83R499 TJS-D
By: Johnson H.B. No. 1002
A BILL TO BE ENTITLED
AN ACT
relating to creation of the Texas Health Insurance Exchange.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle G, Title 8, Insurance Code, is amended
by adding Chapter 1509 to read as follows:
CHAPTER 1509. TEXAS HEALTH INSURANCE EXCHANGE
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1509.001. DEFINITIONS. In this chapter:
(1) "Board" means the board of directors of the
exchange.
(2) "Catastrophic plan" has the meaning described by
Section 1302(e), Patient Protection and Affordable Care Act (42
U.S.C. Section 18022).
(3) "Educated health care consumer" means an
individual who is knowledgeable about the health care system and
has background or experience in making informed decisions regarding
health, medical, and scientific matters.
(4) "Enrollee" means an individual who is enrolled in
a qualified health plan.
(5) "Exchange" means the Texas Health Insurance
Exchange.
(6) "Executive commissioner" means the executive
commissioner of the Health and Human Services Commission.
(7) "Qualified employer" means an employer that elects
to make all of its full-time employees eligible for one or more
qualified health plans offered through the exchange and, at the
option of the employer, some or all of its part-time employees and:
(A) has its principal place of business in this
state and elects to provide coverage through the exchange to all of
its eligible employees, wherever employed; or
(B) elects to provide coverage through the
exchange to all of its eligible employees who are principally
employed in this state and who are eligible to participate in a
qualified health plan.
(8) "Qualified health plan" means a health benefit
plan that has been certified by the board as meeting the criteria
specified by Section 1311(c), Patient Protection and Affordable
Care Act (42 U.S.C. Section 18031(c)).
(9) "Qualified individual" means an individual,
including a minor, who:
(A) seeks to enroll in a qualified health plan
offered to individuals through the exchange;
(B) resides in this state;
(C) at the time of enrollment, is not
incarcerated, other than incarceration pending the disposition of
charges; and
(D) is, and is reasonably expected to be, for the
entire period for which enrollment is sought, a citizen or national
of the United States or an alien lawfully present in the United
States.
(10) "Secretary" means the secretary of the United
States Department of Health and Human Services.
(11) "SHOP Exchange" means a Small Business Health
Options Program as described by Section 1311(b)(1)(B), Patient
Protection and Affordable Care Act (42 U.S.C. Section
18031(b)(1)(B)).
Sec. 1509.002. DEFINITION OF HEALTH BENEFIT PLAN. (a) In
this chapter, "health benefit plan" means an insurance policy,
insurance agreement, evidence of coverage, or other similar
coverage document that provides coverage for medical or surgical
expenses incurred as a result of a health condition, accident, or
sickness that is issued 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) an exchange operating under Chapter 942;
(6) a health maintenance organization operating under
Chapter 843;
(7) a multiple employer welfare arrangement that holds
a certificate of authority under Chapter 846; or
(8) an approved nonprofit health corporation that
holds a certificate of authority under Chapter 844.
(b) In this chapter, "health benefit plan" does not include:
(1) a plan that provides coverage:
(A) for wages or payments in lieu of wages for a
period during which an employee is absent from work because of
sickness or injury;
(B) as a supplement to a liability insurance
policy;
(C) for credit insurance;
(D) only for vision care;
(E) only for hospital expenses; or
(F) only for indemnity for hospital confinement;
(2) a Medicare supplemental policy as defined by
Section 1882(g)(1), Social Security Act (42 U.S.C. Section
1395ss(g)(1));
(3) a workers' compensation insurance policy; or
(4) medical payment insurance coverage provided under
a motor vehicle insurance policy.
Sec. 1509.003. TREATMENT OF EMPLOYERS. (a) For purposes of
this chapter, "small employer" means a person who employed at least
two, and an average of not more than 50 employees during the
preceding calendar year. This subsection expires December 31,
2015.
(b) All persons treated as a single employer under Section
414(b), (c), (m), or (o), Internal Revenue Code of 1986, are single
employers for purposes of this chapter.
(c) An employer and any predecessor employer are a single
employer for purposes of this chapter.
(d) In determining the number of employees of an employer
under this section, the number of employees:
(1) includes part-time employees and employees who are
not eligible for coverage through the employer; and
(2) for an employer that did not have employees during
the entire preceding calendar year, is the average number of
employees that the employer is reasonably expected to employ on
business days in the current calendar year.
(e) A small employer that makes enrollment in qualified
health benefit plans available to its employees through the
exchange and ceases to be a small employer by reason of an increase
in the number of its employees continues to be a small employer for
purposes of this chapter as long as it continuously makes
enrollment through the exchange available to its employees.
Sec. 1509.004. RULEMAKING AUTHORITY. The board may adopt
rules necessary and proper to implement this chapter. Rules adopted
under this section may not conflict with or prevent the application
of regulations promulgated by the secretary under the Patient
Protection and Affordable Care Act (Pub. L. No. 111-148).
Sec. 1509.005. AGENCY COOPERATION. (a) The exchange, the
department, and the Health and Human Services Commission shall
cooperate fully in performing their respective duties under this
code or another law of this state relating to the operation of the
exchange.
