Texas 2015 - 84th Regular

Texas Senate Bill SB90 Compare Versions

Only one version of the bill is available at this time.

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1	1	84R592 KKR-D
2	2	By: Ellis S.B. No. 90
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to notice and prior approval of health benefit plan rates.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Title 8, Insurance Code, is amended by adding
10	10	Subtitle L to read as follows:
11	11	SUBTITLE L. RATES AND RATEMAKING IN GENERAL
12	12	CHAPTER 1691. RATES
13	13	SUBCHAPTER A. GENERAL PROVISIONS
14	14	Sec. 1691.001. APPLICABILITY OF CHAPTER. (a) This chapter
15	15	applies only to a health benefit plan that provides benefits for
16	16	medical or surgical expenses incurred as a result of a health
17	17	condition, accident, or sickness, including an individual, group,
18	18	blanket, or franchise insurance policy or insurance agreement, a
19	19	group hospital service contract, or an individual or group evidence
20	20	of coverage or similar coverage document that is offered by:
21	21	(1) an insurance company;
22	22	(2) a group hospital service corporation operating
23	23	under Chapter 842;
24	24	(3) a fraternal benefit society operating under
25	25	Chapter 885;
26	26	(4) a stipulated premium company operating under
27	27	Chapter 884;
28	28	(5) an exchange operating under Chapter 942;
29	29	(6) a health maintenance organization operating under
30	30	Chapter 843;
31	31	(7) a multiple employer welfare arrangement that holds
32	32	a certificate of authority under Chapter 846; or
33	33	(8) an approved nonprofit health corporation that
34	34	holds a certificate of authority under Chapter 844.
35	35	(b) Notwithstanding any other law, this chapter applies to a
36	36	health benefit plan issuer with respect to a standard health
37	37	benefit plan provided under Chapter 1507.
38	38	Sec. 1691.002. EXCEPTION. (a) This chapter does not apply
39	39	with respect to:
40	40	(1) a plan that provides coverage:
41	41	(A) for wages or payments in lieu of wages for a
42	42	period during which an employee is absent from work because of
43	43	sickness or injury;
44	44	(B) as a supplement to a liability insurance
45	45	policy;
46	46	(C) for credit insurance;
47	47	(D) only for dental or vision care;
48	48	(E) only for hospital expenses; or
49	49	(F) only for indemnity for hospital confinement;
50	50	(2) a Medicare supplemental policy as defined by
51	51	Section 1882(g)(1), Social Security Act (42 U.S.C. Section
52	52	1395ss(g)(1));
53	53	(3) a workers' compensation insurance policy; or
54	54	(4) medical payment insurance coverage provided under
55	55	a motor vehicle insurance policy.
56	56	(b) This chapter does not apply to coverage provided under
57	57	Subtitle H.
58	58	Sec. 1691.003. APPLICABILITY OF OTHER LAWS GOVERNING RATES.
59	59	The requirements of this chapter are in addition to any other
60	60	provision of this code governing health benefit plan rates. Except
61	61	as otherwise provided by this chapter, in the case of a conflict
62	62	between this chapter and another provision of this code, this
63	63	chapter controls.
64	64	Sec. 1691.004. NOTICE OF RATE INCREASE; DEPARTMENT WEBSITE.
65	65	(a) In addition to any notice required to be provided under Section
66	66	1254.001, a health benefit plan issuer shall notify the department
67	67	and each person responsible for paying any part of an individual's
68	68	premium or charge for coverage under the health benefit plan, other
69	69	than a person who receives notice under Section 1254.001, of a rate
70	70	increase scheduled to take effect on the renewal of the
71	71	individual's coverage that will result in a total premium or charge
72	72	amount for covering that individual that is at least 10 percent
73	73	greater than the lesser of:
74	74	(1) the total premium or charge amount paid for the
75	75	individual's coverage under the health benefit plan during the
76	76	12-month period preceding the coverage's renewal date; or
77	77	(2) the total premium or charge amount paid for the
78	78	individual's coverage under the health benefit plan during the
79	79	policy or contract period preceding the coverage's renewal date.
