Texas 2021 - 87th Regular

Texas Senate Bill SB1271 Compare Versions

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

Old	New	Differences
1	1	87R209 SCL-F
2	2	By: Schwertner S.B. No. 1271
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the operation of health care sharing ministries;
8	8	authorizing a fee; providing an administrative penalty.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Chapter 1681, Insurance Code, is amended by
11	11	designating Section 1681.003 as Subchapter A and adding a
12	12	subchapter heading to read as follows:
13	13	SUBCHAPTER A. GENERAL PROVISIONS
14	14	SECTION 2. Subchapter A, Chapter 1681, Insurance Code, as
15	15	added by this Act, is amended by adding Section 1681.0011 to read as
16	16	follows:
17	17	Sec. 1681.0011. DEFINITIONS. In this chapter:
18	18	(1) "Administrative fee" means an amount collected
19	19	from members and used for a purpose other than reimbursing members
20	20	for their medical expenses, including amounts used to pay for
21	21	health care sharing ministry administrative expenses and the
22	22	compensation of third-party vendors for services.
23	23	(2) "Health care sharing ministry" means an
24	24	organization:
25	25	(A) described by 26 U.S.C. Section 501(c)(3) and
26	26	exempt from taxation under 26 U.S.C. Section 501(a);
27	27	(B) in which members:
28	28	(i) share a common set of ethical or
29	29	religious beliefs and share medical expenses among members in
30	30	accordance with those beliefs and without regard to the state in
31	31	which a member resides or is employed; and
32	32	(ii) retain membership even after the
33	33	member develops a medical condition;
34	34	(C) that has been in existence or that has a
35	35	predecessor that has been in existence at all times since December
36	36	31, 1999, and in which medical expenses of its members have been
37	37	shared continuously and without interruption since December 31,
38	38	1999; and
39	39	(D) that does not assume risk or promise to pay
40	40	any medical expenses for or on behalf of a member or the health care
41	41	sharing ministry.
42	42	(3) "Member" means an individual enrolled in a health
43	43	care sharing ministry to share medical expenses with other enrolled
44	44	individuals.
45	45	(4) "Sharing request" means a request for
46	46	reimbursement of medical expenses submitted by a member to the
47	47	health care sharing ministry.
48	48	SECTION 3. Chapter 1681, Insurance Code, is amended by
49	49	adding Subchapters B, C, and D to read as follows:
50	50	SUBCHAPTER B. CERTIFICATE OF REGISTRATION
51	51	Sec. 1681.051. CERTIFICATE OF REGISTRATION REQUIRED. (a)
52	52	Except as provided by Subsection (b), a person must obtain and
53	53	maintain a certificate of registration from the commissioner to
54	54	operate as a health care sharing ministry in this state.
55	55	(b) A health care sharing ministry with an expired
56	56	certificate of registration may continue to operate without a
57	57	certificate until the later of the 90th day after the date of the
58	58	certificate's expiration or the date on which a late application
59	59	for renewal made under Section 1681.057 is approved or denied.
60	60	Sec. 1681.052. APPLICATION FOR CERTIFICATE OF
61	61	REGISTRATION. (a) An applicant must apply for a health care
62	62	sharing ministry certificate of registration on an application form
63	63	prescribed by the commissioner and in the manner prescribed by the
64	64	commissioner.
65	65	(b) A health care sharing ministry application must include
66	66	the application form along with all information required by the
67	67	commissioner, including:
68	68	(1) the responsible director or manager of the
69	69	applicant;
70	70	(2) the applicant's physical, mailing, and electronic
71	71	mail addresses;
72	72	(3) the contact phone number for the responsible
73	73	director or manager of the applicant;
74	74	(4) information demonstrating that the applicant:
75	75	(A) meets the definition of a health care sharing
76	76	ministry under Section 1681.0011; and
77	77	(B) complies with Section 1681.108;
78	78	(5) a copy of the most recent annual audit required
79	79	under 26 U.S.C. Section 5000A(d)(2)(B);
80	80	(6) a list of any third-party vendors acting on behalf
81	81	of the applicant in this state for the purposes of:
82	82	(A) enrolling members;
83	83	(B) negotiating with health care providers after
84	84	services are rendered; or
85	85	(C) the financial sharing of member medical
86	86	needs;
87	87	(7) a copy of any application forms and ministry
88	88	guidelines used by the applicant;
89	89	(8) a report of the applicant's members in this state
90	90	as of the date of application that includes the:
91	91	(A) total number of enrolled members;
92	92	(B) distribution of members by age; and
93	93	(C) distribution of members by sex;
94	94	(9) a certification that the applicant does not
95	95	compensate anyone to solicit or enroll members in this state based
96	96	on the number of members solicited or enrolled or the amount of
97	97	contributions received from enrolled members, including by
98	98	commission; and
99	99	(10) other information as prescribed by the
100	100	commissioner.