(b) The exchange and the Health and Human Services
Commission shall cooperate fully to:
(1) ensure that the development of eligibility and
enrollment systems for the exchange and its tax credits are fully
integrated with the planning and development of the Health and
Human Services Commission's eligibility systems modernization
efforts;
(2) ensure full and seamless interoperability and
minimize duplication of cost and effort;
(3) develop and administer transition procedures
that:
(A) address the needs of individuals and families
who experience a change in income that results in a change in the
source of coverage, with a particular emphasis on children and
adults with special health care needs and chronic illnesses,
conditions, and disabilities, as well as all individuals who are
also enrolled in Medicare; and
(B) to the extent practicable under the Patient
Protection and Affordable Care Act (Pub. L. No. 111-148), provide
for the coordination of payments to Medicaid managed care
organizations and qualified health plans that experience changes in
enrollment resulting from changes in eligibility for Medicaid
during an enrollment period;
(4) ensure consistent methods and standards,
including formulas and verification methods, for prompt
calculation of income based on individuals' modified adjusted gross
incomes in order to guard against lapses in coverage and
inconsistent eligibility determinations and procedures;
(5) ensure maximum access to federal data sources for
the purpose of verifying income eligibility for Medicaid, the state
child health plan program, premium tax credits, and cost-sharing
reductions;
(6) ensure the prompt processing of applications and
enrollment in the correct state subsidy program, regardless of
whether the program is Medicaid, the state child health plan
program, premium tax credits, or cost-sharing reductions;
(7) ensure procedures for transitioning individuals
between Medicaid and tax-credit-based subsidies that protect
individuals against delays in eligibility and plan enrollment;
(8) ensure rapid resolution of inconsistent
information affecting eligibility and dissemination of clear and
understandable information to applicants regarding the resolution
process and any interim assistance that may be available while
resolution is pending and procedures to assure that individuals are
meaningfully informed of:
(A) the potential existence of overpayments of
advance tax credits;
(B) procedures for reconciling enrollee
liability for repayment in the event that an advance tax credit is
subsequently proved to be an overpayment;
(C) procedures by which individuals can report a
change in income that may affect the subsequent level of advance tax
payment or the availability of a safe harbor; and
(D) information regarding safe harbors against
overpayment liability or recoupment that may exist under federal or
state law; and
(9) develop cross-market participation by:
(A) encouraging the development of common
provider networks, network performance standards for health
benefit plans that participate in the exchange, Medicaid, and the
state child health plan program, and developing coverage terms and
quality standards in order to ensure maximum continuity and quality
of care;
(B) promoting participation by health benefit
plans that satisfy both qualified health plan and Medicaid managed
care plan criteria, in order to minimize disruption in care as a
result of enrollment shifts between subsidy sources;
(C) developing incentives, including quality
ratings, default enrollment preferences, and other approaches, in
order to encourage health benefit plans to participate in both
Medicaid and the exchange; and
(D) coordinating health benefit plan payments
and timely adjustments in all markets that may result from
enrollment changes.
Sec. 1509.006. EXEMPTION FROM STATE TAXES AND FEES. The
exchange is not subject to any state tax, regulatory fee, or
surcharge, including a premium or maintenance tax or fee.
Sec. 1509.007. COMPLIANCE WITH FEDERAL LAW. The exchange
shall comply with all applicable federal law and regulations.
Sec. 1509.008. TEMPORARY EXEMPTION FROM STATE PURCHASING
PROCEDURES. (a) The exchange is not subject to state purchasing or
procurement requirements under Subtitle D, Title 10, Government
Code, or any other law.
(b) This section expires January 1, 2016.
[Sections 1509.009-1509.050 reserved for expansion]
SUBCHAPTER B. ESTABLISHMENT AND GOVERNANCE
Sec. 1509.051. ESTABLISHMENT. The Texas Health Insurance
Exchange is established as an American Health Benefit Exchange and
a Small Business Health Options Program (SHOP) Exchange authorized
and required by Section 1311, Patient Protection and Affordable
Care Act (42 U.S.C. Section 18031).
Sec. 1509.052. GOVERNANCE OF EXCHANGE; BOARD MEMBERSHIP.
(a) The exchange is governed by a board of directors.
(b) The board consists of seven members as follows:
(1) five appointed members:
(A) one of whom is appointed by the governor;
(B) two of whom are appointed by the lieutenant
governor; and
(C) two of whom are appointed by the speaker of
the house of representatives;
(2) the commissioner as an ex officio voting member;
and
(3) the executive commissioner as an ex officio voting
member.
(c) Each of the five board members appointed under
Subsection (b)(1) must have demonstrated experience in at least two
of the following areas:
(1) individual health care coverage;
(2) small employer health care coverage;
(3) health benefit plan administration;
(4) health care finance or economics;
(5) actuarial science;
(6) administration of a public or private health care
delivery system; and
(7) purchasing health plan coverage.
(d) The board must include members who are health care
consumers or small business owners.
(e) In making appointments under this section, the
governor, lieutenant governor, and speaker of the house of
representatives shall attempt to make appointments that increase
the board's diversity of expertise.
Sec. 1509.053. PRESIDING OFFICER. The board shall annually
designate one member of the board to serve as presiding officer.
Sec. 1509.054. TERMS; VACANCY. (a) Appointed members of
the board serve six-year staggered terms, with either one or two of
the members' terms expiring February 1 of each odd-numbered year.