80	80	(b) A health benefit plan issuer shall send the notice
81	81	required by Subsection (a) before the renewal date and not later
82	82	than the 60th day before the date the rate increase is scheduled to
83	83	take effect.
84	84	(c) The notice required by Subsection (a) must include, in a
85	85	prominent manner:
86	86	(1) the mailing address and Internet website address
87	87	of the health benefit plan issuer;
88	88	(2) the mailing address of the department to which a
89	89	covered individual may submit written comments concerning the rate
90	90	increase and notice; and
91	91	(3) the Internet address of the website maintained by
92	92	the department under Subsection (d).
93	93	(d) The department, as soon as practicable after receipt of
94	94	the notice required by Subsection (a), shall post on an Internet
95	95	website maintained by the department information regarding the
96	96	notice, including any relevant written comments received by the
97	97	department concerning the notice and any filing information
98	98	provided by the health benefit plan issuer in support of the notice.
99	99	Sec. 1691.005. CONSIDERATION OF CERTAIN OTHER LAW. In
100	100	reviewing rates under this chapter, the commissioner shall consider
101	101	any state or federal law that may affect rates for health benefit
102	102	plan coverage included in a policy, contract, or evidence of
103	103	coverage subject to this chapter.
104	104	Sec. 1691.006. ADMINISTRATIVE PROCEDURE ACT APPLICABLE.
105	105	Chapter 2001, Government Code, applies to all rate hearings under
106	106	this chapter.
107	107	Sec. 1691.007. ANNUAL REPORT OF PLAN ISSUER; LEGISLATIVE
108	108	REPORT. (a) The commissioner shall require each health benefit
109	109	plan issuer subject to this chapter to file annually with the
110	110	commissioner information relating to changes in losses, premiums or
111	111	other charges for coverage, and market share since January 1, 2016.
112	112	The commissioner may require a health benefit plan issuer subject
113	113	to this chapter to report to the commissioner, in the form and in
114	114	the time required by the commissioner, any other information the
115	115	commissioner determines is necessary to comply with this section.
116	116	(b) Annually, the commissioner shall report to the
117	117	governor, the lieutenant governor, the speaker of the house of
118	118	representatives, the legislature, and the public regarding:
119	119	(1) the information provided to the commissioner,
120	120	other than information made confidential by law, in the health
121	121	benefit plan issuers' reports under Subsection (a); and
122	122	(2) market conduct, including rates and consumer
123	123	complaints.
124	124	(c) The report required by Subsection (b) must:
125	125	(1) cover a calendar year;
126	126	(2) for each health benefit plan issuer that writes a
127	127	line of health benefit plan coverage subject to this chapter,
128	128	state:
129	129	(A) the plan issuer's market share;
130	130	(B) the plan issuer's profits and losses;
131	131	(C) the plan issuer's average medical loss ratio;
132	132	and
133	133	(D) whether the plan issuer submitted a rate
134	134	filing during the year covered in the report; and
135	135	(3) for each rate filing described by Subdivision
136	136	(2)(D), indicate any significant impact on holders of policies,
137	137	contracts, or evidences of coverage, the overall rate change from
138	138	the rate previously used by the plan issuer stated as a percentage,
139	139	and any rate changes for the previous 12, 24, and 36 months.
140	140	(d) Except as provided by Subsection (e), the annual report
141	141	required by Subsection (b) must be made available to the governor,
142	142	lieutenant governor, speaker of the house of representatives,
143	143	legislature, and public not later than the 90th day after the last
144	144	day of the calendar year covered by the report.
145	145	(e) If the commissioner determines that it is not feasible
146	146	to provide the report required by this section within the period
147	147	specified by Subsection (d) for all types of health benefit plan
148	148	coverage subject to this chapter, the department:
149	149	(1) shall make the annual report, as applicable to
150	150	individual health benefit plan coverage, available within the
151	151	period specified by Subsection (d); and
152	152	(2) may delay publication of the annual report as it
153	153	relates to other types of health benefit plan coverage subject to
154	154	this chapter until a date specified by the commissioner.
155	155	SUBCHAPTER B. RATE STANDARDS
156	156	Sec. 1691.051. EXCESSIVE, INADEQUATE, AND UNFAIRLY
157	157	DISCRIMINATORY RATES. (a) A rate is excessive, inadequate, or
158	158	unfairly discriminatory for purposes of this chapter as provided by
159	159	this section.
