Texas 2021 - 87th Regular

Texas Senate Bill SB1807 Compare Versions

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1	1	87R9607 MEW-D
2	2	By: Johnson S.B. No. 1807
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the creation of the Texas Health Insurance Exchange and
8	8	an exchange reinsurance program.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subtitle G, Title 8, Insurance Code, is amended
11	11	by adding Chapter 1511 to read as follows:
12	12	CHAPTER 1511. TEXAS HEALTH INSURANCE EXCHANGE AND REINSURANCE
13	13	PROGRAM
14	14	SUBCHAPTER A. GENERAL PROVISIONS
15	15	Sec. 1511.001. DEFINITIONS. In this chapter:
16	16	(1) "Attachment point" means the threshold amount of
17	17	claim costs that an eligible health benefit plan issuer must incur
18	18	for an enrollee's covered benefits during a plan year above which
19	19	the claim costs for benefits are eligible for reinsurance payments
20	20	under the reinsurance program.
21	21	(2) "Board" means the board of directors of the Texas
22	22	Health Insurance Exchange Authority.
23	23	(3) "Coinsurance rate" means the percentage rate at
24	24	which the reinsurance program reimburses an eligible health benefit
25	25	plan issuer for claim costs incurred above the attachment point and
26	26	below the reinsurance cap for an enrollee's covered benefits during
27	27	a plan year.
28	28	(4) "Eligible health benefit plan issuer" means a
29	29	health benefit plan issuer offering health benefit plans eligible
30	30	for the reinsurance program to individuals in this state.
31	31	(5) "Enrollee" means an individual who is enrolled in
32	32	a qualified health plan.
33	33	(6) "Exchange" means the Texas Health Insurance
34	34	Exchange established under this chapter.
35	35	(7) "Exchange assister" means an individual or
36	36	organization, including a navigator, who provides public education
37	37	or assists consumers on behalf of the exchange. The term does not
38	38	include a licensed insurance agent.
39	39	(8) "Exchange authority" means the Texas Health
40	40	Insurance Exchange Authority established under this chapter.
41	41	(9) "Exchange fund" means the exchange revolving fund
42	42	established under Section 1511.251.
43	43	(10) "Executive commissioner" means the executive
44	44	commissioner of the Health and Human Services Commission.
45	45	(11) "Navigator" means an individual or entity
46	46	performing the activities and duties of a navigator as described by
47	47	42 U.S.C. Section 18031 or any regulation enacted under that
48	48	section.
49	49	(12) "Plan year" means the calendar year during which
50	50	an eligible health benefit plan issuer provides coverage through a
51	51	health benefit plan.
52	52	(13) "Qualified health plan" has the meaning assigned
53	53	by Section 1301(a), Patient Protection and Affordable Care Act (42
54	54	U.S.C. Section 18021).
55	55	(14) "Reinsurance cap" means the maximum amount of
56	56	claim costs incurred by an eligible health benefit plan issuer for
57	57	an enrollee's covered benefits during a plan year above which the
58	58	claim costs are no longer eligible for reinsurance payments under
59	59	the reinsurance program.
60	60	(15) "Reinsurance fund" means the reinsurance program
61	61	revolving fund established under Section 1511.316.
62	62	(16) "Reinsurance payment" means an amount paid to an
63	63	eligible health benefit plan issuer under the reinsurance program.
64	64	(17) "Reinsurance program" means the exchange
65	65	reinsurance program established under this chapter.
66	66	Sec. 1511.002. DEFINITION OF HEALTH BENEFIT PLAN. (a) In
67	67	this chapter, "health benefit plan" means an insurance policy,
68	68	insurance agreement, evidence of coverage, or other similar
69	69	coverage document that provides coverage for medical or surgical
70	70	expenses incurred as a result of a health condition, accident, or
71	71	sickness that is issued by:
72	72	(1) an insurance company;
73	73	(2) a group hospital service corporation operating
74	74	under Chapter 842;
75	75	(3) a health maintenance organization operating under
76	76	Chapter 843;
77	77	(4) an approved nonprofit health corporation that
78	78	holds a certificate of authority under Chapter 844;
79	79	(5) a multiple employer welfare arrangement that holds
80	80	a certificate of authority under Chapter 846;
81	81	(6) a stipulated premium company operating under
82	82	Chapter 884;
83	83	(7) a fraternal benefit society operating under
84	84	Chapter 885; or
85	85	(8) an exchange operating under Chapter 942.
86	86	(b) In this chapter, "health benefit plan" does not include:
87	87	(1) a plan that provides coverage:
88	88	(A) for wages or payments in lieu of wages for a
89	89	period during which an employee is absent from work because of
90	90	sickness or injury;
91	91	(B) as a supplement to a liability insurance
92	92	policy;
93	93	(C) for credit insurance;
94	94	(D) only for vision care;
95	95	(E) only for hospital expenses; or
96	96	(F) only for indemnity for hospital confinement;
97	97	(2) a Medicare supplemental policy as defined by
98	98	Section 1882(g)(1), Social Security Act (42 U.S.C. Section
99	99	1395ss(g)(1));
100	100	(3) a workers' compensation insurance policy;
101	101	(4) medical payment insurance coverage provided under
102	102	a motor vehicle insurance policy; or
103	103	(5) an individual health benefit plan issued on or
104	104	before March 23, 2010, that has not had any significant changes
105	105	since that date that reduce benefits or increase costs to the
106	106	individual.
107	107	Sec. 1511.003. RULEMAKING AUTHORITY. The department and
108	108	the board may adopt rules necessary and proper to implement this
109	109	chapter. Rules adopted under this section may not conflict with or
110	110	prevent the application of regulations promulgated by the United
111	111	States secretary of health and human services under the Patient
112	112	Protection and Affordable Care Act (Pub. L. No. 111-148).
113	113	Sec. 1511.004. AGENCY COOPERATION. (a) The exchange
114	114	authority, the department, and the Health and Human Services
115	115	Commission shall cooperate fully in performing their respective
116	116	duties under this code or another law of this state relating to the
117	117	operation of the exchange.
118	118	(b) The exchange authority and the Health and Human Services
119	119	Commission shall cooperate fully to:
120	120	(1) ensure that the development of eligibility and
121	121	enrollment systems for the exchange and related premium tax credits
122	122	are fully integrated with the planning and development of the
123	123	Health and Human Services Commission's eligibility systems
124	124	modernization efforts;
125	125	(2) ensure full and seamless interoperability and
126	126	minimize duplication of cost and effort;
127	127	(3) develop and administer transition procedures
128	128	that:
129	129	(A) address the needs of individuals and families
130	130	who experience a change in income that results in a change in the
131	131	source of coverage, with a particular emphasis on children and
132	132	adults with special health care needs and chronic illnesses,
133	133	conditions, and disabilities, as well as all individuals who are
134	134	also enrolled in Medicare; and
135	135	(B) to the extent practicable under the Patient
136	136	Protection and Affordable Care Act (Pub. L. No. 111-148), provide
137	137	for the coordination of payments to Medicaid managed care
138	138	organizations and qualified health plans that experience changes in
139	139	enrollment resulting from changes in eligibility for Medicaid
140	140	during an enrollment period;
141	141	(4) ensure consistent methods and standards,
142	142	including formulas and verification methods, for prompt
143	143	calculation of income based on individuals' modified adjusted gross
144	144	incomes in order to guard against lapses in coverage and
145	145	inconsistent eligibility determinations and procedures;
146	146	(5) ensure maximum access to federal data sources for
147	147	the purpose of verifying income eligibility for Medicaid, the state
148	148	child health plan program, premium tax credits, and cost-sharing
149	149	reductions;
150	150	(6) ensure the prompt processing of applications and
151	151	enrollment in the correct state subsidy program, regardless of
152	152	whether the program is Medicaid, the state child health plan
153	153	program, premium tax credits, or cost-sharing reductions;
154	154	(7) ensure procedures for transitioning individuals
155	155	between Medicaid and tax-credit-based subsidies that protect
156	156	individuals against delays in eligibility and plan enrollment; and
157	157	(8) ensure rapid resolution of inconsistent
158	158	information affecting eligibility and dissemination of clear and
159	159	understandable information to applicants regarding the resolution
160	160	process and any interim assistance that may be available while
161	161	resolution is pending.
162	162	Sec. 1511.005. CONFIDENTIALITY OF RECORDS. (a) Except as
163	163	otherwise provided by this chapter, documents, materials, or other
164	164	information, including a disclosure, in the possession or control
165	165	of the department or the exchange authority that is obtained by,
166	166	created by, or disclosed to the commissioner or any other person
167	167	under this chapter is confidential and privileged and is:
168	168	(1) not subject to disclosure under Chapter 552,
169	169	Government Code;
170	170	(2) not subject to subpoena; and
171	171	(3) not subject to discovery or admissible in evidence
172	172	in any private civil action.
173	173	(b) Except as otherwise provided by this chapter,
174	174	documents, materials, or other information, including a
175	175	disclosure, in the possession or control of the department or the
176	176	exchange authority that is obtained by, created by, or disclosed to
177	177	the commissioner or any other person under this chapter is
178	178	recognized by this state as being proprietary and to contain trade
179	179	secrets.
180	180	Sec. 1511.006. PERSONAL HEALTH AND FINANCIAL INFORMATION
181	181	CONFIDENTIAL. The department and the exchange authority shall
182	182	protect all personally identifiable health and financial
183	183	information in accordance with all applicable federal and state
184	184	laws, including the Patient Protection and Affordable Care Act
185	185	(Pub. L. No. 111-148), the Health Insurance Portability and
186	186	Accountability Act of 1996 (Pub. L. No. 104-191), and the Health
187	187	Information Technology for Economic and Clinical Health Act (Pub.
188	188	L. No. 111-5), enacted under the American Recovery and Reinvestment
189	189	Act of 2009 (Pub. L. No. 111-5), and any regulations promulgated
190	190	under those laws.
191	191	Sec. 1511.007. INFORMATION SHARING AND CONFIDENTIALITY.
192	192	(a) The department or the exchange authority may enter into
193	193	information-sharing agreements with each other to carry out the
194	194	department's or exchange authority's responsibilities under this
195	195	chapter or with:
196	196	(1) federal and state agencies; and
197	197	(2) an eligible health benefit plan issuer.
198	198	(b) An agreement entered into under this section must
199	199	include adequate protection with respect to the confidentiality of
200	200	any information shared and comply with all applicable state and
201	201	federal law.
202	202	Sec. 1511.008. IMMUNITY. The following persons are not
203	203	liable, and a cause of action does not arise against any of the
204	204	following persons, for a good faith act or omission in exercising
205	205	powers and performing duties under this chapter:
206	206	(1) the board, the department, or the exchange
207	207	authority;
208	208	(2) a board member or member of the advisory committee
209	209	established in Section 1511.152; or
210	210	(3) an officer or employee of an entity listed in
211	211	Subdivision (1).
212	212	Sec. 1511.009. COMPLIANCE WITH FEDERAL LAW. The exchange
213	213	authority and the reinsurance program shall comply with all
214	214	applicable federal law and regulations, including all federal
215	215	reporting requirements.
216	216	Sec. 1511.010. NO ENTITLEMENT. Nothing in this chapter
217	217	constitutes an entitlement or a claim on any money of the state.
218	218	Sec. 1511.011. EXPIRATION OF CHAPTER. If any provision of
219	219	the Patient Protection and Affordable Care Act (Pub. L.
220	220	No. 111-148), as amended by the Health Care and Education
221	221	Reconciliation Act of 2010 (Pub. L. No. 111-152), integral to the
222	222	operation of the exchange authority or reinsurance program
223	223	established under this chapter is repealed, defunded, or
224	224	invalidated, the commissioner shall notify the exchange authority
225	225	or the department to initiate steps to cease operations of the
226	226	exchange or reinsurance program and to cease operations not later
227	227	than 15 months after notification is received under this section.
228	228	SUBCHAPTER B. EXCHANGE ESTABLISHMENT AND PURPOSE
229	229	Sec. 1511.051. EXCHANGE AUTHORITY ESTABLISHED. This
230	230	chapter establishes the Texas Health Insurance Exchange Authority
231	231	to implement the Texas Health Insurance Exchange as an American
232	232	Health Benefit Exchange authorized by Section 1311, Patient
233	233	Protection and Affordable Care Act (42 U.S.C. Section 18031).
234	234	Sec. 1511.052. PURPOSE. The purpose of the exchange
235	235	authority is to create, manage, and maintain the exchange in order
236	236	to:
237	237	(1) benefit the state health insurance market and
238	238	individuals enrolling in health benefit plans;
239	239	(2) facilitate or assist in facilitating the
240	240	purchasing of qualified health plans on the exchange by qualified
241	241	enrollees in the individual market or the individual and small
242	242	group markets; and
243	243	(3) reduce or eliminate barriers to enrollment in
244	244	qualified health plans offered on the exchange by:
245	245	(A) simplifying the process to resolve data
246	246	matching issues;
247	247	(B) reducing circumstances under which
248	248	documentation must be submitted;
249	249	(C) simplifying the process for consumers to
250	250	submit documentation;
251	251	(D) streamlining special enrollment periods; and
252	252	(E) making the Internet website for the exchange
253	253	more user-friendly and mobile-friendly.
254	254	SUBCHAPTER C. GOVERNANCE OF EXCHANGE
255	255	Sec. 1511.101. GOVERNANCE OF EXCHANGE AUTHORITY; BOARD
256	256	MEMBERSHIP. The exchange authority is governed by a board of nine
257	257	directors, with the advice and consent of the senate, as follows:
258	258	(1) seven members appointed by the governor:
259	259	(A) four of whom are health benefit plan issuers
260	260	that offer health benefit plans through the exchange;
261	261	(B) two of whom are individuals with experience
262	262	in health care public education and consumer assistance activities
263	263	who do not have a conflict of interest as provided by Section
264	264	1511.106; and
265	265	(C) one of whom is a consumer advocate;
266	266	(2) the commissioner, or the commissioner's designee,
267	267	as an ex officio voting member; and
268	268	(3) the executive commissioner, or the executive
269	269	commissioner's designee, as an ex officio voting member.
270	270	Sec. 1511.102. PRESIDING OFFICER. The commissioner, or the
271	271	commissioner's designee, shall serve as the presiding officer.
272	272	Sec. 1511.103. TERMS; VACANCY. (a) Appointed members of
273	273	the board serve six-year staggered terms, with two or three of the
274	274	members' terms expiring February 1 of each odd-numbered year.
275	275	(b) The governor shall fill a vacancy on the board by
276	276	appointing, for the unexpired term, an individual who has the
277	277	appropriate qualifications to fill that position.
278	278	Sec. 1511.104. MEETINGS; QUORUM. (a) The board shall meet
279	279	at the call of the presiding officer or as provided in the bylaws of
280	280	the board, but not less frequently than quarterly.
281	281	(b) A majority of the appointed members of the board
282	282	constitutes a quorum. If a quorum is present, the board by majority
283	283	vote may act on any matter within the board's jurisdiction.