(b) The appropriate appointing authority shall fill a
vacancy on the board by appointing, for the unexpired term, an
individual who has the appropriate qualifications to fill that
position.
Sec. 1509.055. CONFLICT OF INTEREST. (a) Any board member
or a member of a committee formed by the board with a direct
interest in a matter, personally or through an employer, before the
board shall abstain from deliberations and actions on the matter in
which the conflict of interest arises and shall further abstain
from any vote on the matter, and may not otherwise participate in a
decision on the matter.
(b) Each board member shall file a conflict of interest
statement and a statement of ownership interests with the board to
ensure disclosure of all existing and potential personal interests
related to board business.
(c) A member of the board or of the staff of the exchange may
not be employed by, affiliated with, a consultant to, a member of
the board of directors of, or otherwise a representative of an
issuer or other insurer, an agent or broker, a health care provider,
or a health care facility or health clinic while serving on the
board or on the staff of the exchange.
(d) A member of the board or of the staff of the exchange may
not be a member, a board member, or an employee of a trade
association of issuers, health facilities, health clinics, or
health care providers while serving on the board or on the staff of
the exchange.
(e) A member of the board or of the staff of the exchange may
not be a health care provider unless the member receives no
compensation for rendering services as a health care provider and
does not have an ownership interest in a professional health care
practice.
Sec. 1509.056. GENERAL DUTIES OF BOARD MEMBERS. (a) Each
board member has the responsibility and duty to meet the
requirements of this title and applicable state and federal laws
and regulations, to serve the public interest of the individuals
and small businesses seeking health care coverage through the
exchange, and to ensure the operational well-being and fiscal
solvency of the exchange.
(b) A member of the board may not make, participate in
making, or in any way attempt to use the board member's official
position to influence the making of any decision that the board
member knows or has reason to know will have a material financial
effect, distinguishable from its effect on the public generally, on
the board member or the board member's immediate family, or on:
(1) any source of income, other than gifts and loans by
a commercial lending institution in the regular course of business
on terms available to the public generally, aggregating $250 or
more in value, provided or promised to the member within the 12
months immediately preceding the date the decision is made; or
(2) any business entity in which the member is a
director, officer, partner, trustee, or employee, or holds any
position of management.
Sec. 1509.057. REIMBURSEMENT. A member of the board is not
entitled to compensation but is entitled to reimbursement for
travel or other expenses incurred while performing duties as a
board member in the amount provided by the General Appropriations
Act for state officials.
Sec. 1509.058. MEMBER'S IMMUNITY. (a) A member of the
board is not liable for an act or omission made in good faith in the
performance of powers and duties under this chapter.
(b) A cause of action does not arise against a member of the
board for an act or omission described by Subsection (a).
Sec. 1509.059. OPEN RECORDS AND OPEN MEETINGS. The board is
subject to Chapters 551 and 552, Government Code.
Sec. 1509.060. RECORDS. The board shall keep records of the
board's proceedings for at least seven years.
[Sections 1509.061-1509.100 reserved for expansion]
SUBCHAPTER C. POWERS AND DUTIES OF EXCHANGE
Sec. 1509.101. EMPLOYEES; COMMITTEES. (a) The board may
employ an executive director, a chief fiscal officer, a chief
operations officer, a director of health plan contracting, a chief
technology and information officer, a general counsel, and any
other agents and employees that the board considers necessary to
assist the exchange in carrying out its responsibilities and
functions.
(b) The executive director shall organize, administer, and
manage the operations of the exchange. The executive director may
hire other employees as necessary to carry out the responsibilities
of the exchange.
(c) The exchange may appoint appropriate legal, actuarial,
and other committees necessary to provide technical assistance in
operating the exchange and performing any of the functions of the
exchange.
(d) The board shall set the salary for an agent or employee
position under this section in an amount reasonably necessary to
attract and retain individuals of superior qualifications. In
determining the compensation for these positions, the board shall
conduct, through the use of independent outside advisors, salary
surveys of both other state and federal health insurance exchanges
that are most comparable to the exchange and other relevant labor
pools.
(e) The salaries established by the board under this section
may not exceed the highest comparable salary for a position of that
type, as determined by the salary surveys in Subsection (d).
(f) The board shall publish the salaries under this section
in the board's annual budget and post the budget on an Internet
website maintained by the exchange.
Sec. 1509.102. ADVISORY COMMITTEE. The board shall appoint
an advisory committee to allow for the involvement of the health
care and health insurance industries and other stakeholders in the
operation of the exchange. The advisory committee may provide
expertise and recommendations to the board but may not adopt rules
or enter into contracts on behalf of the exchange.
Sec. 1509.103. CONTRACTS. (a) Except as provided by
Subsection (b), the exchange may enter into any contract that the
exchange considers necessary to implement or administer this
chapter, including a contract with the Health and Human Services
Commission or an entity that has experience in individual and small
group health insurance, benefit administration, or other
experience relevant to the responsibilities assumed by the entity,
to perform functions or provide services in connection with the
operation of the exchange.
(b) This exchange may not enter into a contract with a
health benefit plan issuer under this section.
Sec. 1509.104. INFORMATION SHARING AND CONFIDENTIALITY.