160	160	(b) A rate is excessive if the rate is likely to produce a
161	161	long-term profit that is unreasonably high in relation to the
162	162	health benefit plan coverage provided.
163	163	(c) A rate is inadequate if:
164	164	(1) the rate is insufficient to sustain projected
165	165	losses and expenses to which the rate applies; and
166	166	(2) continued use of the rate:
167	167	(A) endangers the solvency of a health benefit
168	168	plan issuer using the rate; or
169	169	(B) has the effect of substantially lessening
170	170	competition or creating a monopoly in a market.
171	171	(d) A rate is unfairly discriminatory if the rate:
172	172	(1) is not based on sound actuarial principles;
173	173	(2) does not bear a reasonable relationship to the
174	174	expected loss and expense experience among risks; or
175	175	(3) is based wholly or partly on the race, creed,
176	176	color, ethnicity, or national origin of an individual or group
177	177	sponsoring coverage under or covered by the health benefit plan.
178	178	Sec. 1691.052. RATE STANDARDS. (a) In setting rates, a
179	179	health benefit plan issuer shall consider:
180	180	(1) past and prospective loss experience:
181	181	(A) inside this state; and
182	182	(B) outside this state if the data from this
183	183	state are not credible;
184	184	(2) the peculiar hazards and experiences of individual
185	185	risks, past and prospective, inside and outside this state, except
186	186	to the extent specifically prohibited by law;
187	187	(3) the plan issuer's actuarially credible historical
188	188	premium or charge, exposure, loss, and expense experience;
189	189	(4) catastrophe hazards in this state;
190	190	(5) operating expenses, excluding disallowed
191	191	expenses;
192	192	(6) investment income;
193	193	(7) a reasonable margin for profit; and
194	194	(8) any other factors inside and outside this state:
195	195	(A) determined to be relevant by the plan issuer;
196	196	and
197	197	(B) not disallowed by the commissioner.
198	198	(b) A rate may not be excessive, inadequate, or unfairly
199	199	discriminatory for the risks to which the rate applies.
200	200	(c) Except to the extent limited by other law, the health
201	201	benefit plan issuer may:
202	202	(1) group risks by classification to establish rates
203	203	and minimum premiums or charges for coverage; and
204	204	(2) modify classification rates to produce rates for
205	205	individual risks in accordance with rating plans that establish
206	206	standards for measuring variations in those risks on the basis of
207	207	any factor listed in Subsection (a).
208	208	(d) In setting rates that apply only to holders of policies,
209	209	contracts, or evidences of coverage in this state, a health benefit
210	210	plan issuer shall use available premium or charge, loss, claim, and
211	211	exposure information from this state to the full extent of the
212	212	actuarial credibility of that information. The plan issuer may use
213	213	experience from outside this state as necessary to supplement
214	214	information from this state that is not actuarially credible.
215	215	(e) In determining rating territories and territorial
216	216	rates, an insurer shall use methods based on sound actuarial
217	217	principles.
218	218	(f) Rates for a small employer health benefit plan subject
219	219	to Chapter 1501 must comply with this chapter and Chapter 1501. In
220	220	the case of a conflict between this chapter and Chapter 1501,
221	221	Chapter 1501 controls.
222	222	SUBCHAPTER C. RATE FILINGS AND APPROVAL
223	223	Sec. 1691.101. RATE FILINGS FOR PRIOR APPROVAL. (a) For
224	224	risks written in this state, each health benefit plan issuer shall
225	225	file with the department for the commissioner's approval all rates,
226	226	applicable rating manuals, supplementary rating information, and
227	227	additional information as required by the commissioner or another
228	228	provision of this code.
229	229	(b) The commissioner by rule shall determine the
230	230	information required to be included in the filing, including:
231	231	(1) categories of supporting information and
232	232	supplementary rating information;
233	233	(2) statistics or other information to support the
234	234	rates to be used by the health benefit plan issuer, including
235	235	information necessary to evidence that the computation of the rate
236	236	does not include disallowed expenses; and
237	237	(3) information concerning policy fees, service fees,
238	238	and other fees that are charged or collected by the plan issuer
239	239	under Section 550.001.
