87R9607 MEW-D
By: Johnson S.B. No. 1807
A BILL TO BE ENTITLED
AN ACT
relating to the creation of the Texas Health Insurance Exchange and
an exchange reinsurance program.
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. TEXAS HEALTH INSURANCE EXCHANGE AND REINSURANCE
PROGRAM
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1511.001. DEFINITIONS. In this chapter:
(1) "Attachment point" means the threshold amount of
claim costs that an eligible health benefit plan issuer must incur
for an enrollee's covered benefits during a plan year above which
the claim costs for benefits are eligible for reinsurance payments
under the reinsurance program.
(2) "Board" means the board of directors of the Texas
Health Insurance Exchange Authority.
(3) "Coinsurance rate" means the percentage rate at
which the reinsurance program reimburses an eligible health benefit
plan issuer for claim costs incurred above the attachment point and
below the reinsurance cap for an enrollee's covered benefits during
a plan year.
(4) "Eligible health benefit plan issuer" means a
health benefit plan issuer offering health benefit plans eligible
for the reinsurance program to individuals in this state.
(5) "Enrollee" means an individual who is enrolled in
a qualified health plan.
(6) "Exchange" means the Texas Health Insurance
Exchange established under this chapter.
(7) "Exchange assister" means an individual or
organization, including a navigator, who provides public education
or assists consumers on behalf of the exchange. The term does not
include a licensed insurance agent.
(8) "Exchange authority" means the Texas Health
Insurance Exchange Authority established under this chapter.
(9) "Exchange fund" means the exchange revolving fund
established under Section 1511.251.
(10) "Executive commissioner" means the executive
commissioner of the Health and Human Services Commission.
(11) "Navigator" means an individual or entity
performing the activities and duties of a navigator as described by
42 U.S.C. Section 18031 or any regulation enacted under that
section.
(12) "Plan year" means the calendar year during which
an eligible health benefit plan issuer provides coverage through a
health benefit plan.
(13) "Qualified health plan" has the meaning assigned
by Section 1301(a), Patient Protection and Affordable Care Act (42
U.S.C. Section 18021).
(14) "Reinsurance cap" means the maximum amount of
claim costs incurred by an eligible health benefit plan issuer for
an enrollee's covered benefits during a plan year above which the
claim costs are no longer eligible for reinsurance payments under
the reinsurance program.
(15) "Reinsurance fund" means the reinsurance program
revolving fund established under Section 1511.316.
(16) "Reinsurance payment" means an amount paid to an
eligible health benefit plan issuer under the reinsurance program.
(17) "Reinsurance program" means the exchange
reinsurance program established under this chapter.
Sec. 1511.002. DEFINITION OF HEALTH BENEFIT PLAN. (a) In
this chapter, "health benefit plan" means an insurance policy,
insurance agreement, evidence of coverage, or other similar
coverage document that provides coverage for medical or surgical
expenses incurred as a result of a health condition, accident, or
sickness that is issued by:
(1) an insurance company;
(2) a group hospital service corporation operating
under Chapter 842;
(3) a health maintenance organization operating under
Chapter 843;
(4) an approved nonprofit health corporation that
holds a certificate of authority under Chapter 844;
(5) a multiple employer welfare arrangement that holds
a certificate of authority under Chapter 846;
(6) a stipulated premium company operating under
Chapter 884;
(7) a fraternal benefit society operating under
Chapter 885; or
(8) an exchange operating under Chapter 942.
(b) In this chapter, "health benefit plan" does not include:
(1) a plan that provides coverage:
(A) for wages or payments in lieu of wages for a
period during which an employee is absent from work because of
sickness or injury;
(B) as a supplement to a liability insurance
policy;
(C) for credit insurance;
(D) only for vision care;
(E) only for hospital expenses; or
(F) only for indemnity for hospital confinement;
(2) a Medicare supplemental policy as defined by
Section 1882(g)(1), Social Security Act (42 U.S.C. Section
1395ss(g)(1));
(3) a workers' compensation insurance policy;
(4) medical payment insurance coverage provided under
a motor vehicle insurance policy; or
(5) an individual health benefit plan issued on or
before March 23, 2010, that has not had any significant changes
since that date that reduce benefits or increase costs to the
individual.
Sec. 1511.003. RULEMAKING AUTHORITY. The department and
the board may adopt rules necessary and proper to implement this
chapter. Rules adopted under this section may not conflict with or
prevent the application of regulations promulgated by the United
States secretary of health and human services under the Patient
Protection and Affordable Care Act (Pub. L. No. 111-148).
Sec. 1511.004. AGENCY COOPERATION. (a) The exchange
authority, the department, and the Health and Human Services
Commission shall cooperate fully in performing their respective
duties under this code or another law of this state relating to the
operation of the exchange.
