By: Watson, et al. S.B. No. 815
A BILL TO BE ENTITLED
AN ACT
relating to consumer labeling requirements for and the provision of
certain information concerning health benefit plans; providing
penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 541, Insurance Code, is amended by
adding Subchapter K to read as follows:
SUBCHAPTER K. REQUIRED LABELING FOR HEALTH BENEFIT PLANS
Sec. 541.501. DEFINITIONS. In this subchapter:
(1) "Enrollee" means an individual who is eligible to
receive health care services under a health benefit plan.
(2) "Insurance facts label" means a notice that
complies with the requirements of this subchapter.
(3) "Covered days for inpatient mental health" means
the number of days covered for inpatient treatment related to
mental health, detoxification, or treatment for addiction.
Sec. 541.502. APPLICABILITY OF SUBCHAPTER. (a) This
subchapter applies to any health benefit plan that provides
benefits for medical or surgical expenses incurred as a result of a
health condition, accident, or sickness, including an individual,
group, blanket, or franchise insurance policy or insurance
agreement, a small employer health benefit plan under Chapter 1501,
a group hospital service contract, or an individual or group
evidence of coverage that is offered by:
(1) an insurance company;
(2) a group hospital service corporation operating
under Chapter 842;
(3) a fraternal benefit society operating under
Chapter 885;
(4) a stipulated premium company operating under
Chapter 884;
(5) a health maintenance organization operating under
Chapter 843;
(6) an approved nonprofit health corporation that
holds a certificate of authority under Chapter 844; or
(7) an entity not authorized under this code or
another insurance law of this state that contracts directly for
health care services on a risk-sharing basis, including a
capitation basis.
(b) This subchapter does not apply to:
(1) the child health plan program under Chapter 62,
Health and Safety Code, or the health benefits plan for children
under Chapter 63, Health and Safety Code;
(2) a Medicaid managed care program operated under
Chapter 533, Government Code, or a Medicaid program operated under
Chapter 32, Human Resources Code;
(3) a multiple employer welfare arrangement that holds
a certificate of authority under Chapter 846; or
(4) a large employer health benefit plan as defined
under Section 1501.002.
Sec. 541.503. INSURANCE FACTS LABEL REQUIRED; NOTICE OF
LABEL REQUIRED. (a) The following documents must contain an
insurance facts label:
(1) a written plan description;
(2) an outline of coverage;
(3) a disclosure statement;
(4) a rate increase notice;
(5) a renewal notice; or
(6) a notice for product or plan modifications.
(b) An insurance facts label must be provided to an
individual on the individual's oral or written request.
Sec. 541.504. GENERAL FORMAT OF INSURANCE FACTS LABEL.
(a) An insurance facts label must include a box outline that
contains only white background and black text.
(b) An insurance facts label must:
(1) be conspicuous and not less than three inches in
height and two inches in width;
(2) be enclosed by a one-half point box rule within
three points of text measure; and
(3) separate all lines of text by two points, leading
above and below.
(c) The phrase "Insurance Facts" must:
(1) appear in a widely used sans serif font that is no
smaller than 13 point; and
(2) be located inside and at the top of the box to fit
the width of the label flush left and right.
(d) The health benefit plan name and the name of the company
must:
(1) appear in a widely used sans serif font that is no
smaller than 10 point; and
(2) be located immediately below the phrase "Insurance
Facts" and separated from the phrase "Insurance Facts" by a
seven-point rule.
(e) Any disclaimer or other information not otherwise
required to appear at a specific location on the label by this
subchapter must appear in a widely used sans serif font that is no
smaller than six point and located at the bottom of the label box as
the commissioner permits by rule.
Sec. 541.505. REQUIRED HEADINGS; FORMAT. (a) An insurance
facts label must contain the following headings:
(1) "Monthly Premium (Avg.)";
(2) "Percent of Expense Paid by Insurance (est.)"; and
(3) "Benefit Levels."
(b) The headings described by this section must be flush
left in the label box and appear in a widely used sans serif font
that is no smaller than eight point.
