TX
Texas House Bill HB2507

Texas 2019 - 86th Regular

Texas House Bill HB2507 Compare Versions

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1-86R28295 SMT-F
1+86R6572 SMT-F
22 By: Lucio III H.B. No. 2507
3- Substitute the following for H.B. No. 2507:
4- By: Lucio III C.S.H.B. No. 2507
53
64
75 A BILL TO BE ENTITLED
86 AN ACT
9- relating to the regulation of short-term limited-duration
10- insurance policies providing health insurance coverage.
7+ relating to the regulation of short-term limited-duration health
8+ insurance policies.
119 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1210 SECTION 1. Section 1201.104(a), Insurance Code, is amended
1311 to read as follows:
1412 (a) For individual accident and health insurance policies,
1513 the commissioner shall adopt rules establishing minimum standards
1614 for benefits under each of the following categories of coverage:
1715 (1) basic hospital expense;
1816 (2) basic medical-surgical expense;
1917 (3) hospital indemnity or other fixed indemnity;
2018 (4) major medical expense;
2119 (5) disability income protection;
2220 (6) accident only;
2321 (7) specified disease;
2422 (8) specified accident; [and]
2523 (9) limited benefit; and
26- (10) short-term limited-duration insurance.
24+ (10) short-term limited-duration health.
2725 SECTION 2. Chapter 1201, Insurance Code, is amended by
2826 adding Subchapter G to read as follows:
29- SUBCHAPTER G. SHORT-TERM LIMITED-DURATION INSURANCE
27+ SUBCHAPTER G. SHORT-TERM LIMITED-DURATION HEALTH INSURANCE
3028 Sec. 1201.301. DEFINITIONS. In this subchapter:
3129 (1) "Health benefit exchange" has the meaning assigned
3230 by Section 1369.201.
33- (2) "Short-term limited-duration insurance" has the
34- meaning assigned by 26 C.F.R. Section 54.9801-2.
31+ (2) "Short-term limited-duration health insurance
32+ policy" means a health insurance policy under which coverage is
33+ limited to fewer than 365 days in duration.
3534 Sec. 1201.302. ADVERTISING DISCLOSURES REQUIRED. (a) An
36- insurer issuing a short-term limited-duration insurance policy
37- shall display, on all sales and marketing materials, including any
38- Internet websites advertising or selling the policy, the applicable
39- notice under 26 C.F.R. Section 54.9801-2, including any
40- modifications to the notice prescribed by the commissioner under
41- Subsection (d).
42- (b) An agent selling a short-term limited-duration
35+ insurer issuing a short-term limited-duration health insurance
36+ policy shall display, on all sales and marketing materials,
37+ including any Internet websites advertising or selling the policy,
38+ the following statement in bold type at least 14-point in size:
39+ "NOTICE: THIS SHORT-TERM LIMITED-DURATION INSURANCE POLICY
40+ DOES NOT INCLUDE ALL ESSENTIAL HEALTH BENEFITS AS REQUIRED BY THE
41+ AFFORDABLE CARE ACT. PREEXISTING CONDITIONS (ARE/ARE NOT) COVERED.
42+ BE SURE TO CHECK YOUR POLICY CAREFULLY TO MAKE SURE YOU UNDERSTAND
43+ WHAT THE POLICY DOES AND DOES NOT COVER. THIS POLICY CANNOT BE
44+ RENEWED. WHEN THIS COVERAGE ENDS, YOU MIGHT HAVE TO WAIT UP TO A
45+ YEAR UNTIL THE NEXT OPEN ENROLLMENT PERIOD TO GET OTHER HEALTH
46+ COVERAGE. YOU MAY BE ABLE TO GET LONGER TERM INSURANCE WITH
47+ ESSENTIAL HEALTH BENEFITS AND HELP TO PAY FOR IT AT (health benefit
48+ exchange Internet website address)."
49+ (b) An agent selling a short-term limited-duration health
4350 insurance policy in person or through the telephone shall read out
44- loud the disclosure required by Subsection (a) to a prospective
51+ loud the disclosure prescribed by Subsection (a) to a prospective
4552 purchaser.
46- (c) The commissioner shall by rule prescribe a procedure to
47- communicate the disclosure required by Subsection (a) to a
48- prospective purchaser of a short-term limited-duration insurance
49- policy on an Internet website that is substantially equivalent to
50- an agent reading the disclosure aloud.
51- (d) The commissioner may by rule prescribe modifications to
52- the notice under 26 C.F.R. Section 54.9801-2 for the purpose of
53- making the notice more readable.
5453 Sec. 1201.303. POLICY DISCLOSURE FORM. (a) The
5554 commissioner by rule shall prescribe a disclosure form to be
56- provided with the short-term limited-duration insurance policy and
57- the application.
55+ provided with the short-term limited-duration health insurance
56+ policy and the application.
5857 (b) The disclosure form must be in an easily readable font
5958 at least 14-point in size and include:
6059 (1) the duration of coverage;
6160 (2) a statement that:
62- (A) the policy may be renewed only [x] times/may
63- not be renewed;
64- (B) the expiration of short-term coverage is not
65- a qualifying life event that would make a person eligible for a
66- special enrollment period; and
67- (C) the policy may expire outside of the open
68- enrollment period;
69- (3) to the extent the information is available, the
70- dates of the next three open enrollment periods under the federal
71- Affordable Care Act following the date the policy expires;
72- (4) whether the policy contains any limitations or
73- exclusions to preexisting conditions;
74- (5) the maximum dollar amount payable under the
61+ (A) the policy may not be renewed;
62+ (B) the expiration of short-term coverage does
63+ not make a person eligible for a special enrollment period; and
64+ (C) when the policy ends, the insured may have to
65+ wait up to a year until the next open enrollment period;
66+ (3) whether the policy covers preexisting conditions;
67+ (4) the maximum dollar amount payable under the
7568 policy;
76- (6) the deductibles under the policy and the health
69+ (5) the deductibles under the policy and the health
7770 care services to which the deductibles apply;
78- (7) whether the following health care services are