101	101	Sec. 1681.053. ISSUANCE OF CERTIFICATE OF REGISTRATION.
102	102	(a) The commissioner shall issue a certificate of registration to
103	103	each applicant that meets the requirements of this chapter and
104	104	rules adopted under this chapter.
105	105	(b) The commissioner may deny an application that does not
106	106	meet the requirements of this chapter and rules adopted under this
107	107	chapter.
108	108	(c) On the applicant's request, the commissioner shall hold
109	109	a hearing on a denial of an application for a certificate of
110	110	registration. The hearing is a contested case under Chapter 2001,
111	111	Government Code.
112	112	Sec. 1681.054. TERM OF CERTIFICATE OF REGISTRATION. A
113	113	certificate of registration issued under this chapter expires one
114	114	year after the date of issuance unless it is renewed as provided by
115	115	Section 1681.055.
116	116	Sec. 1681.055. APPLICATION FOR RENEWAL OF CERTIFICATE OF
117	117	REGISTRATION. (a) Before a certificate of registration expires, a
118	118	health care sharing ministry may renew it for an additional
119	119	one-year term if the ministry applies for the renewal in the form
120	120	and manner prescribed by the commissioner.
121	121	(b) A renewal form must include all information required by
122	122	the commissioner, including:
123	123	(1) an update of any changes made to documents
124	124	previously filed with the department;
125	125	(2) a copy of the most recent annual audit required
126	126	under 26 U.S.C. Section 5000A(d)(2)(B);
127	127	(3) a ministry financial report detailing the
128	128	following for the prior registration period:
129	129	(A) the total amount collected from members in
130	130	this state, including contributions, administrative fees, or other
131	131	funds;
132	132	(B) the total amount of sharing requests made by
133	133	members in this state;
134	134	(C) the total amount paid for health care
135	135	services for members in this state;
136	136	(D) the total amount of sharing requests that
137	137	were denied; and
138	138	(E) the total amount of administrative fees
139	139	collected from members in this state, including amounts paid to
140	140	each third-party vendor for services provided to members in this
141	141	state;
142	142	(4) a report of the health care sharing ministry's
143	143	members in this state as of the date of application for renewal that
144	144	includes the:
145	145	(A) total number of enrolled members;
146	146	(B) distribution of members by age; and
147	147	(C) distribution of members by sex;
148	148	(5) a report detailing the following:
149	149	(A) the total number of sharing requests made by
150	150	members in this state;
151	151	(B) the number of sharing requests made by
152	152	members in this state that were approved for sharing;
153	153	(C) the number of sharing requests made by
154	154	members in this state that were denied for sharing; and
155	155	(D) the number of complaints made by members in
156	156	this state;
157	157	(6) a certification that the health care sharing
158	158	ministry does not compensate anyone to solicit or enroll members in
159	159	this state based on the number of members solicited or enrolled or
160	160	the amount of contributions received from enrolled members,
161	161	including by commission; and
162	162	(7) other information as prescribed by the
163	163	commissioner.
164	164	(c) The commissioner shall send written notice of an
165	165	impending expiration of a certificate of registration to a health
166	166	care sharing ministry not later than 30 days before the expiration
167	167	of the certificate of registration.
168	168	Sec. 1681.056. ISSUANCE OF RENEWAL OF CERTIFICATE OF
169	169	REGISTRATION. (a) The commissioner shall renew a certificate of
170	170	registration for each health care sharing ministry that meets the
171	171	requirements of this chapter and rules adopted under this chapter.
172	172	(b) The commissioner may deny a renewal application that
173	173	does not meet the requirements of this chapter and rules adopted
174	174	under this chapter.
175	175	(c) On the applicant's request, the commissioner shall hold
176	176	a hearing on a denial of a renewal application. Not later than the
177	177	30th day after the date of the applicant's request for a hearing,
178	178	the commissioner shall request a hearing date. The hearing is a
179	179	contested case under Chapter 2001, Government Code.
180	180	Sec. 1681.057. LATE RENEWAL OF CERTIFICATE OF REGISTRATION.
