By: Averitt S.B. No. 842
(In the Senate - Filed February 13, 2009; March 4, 2009,
read first time and referred to Committee on State Affairs;
April 6, 2009, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 8, Nays 0; April 6, 2009,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 842 By: Lucio
A BILL TO BE ENTITLED
AN ACT
relating to the operation of health care sharing organizations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Participants of a health care sharing
organization voluntarily assist fellow participants with the
payment of medical expenses. In many instances, participants of a
health care sharing organization provide assistance to individuals
who are without health insurance coverage and, in doing so, provide
important services that the state would otherwise have to provide.
Due to their beneficial work and religious nature, health care
sharing organizations should be statutorily recognized as
religious organizations helping to fulfill the religious beliefs of
organization participants and should not be treated in the same
manner as secular health care coverages, including insurance.
SECTION 2. Title 8, Insurance Code, is amended by adding
Subtitle K to read as follows:
SUBTITLE K. NONINSURANCE HEALTH COVERAGES
CHAPTER 1680. HEALTH CARE SHARING ORGANIZATIONS
Sec. 1680.001. SHORT TITLE. This chapter may be cited as
the Health Care Sharing Organizations Freedom to Share Act.
Sec. 1680.002. TREATMENT AS HEALTH CARE SHARING
ORGANIZATION. An organization that administers a health care
sharing arrangement among individuals of the same religion based on
the individuals' sincerely held religious belief qualifies for
treatment as a health care sharing organization under this chapter
if:
(1) the organization is a bona fide religious
organization, the primary purpose and function of which is
religious, that is entitled to tax exempt status under Section
501(c)(3) Internal Revenue Code of 1986; and
(2) in operating the health care sharing arrangement,
the organization:
(A) does not bear risk but facilitates payments
to participants who have financial or medical-related needs from
participants with the present ability to assist those with
financial or medical-related needs, all in accordance with the
organization's criteria;
(B) notifies a participant of sharing amounts;
(C) provides a written monthly statement to all
participants listing the total dollar amount of qualified needs
submitted to the organization as well as the total dollar amount
actually assigned to participants for sharing;
(D) maintains a complaint log to track complaints
by participants and retains information regarding each complaint
until the third anniversary of the date the complaint is made;
(E) provides, on each application for
participation in a health care sharing arrangement distributed
directly or on behalf of the organization, a notice that complies
with Section 1680.003; and
(F) requires each adult member to sign on behalf
of the participant or, in the case of a minor or dependent child, on
behalf of the minor or dependent child an acknowledgment that the
member has read and understands the notice described by Section
1680.003 and retains the signed acknowledgment until the second
anniversary of the last date of the member's participation in the
health care sharing arrangement.
Sec. 1680.003. NOTICE. The notice described by Section
1680.002(2)(E) must be printed in no smaller than 12-point font and
must read substantially as follows:
"This health care sharing organization is not offering an
insurance product, and the health care sharing arrangement is not
being offered by or through an insurance company. Participation in
the health care sharing organization may limit your future options
to purchase insurance if your health condition changes.
Participation in the health care sharing organization does not
provide creditable coverage, and, therefore, future insurance
coverage you obtain may limit or exclude benefits for your
preexisting conditions.
"This health care sharing organization is also not offering a
discount health care program.
"Whether anyone chooses to assist you with your medical bills
is voluntary, as no other participant may be compelled to share
payment of your medical bills.
"This health care sharing arrangement is not insurance or a
substitute for insurance. Whether you receive any payments for
medical expenses and whether this health care sharing organization
or arrangement continues to operate, you remain, to the extent
allowable under law, personally and fully responsible for the
payment of your own medical bills. Complaints concerning this
health care sharing organization may be reported to the Texas
Office of the Attorney General."