79- covered, including:
71+ (6) whether common health care services are covered,
72+ including:
8073 (A) prescription drug coverage;
8174 (B) mental health services;
8275 (C) substance abuse treatment;
8376 (D) maternity care;
8477 (E) hospitalization;
8578 (F) surgery;
8679 (G) emergency health care; and
8780 (H) preventive health care; and
88- (8) any other information the commissioner determines
89- is important for a purchaser of a short-term limited-duration
90- insurance policy.
91- (c) An insurer issuing a short-term limited-duration
81+ (7) a statement that, before enrolling, an individual
82+ should determine whether the individual is able to purchase
83+ long-term health coverage through the health benefit exchange and
84+ that the individual may be eligible for financial assistance to pay
85+ for it.
86+ (c) An insurer issuing a short-term limited-duration health
9287 insurance policy shall adopt procedures in accordance with
9388 commissioner rule to obtain a signed form from the insured
9489 acknowledging receipt of the disclosure form described by this
95- section. The rule must allow for electronic acknowledgment. The
96- insurer shall retain an acknowledgment form until the fifth
97- anniversary of the date the insurer receives the form, and the
98- insurer shall make the form available to the department on request.
99- Sec. 1201.304. RENEWAL LIMITATION. (a) An insurer may not
100- advertise or describe a short-term limited-duration insurance
101- policy as renewable unless:
102- (1) the policy provides that during the initial term
103- and any renewal period, the insurer may not change a material term
104- in the policy without the consent of the policyholder; and
105- (2) the policy is renewable at the sole option of the
106- policyholder.
107- (b) This subsection does not limit the right of an insurer
108- to make changes in premium rates by class.
109- Sec. 1201.305. TERMINATION. (a) Except as provided by
90+ section. The insurer shall retain the acknowledgment form until
91+ the fifth anniversary of the date the insurer receives the form, and
92+ the insurer shall make the form available to the department on
93+ request.
94+ Sec. 1201.304. DURATION. A short-term limited-duration
95+ health insurance policy must expire not later than the 91st day
96+ after the date the policy takes effect.
97+ Sec. 1201.305. RENEWAL PROHIBITED; NEW POLICY LIMITATION.
98+ (a) An insurer may not renew a short-term limited-duration health
99+ insurance policy.
100+ (b) An insurer may not issue a short-term limited-duration
101+ health insurance policy to an individual covered by a short-term
102+ limited-duration health insurance policy during the preceding 275
103+ days.
104+ Sec. 1201.306. TERMINATION. (a) Except as provided by
110105 Subsection (b), an insurer issuing a short-term limited-duration
111- insurance policy may not terminate the policy before the policy's
112- expiration date except:
113- (1) for nonpayment of premiums; or
114- (2) because the policyholder has performed an act or
115- practice that constitutes fraud or has made an intentional
116- misrepresentation of a material fact relating to the policy.
117- (b) An insurer issuing a short-term limited-duration
106+ health insurance policy may not terminate the policy before the
107+ policy's expiration date except for nonpayment of premiums or
108+ fraud.
109+ (b) An insurer issuing a short-term limited-duration health
118110 insurance policy shall provide an option under the policy for the
119111 insured to cancel the policy effective after each 30-day interval
120112 after the effective date of coverage.
121- SECTION 3. Not later than January 1, 2020, the commissioner
113+ Sec. 1201.307. ADVERTISING FILING REQUIREMENTS. An insurer
114+ that advertises or issues a short-term limited-duration health
115+ insurance policy shall file for informational purposes with the
116+ department a copy of any sales or marketing materials for the policy
117+ that the insurer intends to use in this state.
118+ SECTION 3. Subchapter B, Chapter 1701, Insurance Code, is
119+ amended by adding Section 1701.0525 to read as follows:
120+ Sec. 1701.0525. APPROVAL REQUIRED FOR CERTAIN DOCUMENTS.
121+ Notwithstanding Section 1701.052, an insurer may not use a document
122+ described by Section 1701.002 until the document has been approved
123+ by the commissioner if the document relates to a short-term
124+ limited-duration health insurance policy as defined by Section
125+ 1201.301.
126+ SECTION 4. Not later than January 1, 2020, the commissioner
122127 of insurance shall adopt rules necessary to implement Section
123128 1201.104, Insurance Code, as amended by this Act, and Subchapter G,
124129 Chapter 1201, Insurance Code, as added by this Act.
125- SECTION 4. Subchapter G, Chapter 1201, Insurance Code, as
126- added by this Act, applies only to an insurance policy delivered,
127- issued for delivery, or renewed on or after January 1, 2020. An
128- insurance policy delivered, issued for delivery, or renewed before
129- January 1, 2020, is governed by the law as it existed immediately
130- before the effective date of this Act, and that law is continued in
131- effect for that purpose.
132- SECTION 5. This Act takes effect September 1, 2019.
130+ SECTION 5. Subchapter G, Chapter 1201, and Section
131+ 1701.0525, Insurance Code, as added by this Act, apply only to an
132+ insurance policy delivered, issued for delivery, or renewed on or
133+ after January 1, 2020. An insurance policy delivered, issued for
134+ delivery, or renewed before January 1, 2020, is governed by the law
135+ as it existed immediately before the effective date of this Act, and
136+ that law is continued in effect for that purpose.
137+ SECTION 6. This Act takes effect September 1, 2019.