The exchange may enter into information-sharing agreements with
federal and state agencies to carry out the exchange's
responsibilities under this chapter. An agreement entered into
under this section must include adequate protection with respect to
the confidentiality of any information shared and comply with all
applicable state and federal law.
Sec. 1509.105. MEMORANDUM OF UNDERSTANDING. The exchange
shall enter into a memorandum of understanding with the department
and the Health and Human Services Commission regarding the exchange
of information and the division of regulatory functions among the
exchange, the department, and the commission.
Sec. 1509.106. LEGAL ACTION. (a) The exchange may sue or
be sued.
(b) The exchange may take any legal action necessary to
recover or collect amounts due the exchange, including:
(1) assessments due the exchange;
(2) amounts erroneously or improperly paid by the
exchange; and
(3) amounts paid by the exchange as a mistake of fact
or law.
Sec. 1509.107. FUNCTIONS. (a) The exchange shall make
qualified health plans available to qualified individuals and
qualified employers.
(b) The exchange may not make available any health benefit
plan that is not a qualified health plan.
(c) The exchange may allow a health benefit plan issuer to
offer a plan that provides limited scope dental benefits meeting
the requirements of Section 9832(c)(2)(A), Internal Revenue Code of
1986, through the exchange, either separately or in conjunction
with a qualified health plan, if the plan provides pediatric dental
benefits meeting the requirements of Section 1302(b)(1)(J),
Patient Protection and Affordable Care Act (42 U.S.C. Section
18022(b)(1)(J)).
(d) The exchange, or an issuer offering a health benefit
plan through the exchange, may not charge an individual a fee or
penalty for termination of coverage if the individual enrolls in
another type of minimum essential coverage because the individual
has become eligible for that coverage or because the individual's
employer-sponsored coverage has become affordable under the
standards of Section 36B(c)(2)(C), Internal Revenue Code of 1986.
(e) In implementing the requirements of this section, the
exchange shall:
(1) by rule establish procedures consistent with
federal law and regulations for the certification,
recertification, and decertification of health benefit plans as
qualified health plans;
(2) provide for the operation of a toll-free telephone
hotline to respond to requests for assistance, using staff that is
trained to provide assistance in a culturally and linguistically
appropriate manner;
(3) provide oral interpretation services in any
language for individuals seeking coverage through the exchange and
make available a toll-free telephone number for the hearing and
speech impaired;
(4) maintain an Internet website through which an
enrollee or prospective enrollee may obtain standardized
comparative information on a qualified health plan's premiums,
coverage, cost-sharing, ratings, enrollee satisfaction, quality
measures, and other relevant information;
(5) use a standardized format for presenting health
benefit options in the exchange, including the use of the uniform
outline of coverage established under Section 2715, Public Health
Service Act (42 U.S.C. Section 300gg-15);
(6) assign a rating to each qualified health plan
certified by the exchange based on criteria developed by the
secretary;
(7) ensure that written information made available by
the exchange is presented in a plainly worded, easily
understandable format and made available in prevalent languages;
(8) determine each qualified health plan's level of
coverage in accordance with regulations issued by the secretary
under Section 1302(d)(2)(A), Patient Protection and Affordable
Care Act (42 U.S.C. Section 18022(d)(2)(A)); and
(9) in accordance with federal law and regulations,
inform individuals of eligibility requirements for Medicaid, the
state child health plan program, or any applicable state or local
public program and if through screening of the application by the
exchange, the exchange determines that an individual is eligible
for such program, enroll the individual in the program.
(f) In addition to performing the duties described by
Subsection (e), and consistent with Section 1413, Patient
Protection and Affordable Care Act (42 U.S.C. Section 18083), the
exchange shall:
(1) enter into data-sharing agreements with relevant
state and federal agencies to facilitate eligibility
determinations and enrollment;
(2) provide enrollment information and other relevant
data, consistent with federal and state privacy rules, to the
qualified health plan in which a qualified individual or qualified
small employer is enrolled;
(3) conduct redeterminations of eligibility for
subsidies and assist in reenrollment as necessary, if an individual
experiences changes in income or circumstances;
(4) inform individuals of the potential for
overpayments of advance premium tax credits and of procedures by
which individuals can report a change of income that may affect the
subsequent level of premium tax credits, including the availability
of any safe harbor from recoupment of any overpayment, to the extent
permitted by the Patient Protection and Affordable Care Act (Pub.
L. No. 111-148) or any federal regulations promulgated under that
Act;
(5) establish, and make available electronically, a
calculator designed to:
(A) enable consumers to determine the actual cost
of coverage after the application of any premium tax credit or
cost-sharing subsidy available under federal law; and
(B) provide consumers with information on
out-of-pocket costs for in-network and, if feasible,
out-of-network services, taking into account any cost-sharing
reductions;
(6) establish capability through which qualified
employers may access coverage for their employees, and which shall
enable any qualified employer to specify a level of coverage so that
any of its employees may enroll in any qualified health plan offered
through the exchange at the specified level of coverage;
(7) subject to Section 1411, Patient Protection and
Affordable Care Act (42 U.S.C. Section 18081), grant a
certification attesting that, for purposes of the individual
responsibility penalty under Section 5000A, Internal Revenue Code
of 1986, an individual is exempt from the individual responsibility
requirement or from the penalty imposed by that section because:
(A) there is no affordable qualified health plan
available through the exchange, or the individual's employer,
covering the individual; or
(B) the individual meets the requirements for any
other such exemption from the individual responsibility
requirement or penalty;
(8) transfer to the United States secretary of the
treasury the following:
(A) a list of the individuals who are issued a
certification under Subdivision (7), including the name and
taxpayer identification number of each individual;
(B) the name and taxpayer identification number
of each individual who was an employee of an employer but who was
determined to be eligible for the premium tax credit under Section
36B, Internal Revenue Code of 1986, because the employer did not
provide minimum essential coverage, or the employer provided the
minimum essential coverage, but it was determined under Section
36B(c)(2)(C) of that code to be either unaffordable to the employee
or not provide the required minimum actuarial value; and
(C) the name and taxpayer identification number
of each individual who notifies the exchange under Section
1411(b)(4), Patient Protection and Affordable Care Act (42 U.S.C.
Section 18081(b)(4)), that he or she has changed employers and each
individual who ceases coverage under a qualified health plan during
a plan year, and the effective date of that cessation;
(9) provide to each employer the name of each employee
of the employer described above who ceases coverage under a
qualified health plan during a plan year and the effective date of
the cessation;
(10) perform duties required of the exchange by the
secretary or the United States secretary of the treasury related to
determining eligibility for premium tax credits, reduced
cost-sharing, or individual responsibility requirement exemptions;
(11) select entities qualified to serve as Navigators
in accordance with Section 1311(i), Patient Protection and
Affordable Care Act (42 U.S.C. Section 18031(i)), and standards
developed by the secretary;
(12) award grants to enable Navigators to:
(A) conduct public education activities to raise
awareness of the availability of qualified health plans;
(B) distribute fair and impartial information
concerning enrollment in qualified health plans, and the
availability of premium tax credits under Section 36B, Internal
Revenue Code of 1986, and cost-sharing reductions under Section
1402, Patient Protection and Affordable Care Act (42 U.S.C. Section
18071);
(C) facilitate enrollment in qualified health
plans;
(D) provide referrals to any applicable office of
health insurance consumer assistance or health insurance ombudsman
established under Section 2793, Public Health Service Act (42
U.S.C. Section 300gg-93), or any other appropriate state agency or
agencies, for any enrollee with a grievance, complaint, or question
regarding the enrollee's health benefit plan or coverage or a
determination under that plan or coverage;
(E) provide information in a manner that is
culturally and linguistically appropriate to the needs of the
population being served by the exchange; and
(F) counsel exchange participants about the
exchange, Medicaid, and the state child health plan program
markets, including selection of plans and transition procedures for
transitioning among Medicaid, the state child health plan program,
exchange plans, and other coverage;
(13) ensure that there is a sufficient number of
Navigators that possess the experience and capacity to serve
disadvantaged, hard-to-reach, and culturally or linguistically
isolated populations;
(14) certify Navigators as able to carry out the
duties required by Section 1311(i)(3), Patient Protection and
Affordable Care Act (42 U.S.C. Section 18031(i)(3));
(15) review the rate of premium growth within the
exchange and outside the exchange and consider the information in
developing recommendations on whether to continue limiting
qualified employer status to small employers;
(16) consult with stakeholders relevant to carrying
out the activities required under this chapter, including:
(A) educated health care consumers who are
enrollees in qualified health plans;
(B) individuals and entities with experience in
facilitating enrollment in qualified health plans;
(C) representatives of small businesses and
self-employed individuals;
(D) the Health and Human Services Commission; and
(E) advocates for enrolling hard-to-reach
populations;
(17) meet the following financial integrity
requirements:
(A) keep an accurate accounting of all
activities, receipts, and expenditures and annually submit to the
secretary, the governor, the commissioner, and the legislature a
report concerning such accountings; and
(B) fully cooperate with any investigation
conducted by the secretary pursuant to the secretary's authority
under the Patient Protection and Affordable Care Act (Pub. L. No.
111-148) and allow the secretary, in coordination with the
inspector general of the United States Department of Health and
Human Services, to investigate the affairs of the exchange, examine
the books and records of the exchange, and require periodic reports
in relation to the activities undertaken by the exchange;
(18) use a single application for enrollment in
Medicaid, the state child health plan program, and health benefit
plans offered in the exchange, including establishing eligibility
for premium tax credits and cost-sharing reductions, that may be:
(A) the single application form developed by the
secretary under Section 1413(b), Patient Protection and Affordable
Care Act (42 U.S.C. Section 18083(b)); or
(B) an application form developed in cooperation
with the Health and Human Services Commission for that purpose;
(19) undertake activities necessary to market and
publicize the availability of health care coverage and federal
subsidies through the exchange;
(20) undertake outreach and enrollment activities
that seek to assist enrollees and potential enrollees with
enrolling and reenrolling in the exchange in the least burdensome
manner, including populations that may experience barriers to
enrollment, such as persons with disabilities and those with
limited English language proficiency;
(21) provide for:
(A) the processing of applications for coverage
under a qualified health plan;
(B) the enrollment of persons in qualified health
plans;
(C) the disenrollment of enrollees from
qualified health plans; and
(D) for individual coverage, the collection of
premiums and assistance in the administration of subsidies, as the
board considers appropriate; and
(22) for small employers, collect and aggregate
premiums and administer all other necessary and related tasks,
including enrollment and plan payment, in order to make the
offering of employee plan choice as simple as possible for
qualified small employers.