181	181	(a) The commissioner shall renew a certificate of registration in
182	182	accordance with Section 1681.056 if a request is made by the health
183	183	care sharing ministry within 90 days after the expiration of the
184	184	certificate.
185	185	(b) A health care sharing ministry that fails to timely
186	186	renew a certificate of registration must pay the following fee:
187	187	(1) $250 for an application for renewal filed 1 to 30
188	188	days late;
189	189	(2) $500 for an application for renewal filed 31 to 60
190	190	days late; or
191	191	(3) $1,000 for an application for renewal filed 61 to
192	192	90 days late.
193	193	(c) If a health care sharing ministry fails to apply to
194	194	renew a certificate of registration within 90 days after the
195	195	expiration of the certificate, the ministry may not reapply for a
196	196	certificate of registration for two years.
197	197	Sec. 1681.058. FEES. Except as provided by Section
198	198	1681.057, the commissioner by rule shall set a fee for an
199	199	application for the issuance or renewal of a certificate of
200	200	registration under this chapter in an amount not to exceed $100.
201	201	SUBCHAPTER C. REGULATION OF HEALTH CARE SHARING MINISTRIES
202	202	Sec. 1681.101. NAME. A health care sharing ministry may not
203	203	operate under any name other than the name for which the ministry's
204	204	certificate of registration has been issued.
205	205	Sec. 1681.102. MARKETING AND COMMUNICATION. (a) Except
206	206	for a health care sharing ministry making its annual audit
207	207	available to the public, the ministry may not make a direct or
208	208	indirect representation that it:
209	209	(1) is operating in a financially sound manner; or
210	210	(2) has a successful history of meeting members'
211	211	medical costs.
212	212	(b) In all communications with members or the public, a
213	213	health care sharing ministry may not:
214	214	(1) use insurance terms that may mislead or confuse a
215	215	member or prospective member, including terms such as premium,
216	216	copay, deductible, coverage, network, and benefit plan; or
217	217	(2) make a direct or indirect representation that a
218	218	health care service is free or included with membership.
219	219	Sec. 1681.103. COMPENSATION FOR SERVICES. A health care
220	220	sharing ministry may not compensate anyone for services provided to
221	221	members in this state based on the number of members solicited or
222	222	enrolled or the amount of contributions received from enrolled
223	223	members, including by commission.
224	224	Sec. 1681.104. ENROLLMENT DISCLOSURES. A health care
225	225	sharing ministry shall disclose the following information in
226	226	writing for each calendar year from the previous five calendar
227	227	years in a prominent and conspicuous manner before and at the time
228	228	an individual is enrolled as a member:
229	229	(1) total member contributions;
230	230	(2) total amounts paid for sharing requests;
231	231	(3) total administrative fees paid by members; and
232	232	(4) the percentage of money paid by members that was
233	233	paid toward the following:
234	234	(A) sharing requests; and
235	235	(B) administrative fees.
236	236	Sec. 1681.105. MONTHLY STATEMENTS. A health care sharing
237	237	ministry must provide a prominent and conspicuous written monthly
238	238	and annual statement to all members that includes the following:
239	239	(1) the number of members participating that month and
240	240	for that calendar year;
241	241	(2) the amount of money contributed by members that
242	242	month and for that calendar year;
243	243	(3) the number of and monetary amount of all sharing
244	244	requests submitted that month and for that calendar year;
245	245	(4) the number of and monetary amount of sharing
246	246	requests paid that month and for that calendar year;
247	247	(5) the amount of member contributions remaining for
248	248	future sharing requests for that month and for that calendar year;
249	249	(6) the amount of administrative fees for that month
250	250	and for that calendar year, including:
251	251	(A) the purpose of the administrative fee;
252	252	(B) the amount paid for each type of
253	253	administrative fee; and
254	254	(C) any third-party vendor to which the fee is
255	255	paid; and
256	256	(7) the percentage of money paid by members that was
257	257	paid toward the following for that month and for that calendar year:
258	258	(A) sharing requests;
259	259	(B) administrative fees; and
260	260	(C) any amount remaining that is designated for
261	261	the payment of future sharing requests.
262	262	Sec. 1681.107. ANNUAL AUDIT. A health care sharing
263	263	ministry shall conduct an annual audit that is:
264	264	(1) performed by an independent certified public
265	265	accounting firm in accordance with generally accepted accounting
266	266	principles; and
267	267	(2) made available to the public on request.
268	268	Sec. 1681.108. COMPLIANCE WITH CERTAIN FEDERAL LAW
269	269	REQUIRED. A health care sharing ministry shall operate in
270	270	accordance with 26 U.S.C. Section 5000A(d)(2)(B).