240	240	(c) In determining filing requirements under this section,
241	241	for a health benefit plan issuer with less than five percent of the
242	242	market, the commissioner shall:
243	243	(1) consider specific attributes of the plan issuer
244	244	and the issuer's market, as applicable; and
245	245	(2) determine filing requirements for the plan issuer
246	246	to accommodate premium or charge volume and loss experience,
247	247	targeted markets, limitations on coverage, and any potential
248	248	barriers to market entry or growth.
249	249	Sec. 1691.102. RATE APPROVAL REQUIRED. A health benefit
250	250	plan issuer subject to this chapter may not use a rate until the
251	251	rate has been filed with the department and approved by the
252	252	commissioner in accordance with this chapter.
253	253	Sec. 1691.103. COMMISSIONER ACTION. (a) Not later than the
254	254	60th day after the date a rate is filed with the department under
255	255	this chapter, the commissioner shall:
256	256	(1) approve the rate if the commissioner determines
257	257	that the rate complies with the requirements of this chapter and
258	258	other provisions of this code governing the setting of rates by the
259	259	health benefit plan issuer; or
260	260	(2) disapprove the rate if the commissioner determines
261	261	that the rate does not comply with a requirement of this chapter or
262	262	another provision of this code governing the setting of rates by the
263	263	plan issuer.
264	264	(b) For good cause, the commissioner may, on the expiration
265	265	of the 60-day period described by Subsection (a), extend the period
266	266	for approval or disapproval of a rate for one additional 30-day
267	267	period. The commissioner and the health benefit plan issuer may not
268	268	by agreement extend the 60-day period described by Subsection (a).
269	269	Sec. 1691.104. ADDITIONAL INFORMATION. (a) If the
270	270	department determines that the information filed by a health
271	271	benefit plan issuer under this chapter is incomplete or otherwise
272	272	deficient, the department may request additional information from
273	273	the plan issuer. If the department requests additional information
274	274	from the plan issuer during the 60-day period provided by Section
275	275	1691.103(a) or under the 30-day period provided under Section
276	276	1691.103(b), the time between the date the department submits the
277	277	request to the plan issuer and the date the department receives the
278	278	information requested is not included in the computation of the
279	279	60-day period or the 30-day period, as applicable.
280	280	(b) For purposes of this section, the date of the
281	281	department's submission of a request for additional information is:
282	282	(1) the date of the department's electronic mailing or
283	283	telephone call relating to the request for additional information;
284	284	or
285	285	(2) the postmarked date on the department's letter
286	286	relating to the request for additional information.
287	287	Sec. 1691.105. NOTICE OF COMMISSIONER APPROVAL; USE OF
288	288	FILED RATE. If the commissioner approves a filed rate under Section
289	289	1691.103, the commissioner shall provide the health benefit plan
290	290	issuer with a written or electronic notice of the approval. The
291	291	plan issuer may use the rate on receipt of the approval notice.
292	292	Sec. 1691.106. DISAPPROVAL OF FILED RATE BY COMMISSIONER;
293	293	HEARING. (a) If the commissioner disapproves a filed rate under
294	294	Section 1691.103, the commissioner shall issue an order
295	295	disapproving the rate.
296	296	(b) The order must specify in what respects the filing fails
297	297	to meet a requirement of this chapter or another provision of this
298	298	code governing the setting of rates by the health benefit plan
299	299	issuer.
300	300	(c) A health benefit plan issuer whose filed rate is
301	301	disapproved is entitled to a hearing on written request made to the
302	302	commissioner not later than the 60th day after the date the order
303	303	disapproving the filed rate takes effect.
304	304	Sec. 1691.107. DISAPPROVAL OF RATE IN EFFECT; HEARING. The
305	305	commissioner may disapprove a rate that is in effect only after a
306	306	hearing. The commissioner by rule shall establish procedures to
307	307	conduct a hearing required under this section.
308	308	Sec. 1691.108. USE OF RATE DURING FILING PERIOD OR APPEAL.
309	309	(a) From the date of the filing of a new rate with the department to
310	310	the effective date of the new rate, the health benefit plan issuer's
311	311	previously filed rate that is in effect on the date of the filing
312	312	remains in effect.
