81R2562 PMO-D
By: Nelson S.B. No. 77
A BILL TO BE ENTITLED
AN ACT
relating to participation by single-employee businesses in private
purchasing cooperatives or health group cooperatives.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1501.051, Insurance Code, is amended by
adding Subdivision (3-b) to read as follows:
(3-b) "Eligible single-employee business" means a
business entity that:
(A) is owned and operated by a sole proprietor;
(B) employs an average of fewer than two
employees on business days during the preceding calendar year; and
(C) is eligible to participate in a cooperative
under this subchapter in accordance with Section 1501.066.
SECTION 2. Section 1501.0581, Insurance Code, is amended by
amending Subsections (a), (b), and (p) and adding Subsection (o-1)
to read as follows:
(a) The membership of a health group cooperative may consist
of only small employers, only large employers, or only eligible
single-employee businesses, but may not consist of a combination of
those types of entities [or both small and large employers]. To
participate as a member of a health group cooperative, an employer
must be a small or large employer as described by this chapter or an
eligible single-employee business as described by Section
1501.051(3-b).
(b) Subject to the requirements imposed on small employer
health benefit plan issuers under Section 1501.101 and subject to
Subsections (a-1) and (o), a health group cooperative:
(1) shall allow a small employer to join a health group
cooperative consisting of only small employers or both small and
large employers and enroll in health benefit plan coverage; [and]
(2) may allow an eligible single-employee business to
join a health group cooperative consisting of only eligible
single-employee businesses and enroll in health benefit plan
coverage; and
(3) may allow a large employer to join the health group
cooperative and enroll in health benefit plan coverage.
(o-1) A health group cooperative consisting only of
eligible single-employee businesses may elect to restrict
membership in the cooperative so that the total number of eligible
employees employed on business days during the preceding calendar
year by all eligible single-employee businesses participating in
the cooperative does not exceed 50.
(p) A health group cooperative must make the election
described by Subsection (o) or (o-1) at the time the cooperative is
initially formed. Evidence of the election must be filed in writing
with the commissioner in the form and at the time prescribed by the
commissioner by rule.
SECTION 3. Sections 1501.063(b-1) and (b-2), Insurance
Code, are amended to read as follows:
(b-1) Subject to Section 1501.066, a [A] health group
cooperative that is composed only of small employers or only of
eligible single-employee businesses and that has made the election
described by Section 1501.0581(o)(1) or (o-1), as applicable, in
accordance with Subsection (p) of that section shall be treated in
the same manner as a small employer for the purposes of this
chapter, including for the purposes of any provision relating to
premium rates and issuance and renewal of coverage.
(b-2) A health group cooperative that is composed only of
small employers or only of eligible single-employee businesses and
that has not made the election described by Section 1501.0581(o)(1)
or (o-1), as applicable, in accordance with Subsection (p) of that
section, or a health group cooperative that is composed of both
small and large employers, may be treated in the same manner as a
large employer for the purposes of this chapter, including for the
purposes of any provision relating to premium rates and issuance
and renewal of coverage.
SECTION 4. Subchapter B, Chapter 1501, Insurance Code, is
amended by adding Sections 1501.066 and 1501.067 to read as
follows:
Sec. 1501.066. ELIGIBLE SINGLE-EMPLOYEE BUSINESS. (a) The
commissioner by rule shall adopt rules governing the eligibility of
a single-employee business to participate in a health group
cooperative under this subchapter. The rules must include
provisions to ensure that each eligible single-employee business
has a business purpose and was not formed solely to obtain health
benefit plan coverage under this subchapter.
(b) The commissioner may specify additional requirements
for a health group cooperative composed solely of eligible
single-employee businesses to qualify for coverage as a small
employer under this chapter or, if the commissioner finds that
treatment of such a cooperative as a small employer is not
actuarially justified, may require that a health group cooperative
composed solely of eligible single-employee businesses be treated
as a large employer under this chapter.
Sec. 1501.067. COOPERATIVES FOR SMALL EMPLOYERS, LARGE
EMPLOYERS, AND SINGLE-EMPLOYEE BUSINESSES. The department may
develop a program to assist small employers, large employers, and
single-employee businesses to form or participate in private
purchasing cooperatives and health group cooperatives in
accordance with this subchapter.
SECTION 5. The commissioner of insurance shall adopt any
rules necessary to implement the change in law made by this Act not
later than December 1, 2009. A person may not form a health group
cooperative composed solely of eligible single-employee businesses
under Subchapter B, Chapter 1501, Insurance Code, as amended by
this Act, before January 1, 2010.
SECTION 6. This Act takes effect September 1, 2009.