271	271	SUBCHAPTER D. ENFORCEMENT
272	272	Sec. 1681.151. ENFORCEMENT ACTIONS. If a health care
273	273	sharing ministry is violating or has violated this chapter or other
274	274	law, the commissioner may:
275	275	(1) suspend or revoke a certificate of registration
276	276	issued to the ministry under this chapter;
277	277	(2) impose a sanction under Chapter 82;
278	278	(3) issue a cease and desist order under Chapter 83;
279	279	(4) impose an administrative penalty under Chapter 84;
280	280	or
281	281	(5) any combination of Subdivisions (1) through (4).
282	282	Sec. 1681.152. INJUNCTION. If the commissioner believes
283	283	that a health care sharing ministry or another person is violating
284	284	or has violated this chapter, the attorney general at the request of
285	285	the commissioner may bring an action in a Travis County district
286	286	court to enjoin the violation, order restitution, and obtain other
287	287	relief the court considers appropriate.
288	288	Sec. 1681.153. REMEDIES CUMULATIVE. A remedy or action
289	289	authorized by this subchapter is in addition to any other civil,
290	290	administrative, or criminal action provided by law.
291	291	SECTION 4. Section 1681.002, Insurance Code, is transferred
292	292	to Subchapter C, Chapter 1681, Insurance Code, as added by this Act,
293	293	redesignated as Section 1681.106, Insurance Code, and amended to
294	294	read as follows:
295	295	Sec. 1681.106 [1681.002]. NOTICE. (a) A health care
296	296	sharing ministry shall provide written notice on or accompanying
297	297	all applications, guideline materials, and written advertisements,
298	298	including print and digital advertisements, distributed by or on
299	299	behalf of the ministry.
300	300	(b) The notice described by Subsection (a) must be in at
301	301	least 10-point font, in a prominent and conspicuous place, and [To
302	302	qualify as a health care sharing ministry under this chapter, the
303	303	notice described by Section 1681.001(8) must] read [substantially]
304	304	as follows:
305	305	"Notice: Payment of your medical expenses is not guaranteed.
306	306	This health care sharing ministry facilitates the sharing of
307	307	medical expenses and is not an insurance company, and neither its
308	308	guidelines nor its plan of operation is an insurance policy.
309	309	Whether anyone chooses to assist you with your medical bills will be
310	310	totally voluntary because no other participant will be compelled by
311	311	law to contribute toward your medical bills. As such, participation
312	312	in the ministry or a subscription to any of its documents should
313	313	never be considered to be insurance. Regardless of whether you
314	314	receive any payment for medical expenses or whether this ministry
315	315	continues to operate, you are always personally responsible for the
316	316	payment of your own medical bills. Complaints concerning this
317	317	health care sharing ministry may be reported to the Texas
318	318	Department of Insurance [office of the Texas attorney general]."
319	319	(c) A health care sharing ministry shall provide the
320	320	following notice in any audio or visual advertisement clearly,
321	321	conspicuously, and in a manner that a listener would hear and
322	322	understand:
323	323	"Payment of your medical expenses is not guaranteed. This
324	324	health care sharing ministry facilitates the sharing of medical
325	325	expenses, is not an insurance company, and is not offering an
326	326	insurance policy. Regardless of whether you receive any payment for
327	327	medical expenses or whether this ministry continues to operate, you
328	328	are always personally responsible for the payment of your own
329	329	medical bills."
330	330	SECTION 5. Section 1681.001, Insurance Code, is repealed.
331	331	SECTION 6. (a) Notwithstanding Section 1681.051, Insurance
332	332	Code, as added by this Act, a health care sharing ministry operating
333	333	in this state immediately before the effective date of this Act is
334	334	not required to apply for a certificate of registration under
335	335	Chapter 1681, Insurance Code, as amended by this Act, before March
336	336	1, 2022. The ministry may continue operating without a certificate
337	337	of registration until the application is approved or denied.
338	338	(b) A health care sharing ministry described by Subsection
339	339	(a) of this section that fails to apply for a certificate of
340	340	registration under Chapter 1681, Insurance Code, as amended by this
341	341	Act, before March 1, 2022, or whose application for registration
342	342	made before that date is denied, may not apply for a certificate of
343	343	registration under Section 1681.052, Insurance Code, as added by
344	344	this Act, before March 1, 2024.
345	345	SECTION 7. This Act takes effect September 1, 2021.