87R19880 SCL-F
By: Oliverson, Sanford, Jetton H.B. No. 573
Substitute the following for H.B. No. 573:
By: Oliverson C.S.H.B. No. 573
A BILL TO BE ENTITLED
AN ACT
relating to the operation of health care sharing ministries;
authorizing a fee; providing a civil penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 1681, Insurance Code, is transferred to
Subtitle C, Title 5, Business & Commerce Code, redesignated as
Chapter 113, Business & Commerce Code, and amended to read as
follows:
CHAPTER 113 [1681]. HEALTH CARE SHARING MINISTRIES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 113.001. DEFINITIONS. In this chapter:
(1) "Administrative fee" means an amount collected
from members and used for a purpose other than reimbursing members
for their medical expenses, including amounts used to pay for
health care sharing ministry administrative expenses and the
compensation of third-party vendors for services.
(2) "Commissioner" means the commissioner of
insurance.
(3) "Department" means the Texas Department of
Insurance.
(4) "Health care sharing ministry" means a [Sec.
1681.001. TREATMENT AS HEALTH CARE SHARING MINISTRY. A]
faith-based, nonprofit organization described by 26 U.S.C. Section
501(c)(3) and exempt from taxation under 26 U.S.C. Section 501(a)
that [is tax-exempt under the Internal Revenue Code of 1986
qualifies for treatment as a health care sharing ministry under
this chapter if it]:
(A) [(1)] limits its participants to individuals
of a similar faith;
(B) [(2)] acts as a facilitator among
participants who have medical bills and matches those participants
with other participants with the present ability to assist those
with medical bills in accordance with criteria established by the
health care sharing ministry;
(C) [(3)] provides for the medical bills of a
participant through contributions from one participant to another;
(D) [(4)] provides amounts that participants may
contribute with no assumption of risk or promise to pay among the
participants and no assumption of risk or promise to pay by the
health care sharing ministry to the participants; and
(E) [(5) provides a written monthly statement to
all participants that lists the total dollar amount of qualified
needs submitted to the health care sharing ministry, as well as the
amount actually published or assigned to participants for their
contribution;
[(6) discloses administrative fees and costs to
participants;
[(7) provides that any card issued to a participant
for the purpose of presentation to a health care provider clearly
indicates that the participant is part of a health care sharing
ministry that is not engaging in the business of insurance;
[(8) provides a written disclaimer on or accompanying
all applications and guideline materials distributed by or on
behalf of the ministry that complies with Section 1681.002; and
[(9)] does not operate a discount health care program
as defined by Section 7001.001, Insurance Code.
(5) "Member" means an individual enrolled in a health
care sharing ministry to share medical expenses with other enrolled
individuals.
(6) "Sharing request" means a request for
reimbursement of medical expenses submitted by a member to the
health care sharing ministry.
[Sec. 1681.002. NOTICE. To qualify as a health care sharing
ministry under this chapter, the notice described by Section
1681.001(8) must read substantially as follows:
["Notice: This health care sharing ministry facilitates the
sharing of medical expenses and is not an insurance company, and
neither its guidelines nor its plan of operation is an insurance
policy. Whether anyone chooses to assist you with your medical
bills will be totally voluntary because no other participant will
be compelled by law to contribute toward your medical bills. As
such, participation in the ministry or a subscription to any of its
documents should never be considered to be insurance. Regardless
of whether you receive any payment for medical expenses or whether
this ministry continues to operate, you are always personally
responsible for the payment of your own medical bills. Complaints
concerning this health care sharing ministry may be reported to the
office of the Texas attorney general."]
Sec. 113.002 [1681.003]. EXEMPTION. Notwithstanding any
[other] provision of the Insurance Code [this code], a health care
sharing ministry that acts in accordance with this chapter is not
considered to be engaging in the business of insurance.
Sec. 113.003. EXEMPTION FROM HEALTH COVERAGE REQUIREMENT BY
INSTITUTION OF HIGHER EDUCATION. A student at an institution of
higher education who is a member of a health care sharing ministry
may use the membership to comply with a requirement by the
institution that the student maintain health benefit coverage.
SUBCHAPTER B. FILING REQUIREMENTS
Sec. 113.051. INITIAL FILING REQUIREMENT. (a) A person
must file information described by Subsection (b) with the
department in the form and manner prescribed by the commissioner to
operate as a health care sharing ministry in this state.