(b) The exchange authority and the Health and Human Services
Commission shall cooperate fully to:
(1) ensure that the development of eligibility and
enrollment systems for the exchange and related premium tax credits
are fully integrated with the planning and development of the
Health and Human Services Commission's eligibility systems
modernization efforts;
(2) ensure full and seamless interoperability and
minimize duplication of cost and effort;
(3) develop and administer transition procedures
that:
(A) address the needs of individuals and families
who experience a change in income that results in a change in the
source of coverage, with a particular emphasis on children and
adults with special health care needs and chronic illnesses,
conditions, and disabilities, as well as all individuals who are
also enrolled in Medicare; and
(B) to the extent practicable under the Patient
Protection and Affordable Care Act (Pub. L. No. 111-148), provide
for the coordination of payments to Medicaid managed care
organizations and qualified health plans that experience changes in
enrollment resulting from changes in eligibility for Medicaid
during an enrollment period;
(4) ensure consistent methods and standards,
including formulas and verification methods, for prompt
calculation of income based on individuals' modified adjusted gross
incomes in order to guard against lapses in coverage and
inconsistent eligibility determinations and procedures;
(5) ensure maximum access to federal data sources for
the purpose of verifying income eligibility for Medicaid, the state
child health plan program, premium tax credits, and cost-sharing
reductions;
(6) ensure the prompt processing of applications and
enrollment in the correct state subsidy program, regardless of
whether the program is Medicaid, the state child health plan
program, premium tax credits, or cost-sharing reductions;
(7) ensure procedures for transitioning individuals
between Medicaid and tax-credit-based subsidies that protect
individuals against delays in eligibility and plan enrollment; and
(8) ensure rapid resolution of inconsistent
information affecting eligibility and dissemination of clear and
understandable information to applicants regarding the resolution
process and any interim assistance that may be available while
resolution is pending.
Sec. 1511.005. CONFIDENTIALITY OF RECORDS. (a) Except as
otherwise provided by this chapter, documents, materials, or other
information, including a disclosure, in the possession or control
of the department or the exchange authority that is obtained by,
created by, or disclosed to the commissioner or any other person
under this chapter is confidential and privileged and is:
(1) not subject to disclosure under Chapter 552,
Government Code;
(2) not subject to subpoena; and
(3) not subject to discovery or admissible in evidence
in any private civil action.
(b) Except as otherwise provided by this chapter,
documents, materials, or other information, including a
disclosure, in the possession or control of the department or the
exchange authority that is obtained by, created by, or disclosed to
the commissioner or any other person under this chapter is
recognized by this state as being proprietary and to contain trade
secrets.
Sec. 1511.006. PERSONAL HEALTH AND FINANCIAL INFORMATION
CONFIDENTIAL. The department and the exchange authority shall
protect all personally identifiable health and financial
information in accordance with all applicable federal and state
laws, including the Patient Protection and Affordable Care Act
(Pub. L. No. 111-148), the Health Insurance Portability and
Accountability Act of 1996 (Pub. L. No. 104-191), and the Health
Information Technology for Economic and Clinical Health Act (Pub.
L. No. 111-5), enacted under the American Recovery and Reinvestment
Act of 2009 (Pub. L. No. 111-5), and any regulations promulgated
under those laws.
Sec. 1511.007. INFORMATION SHARING AND CONFIDENTIALITY.
(a) The department or the exchange authority may enter into
information-sharing agreements with each other to carry out the
department's or exchange authority's responsibilities under this
chapter or with:
(1) federal and state agencies; and
(2) an eligible health benefit plan issuer.
(b) An agreement entered into under this section must
include adequate protection with respect to the confidentiality of
any information shared and comply with all applicable state and
federal law.
Sec. 1511.008. IMMUNITY. The following persons are not
liable, and a cause of action does not arise against any of the
following persons, for a good faith act or omission in exercising
powers and performing duties under this chapter:
(1) the board, the department, or the exchange
authority;
(2) a board member or member of the advisory committee
established in Section 1511.152; or
(3) an officer or employee of an entity listed in
Subdivision (1).
Sec. 1511.009. COMPLIANCE WITH FEDERAL LAW. The exchange
authority and the reinsurance program shall comply with all
applicable federal law and regulations, including all federal
reporting requirements.
Sec. 1511.010. NO ENTITLEMENT. Nothing in this chapter
constitutes an entitlement or a claim on any money of the state.
Sec. 1511.011. EXPIRATION OF CHAPTER. If any provision of
the Patient Protection and Affordable Care Act (Pub. L.
No. 111-148), as amended by the Health Care and Education
Reconciliation Act of 2010 (Pub. L. No. 111-152), integral to the
operation of the exchange authority or reinsurance program
established under this chapter is repealed, defunded, or
invalidated, the commissioner shall notify the exchange authority
or the department to initiate steps to cease operations of the
exchange or reinsurance program and to cease operations not later
than 15 months after notification is received under this section.
SUBCHAPTER B. EXCHANGE ESTABLISHMENT AND PURPOSE
Sec. 1511.051. EXCHANGE AUTHORITY ESTABLISHED. This
chapter establishes the Texas Health Insurance Exchange Authority
to implement the Texas Health Insurance Exchange as an American
Health Benefit Exchange authorized by Section 1311, Patient
Protection and Affordable Care Act (42 U.S.C. Section 18031).