284	284	(c) Meetings of the board are subject to Chapter 551,
285	285	Government Code.
286	286	Sec. 1511.105. BOARD MEMBER COMPENSATION. (a) A board
287	287	member may not receive compensation but is entitled to
288	288	reimbursement of the travel expenses incurred by the board member
289	289	while conducting board business, subject to the availability of
290	290	money.
291	291	(b) Reimbursement under Subsection (a) shall be paid from
292	292	the exchange fund.
293	293	Sec. 1511.106. CONFLICTS OF INTEREST; RELEVANT EXPERIENCE.
294	294	The board shall ensure compliance with the standards described by
295	295	42 U.S.C. Section 18041 and all applicable federal regulations
296	296	promulgated under the Patient Protection and Affordable Care Act
297	297	(Pub. L. No. 111-148) regarding conflicts of interest and relevant
298	298	experience.
299	299	SUBCHAPTER D. POWERS AND DUTIES OF EXCHANGE
300	300	Sec. 1511.151. EMPLOYEES; COMMITTEES. (a) The board may
301	301	employ an executive director and any other agents and employees
302	302	that the board considers necessary to assist the exchange authority
303	303	in carrying out its responsibilities and functions. An employee of
304	304	the exchange authority is a state employee.
305	305	(b) The executive director shall organize, administer, and
306	306	manage the operations of the exchange authority. The executive
307	307	director may hire other employees as necessary to carry out the
308	308	responsibilities of the exchange authority.
309	309	(c) The executive director shall attend all meetings of the
310	310	board, but is not a member of the board, and may not vote or be
311	311	counted for purposes of establishing a quorum.
312	312	(d) The exchange authority may appoint appropriate legal,
313	313	actuarial, and other committees necessary to provide technical
314	314	assistance in operating the exchange and performing any of the
315	315	functions of the exchange or exchange authority.
316	316	Sec. 1511.152. ADVISORY COMMITTEE. (a) An advisory
317	317	committee is established to advise the board on:
318	318	(1) initial operational decisions;
319	319	(2) ongoing financing decisions; and
320	320	(3) any other decisions considered appropriate by the
321	321	board.
322	322	(b) The advisory committee is composed of eight members
323	323	appointed or selected as follows:
324	324	(1) four consumer representatives, including:
325	325	(A) two persons appointed by the governor, one of
326	326	whom must be a registered insurance exchange navigator or assister;
327	327	(B) one person appointed by the speaker of the
328	328	house of representatives; and
329	329	(C) one person appointed by the lieutenant
330	330	governor;
331	331	(2) one representative selected by the Texas Hospital
332	332	Association;
333	333	(3) one representative selected by the Texas Medical
334	334	Association;
335	335	(4) one representative selected by the Texas Chamber
336	336	of Commerce Executives from a small employer, as that term is
337	337	defined by Section 1501.002; and
338	338	(5) one representative selected by the Texas
339	339	Association of Health Underwriters.
340	340	(c) Advisory committee members serve staggered four-year
341	341	terms, with two of the members' terms expiring February 1 of each
342	342	odd-numbered year. A member may be reappointed for a second term.
343	343	If a vacancy occurs on the committee, the appropriate appointing
344	344	authority shall appoint a successor, in the same manner as the
345	345	original appointment, to serve for the remainder of the unexpired
346	346	term.
347	347	(d) A majority of the members of the advisory committee
348	348	constitutes a quorum. If a quorum is present, the advisory
349	349	committee by majority vote may act on any matter within the
350	350	committee's jurisdiction.
351	351	(e) The advisory committee shall meet at least twice per
352	352	year, with each meeting being held before a meeting of the board.
353	353	Additional meetings may be held on reasonable notice of the time and
354	354	location of the meeting selected by the board. The advisory
355	355	committee shall meet at the call of the presiding officer or on
356	356	written request of three members of the committee. A meeting of the
357	357	committee is subject to Chapter 551, Government Code.
358	358	(f) The executive director of the exchange authority, or the
359	359	executive director's designee, shall attend each meeting of the
360	360	advisory committee.
361	361	(g) The members of the advisory committee shall determine
362	362	the dates of each meeting by majority vote or by the call of the
363	363	presiding officer on seven days' notice to all members.
364	364	(h) The advisory committee must post a notice, including the
365	365	date, time, and place, of a committee meeting on the exchange
366	366	authority's Internet website not less than five days before each
367	367	meeting. The notice must state that the meeting is open to the
368	368	public. All actions taken by the committee must be taken in open
369	369	session and on a majority vote of the members present.
370	370	(i) A member of the advisory committee may not receive
371	371	compensation but is entitled to reimbursement of the travel
372	372	expenses incurred by the member while conducting committee
373	373	business, subject to the availability of money. Reimbursement
374	374	under this subsection shall be paid from the exchange fund.