Sec. 1680.004. AUTHORITY; LIMITATIONS. (a) A health care
sharing organization may:
(1) establish additional qualifications for
participation in the health care sharing arrangement;
(2) limit the financial or medical-related needs that
may be eligible for payment among the participants;
(3) cancel a participant's participation in the health
care sharing arrangement if the participant fails to make a
specific payment to another participant before the 60th day after
the date the payment is due; and
(4) issue participant membership cards.
(b) If a health care sharing organization issues
participant membership cards, the cards must include the statement
"Not Insurance."
(c) A health care sharing organization may not require that
participants speak English.
Sec. 1680.005. CONSTRUCTION WITH OTHER LAW. (a) Chapter
76, Health and Safety Code, does not apply to a health care sharing
organization.
(b) Notwithstanding any other provision of this code, a
health care sharing organization is exempt from the operation of
the insurance laws of this state and is not subject to the
commissioner's oversight.
Sec. 1680.006. ENFORCEMENT AND ADMINISTRATION BY ATTORNEY
GENERAL. (a) Notwithstanding any other law, the office of the
attorney general has jurisdiction over health care sharing
organizations to ensure compliance with this chapter and for:
(1) the prevention and prosecution of deceptive trade
practices and fraud; and
(2) consumer protection.
(b) A health care sharing organization shall provide to the
attorney general, on the request of the attorney general, any audit
conducted of the organization and any original or amended annual
filing made by the organization with the United States Internal
Revenue Service.
(c) The attorney general may adopt rules to implement this
chapter.
Sec. 1680.007. CONSUMER PROTECTION. A participant in a
health care sharing organization is a consumer for purposes of
Chapter 17, Business & Commerce Code, and is entitled to the
protections provided by that chapter.
Sec. 1680.008. NO ASSUMPTION OF RISK. (a) Participants in
a health care sharing arrangement and the health care sharing
organization:
(1) do not assume any risk or make any promise to pay
the financial or medical-related needs of other participants; and
(2) are not risk-bearing entities.
(b) None of the activities in this chapter give rise to an
assumption of risk or promise to pay by either the participants or
the health care sharing organization.
Sec. 1680.009. COLLATERAL SHARING ACTIVITIES. A health
care sharing organization may:
(1) arrange for participants to share bills when a
participant experiences disability; and
(2) provide health counseling, education, and
resources to participants in the health care sharing arrangement.
Sec. 1680.010. CONTRACTUAL ARRANGEMENTS WITH OTHER
ENTITIES. (a) A health care sharing organization may contract
with an administrator as defined by Chapter 4151, Insurance Code,
or a preferred provider organization or similar entity to
facilitate the operation of the organization.
(b) A health care sharing organization that enters into a
contractual arrangement under Subsection (a) remains exempt from
the operation of the insurance laws of this state as described by
Section 1680.005.
Sec. 1680.011. ANNUAL REPORT. Not later than January 1 of
each year, the organization shall file an annual report regarding
its operations in this state during that fiscal year with the
governor, attorney general, lieutenant governor, and speaker of the
house of representatives.
SECTION 3. Subsection (a), Section 101.055, Insurance Code,
is amended to read as follows:
(a) Section 101.051(b)(7) does not apply to:
(1) a program otherwise authorized by law that is
established:
(A) by a political subdivision of this state;
(B) by a state agency; or
(C) under Chapter 791, Government Code; [or]
(2) a multiple employer welfare arrangement that is
fully insured as defined by 29 U.S.C. Section 1144(b)(6); or
(3) a health care sharing organization operated under
Chapter 1680.
SECTION 4. Section 76.002, Health and Safety Code, is
amended to read as follows:
Sec. 76.002. CONSTRUCTION WITH [APPLICABILITY OF] OTHER
LAW. (a) In addition to the requirements of this chapter, a
program operator or marketer is subject to the applicable consumer
protection laws under Chapter 17, Business & Commerce Code.
(b) This chapter does not apply to a health care sharing
organization operated under Chapter 1680, Insurance Code.
SECTION 5. 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.
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