(b) A person intending to operate a health care sharing
ministry must include in the filing described by Subsection (a) all
information required by the commissioner, including:
(1) the responsible director or manager of the
ministry;
(2) the ministry's physical, mailing, and electronic
mail addresses;
(3) the contact phone number for the responsible
director or manager of the ministry;
(4) information demonstrating that the ministry meets
the definition of a health care sharing ministry under Section
113.001;
(5) a copy of the most recent annual audit created by
an independent certified public accounting firm in accordance with
generally accepted accounting principles and which is made
available to the public on request;
(6) a list of any third-party vendors acting on behalf
of the ministry in this state for the purposes of:
(A) enrolling members;
(B) negotiating with health care providers after
services are rendered; or
(C) the financial sharing of member medical
needs;
(7) a copy of any application forms and organization
guidelines used by the ministry;
(8) a report of the ministry's members in this state as
of the date of the filing that includes the:
(A) total number of enrolled members;
(B) distribution of members by age; and
(C) distribution of members by sex; and
(9) a certification that the ministry does not
compensate anyone to solicit or enroll members in this state based
on the number of members solicited or enrolled or the amount of
contributions received from enrolled members, including by
commission, at a rate of more than five percent of the membership
fee received in the first year of membership.
(c) Subsection (b)(9) does not apply to:
(1) a salaried individual employed by the health care
sharing ministry who does not receive any form of commission,
compensation, or other valuable consideration based on enrolling
new members; or
(2) a new member referral program providing credit for
membership for existing members of a health care sharing ministry
who have referred new members only if the program is limited to
credit for no more than 12 months of membership for the existing
members annually.
Sec. 113.052. ANNUAL FILING REQUIREMENT. (a) A health care
sharing ministry shall submit an annual filing of information
described by Subsection (b) to the department in the form and manner
prescribed by the commissioner.
(b) The annual filing must include all information required
by the commissioner, including:
(1) an update of any changes made to documents
previously filed with the department;
(2) a copy of the most recent annual audit required
under 26 U.S.C. Section 5000A(d)(2)(B);
(3) an organization financial report detailing the
following for the prior registration period:
(A) the total amount of money collected from
members in this state, including contributions, administrative
fees, or other funds;
(B) the total number of sharing requests made by
members in this state;
(C) the total amount of money paid for health
care services for members in this state;
(D) the total number of sharing requests that
were denied;
(E) the total amount of administrative fees
collected from members in this state, including amounts paid to
each third-party vendor for services provided to members in this
state; and
(F) the total equivalent monetary amount of
membership contributions waived for participants rewarded by
referring others to a new member enrollment program;
(4) a report of the health care sharing ministry's
members in this state as of the date of the filing that includes
the:
(A) total number of enrolled members;
(B) distribution of members by age; and
(C) distribution of members by sex;
(5) a report detailing the following:
(A) the number of sharing requests made by
members in this state that were approved for sharing;
(B) the number of sharing requests made by
members in this state that were denied for sharing; and
(C) the number of complaints made by members in
this state; and
(6) a certification that the health care sharing
ministry does not compensate anyone to solicit or enroll members in
this state based on the number of members solicited or enrolled or
the amount of contributions received from enrolled members,
including by commission, at a rate of more than five percent of the
membership fee received in the first year of membership.
(c) Subsection (b)(6) does not apply to:
(1) a salaried individual employed by the health care
sharing ministry who does not receive any form of commission,
compensation, or other valuable consideration based on enrolling
new members; or
(2) a new member referral program providing credit for
membership for existing members of a health care sharing ministry
who have referred new members only if the program is limited to
credit for no more than 12 months of membership for the existing
members annually.
Sec. 113.053. LATE FILING. (a) A health care sharing
ministry that fails to timely submit a filing required by this
subchapter must pay the following fee to the department:
(1) $250 for a filing submitted 1 to 30 days late;
(2) $500 for a filing submitted 31 to 60 days late; or
(3) $1,000 for a filing submitted 61 to 90 days late.
(b) If a health care sharing ministry fails to submit a
filing required by this subchapter within 90 days after the
filing's deadline, the ministry may not operate as a health care
sharing ministry for two years.
Sec. 113.054. FEES. Except as provided by Section 113.053,
the commissioner by rule shall set a fee for a filing required under
this subchapter in an amount not to exceed $100. A fee collected
under this section shall be deposited to the credit of the Texas
Department of Insurance operating account.
SUBCHAPTER C. REGULATION OF HEALTH CARE SHARING MINISTRIES
Sec. 113.101. NAME. A health care sharing ministry may not
operate under any name other than the name under which the ministry
has submitted a filing under Subchapter B.
Sec. 113.102. MARKETING AND COMMUNICATION. (a) In all
communications with the public, a health care sharing ministry may
not:
(1) make a direct or indirect representation that:
(A) the ministry provides insurance; or
(B) a health care service is free or included
with membership; or
(2) include "premium," "copay," "deductible,"
"coverage," "network," "benefit plan," or a similar term in
marketing except to explain the differences between a health care
sharing ministry and insurance.
(b) A violation of this section is a false, misleading, or
deceptive act or practice in violation of Section 17.46.
Sec. 113.103. PROHIBITED COMPENSATION. (a) A health care
sharing ministry may not compensate anyone to solicit or enroll
members in this state based on the number of members solicited or
enrolled or the amount of contributions received from enrolled
members, including by commission, at a rate of more than five
percent of the membership fee received in the first year of
membership.
(b) This section does not apply to:
(1) a salaried individual employed by the health care
sharing ministry who does not receive any form of commission,
compensation, or other valuable consideration based on enrolling
new members; or
(2) a new member referral program providing credit for
membership for existing members of a health care sharing ministry
who have referred new members only if the program is limited to
credit for no more than 12 months of membership for the existing
members annually.
Sec. 113.104. ENROLLMENT DISCLOSURES. A health care
sharing ministry shall disclose the following information in
writing for each calendar year from the previous five calendar
years in a prominent and conspicuous manner before and at the time
an individual is enrolled as a member:
(1) total member contributions;
(2) total amounts paid for sharing requests;
(3) total administrative fees paid by members; and
(4) the percentage of money paid by members that was
paid toward the following:
(A) sharing requests; and
(B) administrative fees.
Sec. 113.105. QUARTERLY STATEMENTS. A health care sharing
ministry must provide a prominent and conspicuous written quarterly
and annual statement to all members that includes the following:
(1) the number of members participating that quarter
and for that calendar year;
(2) the amount of money contributed by members that
quarter and for that calendar year;
(3) the number of and monetary amount of all sharing
requests submitted that quarter and for that calendar year;
(4) the number of and monetary amount of sharing
requests paid that quarter and for that calendar year;
(5) the amount of member contributions remaining for
future sharing requests for that quarter and for that calendar
year;
(6) the amount of administrative fees for services to
members for that quarter and for that calendar year, including:
(A) the purpose of the administrative fee;
(B) the amount paid for each type of
administrative fee; and
(C) any third-party vendor to which the fee is
paid;
(7) the percentage of money paid by members that was
paid toward the following for that quarter and for that calendar
year:
(A) sharing requests;
(B) administrative fees; and
(C) any amount remaining that is designated for
the payment of future sharing requests; and
(8) the total amount of membership contributions
waived for that quarter and for that calendar year for participants
in a new member enrollment program.
Sec. 113.106. NOTICE; DISCLOSURE. (a) A health care
sharing ministry shall provide written notice on or accompanying
all applications, guideline materials, and written advertisements,
including print and digital advertisements, distributed by or on
behalf of the ministry.
(b) The notice described by Subsection (a) must be in at
least 10-point font, in a prominent and conspicuous place, and read
as follows:
"Notice: Payment of your medical expenses is not guaranteed.
This health care sharing ministry facilitates the sharing of
medical expenses and is not an insurance company, and neither its
guidelines nor its plan of operation is an insurance policy.
Whether anyone chooses to assist you with your medical bills will be
totally voluntary because no other participant will be compelled by
law to contribute toward your medical bills. As such,
participation in the ministry or a subscription to any of its
documents should never be considered to be insurance. Regardless
of whether you receive any payment for medical expenses or whether
this ministry continues to operate, you are always personally
responsible for the payment of your own medical bills. Complaints
concerning this health care sharing ministry may be reported to the
office of the Texas attorney general."
(c) A health care sharing ministry shall provide the
following notice in any audio or visual advertisement clearly,
conspicuously, and in a manner that a listener would hear and
understand:
"Payment of your medical expenses is not guaranteed. This
health care sharing ministry facilitates the sharing of medical
expenses, is not an insurance company, and is not offering an
insurance policy. Regardless of whether you receive any payment for
medical expenses or whether this ministry continues to operate, you
are always personally responsible for the payment of your own
medical bills."
(d) A health care sharing ministry shall provide a written
disclosure to a member at enrollment that states:
(1) the member may not be exempt from Section
5000A(d)(2)(B) of the Internal Revenue Code; and
(2) the member may be subject to a tax if Congress
reinstates the tax.
Sec. 113.107. ANNUAL AUDIT. A health care sharing ministry
shall conduct an annual audit that is:
(1) performed by an independent certified public
accounting firm in accordance with generally accepted accounting
principles; and
(2) made available to the public on request.
Sec. 113.108. EXCESS BENEFIT TRANSACTIONS PROHIBITED. A
health care sharing ministry may not conduct an excess benefit
transaction as defined by 26 U.S.C. Section 4958.
