86R12955 PMO-F
By: Lucio III H.B. No. 4435
A BILL TO BE ENTITLED
AN ACT
relating to the creation of a health insurance risk pool for certain
health benefit plan enrollees; authorizing an assessment.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle G, Title 8, Insurance Code, is amended
by adding Chapter 1511 to read as follows:
CHAPTER 1511. HEALTH INSURANCE RISK POOL
Sec. 1511.001. DEFINITION. In this chapter, "pool" means a
health insurance risk pool established and administered by the
commissioner under this chapter.
Sec. 1511.002. ESTABLISHMENT OF HEALTH INSURANCE RISK POOL.
To the extent that federal funds are available, the commissioner
may:
(1) apply for the federal funds; and
(2) use the federal funds to establish and administer
a pool for the purpose of this chapter.
Sec. 1511.003. PURPOSE OF POOL. (a) The purpose of the
pool is to provide a mechanism to meaningfully reduce health
insurance premiums in the individual health insurance market by
maximizing available federal funds to assist residents of this
state to obtain guaranteed issue health benefit coverage.
(b) The pool may not be used to expand the Medicaid program,
including the program administered under Chapter 32, Human
Resources Code, and the program administered under Chapter 533,
Government Code.
Sec. 1511.004. METHODS TO REDUCE PREMIUM IN THE INDIVIDUAL
MARKET. Subject to any requirements to obtain federal funds for the
pool, the commissioner may use money from the pool to achieve lower
enrollee premium rates by providing to health benefit plan issuers
writing guaranteed issue coverage in the individual market:
(1) a reinsurance program; or
(2) direct funding if the health benefit plan issuer's
plan provides coverage for individuals described by Section
1511.005.
Sec. 1511.005. ACCESS TO GUARANTEED ISSUE COVERAGE. The
commissioner shall use pool funds to enhance enrollment in
guaranteed issue coverage in the individual market in a manner that
ensures that the benefits and cost-sharing protections available in
the individual market are maintained in the same manner the
benefits and protections would be maintained without the waiver
described by Section 1511.020.
Sec. 1511.006. CONTRACTS AND AGREEMENTS. The commissioner
may enter into a contract or agreement that the commissioner
determines is appropriate to carry out this chapter, including a
contract or agreement with:
(1) a similar pool in another state for the joint
performance of common administrative functions;
(2) another organization for the performance of
administrative functions; or
(3) a federal agency.
Sec. 1511.007. FUNDING. (a) The commissioner may use funds
appropriated to the department to:
(1) apply for federal funds and grants; and
(2) administer this chapter.
(b) Notwithstanding Section 6(e)(2)(B), Chapter 615 (S.B.
1367), Acts of the 83rd Legislature, Regular Session, 2013, the
commissioner may use money appropriated to the department from the
healthy Texas small employer premium stabilization fund for the
exclusive purposes of this chapter, other than for paying salaries
and salary-related benefits.
(c) Notwithstanding Section 6(e)(2)(B), Chapter 615 (S.B.
1367), Acts of the 83rd Legislature, Regular Session, 2013, the
commissioner shall transfer money from the healthy Texas small
employer premium stabilization fund to the Texas Department of
Insurance operating account in an amount equal to the amount of
money appropriated to the department from that fund, as described
by Subsection (b), for the direct and indirect costs of the
exclusive purposes of this chapter.
(d) Except as provided by Subsections (a) and (b), the
commissioner may not use any state funds to fund the pool unless the
funds are specifically appropriated for that purpose.
Sec. 1511.008. ASSESSMENTS. (a) The commissioner may
assess health benefit plan issuers, including making advance
interim assessments, as reasonable and necessary for the pool's
organizational and interim operating expenses.
(b) The commissioner shall credit an interim assessment as
an offset against any regular assessment that is due after the end
of the fiscal year.
(c) The regular assessment is the amount determined by the
commissioner under Section 1511.009 and recovered from health
benefit plan issuers under Section 1511.013.
Sec. 1511.009. DETERMINATION OF POOL FUNDING REQUIREMENTS.
After the end of each fiscal year, the commissioner shall determine
for the next calendar year the amount of money required by the pool
to reduce the amount of premiums the enrollee would otherwise pay in
that year by 15 percent in accordance with this chapter after
applying the federal funds obtained under this chapter.
Sec. 1511.010. ANNUAL REPORT TO COMMISSIONER. Each health
benefit plan issuer shall report to the commissioner the
information requested by the commissioner, as of December 31 of the
preceding year.
Sec. 1511.011. ANNUAL REPORT TO COMMISSIONER: ENROLLED
INDIVIDUALS. (a) Each health benefit plan issuer shall report to
the commissioner the number of residents of this state enrolled, as
of December 31 of the previous year, in the issuer's health benefit
plans providing coverage for residents in this state, as:
(1) an employee under a group health benefit plan; or
(2) an individual policyholder or subscriber.
