S.B. No. 1296
AN ACT
relating to the authority of the commissioner of insurance to
review rates and rate changes for certain health benefit plans.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 8, Insurance Code, is amended by adding
Subtitle N to read as follows:
SUBTITLE N. RATES
CHAPTER 1698. RATES FOR CERTAIN COVERAGE
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1698.001. APPLICABILITY OF CHAPTER. This chapter
applies only to rates for the following health benefit plans:
(1) an individual major medical expense insurance
policy to which Chapter 1201 applies;
(2) individual health maintenance organization
coverage; or
(3) a small employer health benefit plan provided
under Chapter 1501.
Sec. 1698.002. APPLICABILITY OF OTHER LAWS GOVERNING RATES.
The requirements of this chapter are in addition to any other
provision of this code governing health benefit plan rates. Except
as otherwise provided by this chapter, in the case of a conflict
between this chapter and another provision of this code, this
chapter controls.
SUBCHAPTER B. REVIEW OF RATES
Sec. 1698.051. REVIEW OF PREMIUM RATES. (a) In this
section:
(1) "Individual health benefit plan" means:
(A) an individual accident and health insurance
policy to which Chapter 1201 applies; or
(B) individual health maintenance organization
coverage.
(2) "Small employer health benefit plan" has the
meaning assigned by Section 1501.002.
(b) The commissioner by rule shall establish a process under
which the commissioner reviews health benefit plan rates and rate
changes for compliance with this chapter and other applicable state
and federal law, including 42 U.S.C. Sections 300gg, 300gg-94, and
18032(c) and those sections' implementing regulations, including
rules establishing geographic rating areas.
Sec. 1698.052. ADDITIONAL RULES AND GUIDANCE RELATED TO
INDIVIDUAL HEALTH PLAN RATES. (a) In this section, "qualified
health plan" has the meaning assigned by Section 1301(a), Patient
Protection and Affordable Care Act (42 U.S.C. Section 18021).
(b) The commissioner shall adopt rules and provide guidance
regarding additional requirements related to individual health
benefit plans, including qualified health plans, to address the
following factors:
(1) whether the plan issuer has complied with all
requirements for pooling risk and participating in risk adjustment
programs in effect under state or federal law;
(2) the covered benefits or health benefit plan design
or, for a rate change, any changes to the benefits or design;
(3) the allowable variations for case
characteristics, risk classifications, and participation in
programs promoting wellness; and
(4) any other factor listed in 45 C.F.R. Section
154.301(a)(4) to the extent applicable.
(c) In making a determination under this section regarding a
proposed rate for a qualified health plan, the commissioner shall
consider, in addition to the factors under Subsection (b), the
following factors:
(1) the purchasing power of consumers who are eligible
for a premium subsidy under the Patient Protection and Affordable
Care Act (Pub. L. No. 111-148);
(2) if the plan is in the silver level, as described by
42 U.S.C. Section 18022(d), whether the rate is appropriate for the
plan in relation to the rates charged for qualified health plans
offering different levels of coverage, taking into account any
funding or lack of funding for cost-sharing reductions and the
covered benefits for each level of coverage; and
(3) whether the plan issuer utilized the induced
demand factors developed by the Centers for Medicare and Medicaid
Services for the risk adjustment program established under 42
U.S.C. Section 18063 for the level of coverage offered by the plan
or any state-specific induced demand factors established by
department regulations.
(d) The commissioner may consider the following factors:
(1) if the commissioner determines appropriate for
comparison purposes, medical claims trends reported by plan issuers
in this state or in a region of this country or the country as a
whole; and
(2) inflation indexes.
Sec. 1698.053. PLAN DESIGN FLEXIBILITY WITHIN RATING AREAS.
Notwithstanding any other provision of this code, a health benefit
plan issuer may:
(1) offer different plan designs by rating area to
individuals and small employers; and
(2) provide network access beyond the geographic
rating area.
Sec. 1698.054. FEDERAL ACTUARIAL LEVELS AND PLAN
COST-SHARING. Notwithstanding any other provision of this code, a
health benefit plan issuer may offer plan designs with deductibles,
coinsurance, and other cost-sharing mechanisms necessary to comply
with federal actuarial values in the individual and small group
market in this state.
Sec. 1698.055. FEDERAL FUNDING. The commissioner shall
seek all available federal funding to cover the cost to the
department of reviewing rates under this subchapter.
SECTION 2. Subtitle N, Title 8, Insurance Code, as added by
this Act, applies only to rates for health benefit plan coverage
delivered, issued for delivery, or renewed on or after January 1,
2023. Rates for health benefit plan coverage delivered, issued for
delivery, or renewed before January 1, 2023, are governed by the law
in effect immediately before the effective date of this Act, and
that law is continued in effect for that purpose.
SECTION 3. The Texas Department of Insurance is required to
implement a provision of this Act only if the legislature
appropriates money specifically for that purpose. If the
legislature does not appropriate money specifically for that
purpose, the department may, but is not required to, implement a
provision of this Act using other appropriations that are available
for that purpose.
SECTION 4. This Act takes effect September 1, 2021.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1296 passed the Senate on
April 29, 2021, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1296 passed the House on
May 26, 2021, by the following vote: Yeas 145, Nays 2, two
present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor