;
(2) determine the methods and procedures of claims
administration;
(3) establish procedures to decide contested cases
arising from coverage provided under this chapter;
(4) study, on an ongoing basis, the operation of all
coverages provided under this chapter, including gross and net
costs, administration costs, benefits, utilization of benefits,
and claims administration;
(5) administer the healthy Texas small employer
premium stabilization fund established under Subchapter F;
(6) provide the beginning and ending dates of
coverages for enrollees in a qualifying health benefit plan;
(7) develop basic group coverage plans applicable to
all individuals eligible to participate in the program;
(8) provide for optional group coverage plans in
addition to the basic group coverage plans described by Subdivision
(7);
(9) provide, as determined to be appropriate by the
commissioner, additional statewide optional coverage plans;
(10) develop specific health benefit plans that permit
access to high-quality, cost-effective health care;
(11) design, implement, and monitor health benefit
plan features intended to discourage excessive utilization,
promote efficiency, and contain costs for qualifying health benefit
plans;
(12) develop and refine, on an ongoing basis, a health
benefit strategy for the program that is consistent with evolving
benefits delivery systems;
(13) develop a funding strategy that efficiently uses
employer contributions to achieve the purposes of this chapter; and
(14) modify the copayment and deductible amounts for
prescription drug benefits under a qualifying health benefit plan,
if the commissioner determines that the modification is necessary
to achieve the purposes of this chapter.
[Sections 1508.105-1508.150 reserved for expansion]
SUBCHAPTER D. PROGRAM ADMINISTRATION
Sec. 1508.151. EMPLOYER CERTIFICATION. (a) At the time of
initial application, a health benefit plan issuer shall obtain from
a small employer that seeks to purchase a qualifying health benefit
plan a written certification that the employer meets the
eligibility requirements described by Section 1508.051 and the
minimum employer participation requirements described by Section
1508.053.
(b) Not later than the 90th day before the renewal date of a
qualifying health benefit plan, a health benefit plan issuer shall
obtain from the small employer that purchased the qualifying health
benefit plan a written certification that the employer continues to
meet the eligibility requirements described by Section 1508.051 and
the minimum employer participation requirements described by
Section 1508.053.
(c) A participating health benefit plan issuer may require a
small employer to submit appropriate documentation in support of a
certification described by Subsection (a) or (b).
Sec. 1508.152. APPLICATION PROCESS. (a) Subject to
Subsection (b), a health benefit plan issuer shall accept
applications for qualifying health benefit plan coverage from small
employers at all times throughout the calendar year.
(b) The commissioner may limit the dates on which a health
benefit plan issuer must accept applications for qualifying health
benefit plan coverage if the commissioner determines the limitation
to be necessary to achieve the purposes of this chapter.
Sec. 1508.153. EMPLOYEE ENROLLMENT; WAITING PERIOD. (a) A
qualifying health benefit plan must provide employees with an
initial enrollment period that is 31 days or longer, and annually at
least one open enrollment period that is 31 days or longer. The
commissioner by rule may require an additional open enrollment
period if the commissioner determines that the additional open
enrollment period is necessary to achieve the purposes of this
chapter.
(b) A small employer may establish a waiting period for
employees during which an employee is not eligible for coverage
under a qualifying health benefit plan. The last day of a waiting
period established under this subsection may not be later than the
90th day after the date on which the employee begins employment with
the small employer.
(c) A health benefit plan issuer may not deny coverage under
a qualifying health benefit plan to a new employee of a small
employer that purchased the qualifying health benefit plan if the
health benefit plan issuer receives an application for coverage
from the employee not later than the 31st day after the latter of:
(1) the first day of the employee's employment; or
(2) the first day after the expiration of a waiting
period established under Subsection (b).
(d) Subject to Subsection (e), a health benefit plan issuer
may deny coverage under a qualifying health benefit plan to an
employee of a small employer who applies for coverage after the
period described by Subsection (c).
(e) A health benefit plan issuer that denies an employee
coverage under Subsection (d):
(1) may only deny the employee coverage until the next
open enrollment period; and
(2) may subject the enrollee to a one-year preexisting
condition provision, as described by Section 1508.102, if the
period during which the preexisting condition provision applies
does not exceed 18 months from the date of the initial application
for coverage under the qualifying health benefit plan.
Sec. 1508.154. REPORTS. A health benefit plan issuer that
participates in the program shall submit reports to the department
in the form and at the time the commissioner prescribes.
[Sections 1508.155-1508.200 reserved for expansion]
SUBCHAPTER E. RATING OF QUALIFIED HEALTH BENEFIT PLANS
Sec. 1508.201. RATING; PREMIUM PRACTICES IN GENERAL.
(a) A health benefit plan issuer participating in the program
must:
(1) use rating practices for qualifying health benefit
plans that are consistent with the purposes of this chapter; and
(2) in setting premiums for qualifying health benefit
plans, consider the availability of reimbursement from the fund.
(b) A health benefit plan issuer participating in the
program shall apply rating factors consistently with respect to all
small employers in a class of business.
(c) Differences in premium rates charged for qualifying
health benefit plans must be reasonable and reflect objective
differences in plan design.