Sec. 1509.108. CERTIFICATION OF PLAN. The exchange shall
certify a health benefit plan as a qualified health plan if:
(1) the plan provides the essential health benefits
package described by Section 1302(a), Patient Protection and
Affordable Care Act (42 U.S.C. Section 18022(a)), except that the
plan is not required to provide essential benefits that duplicate
the minimum benefits of qualified dental plans, if:
(A) the exchange has determined that at least one
qualified dental plan is available to supplement the plan's
coverage; and
(B) the issuer makes prominent disclosure at the
time it offers the plan, in a form approved by the exchange, that
the plan does not provide the full range of essential pediatric
benefits and that qualified dental plans providing those benefits
and other dental benefits not covered by the plan are offered
through the exchange;
(2) the premium rates and contract language have been
approved by the commissioner;
(3) the plan provides at least a bronze level of
coverage, as described by Section 1302(d), Patient Protection and
Affordable Care Act (42 U.S.C. Section 18022(d)), unless the plan
is a catastrophic plan and is offered only to individuals eligible
for catastrophic coverage;
(4) the plan's cost-sharing requirements do not exceed
the limits established under Section 1302(c)(1), Patient
Protection and Affordable Care Act (42 U.S.C. Section 18022(c)(1)),
and if the plan is offered to small employers, the plan's deductible
does not exceed the limits established under Section 1302(c)(2) of
that Act (42 U.S.C. Section 18022(c)(2));
(5) the health benefit plan issuer offering the plan:
(A) is licensed and in good standing to offer
health insurance coverage in this state;
(B) offers at least one qualified health plan in
the silver level and at least one plan in the gold level as
described by Section 1302(d), Patient Protection and Affordable
Care Act (42 U.S.C. Section 18022(d));
(C) charges the same premium rate for each
qualified health plan without regard to whether the plan is offered
through the exchange and without regard to whether the plan is
offered directly from the issuer or through an insurance producer;
and
(D) complies with the regulations developed by
the secretary under Section 1311(d), Patient Protection and
Affordable Care Act (42 U.S.C. Section 18031(d)), and other
requirements the exchange establishes;
(6) the plan meets the requirements of certification
under this chapter and any rules promulgated by the secretary under
Section 1311(c), Patient Protection and Affordable Care Act (42
U.S.C. Section 18031(c)), including minimum standards in the areas
of marketing practices, network adequacy, essential community
providers in underserved areas, accreditation, quality
improvement, uniform enrollment forms and descriptions of
coverage, and information on quality measures for health benefit
plan performance; and
(7) the exchange determines that making the plan
available through the exchange is in the interest of qualified
individuals and qualified employers in this state.
Sec. 1509.109. PROHIBITED BASES FOR DENIAL OF
CERTIFICATION. The exchange may not deny certification to a health
benefit plan on the ground that the plan:
(1) is a fee-for-service plan; or
(2) provides treatments necessary to prevent patients'
deaths in circumstances the exchange determines are inappropriate
or too costly.
Sec. 1509.110. PREREQUISITES TO CERTIFICATION. (a) The
exchange shall require each health benefit plan issuer seeking
certification of a plan as a qualified health plan to:
(1) submit a justification for any premium increase
before implementation of that increase;
(2) prominently display the justification for any
premium increase on the health benefit plan issuer's Internet
website;
(3) make available to the public, in plain language as
that term is defined in Section 1311(e)(3)(B), Patient Protection
and Affordable Care Act (42 U.S.C. Section 18031(e)(3)(B)), and
submit to the exchange, the secretary, and the commissioner,
accurate and timely disclosure of:
(A) claims payment policies and practices;
(B) periodic financial disclosures;
(C) data on enrollment;
(D) data on disenrollment;
(E) data on the number of claims that are denied;
(F) data on rating practices;
(G) information on cost-sharing and payments
with respect to any out-of-network coverage;
(H) information on enrollee and participant
rights under Title I, Patient Protection and Affordable Care Act
(Pub. L. No. 111-148); and
(I) other information as determined appropriate
by the secretary;
(4) on request, inform an individual of the amount of
cost-sharing, including deductibles, copayments, and coinsurance,
under the individual's plan or coverage that the individual would
be responsible for paying with respect to the furnishing of a
specific item or service by a participating provider;
(5) make the information required to be disclosed
under Subdivision (4) available to the individual:
(A) on an Internet website; and
(B) by means other than an Internet website for
individuals without access to the Internet;
(6) promptly notify affected individuals of price and
benefit changes or other changes in circumstance that could
materially impact enrollment or coverage;
(7) make available to the exchange and regularly
update an electronic directory of contracting health care providers
so that individuals seeking coverage through the exchange can
search by health care provider name to determine which health plans
in the exchange include that health care provider in their network;
and
(8) as the board considers necessary, provide
regularly updated information to the exchange as to whether a
health care provider is accepting new patients for a particular
health plan.
(b) In determining whether to certify an issuer, the
exchange shall consider premium increase justification information
obtained under Subsection (a), together with information and
recommendations provided by the commissioner under Section
2794(b), Public Health Service Act (42 U.S.C. Section 300gg-94(b)).