(b) In determining the number of individuals to report under
Subsection (a)(1), the health benefit plan issuer shall include
each employee for whom a premium is paid and coverage is provided
under an excess loss, stop-loss, or reinsurance policy issued by
the issuer to an employer or group health benefit plan providing
coverage for employees in this state. A health benefit plan issuer
providing excess loss insurance, stop-loss insurance, or
reinsurance, as described by this subsection, for a primary health
benefit plan issuer may not report individuals reported by the
primary health benefit plan issuer.
(c) Ten employees covered by a health plan issuer under a
policy of excess loss insurance, stop-loss insurance, or
reinsurance count as one employee for purposes of determining that
health plan issuer's assessment.
(d) In determining the number of individuals to report under
this section, the health benefit plan issuer shall exclude:
(1) the dependents of the employee or an individual
policyholder or subscriber; and
(2) individuals who are covered by the health benefit
plan issuer under a Medicare supplement benefit plan subject to
Chapter 1652.
(e) In determining the number of enrolled individuals to
report under this section, the health benefit plan issuer shall
exclude individuals who are retired employees 65 years of age or
older.
Sec. 1511.012. ANNUAL REPORT TO COMMISSIONER: GROSS
PREMIUMS. (a) Each health benefit plan issuer shall report to the
commissioner the gross premiums collected for the preceding
calendar year for health benefit plans.
(b) For purposes of this section, gross health benefit plan
premiums do not include premiums collected for:
(1) coverage under a Medicare supplement benefit plan
subject to Chapter 1652;
(2) coverage under a small employer health benefit
plan subject to Chapter 1501;
(3) coverage:
(A) for wages or payments in lieu of wages for a
period during which an employee is absent from work because of
accident or disability;
(B) as a supplement to a liability insurance
policy;
(C) for credit insurance;
(D) only for dental or vision care;
(E) only for a specified disease or illness; or
(F) only for indemnity for hospital confinement;
(4) a workers' compensation insurance policy;
(5) medical payment insurance coverage provided under
a motor vehicle insurance policy;
(6) a long-term care policy, including a nursing home
fixed indemnity policy, unless the commissioner determines that the
policy provides comprehensive health benefit plan coverage;
(7) liability insurance coverage, including general
liability insurance and automobile liability insurance;
(8) coverage for on-site medical clinics;
(9) insurance coverage under which benefits are
payable with or without regard to fault and that is statutorily
required to be contained in a liability insurance policy or
equivalent self-insurance; or
(10) other similar insurance coverage, as specified by
federal regulations issued under the Health Insurance Portability
and Accountability Act of 1996 (Pub. L. No. 104-191), under which
benefits for medical care are secondary or incidental to other
insurance benefits.
Sec. 1511.013. ASSESSMENTS TO COVER POOL FUNDING
REQUIREMENTS. (a) The commissioner shall recover an amount equal
to the funding required as estimated under Section 1511.009 by
assessing each health benefit plan issuer an amount determined
annually by the commissioner based on information in annual
statements, the health benefit plan issuer's annual report to the
commissioner under Sections 1511.010 and 1511.011, and any other
reports required by and filed with the commissioner.
(b) The commissioner shall use the total number of enrolled
individuals reported by all health benefit plan issuers under
Section 1511.011 as of the preceding December 31 to compute the
amount of a health benefit plan issuer's assessment, if any, in
accordance with this subsection. The commissioner shall allocate
the total amount to be assessed based on the total number of
enrolled individuals covered by excess loss, stop-loss, or
reinsurance policies and on the total number of other enrolled
individuals as determined under Section 1511.011. To compute the
amount of a health benefit plan issuer's assessment:
(1) for the issuer's enrolled individuals covered by
an excess loss, stop-loss, or reinsurance policy, the commissioner
shall:
(A) divide the allocated amount to be assessed by
the total number of enrolled individuals covered by excess loss,
stop-loss, or reinsurance policies, as determined under Section
1511.011, to determine the per capita amount; and
(B) multiply the number of a health benefit plan
issuer's enrolled individuals covered by an excess loss, stop-loss,
or reinsurance policy, as determined under Section 1511.011, by the
per capita amount to determine the amount assessed to that health
benefit plan issuer; and
(2) for the issuer's enrolled individuals not covered
by excess loss, stop-loss, or reinsurance policies, the
commissioner, using the gross health benefit plan premiums reported
for the preceding calendar year by health benefit plan issuers
under Section 1511.012, shall:
(A) divide the gross premium collected by a
health benefit plan issuer by the gross premium collected by all
health benefit plan issuers; and
(B) multiply the allocated amount to be assessed
by the fraction computed under Paragraph (A) to determine the
amount assessed to that health benefit plan issuer.
(c) A small employer health benefit plan subject to Chapter
1501 is not subject to an assessment under this section.
Sec. 1511.014. ASSESSMENT DUE DATE; INTEREST. (a) An
assessment is due on the date specified by the commissioner that is
not earlier than the 30th day after the date written notice of the
assessment is transmitted to the health benefit plan issuer.
(b) Interest accrues on the unpaid amount of an assessment
at a rate equal to the prime lending rate, as published in the most
recent issue of the Wall Street Journal and determined as of the
first day of each month during which the assessment is delinquent,
plus three percent.
Sec. 1511.015. ABATEMENT OR DEFERMENT OF ASSESSMENT. (a) A
health benefit plan issuer may petition the commissioner for an
abatement or deferment of all or part of an assessment imposed by
the commissioner. The commissioner may abate or defer all or part
of the assessment if the commissioner determines that payment of
the assessment would endanger the ability of the health benefit
plan issuer to fulfill its contractual obligations.
(b) If all or part of an assessment against a health benefit
plan issuer is abated or deferred, the amount of the abatement or
deferment shall be assessed against the other health benefit plan
issuers in a manner consistent with the method for computing
assessments under this chapter.
(c) A health benefit plan issuer receiving an abatement or
deferment under this section remains liable to the pool for the
deficiency.
Sec. 1511.016. USE OF EXCESS FROM ASSESSMENTS. If the total
amount of the assessments exceeds the pool's actual losses and
administrative expenses, the commissioner shall credit each health
benefit plan issuer with the excess in an amount proportionate to
the amount the health benefit plan issuer paid in assessments. The
credit may be paid to the health benefit plan issuer or applied to
future assessments under this chapter.
Sec. 1511.017. COLLECTION OF ASSESSMENTS. The pool may
recover or collect assessments made under this chapter.
Sec. 1511.018. PROCEDURES, CRITERIA, AND FORMS. The
commissioner by rule shall provide the procedures, criteria, and
forms necessary to implement, collect, and deposit assessments
under this chapter.
Sec. 1511.019. PUBLIC EDUCATION AND OUTREACH. (a) The
commissioner may use funds appropriated to the department for the
exclusive purposes of this chapter to develop and implement public
education, outreach, and facilitated enrollment strategies under
this chapter.
(b) The commissioner may contract with marketing
organizations to perform or provide assistance with the strategies
described by Subsection (a).
Sec. 1511.020. WAIVER. The commissioner may:
(1) apply to the United States secretary of health and
human services under 42 U.S.C. Section 18052 for a waiver of
applicable provisions of the Patient Protection and Affordable Care
Act (Pub. L. No. 111-148) and any applicable regulations or
guidance;
(2) take any action the commissioner considers
appropriate to make an application under Subdivision (1); and
(3) implement a state plan that meets the requirements
of a waiver granted in response to an application under Subdivision
(1) if the plan is:
(A) consistent with state and federal law; and
(B) approved by the United States secretary of
health and human services.
Sec. 1511.021. AUTHORITY TO ACT AS REINSURER. In addition
to the powers granted to the commissioner under this chapter, the
commissioner may exercise any authority that may be exercised under
the law of this state by a reinsurer.
Sec. 1511.022. RULES. The commissioner may adopt rules
necessary to implement this chapter, including rules to administer
the pool and distribute money from the pool.
Sec. 1511.023. EXEMPTION FROM STATE TAXES AND FEES.
Notwithstanding any other law, a program created under this chapter
is not subject to any state tax, regulatory fee, or surcharge,
including a premium or maintenance tax or fee.
Sec. 1511.024. ANNUAL REPORT OF POOL ACTIVITIES. (a)
Beginning June 1, 2020, not later than June 1 of each year, the
department shall submit a report to the governor, the lieutenant
governor, and the speaker of the house of representatives.
(b) The report submitted under Subsection (a) must
summarize the activities conducted under this chapter in the
calendar year preceding the year in which the report is submitted.
SECTION 2. Notwithstanding Section 6(d)(2), Chapter 615
(S.B. 1367), Acts of the 83rd Legislature, Regular Session, 2013,
on the effective date of this Act, the commissioner of insurance
shall transfer any money remaining outside the state treasury in
the Texas Treasury Safekeeping Trust Company account established
under Section 6(c), Chapter 615 (S.B. 1367), Acts of the 83rd
Legislature, Regular Session, 2013, to the health insurance risk
pool established by Chapter 1511, Insurance Code, as added by this
Act.
SECTION 3. 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, 2019.