375	375	Sec. 1511.153. ADMINISTRATIVE POWERS AND DUTIES OF EXCHANGE
376	376	AUTHORITY. (a) The exchange authority shall exercise all powers
377	377	and duties necessary and appropriate to carry out the authority's
378	378	purpose, including:
379	379	(1) adopting bylaws;
380	380	(2) employing staff;
381	381	(3) making, executing, and delivering contracts;
382	382	(4) applying for, soliciting, and receiving money from
383	383	any source consistent with the purposes of this chapter;
384	384	(5) establishing priorities for and allocating and
385	385	distributing money received by the exchange authority;
386	386	(6) submitting the exchange authority's budget
387	387	annually and the exchange authority's budget request, including
388	388	amounts to be appropriated out of the exchange fund necessary to
389	389	administer the provisions of this chapter and the transfer of money
390	390	to the reinsurance fund, biennially to the governor and the chairs
391	391	of the standing committees of the senate and house of
392	392	representatives with primary jurisdiction over appropriations;
393	393	(7) establishing travel reimbursement policies for
394	394	the exchange authority, the board, and the advisory committee;
395	395	(8) coordinating with the appropriate federal and
396	396	state agencies to seek waivers from statutory or regulatory
397	397	requirements as necessary to carry out the purposes of this
398	398	chapter;
399	399	(9) entering into other arrangements, including
400	400	interagency agreements with federal agencies and state agencies, as
401	401	necessary;
402	402	(10) giving reasonable public notice of any policies
403	403	and procedures the exchange authority may implement to operate the
404	404	exchange authority;
405	405	(11) ensuring that there is a sufficient number of
406	406	navigators and exchange assisters by awarding grants to navigators
407	407	and exchange assisters at a yearly average number that exceeds the
408	408	yearly average number of grants awarded from 2013 through 2016;
409	409	(12) providing centralized training, support, and
410	410	technical assistance for navigators and exchange assisters;
411	411	(13) spending money on marketing and advertisements
412	412	for the exchange in an amount that exceeds the amount of money spent
413	413	in this state annually on marketing and advertisements in relation
414	414	to the federally facilitated marketplace from 2013 to 2016;
415	415	(14) coordinating innovative marketing and outreach
416	416	campaigns, including by working with and supporting local
417	417	enrollment coalitions, agents, and stakeholders;
418	418	(15) ensuring a sufficient amount of money is spent on
419	419	customer support services, including call centers, web support, and
420	420	navigator and agent support, to provide high-quality services,
421	421	including by:
422	422	(A) creating a special team with knowledge and
423	423	authority to resolve difficult eligibility and enrollment
424	424	challenges;
425	425	(B) ensuring call center staff are able to access
426	426	and share information specific to a consumer's application;
427	427	(C) investing in services and systems to improve
428	428	information for consumers with limited English proficiency;
429	429	(D) making the exchange Internet website and
430	430	application process mobile-friendly; and
431	431	(E) ensuring consumers can easily submit
432	432	documentation, when needed; and
433	433	(16) performing any other operational activities
434	434	necessary or appropriate under this chapter.
435	435	(b) The board must consider the advice of the advisory
436	436	committee established under Section 1511.152.
437	437	Sec. 1511.154. FUNCTIONS OF THE EXCHANGE AUTHORITY. (a) In
438	438	carrying out the purposes of this chapter, the exchange authority
439	439	shall:
440	440	(1) educate consumers, including through outreach, a
441	441	navigator program, and post-enrollment support;
442	442	(2) assist individuals in accessing income-based
443	443	assistance for which the individual may be eligible, including
444	444	premium tax credits, cost-sharing reductions, and government
445	445	programs;
446	446	(3) consider the need for consumer choice in rural,
447	447	urban, and suburban areas of the state;
448	448	(4) negotiate premium rates with health benefit plan
449	449	issuers on the exchange;
450	450	(5) contract selectively with health benefit plan
451	451	issuers to drive value and promote improvement in the delivery
452	452	system;
453	453	(6) standardize health benefit plan designs and
454	454	cost-sharing;
455	455	(7) leverage quality improvement and delivery system
456	456	reforms by encouraging participating health benefit plans to
457	457	implement strategies to promote the delivery of better coordinated,
458	458	more efficient health care services;
459	459	(8) align with other large purchasers of health
460	460	benefit plans, including the state Medicaid program, the child
461	461	health plan program under Chapter 62, Health and Safety Code, the
462	462	Teacher Retirement System of Texas, and the Employees Retirement
463	463	System of Texas, to send consistent purchasing signals to health
464	464	benefit plan issuers and providers;
465	465	(9) recruit new health benefit plan issuers to areas
466	466	with less competition;
467	467	(10) leverage consumer decision-making through better
468	468	information and web-based decision-making tools;
469	469	(11) subject to Subsection (b), assess and collect
470	470	fees from health benefit plan issuers on the exchange to support the
471	471	operation of the exchange and the reinsurance program under this
472	472	chapter; and
473	473	(12) distribute collected fees, including to benefit
474	474	the reinsurance program.
475	475	(b) The exchange authority may not assess or collect any
476	476	costs or fees under Subsection (a)(11) other than an exchange user
477	477	fee on total monthly premiums for health benefit plans on the
478	478	exchange. The fee may not exceed three percent unless approved by
479	479	unanimous consent of the board, and in no circumstance may the fee
480	480	exceed 3.5 percent. The exchange authority shall set aside a
481	481	percentage of the exchange user fee to increase subsidies for
482	482	health benefit plans.