Sec. 1509.111. ADDITIONAL REQUIREMENTS RELATING TO
RULEMAKING BY BOARD. In adopting rules under this chapter, the
board shall:
(1) standardize benefits and cost-sharing within
tiers for products to be offered through the exchange;
(2) establish and use a competitive process, which is
not required to comply with Chapter 2151, Government Code, to
select participating health benefit plan issuers;
(3) determine the minimum requirements an issuer must
meet to be considered for participation in the exchange and the
standards and criteria for selecting qualified health plans to be
offered through the exchange that are in the best interests of
qualified individuals and qualified small employers;
(4) consistently and uniformly apply any
requirements, standards, and criteria under this chapter to all
issuers;
(5) in the course of selectively contracting for
health care coverage offered to qualified individuals and qualified
small employers through the exchange, seek to contract with issuers
to provide health care coverage choices that offer the optimal
combination of choice, value, quality, and service;
(6) ensure, in each region of the state, a choice of
qualified health plans at each of the five tiers of coverage
contained in Sections 1302(d) and (e), Patient Protection and
Affordable Care Act (42 U.S.C. Sections 18022(d) and (e));
(7) require issuers, as a condition of participation
in the exchange, to fairly and affirmatively offer, market, and
sell in the exchange at least one product within each of the five
levels of coverage described by Sections 1302(d) and (e), Patient
Protection and Affordable Care Act (42 U.S.C. Sections 18022(d) and
(e)), and, as the board considers necessary, to offer additional
products within each of the five levels of coverage described by
Section 1302(d) of that Act (42 U.S.C. Section 18022(d)); and
(8) require, as a condition of participation in the
exchange, issuers that sell any products outside the exchange to
fairly and affirmatively offer, market, and sell:
(A) all products made available to individuals in
the exchange to individuals purchasing coverage outside the
exchange; or
(B) all products made available to small
employers in the exchange to small employers purchasing coverage
outside the exchange.
Sec. 1509.112. EXEMPTION FROM STANDARDS PROHIBITED; FAIR
COMPETITIVE MARKET. (a) The exchange may not exempt any health
benefit plan issuer seeking certification of a qualified health
plan, regardless of the type or size of the issuer, from state
licensing or solvency requirements.
(b) The exchange shall apply the criteria of this chapter in
a manner that assures a fair competitive market between or among
health benefit plan issuers participating in the exchange.
Sec. 1509.113. DENTAL PLANS. (a) This chapter applies to
dental plans as provided in this section.
(b) A health benefit plan issuer may be certified to offer
dental coverage, without being certified to offer other health
coverages.
(c) A plan may be limited to dental and oral health benefits
without substantially duplicating the benefits typically offered
by health benefit plans that do not offer dental coverage.
(d) To be certified under this chapter, a dental plan must
include, at a minimum, the essential pediatric dental benefits
prescribed by the secretary pursuant to Section 1302(b)(1)(J),
Patient Protection and Affordable Care Act (42 U.S.C. Section
18022(b)(1)(J)), and any other dental benefits the exchange or the
secretary specifies by regulation.
(e) An issuer may offer jointly with another issuer a
comprehensive plan through the exchange in which dental benefits
are provided by an issuer through a qualified dental plan and the
other benefits are provided by an issuer through a qualified health
plan. Plans offered under this subsection must be priced
separately and made available for purchase separately at the same
price at which they are offered together.
Sec. 1509.114. HEALTH CARE PROVIDER DIRECTORY AND
INFORMATION. (a) The exchange may provide an integrated and
uniform consumer directory of health care providers indicating
which health benefit plan issuers the providers contract with and
whether the providers are currently accepting new patients.
(b) The exchange may establish methods by which health care
providers may transmit relevant information directly to the
exchange, rather than through an issuer.
[Sections 1509.115-1509.150 reserved for expansion]
SUBCHAPTER D. ASSESSMENTS FOR OPERATION OF EXCHANGE
Sec. 1509.151. ASSESSMENTS; PENALTY FOR NONPAYMENT. (a)
The exchange may charge the issuers of health benefit plans in this
state, including qualified health plans, an assessment as
reasonable and necessary for the exchange's organizational and
operating expenses. Assessments must be determined annually. The
exchange may charge interest for late assessments.
(b) The exchange may refuse to recertify or may decertify a
health benefit plan as a qualified health plan if the issuer of the
plan fails or refuses to pay an assessment under this section.
(c) The commissioner shall adopt rules to implement and
enforce the assessment of health benefit plan issuers under this
section.
Sec. 1509.152. GRANTS AND FEDERAL FUNDS. (a) The exchange
may accept a grant from a public or private organization and may
spend those funds to pay the costs of program administration and
operations.
(b) The exchange may accept federal funds and shall use
those funds in compliance with applicable federal law, regulations,
and guidelines.
Sec. 1509.153. USE OF EXCHANGE ASSETS; ANNUAL REPORT. (a)
The assets of the exchange may be used only to pay the costs of the
administration and operation of the exchange.
(b) The exchange shall prepare annually a complete and
detailed written report accounting for all funds received and
disbursed by the exchange during the preceding fiscal year. The
report must meet any reporting requirements provided in the General
Appropriations Act, regardless of whether the exchange receives any
funds under that Act. The exchange shall submit the report to the
governor, the legislature, the commissioner, and the executive
commissioner not later than January 31 of each year.