(c) "Monthly Premium (Avg.)" must be the first heading and
must be:
(1) located immediately below the health benefit plan
and health benefit plan issuer name; and
(2) separated from all other headings by a three-point
rule.
(d) A numeric value that corresponds to a heading must
appear flush right in a widely used sans serif font that is no
smaller than eight point.
(e) Each heading must be separated from another heading and
any applicable subheadings by a one-quarter-point rule.
(f) "Benefit Levels" must be the last heading, when headings
are listed top to bottom, and must appear immediately before the
required subheadings. There is no value for the "Benefit Levels"
heading.
Sec. 541.506. REQUIRED HEADINGS; DEFINITIONS. For the
purposes of Section 541.505, the following terms have the following
meanings:
(1) "Monthly Premium (Avg.)" means the average dollar
amount an enrollee pays each month for coverage under a health
benefit plan.
(2) "Percent of Expense Paid by Insurance (est.)"
means the estimate of the average percentage share of enrollees'
costs that a health benefit plan pays versus out-of-pocket charges.
Sec. 541.507. REQUIRED SUBHEADINGS; FORMAT.
(a) Subheadings under the "Benefit Levels" heading must disclose
the dollar value provided by the underlying certificate, policy, or
contract, and must be as follows:
(1) "Annual Deductible";
(2) "Out-of-Pocket Maximum";
(3) "Office Visit Copayment" listed separately for
primary care providers and specialists;
(4) "Prescription Copayment (Generic/Brand)";
(5) "Prescription Deductible";
(6) "Lifetime Maximum Coverage";
(7) "Maternity Coverage Included";
(8) "Emergency Room Visit Copayment";
(9) "Covered Days for Inpatient Mental Health";
(10) "Outpatient Surgery Copayment"; and
(11) "Inpatient Cost Sharing."
(b) Each subheading required by this section must be
indented six points from the left and appear in a widely used sans
serif font that is no smaller than eight point.
(c) A numeric value that corresponds to a subheading must
appear flush right in a widely used sans serif font that is no
smaller than eight point.
(d) Each subheading must be separated from another
subheading or heading by a one-quarter-point rule.
Sec. 541.508. RULES. (a) The commissioner may:
(1) require differing titles, headings, and
subheadings as may otherwise be required by this subchapter as
necessary to prevent confusion between insurance and noninsurance
products;
(2) adopt rules to resolve legibility and format
issues; and
(3) adopt any other rules as necessary to implement
and administer this subchapter.
(b) The commissioner shall adopt rules regulating:
(1) the use of insurance and noninsurance terms in the
insurance facts label to prevent confusion in the marketplace
between insurance and noninsurance products;
(2) the manner in which a health benefit plan may use
space available in the label box after disclosure of the consumer
information required by this subchapter;
(3) allowable disclaimers that may appear in a
separate section at the bottom of an insurance facts label box below
all headings and subheadings on the label;
(4) the format for a label containing information
about multiple health benefit plans for a document that presents or
promotes multiple health benefit plans; and
(5) the composition and computation of the estimates
required in the insurance facts label.
Sec. 541.509. REMEDIES AND ENFORCEMENT. A violation of
this subchapter is an unfair and deceptive act or practice in the
business of insurance under this chapter.
SECTION 2. (a) Section 32.101, Insurance Code, is amended
to read as follows:
Sec. 32.101. APPLICABILITY OF SUBCHAPTER. (a) This
subchapter applies to insurers who comprise the top 25 insurance
groups in the national market and who issue residential property
insurance or personal automobile insurance policies in this state,
including a Lloyd's plan, a reciprocal or interinsurance exchange,
a county mutual insurance company, a farm mutual insurance company,
the Texas Windstorm Insurance Association, the FAIR Plan
Association, and the Texas Automobile Insurance Plan Association.
(b) This subchapter applies to an issuer of a health benefit
plan described by Section 544.301, as added by Chapter 748 (H.B.
2810), Acts of the 79th Legislature, Regular Session, 2005.