313	313	(b) If a health benefit plan issuer files a petition under
314	314	Subchapter D, Chapter 36, for judicial review of an order
315	315	disapproving a rate under this chapter, the plan issuer must use the
316	316	rates in effect for the plan issuer at the time the petition is
317	317	filed and may not use any higher rate for the same type of health
318	318	benefit plan coverage subject to this chapter before the matter
319	319	subject to judicial review is finally resolved unless the health
320	320	benefit plan issuer, in accordance with this chapter, files the new
321	321	rate with the department, along with any applicable supplementary
322	322	rating information and supporting information, and obtains the
323	323	commissioner's approval of the rate.
324	324	(c) For purposes of this section, a rate is filed with the
325	325	department on the date the department receives the rate filing.
326	326	SUBCHAPTER D. GRIEVANCES; PUBLIC REVIEW AND INSPECTION
327	327	Sec. 1691.151. GRIEVANCE. (a) An individual or group who
328	328	sponsors coverage under or is covered by a health benefit plan and
329	329	who is aggrieved with respect to any filing under this chapter that
330	330	is in effect, or the public insurance counsel, may apply to the
331	331	commissioner in writing for a hearing on the filing. The
332	332	application must specify the grounds for the applicant's grievance.
333	333	(b) The commissioner shall hold a hearing on an application
334	334	filed under Subsection (a) not later than the 30th day after the
335	335	date the commissioner receives the application if the commissioner
336	336	determines that:
337	337	(1) the application is made in good faith;
338	338	(2) the applicant would be aggrieved as alleged if the
339	339	grounds specified in the application were established; and
340	340	(3) the grounds specified in the application otherwise
341	341	justify holding the hearing.
342	342	(c) The commissioner shall provide written notice of a
343	343	hearing under Subsection (b) to the applicant and each health
344	344	benefit plan issuer that made the filing not later than the 10th day
345	345	before the date of the hearing.
346	346	(d) If, after the hearing, the commissioner determines that
347	347	the filing does not meet a requirement of this chapter or another
348	348	provision of this code governing the setting of rates by the health
349	349	benefit plan issuer, the commissioner shall issue an order:
350	350	(1) specifying in what respects the filing fails to
351	351	meet the requirement; and
352	352	(2) stating the date on which the filing is no longer
353	353	in effect, which must be within a reasonable period after the order
354	354	date.
355	355	(e) The commissioner shall send copies of the order issued
356	356	under Subsection (d) to the applicant and each affected health
357	357	benefit plan issuer.
358	358	Sec. 1691.152. ROLE OF PUBLIC INSURANCE COUNSEL. (a) On
359	359	request to the commissioner, the public insurance counsel may
360	360	review all rate filings and additional information provided by a
361	361	health benefit plan issuer under this chapter. Confidential
362	362	information reviewed under this subsection remains confidential.
363	363	(b) The public insurance counsel, not later than the 30th
364	364	day after the date of a rate filing under this chapter, may file
365	365	with the commissioner a written objection to:
366	366	(1) a health benefit plan issuer's rate filing; or
367	367	(2) the criteria on which the plan issuer relied to
368	368	determine the rate.
369	369	(c) A written objection filed under Subsection (b) must
370	370	contain the reasons for the objection.
371	371	Sec. 1691.153. PUBLIC INSPECTION OF INFORMATION. Each
372	372	filing made, and any supporting information filed, under this
373	373	chapter is open to public inspection as of the date of the filing.
374	374	SECTION 2. Sections 1507.008 and 1507.058, Insurance Code,
375	375	are repealed.
376	376	SECTION 3. Subtitle L, Title 8, Insurance Code, as added by
377	377	this Act, applies only to rates for health benefit plan coverage
378	378	delivered, issued for delivery, or renewed on or after January 1,
379	379	2016. Rates for health benefit plan coverage delivered, issued for
380	380	delivery, or renewed before January 1, 2016, are governed by the law
381	381	as it existed immediately before the effective date of this Act, and
382	382	that law is continued in effect for that purpose.
383	383	SECTION 4. This Act takes effect September 1, 2015.