(c) General revenue may not be appropriated for the
exchange.
Sec. 1509.154. PUBLICATION OF FINANCIAL INFORMATION. The
exchange shall publish the average costs of licensing, regulatory
fees, and any other payments required by the exchange, and the
administrative costs of the exchange, on an Internet website to
educate consumers on those costs. This information must include
information on losses due to waste, fraud, and abuse.
[Sections 1509.155-1509.200 reserved for expansion]
SUBCHAPTER E. TRUST FUND
Sec. 1509.201. TRUST FUND. (a) The exchange fund is
established as a special trust fund outside of the state treasury in
the custody of the comptroller separate and apart from all public
money or funds of this state.
(b) The exchange may deposit assessments, gifts or
donations, and any federal funding obtained by the exchange in the
exchange fund in accordance with procedures established by the
comptroller.
(c) Interest or other income from the investment of the fund
shall be deposited to the credit of the fund.
[Sections 1509.202-1509.250 reserved for expansion]
SUBCHAPTER F. LEVEL PLAYING FIELD
Sec. 1509.251. LEVEL PLAYING FIELD. (a) The commissioner
shall adopt rules to ensure a level playing field and a fair
competitive market environment among issuers that offer qualified
health plans through the exchange and issuers that offer health
benefit plans or other health insurance coverage outside of the
exchange. Notwithstanding any other law, the rules shall, to the
extent practicable, ensure against adverse selection either in
favor of or against exchange-participating issuers.
(b) To discourage adverse selection or steering of
enrollees to or from the exchange, if the board opts to pay agents
helping people enroll in exchange-participating, qualified plans a
fee, instead of using existing compensation structures directly
from issuers, the exchange shall survey the market outside of the
exchange to determine prevailing agent commission rates and set
exchange fees in a manner that is consistent with prevailing rates
in the market outside of the exchange. This section does not
prohibit the exchange from paying a per member per month fee or
using another fee structure if:
(1) prevailing rates in the market outside of the
exchange are paid a percentage of premiums; and
(2) the total fee amounts earned are reasonably
expected to be similar.
(c) The department shall coordinate with the exchange as
necessary to survey the market on commission rates and identify
prevailing practices. Agent fees paid inside or outside of the
exchange must be fully transparent and clearly disclosed to the
purchaser.
SECTION 2. Effective January 1, 2016, Section 1509.003,
Insurance Code, as added by this Act, is amended by adding
Subsection (a-1) to read as follows:
(a-1) For purposes of this chapter, "small employer" means a
person who employed an average of not more than 100 employees during
the preceding calendar year.
SECTION 3. (a) As soon as practicable after the effective
date of this Act, but not later than October 31, 2013, the governor,
lieutenant governor, and speaker of the house of representatives
shall appoint the initial members of the board of directors of the
Texas Health Insurance Exchange as follows:
(1) the governor shall appoint one person to a term
expiring February 1, 2019;
(2) the lieutenant governor shall appoint one person
to a term expiring February 1, 2015, and one person to a term
expiring February 1, 2017; and
(3) the speaker of the house of representatives shall
appoint one person to a term expiring February 1, 2015, and one
person to a term expiring February 1, 2017.
(b) As soon as practicable after the appointments required
by Subsection (a) of this section are made, but not later than
November 30, 2013, the board of directors of the Texas Health
Insurance Exchange shall hold a special meeting to discuss the
adoption of rules and procedures necessary to implement Chapter
1509, Insurance Code, as added by this Act.
(c) As soon as practicable after the effective date of this
Act, but not later than January 31, 2014, the board of directors of
the Texas Health Insurance Exchange shall adopt rules and
procedures necessary to implement Chapter 1509, Insurance Code, as
added by this Act.
(d) Not later than January 1, 2019, the board shall issue a
report to the 86th Legislature recommending whether to adopt the
option in Section 1312(c), Patient Protection and Affordable Care
Act (42 U.S.C. Section 18032(c)), to merge the individual and small
employer markets. In the report, the board shall provide
information, based on at least two years of data from the exchange,
on the potential impact on rates paid by individuals and by small
employers in a merged individual and small employer market, as
compared to the rates paid by individuals and small employers if a
separate individual and small employer market is maintained.
(e) If, after the effective date of this Act but before the
initial members of the board of directors of the Texas Health
Insurance Exchange have been appointed as required by Subsection
(a) of this section, the Texas Department of Insurance becomes
aware of any planning and establishment grants as described by
Section 1311, Patient Protection and Affordable Care Act (42 U.S.C.
Section 18031), or any other public or private funding source, the
department may apply for funding from that source.
(f) The exchange may not begin operations without adequate
funding.
(g) The board of directors of the Texas Health Insurance
Exchange may adopt rules on an emergency basis in accordance with
Section 2001.034, Government Code. Notwithstanding Section
2001.034(c), Government Code, a rule adopted under this subsection
may remain in effect until January 1, 2017. Rules adopted under
this subsection shall be deemed necessary for the immediate
preservation of the public peace, health, safety, and general
welfare and an additional finding under Sections 2001.034(a)(1) and
(2), Government Code, is not required. The authority to adopt rules
under this subsection expires January 1, 2017.
SECTION 4. Except as otherwise provided by this Act, 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, 2013.