Sec. 1511.052. PURPOSE. The purpose of the exchange
authority is to create, manage, and maintain the exchange in order
to:
(1) benefit the state health insurance market and
individuals enrolling in health benefit plans;
(2) facilitate or assist in facilitating the
purchasing of qualified health plans on the exchange by qualified
enrollees in the individual market or the individual and small
group markets; and
(3) reduce or eliminate barriers to enrollment in
qualified health plans offered on the exchange by:
(A) simplifying the process to resolve data
matching issues;
(B) reducing circumstances under which
documentation must be submitted;
(C) simplifying the process for consumers to
submit documentation;
(D) streamlining special enrollment periods; and
(E) making the Internet website for the exchange
more user-friendly and mobile-friendly.
SUBCHAPTER C. GOVERNANCE OF EXCHANGE
Sec. 1511.101. GOVERNANCE OF EXCHANGE AUTHORITY; BOARD
MEMBERSHIP. The exchange authority is governed by a board of nine
directors, with the advice and consent of the senate, as follows:
(1) seven members appointed by the governor:
(A) four of whom are health benefit plan issuers
that offer health benefit plans through the exchange;
(B) two of whom are individuals with experience
in health care public education and consumer assistance activities
who do not have a conflict of interest as provided by Section
1511.106; and
(C) one of whom is a consumer advocate;
(2) the commissioner, or the commissioner's designee,
as an ex officio voting member; and
(3) the executive commissioner, or the executive
commissioner's designee, as an ex officio voting member.
Sec. 1511.102. PRESIDING OFFICER. The commissioner, or the
commissioner's designee, shall serve as the presiding officer.
Sec. 1511.103. TERMS; VACANCY. (a) Appointed members of
the board serve six-year staggered terms, with two or three of the
members' terms expiring February 1 of each odd-numbered year.
(b) The governor shall fill a vacancy on the board by
appointing, for the unexpired term, an individual who has the
appropriate qualifications to fill that position.
Sec. 1511.104. MEETINGS; QUORUM. (a) The board shall meet
at the call of the presiding officer or as provided in the bylaws of
the board, but not less frequently than quarterly.
(b) A majority of the appointed members of the board
constitutes a quorum. If a quorum is present, the board by majority
vote may act on any matter within the board's jurisdiction.
(c) Meetings of the board are subject to Chapter 551,
Government Code.
Sec. 1511.105. BOARD MEMBER COMPENSATION. (a) A board
member may not receive compensation but is entitled to
reimbursement of the travel expenses incurred by the board member
while conducting board business, subject to the availability of
money.
(b) Reimbursement under Subsection (a) shall be paid from
the exchange fund.
Sec. 1511.106. CONFLICTS OF INTEREST; RELEVANT EXPERIENCE.
The board shall ensure compliance with the standards described by
42 U.S.C. Section 18041 and all applicable federal regulations
promulgated under the Patient Protection and Affordable Care Act
(Pub. L. No. 111-148) regarding conflicts of interest and relevant
experience.
SUBCHAPTER D. POWERS AND DUTIES OF EXCHANGE
Sec. 1511.151. EMPLOYEES; COMMITTEES. (a) The board may
employ an executive director and any other agents and employees
that the board considers necessary to assist the exchange authority
in carrying out its responsibilities and functions. An employee of
the exchange authority is a state employee.
(b) The executive director shall organize, administer, and
manage the operations of the exchange authority. The executive
director may hire other employees as necessary to carry out the
responsibilities of the exchange authority.
(c) The executive director shall attend all meetings of the
board, but is not a member of the board, and may not vote or be
counted for purposes of establishing a quorum.
(d) The exchange authority may appoint appropriate legal,
actuarial, and other committees necessary to provide technical
assistance in operating the exchange and performing any of the
functions of the exchange or exchange authority.
Sec. 1511.152. ADVISORY COMMITTEE. (a) An advisory
committee is established to advise the board on:
(1) initial operational decisions;
(2) ongoing financing decisions; and
(3) any other decisions considered appropriate by the
board.
(b) The advisory committee is composed of eight members
appointed or selected as follows:
(1) four consumer representatives, including:
(A) two persons appointed by the governor, one of
whom must be a registered insurance exchange navigator or assister;
(B) one person appointed by the speaker of the
house of representatives; and
(C) one person appointed by the lieutenant
governor;
(2) one representative selected by the Texas Hospital
Association;
(3) one representative selected by the Texas Medical
Association;
(4) one representative selected by the Texas Chamber
of Commerce Executives from a small employer, as that term is
defined by Section 1501.002; and
(5) one representative selected by the Texas
Association of Health Underwriters.
(c) Advisory committee members serve staggered four-year
terms, with two of the members' terms expiring February 1 of each
odd-numbered year. A member may be reappointed for a second term.
If a vacancy occurs on the committee, the appropriate appointing
authority shall appoint a successor, in the same manner as the
original appointment, to serve for the remainder of the unexpired
term.
(d) A majority of the members of the advisory committee
constitutes a quorum. If a quorum is present, the advisory
committee by majority vote may act on any matter within the
committee's jurisdiction.
(e) The advisory committee shall meet at least twice per
year, with each meeting being held before a meeting of the board.
Additional meetings may be held on reasonable notice of the time and
location of the meeting selected by the board. The advisory
committee shall meet at the call of the presiding officer or on
written request of three members of the committee. A meeting of the
committee is subject to Chapter 551, Government Code.
(f) The executive director of the exchange authority, or the
executive director's designee, shall attend each meeting of the
advisory committee.
(g) The members of the advisory committee shall determine
the dates of each meeting by majority vote or by the call of the
presiding officer on seven days' notice to all members.
(h) The advisory committee must post a notice, including the
date, time, and place, of a committee meeting on the exchange
authority's Internet website not less than five days before each
meeting. The notice must state that the meeting is open to the
public. All actions taken by the committee must be taken in open
session and on a majority vote of the members present.
(i) A member of the advisory committee may not receive
compensation but is entitled to reimbursement of the travel
expenses incurred by the member while conducting committee
business, subject to the availability of money. Reimbursement
under this subsection shall be paid from the exchange fund.
Sec. 1511.153. ADMINISTRATIVE POWERS AND DUTIES OF EXCHANGE
AUTHORITY. (a) The exchange authority shall exercise all powers
and duties necessary and appropriate to carry out the authority's
purpose, including:
(1) adopting bylaws;
(2) employing staff;
(3) making, executing, and delivering contracts;
(4) applying for, soliciting, and receiving money from
any source consistent with the purposes of this chapter;
(5) establishing priorities for and allocating and
distributing money received by the exchange authority;
(6) submitting the exchange authority's budget
annually and the exchange authority's budget request, including
amounts to be appropriated out of the exchange fund necessary to
administer the provisions of this chapter and the transfer of money
to the reinsurance fund, biennially to the governor and the chairs
of the standing committees of the senate and house of
representatives with primary jurisdiction over appropriations;
(7) establishing travel reimbursement policies for
the exchange authority, the board, and the advisory committee;
(8) coordinating with the appropriate federal and
state agencies to seek waivers from statutory or regulatory
requirements as necessary to carry out the purposes of this
chapter;
(9) entering into other arrangements, including
interagency agreements with federal agencies and state agencies, as
necessary;
(10) giving reasonable public notice of any policies
and procedures the exchange authority may implement to operate the
exchange authority;
(11) ensuring that there is a sufficient number of
navigators and exchange assisters by awarding grants to navigators
and exchange assisters at a yearly average number that exceeds the
yearly average number of grants awarded from 2013 through 2016;
(12) providing centralized training, support, and
technical assistance for navigators and exchange assisters;
(13) spending money on marketing and advertisements
for the exchange in an amount that exceeds the amount of money spent
in this state annually on marketing and advertisements in relation
to the federally facilitated marketplace from 2013 to 2016;
(14) coordinating innovative marketing and outreach
campaigns, including by working with and supporting local
enrollment coalitions, agents, and stakeholders;
(15) ensuring a sufficient amount of money is spent on
customer support services, including call centers, web support, and
navigator and agent support, to provide high-quality services,
including by:
(A) creating a special team with knowledge and
authority to resolve difficult eligibility and enrollment
challenges;
(B) ensuring call center staff are able to access
and share information specific to a consumer's application;
(C) investing in services and systems to improve
information for consumers with limited English proficiency;
(D) making the exchange Internet website and
application process mobile-friendly; and
(E) ensuring consumers can easily submit
documentation, when needed; and
(16) performing any other operational activities
necessary or appropriate under this chapter.
(b) The board must consider the advice of the advisory
committee established under Section 1511.152.
Sec. 1511.154. FUNCTIONS OF THE EXCHANGE AUTHORITY. (a) In
carrying out the purposes of this chapter, the exchange authority
shall:
(1) educate consumers, including through outreach, a
navigator program, and post-enrollment support;
(2) assist individuals in accessing income-based
assistance for which the individual may be eligible, including
premium tax credits, cost-sharing reductions, and government
programs;
(3) consider the need for consumer choice in rural,
urban, and suburban areas of the state;
(4) negotiate premium rates with health benefit plan
issuers on the exchange;
(5) contract selectively with health benefit plan
issuers to drive value and promote improvement in the delivery
system;
(6) standardize health benefit plan designs and
cost-sharing;
(7) leverage quality improvement and delivery system
reforms by encouraging participating health benefit plans to
implement strategies to promote the delivery of better coordinated,
more efficient health care services;
(8) align with other large purchasers of health
benefit plans, including the state Medicaid program, the child
health plan program under Chapter 62, Health and Safety Code, the
Teacher Retirement System of Texas, and the Employees Retirement
System of Texas, to send consistent purchasing signals to health
benefit plan issuers and providers;
(9) recruit new health benefit plan issuers to areas
with less competition;
(10) leverage consumer decision-making through better
information and web-based decision-making tools;
(11) subject to Subsection (b), assess and collect
fees from health benefit plan issuers on the exchange to support the
operation of the exchange and the reinsurance program under this
chapter; and
(12) distribute collected fees, including to benefit
the reinsurance program.
(b) The exchange authority may not assess or collect any
costs or fees under Subsection (a)(11) other than an exchange user
fee on total monthly premiums for health benefit plans on the
exchange. The fee may not exceed three percent unless approved by
unanimous consent of the board, and in no circumstance may the fee
exceed 3.5 percent. The exchange authority shall set aside a
percentage of the exchange user fee to increase subsidies for
health benefit plans.
Sec. 1511.155. ENFORCEMENT AND STATE SOVEREIGNTY. The
exchange authority shall ensure that the exchange complies with the
Patient Protection and Affordable Care Act (Pub. L. No. 111-148)
and its subsequent amendments and any federal regulations
promulgated under that act in a manner that maintains state
sovereignty over the health insurance market in this state.
Enforcement responsibilities shall be delegated to the appropriate
state agencies and must be sufficient to prevent a determination by
the United States secretary of health and human services that the
state has failed to substantially enforce any provision of the
Patient Protection and Affordable Care Act.
SUBCHAPTER E. REPORTING REQUIREMENTS FOR EXCHANGE AUTHORITY
Sec. 1511.201. ANNUAL AUDIT. (a) The exchange authority
shall have an examination and audit of the exchange authority
conducted annually by an independent certified public accounting
firm. The audit must:
(1) assess compliance with the requirements of this
chapter; and
(2) identify any material weaknesses or significant
deficiencies and identify and implement solutions to correct those
weaknesses or deficiencies.
(b) Not later than December 31 of each year, the exchange
authority shall:
(1) post on the exchange authority's Internet website:
(A) the audit for the preceding year; and
(B) a summary of the audit, including any
identified material weaknesses or significant deficiencies and the
department's proposed solution for those weaknesses or
deficiencies; and
(2) provide to the secretary of the senate and the
chief clerk of the house of representatives and the department an
electronic link to the web page on which the audit information in
Subdivision (1) is posted.
(c) The exchange authority shall pay for the cost of the
annual audit under Subsection (a) with money from the exchange
fund.
Sec. 1511.202. ANNUAL REPORTS. (a) The exchange authority
shall prepare an annual report regarding the activities of the
exchange authority for the preceding year.
(b) The exchange authority shall:
(1) electronically submit the report required under
this section to the governor, the lieutenant governor, the speaker
of the house of representatives, and the chairs of the standing
committees of the senate and house of representatives with primary
jurisdiction over appropriations and insurance;
(2) post the report on the exchange authority's
Internet website; and
(3) provide a copy of the electronic link to the posted
report under Subdivision (2) to the department.
SUBCHAPTER F. EXCHANGE FUND
Sec. 1511.251. EXCHANGE FUND. (a) The exchange fund is
established as a revolving fund in the state treasury outside the
general revenue fund.
(b) The exchange authority may deposit assessments, gifts
or donations, and any federal funding obtained by the exchange
authority in the exchange fund in accordance with procedures
established by the comptroller.
(c) The exchange fund shall be administered by the exchange
authority for the purposes of the exchange established under this
chapter, including the deposit of federal money available for the
exchange and all other money received under or distributed in
accordance with this subchapter.
(d) Interest or other income from the investment of the
exchange fund shall be deposited to the credit of the fund.
SUBCHAPTER G. REINSURANCE PROGRAM
Sec. 1511.301. APPLICATION FOR STATE INNOVATION WAIVER.
(a) The department shall apply to the United States secretary of
health and human services to obtain a waiver under 42 U.S.C. Section
18052 to:
(1) waive any applicable provisions of the Patient
Protection and Affordable Care Act (Pub. L. No. 111-148) with
respect to health benefit plan coverage in this state;
(2) establish a reinsurance program in accordance with
an approved waiver; and
(3) maximize federal funding for the reinsurance
program for plan years beginning on or after the effective date of
the implementation of the program.
(b) The department may amend the waiver application as
necessary to carry out the provisions of this chapter.
(c) The department shall promptly notify the chairs of the
standing committees of the senate and house of representatives with
primary jurisdiction over appropriations and insurance of any
amendment to the waiver application and any federal actions taken
regarding the application.
(d) Not later than February 1, 2022, the department shall
make a draft of the application for the waiver under Subsection (a)
available for a public review and comment period of not less than 30
days. The department shall consider any comments in submitting the
final application. This subsection expires September 1, 2022.
Sec. 1511.302. IMPLEMENTATION OF WAIVER AND ESTABLISHMENT
OF REINSURANCE PROGRAM. (a) On approval by the United States
secretary of health and human services of the department's
application for a waiver under Section 1511.301, the department
shall establish and implement a reinsurance program for the
purposes of:
(1) stabilizing rates and premiums for health benefit
plans in the individual market; and
(2) providing greater financial certainty to
consumers of health benefit plans in this state.
(b) The reinsurance program under this subchapter is
considered to be a reinsurance entity for carrying out a
reinsurance program under the Patient Protection and Affordable
Care Act (Pub. L. No. 111-148) and its subsequent amendments.
Sec. 1511.303. OPERATION OF REINSURANCE PROGRAM. (a) The
department shall perform all appropriate and necessary functions to
operate the reinsurance program and effectuate the purposes for
which the reinsurance program was established in accordance with
the approved waiver under Section 1511.301. The functions may
include:
(1) establishing procedures for and performing
administrative and accounting operations of the reinsurance
program;
(2) seeking and receiving funding and maximizing
federal funding for the reinsurance program, including funding
from:
(A) the exchange authority;
(B) federal funding that is or may become
available to states to support the administration and
implementation of state-based reinsurance programs; and
(C) any other available sources;
(3) collecting data submissions and reinsurance
payment requests from eligible health benefit plan issuers;
(4) making reinsurance payments to eligible health
benefit plan issuers;
(5) resolving disputes related to the amount of
reinsurance payments;
(6) suing or being sued, including taking any legal
action necessary or proper to recover money for reinsurance
payments; and
(7) submitting invoices or other requests for money as
necessary or appropriate under the waiver.
(b) Except as prohibited under applicable federal law or
regulations, the department may, as may be necessary or appropriate
to carry out department duties, administer the reinsurance program
directly or through:
(1) a federal agency, an agency of another state, or
another state agency; or
(2) a contracted person or entity, including with a
legal, actuarial, or economic third-party administrator or other
person or entity, as the department determines appropriate, to
provide consultation services and technical assistance.
(c) A contracted person or entity under Subsection (b)(2)
shall submit regular reports to the department regarding the
person's or entity's performance, in the form and manner prescribed
by the department.
Sec. 1511.304. COORDINATION WITH EXCHANGE AUTHORITY. The
department shall coordinate with the exchange authority as
necessary to fund and operate the reinsurance program.
Sec. 1511.305. REINSURANCE PROGRAM TERMS. (a) After
consultation with all health benefit plan issuers participating in
the exchange, but not less than 60 days before the date on which
final rate filings for health benefit plans are required to be
submitted each year under Section 1511.309, the department shall
determine and adopt the attachment point, reinsurance cap, and
coinsurance rate applicable to the reinsurance program for the
following year.
(b) In determining the attachment point, reinsurance cap,
and coinsurance rate under Subsection (a), the department shall
seek to:
(1) manage the program within the total amount of
funding available to the department for the reinsurance program;
and
(2) with respect to the individual market:
(A) mitigate the impact of high-cost claims on
premium rates;
(B) stabilize or reduce premium rates; and
(C) increase participation in the market.
(c) The department shall, with respect to the adopted
attachment point, reinsurance cap, and coinsurance rate:
(1) publish notice of the terms:
(A) in the Texas Register; and
(B) on the department's Internet website; and
(2) electronically send notice of the terms to:
(A) the chairs of the standing committees of the
senate and house of representatives with primary jurisdiction over
appropriations and insurance; and
(B) each participating health benefit plan
issuer through a contact person or by e-mail, as identified by the
plan issuer.
(d) Not later than 10 business days after publication of
notice in the Texas Register, a health benefit plan issuer may
challenge and request a review of the department's determination of
the attachment point, reinsurance cap, and coinsurance rate.
(e) After the department has adopted the attachment point,
reinsurance cap, and coinsurance rate under Subsection (a), the
department may not, before or during the plan year for which those
terms are in effect, change the attachment point, reinsurance cap,
or coinsurance rate in a manner that is less favorable to the health
benefit plan issuers participating in the exchange at the time of
adoption.
Sec. 1511.306. REINSURANCE PAYMENTS. (a) A health benefit
plan issuer is eligible for a reinsurance payment if:
(1) the claims costs for an enrollee's covered
benefits during a plan year exceed the attachment point;
(2) the eligible health benefit plan issuer has
implemented and documented reasonable care management practices
for enrollees who are the subject of reinsurance claims through the
reinsurance program;
(3) the eligible health benefit plan issuer makes a
request for reinsurance payments in accordance with any
requirements established by the department, including requirements
regarding the format, structure, and timing for submission of
claims for reinsurance payments; and
(4) the eligible health benefit plan issuer
participated in the exchange, or is affiliated with an entity that
participated in the exchange, during the plan year in which the
claims costs for which a reinsurance payment is requested were
incurred.
(b) In calculating reinsurance payments due to a health
benefit plan issuer, the department must deduct from the relevant
claim costs all other available insurance payments applicable to a
claim, including insurance accessible through subrogation or
coordination of benefits.
(c) Payments to health benefit plan issuers must be
calculated and made on a pro rata basis.
Sec. 1511.307. REPORTING TO DEPARTMENT. A health benefit
plan issuer that requests a reinsurance payment under this chapter
must report to the department, in the form and manner prescribed by
the department, any information regarding enrollees covered by the
health benefit plan issuer necessary for the department to
calculate reinsurance payments.
Sec. 1511.308. REINSURANCE PAYMENT CLAIMS CONFIDENTIAL. A
claim for a reinsurance payment under this subchapter is
confidential and not subject to disclosure under Chapter 552,
Government Code.
Sec. 1511.309. EXCHANGE RATE FILINGS. A health benefit
plan issuer must identify and include the impact of reinsurance
payments under this subchapter in an annual rate filing for a health
benefit plan to be offered through the exchange. The rate filing
shall be submitted in the time and in the form and manner required
by the department.
Sec. 1511.310. RULES. The department may adopt any
necessary and appropriate rules to establish processes for the
settlement of reinsurance coverage claims and disbursement of
reinsurance payments.
Sec. 1511.311. REVIEW OF REINSURANCE PAYMENTS. A health
benefit plan issuer may request an administrative review of the
department's determination regarding the amount of a reinsurance
payment due to the issuer.
Sec. 1511.312. REINSURANCE PAYMENTS FROM FEDERAL MONEY.
Notwithstanding any other provision of this subchapter, the
department is not required to pay a reinsurance payment that would
be payable with federal money if the federal government does not
provide sufficient money for the reinsurance fund to fully
reimburse the amount of the reinsurance payment.
Sec. 1511.313. ANNUAL AUDIT. (a) The department shall have
an examination and audit of the reinsurance program conducted
annually by an independent certified public accounting firm. The
audit must:
(1) assess compliance with the requirements of this
subchapter; and
(2) identify any material weaknesses or significant
deficiencies and identify and implement solutions to correct those
weaknesses or deficiencies.
(b) Not later than December 31 of each year, the department
shall:
(1) post on the department's Internet website:
(A) the audit for the preceding year; and
(B) a summary of the audit, including any
identified material weaknesses or significant deficiencies and the
department's proposed solution for those weaknesses or
deficiencies; and
(2) provide to the secretary of the senate and the
chief clerk of the house of representatives an electronic link to
the web page on which the audit information in Subdivision (1) is
posted.
(c) The department shall pay for the cost of the annual
examination and audit under Subsection (a) with money from the
reinsurance fund.
Sec. 1511.314. ANNUAL REPORTS. (a) Not later than November
1 of the year following a plan year or 60 days after the final
distribution of reinsurance payments for the applicable plan year,
whichever is later, the department shall prepare a financial report
regarding the previous plan year. The report must include:
(1) the amount of money deposited into the reinsurance
fund;
(2) requests for reinsurance payments received from
eligible health benefit plan issuers;
(3) reinsurance payments made to eligible health
benefit plan issuers; and
(4) administrative and operational expenses incurred
for the reinsurance program.
(b) Not later than 60 days after rate filings required by
Section 1511.309 for the individual market are submitted, the
department shall prepare a report summarizing the quantifiable
impact of the reinsurance program on individual market rates for
the following plan year.
(c) The department shall:
(1) electronically submit the reports required under
this section to the lieutenant governor, the speaker of the house of
representatives, and the chairs of the standing committees of the
senate and house of representatives with primary jurisdiction over
appropriations and insurance; and
(2) post the reports on the department's Internet
website.
Sec. 1511.315. REPORTING BY HEALTH BENEFIT PLAN ISSUERS.
(a) A health benefit plan issuer must report information and
provide access to records requested by the department as the
department determines necessary for purposes of:
(1) preparing the state innovation waiver application
under Section 1511.301;
(2) determining reinsurance program terms under
Section 1511.305;
(3) determining the amount of reinsurance payments due
to a health benefit plan issuer;
(4) monitoring costs and revenue associated with the
reinsurance program;
(5) administering the reinsurance program; and
(6) ensuring compliance with all applicable federal
and state laws with respect to the reinsurance program.
(b) A health benefit plan issuer must provide information or
records requested under Subsection (a) by the department not later
than 30 days after the date that the plan issuer receives the
request or, if necessary for the department to comply with a request
from a federal or state agency, an earlier date as specified in the
request.
(c) Information and records provided to the department
under this section:
(1) may only be used by the department for the purposes
described by Subsection (a); and
(2) are confidential and not subject to disclosure
under Chapter 552, Government Code.
Sec. 1511.316. REINSURANCE FUND. (a) The reinsurance fund
is established as a revolving fund in the state treasury outside the
general revenue fund.
(b) The fund shall be administered by the department for the
purpose of the reinsurance program under this subchapter, including
the deposit of federal money available for the reinsurance program
and all other money received under or distributed in accordance
with this subchapter.
(c) Money from the fund may be used to:
(1) implement and operate the reinsurance program; and
(2) make reinsurance payments to eligible health
benefit plan issuers under the reinsurance program.