SUBCHAPTER D. ENFORCEMENT
Sec. 113.151. CEASE AND DESIST ORDER. (a) The attorney
general ex parte may issue an emergency cease and desist order if
the attorney general believes that:
(1) a person is operating a health care sharing
ministry in violation of this chapter; and
(2) the alleged conduct:
(A) is fraudulent;
(B) is hazardous or creates an immediate danger
to public safety; or
(C) is causing or can be reasonably expected to
cause public injury that:
(i) is likely to occur at any moment;
(ii) is incapable of being repaired or
rectified; and
(iii) has or is likely to have influence or
effect.
(b) The cease and desist order must:
(1) be served on the person by registered or certified
mail, return receipt requested, at the person's last known address;
(2) contain a statement of the charges; and
(3) require the person to immediately cease and desist
from the acts, methods, or practices stated in the order.
(c) A person affected by the cease and desist order is
entitled to request a hearing to contest the order. The hearing is
a contested case under Chapter 2001, Government Code.
(d) An order is final on the 31st day after the date it is
received unless the affected person requests a hearing under
Subsection (c). Pending a hearing under this section, the order
continues in effect unless the order is stayed by the attorney
general.
(e) The attorney general shall provide to the affected
person with the order written notice of the opportunity to request a
contested case hearing under Chapter 2001, Government Code.
(f) If the affected person requests a hearing under
Subsection (c), the attorney general shall set a contested case
hearing under Chapter 2001, Government Code, and notify the person
of the hearing.
(g) The administrative law judge shall make findings of fact
and conclusions of law and promptly issue to the attorney general a
proposal for a decision regarding the order.
Sec. 113.152. CIVIL PENALTY. (a) A person who violates
this chapter, including a cease and desist order issued under
Section 113.151, is liable to this state for a civil penalty in an
amount not to exceed $25,000 for each violation.
(b) In determining the amount of the civil penalty, the
court shall consider:
(1) the seriousness of the violation, including:
(A) the nature, circumstances, extent, and
gravity of the violation; and
(B) the hazard or potential hazard created to the
health, safety, or economic welfare of the public;
(2) the economic harm to the public interest or public
confidence caused by the violation;
(3) the history of previous violations;
(4) the amount necessary to deter future violations;
(5) efforts to correct the violation;
(6) whether the violation was intentional; and
(7) any other matter that justice may require.
Sec. 113.153. ENFORCEMENT ACTION. If the attorney general
believes that a health care sharing ministry or another person is
violating or has violated this chapter, the attorney general may
bring an action in a Travis County district court to enjoin the
violation, recover a civil penalty under Section 113.152, order
restitution, and obtain other relief the court considers
appropriate.
Sec. 113.154. REMEDIES CUMULATIVE. A remedy or action
authorized by this subchapter is in addition to any other civil,
administrative, or criminal action provided by law.
SECTION 2. Section 562.0041, Insurance Code, is amended to
read as follows:
Sec. 562.0041. EXEMPTION. This chapter does not apply to a
health care sharing ministry operated under Chapter 113, Business &
Commerce Code [1681].
SECTION 3. Section 651.002(c), Insurance Code, is amended
to read as follows:
(c) This chapter does not apply to a health care sharing
ministry operated under Chapter 113, Business & Commerce Code
[1681].
SECTION 4. Section 4151.0022, Insurance Code, is amended to
read as follows:
Sec. 4151.0022. NONAPPLICABILITY. This chapter does not
apply to a health care sharing ministry operated under Chapter 113,
Business & Commerce Code [1681].
SECTION 5. Section 7001.002, Insurance Code, is amended to
read as follows:
Sec. 7001.002. EXEMPTION. This chapter does not apply to a
program operator who is an insurer and who holds a certificate of
authority under Title 6, or a health care sharing ministry operated
under Chapter 113, Business & Commerce Code [1681].
SECTION 6. Section 7002.004, Insurance Code, is amended to
read as follows:
Sec. 7002.004. EXEMPTION. This chapter does not apply to a
health care sharing ministry operated under Chapter 113, Business &
Commerce Code [1681].
SECTION 7. (a) Notwithstanding Section 113.051, Business &
Commerce Code, as added by this Act, a health care sharing ministry
operating in this state immediately before the effective date of
this Act is not required to submit a filing under Subchapter B,
Chapter 113, Business & Commerce Code, as added by this Act, before
March 1, 2022. The ministry may continue operating without a filing
until April 1, 2022.
(b) A health care sharing ministry described by Subsection
(a) of this section that fails to submit a filing under Subchapter
B, Chapter 113, Business & Commerce Code, as added by this Act,
before March 1, 2022, may not operate as a health care sharing
ministry until the ministry submits a filing on or after March 1,
2024.
SECTION 8. This Act takes effect September 1, 2021.