(b) This section takes effect only if the Act of the 81st
Legislature, Regular Session, 2009, relating to nonsubstantive
additions to and corrections in enacted codes does not become law.
SECTION 3. (a) Section 32.101, Insurance Code, is amended
to read as follows:
Sec. 32.101. APPLICABILITY OF SUBCHAPTER. (a) This
subchapter applies to insurers who comprise the top 25 insurance
groups in the national market and who issue residential property
insurance or personal automobile insurance policies in this state,
including a Lloyd's plan, a reciprocal or interinsurance exchange,
a county mutual insurance company, a farm mutual insurance company,
the Texas Windstorm Insurance Association, the FAIR Plan
Association, and the Texas Automobile Insurance Plan Association.
(b) This subchapter applies to an issuer of a health benefit
plan described by Section 544.501.
(b) This section takes effect only if the Act of the 81st
Legislature, Regular Session, 2009, relating to nonsubstantive
additions to and corrections in enacted codes becomes law.
SECTION 4. Subsection (a), Section 32.102, Insurance Code,
is amended to read as follows:
(a) The department, in conjunction with the office of public
insurance counsel, shall establish and maintain a single Internet
website that provides information to enable consumers to make
informed decisions relating to the purchase of health insurance,
residential property insurance, and personal automobile insurance.
The website must include:
(1) a description of each type of residential property
insurance policy and personal automobile insurance policy issued in
this state, including a comparison of the coverage, exclusions, and
restrictions of each policy that allows a side-by-side comparison
of the features of the policy forms;
(2) a listing of each insurer writing residential
property insurance or personal automobile insurance in this state,
indexed by each county or zip code in which the insurer is actively
writing that insurance, and a profile of the insurer that includes:
(A) contact information for the insurer,
including the insurer's full name, address, and telephone number
and the insurer's fax number and e-mail address, if available;
(B) information on rates charged by the insurer,
including:
(i) sample rates for different policyholder
profiles in each county or zip code; and
(ii) the percentage by which the sample
rate has fallen or risen due to filings in the previous 12, 24, and
36 months;
(C) a list of policy forms, exclusions,
endorsements, and discounts offered by the insurer;
(D) an indication of whether the insurer uses
credit scoring in underwriting, rating, or tiering, and a link to
the insurer's credit model or a link explaining how to request the
insurer's credit model;
(E) the insurer's financial rating determined by
A. M. Best or similar rating organization and an explanation of the
meaning and importance of the rating;
(F) a complaint ratio or similar complaint rating
system for the insurer for each of the previous three years and an
explanation of the meaning of the rating system; and
(G) information, other than information made
confidential by law, on the insurer's regulatory and administrative
experience with the department, the office of public insurance
counsel, and insurance regulatory authorities in other states;
[and]
(3) if feasible, as determined by the commissioner and
the public insurance counsel:
(A) a side-by-side comparison of credit scoring
models, including factors, key variables, and weights, of
residential property insurers in this state; and
(B) a side-by-side comparison of credit scoring
models, including factors, key variables, and weights, of private
passenger automobile insurers in this state; and
(4) in the manner prescribed by the commissioner by
rule, contact information for individual health benefit plans as
necessary for consumers to obtain additional rate information
regarding a plan and a comparison of information about health
benefit plans, including information regarding a plan's:
(A) annual deductibles;
(B) out-of-pocket maximums;
(C) office visit copayments, listed separately
for primary care providers and specialists;
(D) prescription copayments, listed by generic
and brand name medications;
(E) prescription deductibles;
(F) lifetime maximum coverage;
(G) maternity coverage included;
(H) emergency room visit copayments;
(I) covered days for inpatient mental health;
(J) outpatient surgery copayments; and
(K) inpatient cost sharing.
SECTION 5. As soon as practicable, but not later than
October 31, 2009, the commissioner of insurance shall prepare a
sample of an insurance facts label that complies with Subchapter K,
Chapter 541, Insurance Code, as added by this Act, and create an
Internet web page that explains the insurance facts label to
consumers.
SECTION 6. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2009.