(d) In spending money from the fund, available federal money
must be used first.
(e) Interest or other income from the investment of the fund
shall be deposited to the credit of the fund.
Sec. 1511.317. REINSURANCE PROGRAM EXPENDITURES. (a) All
costs and expenses incurred from the reinsurance program must be
paid from the reinsurance fund, including compensation of employees
and independent contractors or consultants hired by the department
for purposes of operating the reinsurance program.
(b) Each fiscal year, the total amount of annual
expenditures from the reinsurance fund, including administrative
and consulting expenses, may not exceed the total amount of federal
money and money from other sources expected to be allocated to the
reinsurance fund for that fiscal year.
Sec. 1511.318. TEMPORARY EXEMPTION FROM STATE PURCHASING
PROCEDURES. (a) For purposes of implementing and operating the
reinsurance program under this subchapter, the department is not
subject to state purchasing or procurement requirements under
Subtitle D, Title 10, Government Code, or any other law. A contract
or agreement entered into before the expiration of this section may
not be for a term of more than five years.
(b) This section expires January 1, 2023.
SUBCHAPTER H. ENFORCEMENT
Sec. 1511.351. ENFORCEMENT REMEDIES. (a) On satisfactory
evidence of a violation of this chapter by a health benefit plan
issuer or other person, the commissioner may, at the commissioner's
discretion, impose any of the following enforcement remedies:
(1) suspension or revocation of the person's license
or certificate of authority;
(2) refusal to issue a new license or certificate of
authority to the person, for a period not to exceed one year; or
(3) a fine not to exceed $5,000 for each violation,
except that the fine may be up to $10,000 if the violation was
intentional.
(b) Fines imposed by the commissioner against an individual
health benefit plan issuer may not exceed an aggregate amount of
$500,000 during a single calendar year.
(c) Fines imposed against a person not described by
Subsection (b) may not exceed an aggregate amount of $100,000
during a single calendar year.
(d) The enforcement remedies under Subsection (a) are in
addition to any other remedies or penalties that may be imposed
under other law.
SUBCHAPTER I. TRANSITION PERIOD FOR ESTABLISHMENT OF EXCHANGE
Sec. 1511.401. BUDGET FOR EXCHANGE. (a) In developing the
exchange, the exchange authority, in coordination with the
department, shall create a budget to fully implement the purposes
and functions of the exchange authority and the exchange under this
chapter.
(b) The exchange authority shall conduct a fiscal analysis
to determine ways in which the exchange authority can achieve the
purposes of this chapter while spending less on exchange user fees
than was spent for the federally facilitated exchange. The
exchange authority must include in the fiscal analysis any funding
sources available for specific purposes or functions under this
chapter, including federal Medicaid matching funds.
Sec. 1511.402. ENROLLMENT INCREASE TARGETS. (a) For the
period of transition during which the exchange is being established
and for the following five years, the department shall establish
clearly stated numeric targets of increased enrollment in the
exchange, the state Medicaid program, and the child health plan
program under Chapter 62, Health and Safety Code.
(b) The department shall take immediate steps to increase
enrollment, including by lengthening open enrollment periods and
streamlining special enrollment periods.
Sec. 1511.403. INCREASED ENROLLMENT ADVISORY COMMITTEE.
(a) The department shall create an advisory committee to:
(1) study ways to increase enrollment in this state;
and
(2) help develop the five-year plan to reach the
numeric targets established under Section 1511.402.
(b) The department shall provide funding to the advisory
committee for the purpose of employing staff and contracting with a
person or entity to provide expertise, actuarial services, or other
services as needed.
(c) The advisory committee shall provide recommendations to
the department and the exchange authority regarding strategies for
increasing enrollment, including recommending the percentage of
the exchange user fee imposed on premiums for health benefit plans
on the exchange that the exchange authority should set aside to
enhance subsidies for health benefit plans.
Sec. 1511.404. EXPIRATION OF SUBCHAPTER. This subchapter
expires September 1, 2027.
SECTION 2. (a) As soon as practicable after the effective
date of this Act, but not later than October 1, 2021, the governor
shall appoint the initial members of the board of directors of the
Texas Health Insurance Exchange Authority. The initial board
members shall draw lots to achieve staggered terms, with two of the
directors serving a term expiring February 1, 2023, two of the
directors serving a term expiring February 1, 2025, and three of the
directors serving a term expiring February 1, 2027.
(b) As soon as practicable after the effective date of this
Act, but not later than March 1, 2022, the board of directors of the
Texas Health Insurance Exchange Authority shall adopt rules and
procedures necessary to implement Chapter 1511, Insurance Code, as
added by this Act.
(c) Until the board of directors of the Texas Health
Insurance Exchange Authority adopts rules under Subsection (b) of
this section, the exchange authority shall operate the exchange in
accordance with:
(1) any applicable federal rules, regulations, or
guidance; or
(2) interim state guidelines consistent with 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, 2021.