483	483	Sec. 1511.155. ENFORCEMENT AND STATE SOVEREIGNTY. The
484	484	exchange authority shall ensure that the exchange complies with the
485	485	Patient Protection and Affordable Care Act (Pub. L. No. 111-148)
486	486	and its subsequent amendments and any federal regulations
487	487	promulgated under that act in a manner that maintains state
488	488	sovereignty over the health insurance market in this state.
489	489	Enforcement responsibilities shall be delegated to the appropriate
490	490	state agencies and must be sufficient to prevent a determination by
491	491	the United States secretary of health and human services that the
492	492	state has failed to substantially enforce any provision of the
493	493	Patient Protection and Affordable Care Act.
494	494	SUBCHAPTER E. REPORTING REQUIREMENTS FOR EXCHANGE AUTHORITY
495	495	Sec. 1511.201. ANNUAL AUDIT. (a) The exchange authority
496	496	shall have an examination and audit of the exchange authority
497	497	conducted annually by an independent certified public accounting
498	498	firm. The audit must:
499	499	(1) assess compliance with the requirements of this
500	500	chapter; and
501	501	(2) identify any material weaknesses or significant
502	502	deficiencies and identify and implement solutions to correct those
503	503	weaknesses or deficiencies.
504	504	(b) Not later than December 31 of each year, the exchange
505	505	authority shall:
506	506	(1) post on the exchange authority's Internet website:
507	507	(A) the audit for the preceding year; and
508	508	(B) a summary of the audit, including any
509	509	identified material weaknesses or significant deficiencies and the
510	510	department's proposed solution for those weaknesses or
511	511	deficiencies; and
512	512	(2) provide to the secretary of the senate and the
513	513	chief clerk of the house of representatives and the department an
514	514	electronic link to the web page on which the audit information in
515	515	Subdivision (1) is posted.
516	516	(c) The exchange authority shall pay for the cost of the
517	517	annual audit under Subsection (a) with money from the exchange
518	518	fund.
519	519	Sec. 1511.202. ANNUAL REPORTS. (a) The exchange authority
520	520	shall prepare an annual report regarding the activities of the
521	521	exchange authority for the preceding year.
522	522	(b) The exchange authority shall:
523	523	(1) electronically submit the report required under
524	524	this section to the governor, the lieutenant governor, the speaker
525	525	of the house of representatives, and the chairs of the standing
526	526	committees of the senate and house of representatives with primary
527	527	jurisdiction over appropriations and insurance;
528	528	(2) post the report on the exchange authority's
529	529	Internet website; and
530	530	(3) provide a copy of the electronic link to the posted
531	531	report under Subdivision (2) to the department.
532	532	SUBCHAPTER F. EXCHANGE FUND
533	533	Sec. 1511.251. EXCHANGE FUND. (a) The exchange fund is
534	534	established as a revolving fund in the state treasury outside the
535	535	general revenue fund.
536	536	(b) The exchange authority may deposit assessments, gifts
537	537	or donations, and any federal funding obtained by the exchange
538	538	authority in the exchange fund in accordance with procedures
539	539	established by the comptroller.
540	540	(c) The exchange fund shall be administered by the exchange
541	541	authority for the purposes of the exchange established under this
542	542	chapter, including the deposit of federal money available for the
543	543	exchange and all other money received under or distributed in
544	544	accordance with this subchapter.
545	545	(d) Interest or other income from the investment of the
546	546	exchange fund shall be deposited to the credit of the fund.
547	547	SUBCHAPTER G. REINSURANCE PROGRAM
548	548	Sec. 1511.301. APPLICATION FOR STATE INNOVATION WAIVER.
549	549	(a) The department shall apply to the United States secretary of
550	550	health and human services to obtain a waiver under 42 U.S.C. Section
551	551	18052 to:
552	552	(1) waive any applicable provisions of the Patient
553	553	Protection and Affordable Care Act (Pub. L. No. 111-148) with
554	554	respect to health benefit plan coverage in this state;
555	555	(2) establish a reinsurance program in accordance with
556	556	an approved waiver; and
557	557	(3) maximize federal funding for the reinsurance
558	558	program for plan years beginning on or after the effective date of
559	559	the implementation of the program.
560	560	(b) The department may amend the waiver application as
561	561	necessary to carry out the provisions of this chapter.
562	562	(c) The department shall promptly notify the chairs of the
563	563	standing committees of the senate and house of representatives with
564	564	primary jurisdiction over appropriations and insurance of any
565	565	amendment to the waiver application and any federal actions taken
566	566	regarding the application.
567	567	(d) Not later than February 1, 2022, the department shall
568	568	make a draft of the application for the waiver under Subsection (a)
569	569	available for a public review and comment period of not less than 30
570	570	days. The department shall consider any comments in submitting the
571	571	final application. This subsection expires September 1, 2022.
572	572	Sec. 1511.302. IMPLEMENTATION OF WAIVER AND ESTABLISHMENT
573	573	OF REINSURANCE PROGRAM. (a) On approval by the United States
574	574	secretary of health and human services of the department's
575	575	application for a waiver under Section 1511.301, the department
576	576	shall establish and implement a reinsurance program for the
577	577	purposes of:
578	578	(1) stabilizing rates and premiums for health benefit
579	579	plans in the individual market; and
580	580	(2) providing greater financial certainty to
581	581	consumers of health benefit plans in this state.
582	582	(b) The reinsurance program under this subchapter is
583	583	considered to be a reinsurance entity for carrying out a
584	584	reinsurance program under the Patient Protection and Affordable
585	585	Care Act (Pub. L. No. 111-148) and its subsequent amendments.
586	586	Sec. 1511.303. OPERATION OF REINSURANCE PROGRAM. (a) The
587	587	department shall perform all appropriate and necessary functions to
588	588	operate the reinsurance program and effectuate the purposes for
589	589	which the reinsurance program was established in accordance with
590	590	the approved waiver under Section 1511.301. The functions may
591	591	include:
592	592	(1) establishing procedures for and performing
593	593	administrative and accounting operations of the reinsurance
594	594	program;
595	595	(2) seeking and receiving funding and maximizing
596	596	federal funding for the reinsurance program, including funding
597	597	from:
598	598	(A) the exchange authority;
599	599	(B) federal funding that is or may become
600	600	available to states to support the administration and
601	601	implementation of state-based reinsurance programs; and
602	602	(C) any other available sources;
603	603	(3) collecting data submissions and reinsurance
604	604	payment requests from eligible health benefit plan issuers;
605	605	(4) making reinsurance payments to eligible health
606	606	benefit plan issuers;
607	607	(5) resolving disputes related to the amount of
608	608	reinsurance payments;
609	609	(6) suing or being sued, including taking any legal
610	610	action necessary or proper to recover money for reinsurance
611	611	payments; and
612	612	(7) submitting invoices or other requests for money as
613	613	necessary or appropriate under the waiver.
614	614	(b) Except as prohibited under applicable federal law or
615	615	regulations, the department may, as may be necessary or appropriate
616	616	to carry out department duties, administer the reinsurance program
617	617	directly or through:
618	618	(1) a federal agency, an agency of another state, or
619	619	another state agency; or
620	620	(2) a contracted person or entity, including with a
621	621	legal, actuarial, or economic third-party administrator or other
622	622	person or entity, as the department determines appropriate, to
623	623	provide consultation services and technical assistance.
624	624	(c) A contracted person or entity under Subsection (b)(2)
625	625	shall submit regular reports to the department regarding the
626	626	person's or entity's performance, in the form and manner prescribed
627	627	by the department.
628	628	Sec. 1511.304. COORDINATION WITH EXCHANGE AUTHORITY. The
629	629	department shall coordinate with the exchange authority as
630	630	necessary to fund and operate the reinsurance program.
631	631	Sec. 1511.305. REINSURANCE PROGRAM TERMS. (a) After
632	632	consultation with all health benefit plan issuers participating in
633	633	the exchange, but not less than 60 days before the date on which
634	634	final rate filings for health benefit plans are required to be
635	635	submitted each year under Section 1511.309, the department shall
636	636	determine and adopt the attachment point, reinsurance cap, and
637	637	coinsurance rate applicable to the reinsurance program for the
638	638	following year.
639	639	(b) In determining the attachment point, reinsurance cap,
640	640	and coinsurance rate under Subsection (a), the department shall
641	641	seek to:
642	642	(1) manage the program within the total amount of
643	643	funding available to the department for the reinsurance program;
644	644	and
645	645	(2) with respect to the individual market:
646	646	(A) mitigate the impact of high-cost claims on
647	647	premium rates;
648	648	(B) stabilize or reduce premium rates; and
649	649	(C) increase participation in the market.
650	650	(c) The department shall, with respect to the adopted
651	651	attachment point, reinsurance cap, and coinsurance rate:
652	652	(1) publish notice of the terms:
653	653	(A) in the Texas Register; and
654	654	(B) on the department's Internet website; and
655	655	(2) electronically send notice of the terms to:
656	656	(A) the chairs of the standing committees of the
657	657	senate and house of representatives with primary jurisdiction over
658	658	appropriations and insurance; and
659	659	(B) each participating health benefit plan
660	660	issuer through a contact person or by e-mail, as identified by the
661	661	plan issuer.
662	662	(d) Not later than 10 business days after publication of
663	663	notice in the Texas Register, a health benefit plan issuer may
664	664	challenge and request a review of the department's determination of
665	665	the attachment point, reinsurance cap, and coinsurance rate.
666	666	(e) After the department has adopted the attachment point,
667	667	reinsurance cap, and coinsurance rate under Subsection (a), the
668	668	department may not, before or during the plan year for which those
669	669	terms are in effect, change the attachment point, reinsurance cap,
670	670	or coinsurance rate in a manner that is less favorable to the health
671	671	benefit plan issuers participating in the exchange at the time of
672	672	adoption.