Sec. 1508.202. PREMIUM RATE DEVELOPMENT AND CALCULATION.
(a) Rating factors used to underwrite qualifying health benefit
plans must produce premium rates for identical groups that:
(1) differ only by the amounts attributable to health
benefit plan design; and
(2) do not reflect differences because of the nature
of the groups assumed to select a particular health benefit plan.
(b) A health benefit plan issuer shall treat each qualifying
health benefit plan that is issued or renewed in a calendar month as
having the same rating period.
(c) A health benefit plan issuer may use only age and gender
as case characteristics, as defined by Section 1501.201(2), in
setting premium rates for a qualifying health benefit plan.
(d) The commissioner by rule may establish additional
rating criteria and requirements for qualifying health benefit
plans if the commissioner determines that the criteria and
requirements are necessary to achieve the purposes of this chapter.
Sec. 1508.203. FILING; APPROVAL. (a) A health benefit
plan issuer shall file with the department, for review and approval
by the commissioner, premium rates to be charged for qualifying
health benefit plans.
(b) If the commissioner limits health benefit plan issuer
participation in the program under Section 1508.101(b), premium
rates proposed to be charged for each qualifying health benefit
plan will be considered as an element in the contract procurement
process required under that section.
[Sections 1508.204-1508.250 reserved for expansion]
SUBCHAPTER F. HEALTHY TEXAS SMALL EMPLOYER PREMIUM STABILIZATION
FUND
Sec. 1508.251. ESTABLISHMENT OF FUND. (a) To the extent
that funds appropriated to the department are available for this
purpose, the commissioner shall establish a fund from which health
benefit plan issuers may receive reimbursement for claims paid by
the health benefit plan issuers for individuals covered under
qualifying group health plans.
(b) The fund established under this section shall be known
as the healthy Texas small employer premium stabilization fund.
(c) The commissioner shall adopt rules necessary to
implement and administer the fund, including rules that set out the
procedures for operation of the fund and distribution of money from
the fund.
Sec. 1508.252. OPERATION OF FUND; CLAIM ELIGIBILITY.
(a) A health benefit plan issuer is eligible to receive
reimbursement in an amount that is equal to 80 percent of the dollar
amount of claims paid between $5,000 and $75,000 in a calendar year
for an enrollee in a qualifying health benefit plan.
(b) A health benefit plan issuer is eligible for
reimbursement from the fund only for the calendar year in which
claims are paid.
(c) Once the dollar amount of claims paid on behalf of a
covered individual reaches or exceeds $75,000 in a given calendar
year, a health benefit plan issuer may not receive reimbursement
for any other claims paid on behalf of the individual in that
calendar year.
Sec. 1508.253. REIMBURSEMENT REQUEST SUBMISSION. (a) A
health benefit plan issuer seeking reimbursement from the fund
shall submit a request for reimbursement in the form prescribed by
the commissioner by rule.
(b) A health benefit plan issuer must request reimbursement
from the fund annually, not later than the date determined by the
commissioner, following the end of the calendar year for which the
reimbursement requests are made.
(c) The commissioner may require a health benefit plan
issuer participating in the program to submit claims data in
connection with reimbursement requests as the commissioner
determines to be necessary to ensure appropriate distribution of
reimbursement funds and oversee the operation of the fund. The
commissioner may require that the data be submitted on a per covered
individual, aggregate, or categorical basis.
Sec. 1508.254. FUND AVAILABILITY. (a) The commissioner
shall compute the total claims reimbursement amount for all health
benefit plan issuers participating in the program for the calendar
year for which claims are reported and reimbursement requested.
(b) If the total amount requested by health benefit plan
issuers participating in the program for reimbursement for a
calendar year exceeds the amount of funds available for
distribution for claims paid during that same calendar year, the
commissioner shall provide for the pro rata distribution of any
available funds. A health benefit plan issuer participating in the
program is eligible to receive a proportional amount of any
available funds that is equal to the proportion of total eligible
claims paid by all participating health benefit plan issuers that
the requesting health benefit plan issuer paid.
(c) If the amount of funds available for distribution for
claims paid by all health benefit plan issuers participating in the
program during a calendar year exceeds the total amount requested
for reimbursement by all participating health benefit plan issuers
during that calendar year, the commissioner shall carry forward any
excess funds and make those excess funds available for distribution
in the next calendar year. Excess funds carried over under this
section are added to the fund in addition to any other money
appropriated for the fund for the calendar year into which the funds
are carried forward.
Sec. 1508.255. PROGRAM REPORTING. (a) Each health benefit
plan issuer participating in the program shall provide the
department, in the form prescribed by the commissioner, monthly
reports of total enrollment under qualifying health benefit plans.
(b) On the request of the commissioner, each health benefit
plan issuer participating in the program shall furnish to the
department, in the form prescribed by the commissioner, data other
than data described by Subsection (a) that the commissioner
determines necessary to oversee the operation of the fund.
Sec. 1508.256. CLAIMS EXPERIENCE DATA. (a) Based on
available data and appropriate actuarial assumptions, the
commissioner shall separately estimate the per covered individual
annual cost of total claims reimbursement from the fund for
qualifying health benefit plans.
(b) On request, a health benefit plan issuer participating
in the program shall furnish to the department claims experience
data for use in the estimates described by Subsection (a).
Sec. 1508.257. TOTAL ELIGIBLE ENROLLMENT DETERMINATION.
The commissioner shall determine total eligible enrollment under
qualifying health benefit plans by dividing the total funds
available for distribution from the fund by the estimated per
covered individual annual cost of total claims reimbursement from
the fund.
Sec. 1508.258. EVALUATION AND PROTECTION OF FUND; EMPLOYER
ENROLLMENT SUSPENSION. (a) The commissioner shall suspend the
enrollment of new employers in qualifying health benefit plans if
the commissioner determines that the total enrollment reported by
all health benefit plan issuers under qualifying health benefit
plans exceeds the total eligible enrollment determined under
Section 1508.257 and is likely to result in anticipated annual
expenditures from the fund in excess of the total funds available
for distribution from the fund.
(b) The commissioner shall provide a health benefit plan
issuer participating in the program with notification of any
enrollment suspension under Subsection (a) as soon as practicable
after:
(1) receipt of all enrollment data; and
(2) determination of the need to suspend enrollment.
(c) A suspension of issuance of qualifying health benefit
plans to employers under Subsection (a) does not preclude the
addition of new employees of an employer already covered under a
qualifying health benefit plan or new dependents of employees
already covered under a qualifying health benefit plan.
Sec. 1508.259. EMPLOYER ENROLLMENT REACTIVATION. If, at
any point during a suspension of enrollment under Section 1508.258,
the commissioner determines that funds are sufficient to provide
for the addition of new enrollments, the commissioner:
(1) may reactivate new enrollments; and
(2) shall notify all participating group health
benefit plan issuers that enrollment of new employers may be
resumed.
Sec. 1508.260. FUND ADMINISTRATOR. (a) The commissioner
may obtain the services of an independent organization to
administer the fund.
(b) The commissioner shall establish guidelines for the
submission of proposals by organizations for the purposes of
administering the fund and may approve, disapprove, or recommend
modification to the proposal of an applicant to administer the
fund.
(c) An organization approved to administer the fund shall
submit reports to the commissioner, in the form and at the times
required by the commissioner, as necessary to facilitate evaluation
and ensure orderly operation of the fund, including an annual
report of the affairs and operations of the fund. The annual report
must also be delivered to the governor, the lieutenant governor,
and the speaker of the house of representatives.
(d) An organization approved to administer the fund shall
maintain records in the form prescribed by the commissioner and
make those records available for inspection by or at the request of
the commissioner.
(e) The commissioner shall determine the amount of
compensation to be allocated to an approved organization as payment
for fund administration. Compensation is payable only from the
fund.
(f) The commissioner may remove an organization approved to
administer the fund from fund administration. An organization
removed from fund administration under this subsection must
cooperate in the orderly transition of services to another approved
organization or to the commissioner.
Sec. 1508.261. STOP-LOSS INSURANCE; REINSURANCE. (a) The
administrator of the fund, on behalf of and with the prior approval
of the commissioner, may purchase stop-loss insurance or
reinsurance from an insurance company licensed to write that
coverage in this state.
(b) Stop-loss insurance or reinsurance may be purchased to
the extent that the commissioner determines funds are available for
the purchase of that insurance.
Sec. 1508.262. PUBLIC EDUCATION AND OUTREACH. (a) The
commissioner may use an amount of the fund, not to exceed eight
percent of the annual amount of the fund, for purposes of developing
and implementing public education, outreach, and facilitated
enrollment strategies targeted to small employers who do not
provide health insurance.
(b) The commissioner shall solicit and accept
recommendations concerning the development and implementation of
education, outreach, and enrollment strategies under Subsection
(a) from agents licensed under Title 13 to write health benefit
plans in this state.
(c) The commissioner may contract with marketing
organizations to perform or provide assistance with education,
outreach, and enrollment strategies described by Subsection (a).
SECTION 2. The commissioner of insurance shall adopt any
rules necessary to implement the change in law made by this Act not
later than January 4, 2010.
SECTION 3. (a) The commissioner of insurance shall make an
initial determination concerning limitation of health benefit plan
issuer participation in the program established under Chapter 1508,
Insurance Code, as added by this Act, not later than January 18,
2010. If the commissioner determines that limited participation is
necessary to achieve the purposes of Chapter 1508, Insurance Code,
as added by this Act, the commissioner shall issue a request for
proposal from health benefit plan issuers to participate in the
program not later than May 1, 2010.
(b) The commissioner of insurance shall ensure that the
Healthy Texas Program is fully operational in a manner that allows
health benefit plan issuers participating in the program to make
the first annual request for reimbursement on January 1, 2011.
SECTION 4. This Act does not make an appropriation. This
Act takes effect only if a specific appropriation for the
implementation of the Act is provided in a general appropriations
act of the 81st Legislature.
SECTION 5. This Act takes effect September 1, 2009.