673	673	Sec. 1511.306. REINSURANCE PAYMENTS. (a) A health benefit
674	674	plan issuer is eligible for a reinsurance payment if:
675	675	(1) the claims costs for an enrollee's covered
676	676	benefits during a plan year exceed the attachment point;
677	677	(2) the eligible health benefit plan issuer has
678	678	implemented and documented reasonable care management practices
679	679	for enrollees who are the subject of reinsurance claims through the
680	680	reinsurance program;
681	681	(3) the eligible health benefit plan issuer makes a
682	682	request for reinsurance payments in accordance with any
683	683	requirements established by the department, including requirements
684	684	regarding the format, structure, and timing for submission of
685	685	claims for reinsurance payments; and
686	686	(4) the eligible health benefit plan issuer
687	687	participated in the exchange, or is affiliated with an entity that
688	688	participated in the exchange, during the plan year in which the
689	689	claims costs for which a reinsurance payment is requested were
690	690	incurred.
691	691	(b) In calculating reinsurance payments due to a health
692	692	benefit plan issuer, the department must deduct from the relevant
693	693	claim costs all other available insurance payments applicable to a
694	694	claim, including insurance accessible through subrogation or
695	695	coordination of benefits.
696	696	(c) Payments to health benefit plan issuers must be
697	697	calculated and made on a pro rata basis.
698	698	Sec. 1511.307. REPORTING TO DEPARTMENT. A health benefit
699	699	plan issuer that requests a reinsurance payment under this chapter
700	700	must report to the department, in the form and manner prescribed by
701	701	the department, any information regarding enrollees covered by the
702	702	health benefit plan issuer necessary for the department to
703	703	calculate reinsurance payments.
704	704	Sec. 1511.308. REINSURANCE PAYMENT CLAIMS CONFIDENTIAL. A
705	705	claim for a reinsurance payment under this subchapter is
706	706	confidential and not subject to disclosure under Chapter 552,
707	707	Government Code.
708	708	Sec. 1511.309. EXCHANGE RATE FILINGS. A health benefit
709	709	plan issuer must identify and include the impact of reinsurance
710	710	payments under this subchapter in an annual rate filing for a health
711	711	benefit plan to be offered through the exchange. The rate filing
712	712	shall be submitted in the time and in the form and manner required
713	713	by the department.
714	714	Sec. 1511.310. RULES. The department may adopt any
715	715	necessary and appropriate rules to establish processes for the
716	716	settlement of reinsurance coverage claims and disbursement of
717	717	reinsurance payments.
718	718	Sec. 1511.311. REVIEW OF REINSURANCE PAYMENTS. A health
719	719	benefit plan issuer may request an administrative review of the
720	720	department's determination regarding the amount of a reinsurance
721	721	payment due to the issuer.
722	722	Sec. 1511.312. REINSURANCE PAYMENTS FROM FEDERAL MONEY.
723	723	Notwithstanding any other provision of this subchapter, the
724	724	department is not required to pay a reinsurance payment that would
725	725	be payable with federal money if the federal government does not
726	726	provide sufficient money for the reinsurance fund to fully
727	727	reimburse the amount of the reinsurance payment.
728	728	Sec. 1511.313. ANNUAL AUDIT. (a) The department shall have
729	729	an examination and audit of the reinsurance program conducted
730	730	annually by an independent certified public accounting firm. The
731	731	audit must:
732	732	(1) assess compliance with the requirements of this
733	733	subchapter; and
734	734	(2) identify any material weaknesses or significant
735	735	deficiencies and identify and implement solutions to correct those
736	736	weaknesses or deficiencies.
737	737	(b) Not later than December 31 of each year, the department
738	738	shall:
739	739	(1) post on the department's Internet website:
740	740	(A) the audit for the preceding year; and
741	741	(B) a summary of the audit, including any
742	742	identified material weaknesses or significant deficiencies and the
743	743	department's proposed solution for those weaknesses or
744	744	deficiencies; and
745	745	(2) provide to the secretary of the senate and the
746	746	chief clerk of the house of representatives an electronic link to
747	747	the web page on which the audit information in Subdivision (1) is
748	748	posted.
749	749	(c) The department shall pay for the cost of the annual
750	750	examination and audit under Subsection (a) with money from the
751	751	reinsurance fund.
752	752	Sec. 1511.314. ANNUAL REPORTS. (a) Not later than November
753	753	1 of the year following a plan year or 60 days after the final
754	754	distribution of reinsurance payments for the applicable plan year,
755	755	whichever is later, the department shall prepare a financial report
756	756	regarding the previous plan year. The report must include:
757	757	(1) the amount of money deposited into the reinsurance
758	758	fund;
759	759	(2) requests for reinsurance payments received from
760	760	eligible health benefit plan issuers;
761	761	(3) reinsurance payments made to eligible health
762	762	benefit plan issuers; and
763	763	(4) administrative and operational expenses incurred
764	764	for the reinsurance program.
765	765	(b) Not later than 60 days after rate filings required by
766	766	Section 1511.309 for the individual market are submitted, the
767	767	department shall prepare a report summarizing the quantifiable
768	768	impact of the reinsurance program on individual market rates for
769	769	the following plan year.
770	770	(c) The department shall:
771	771	(1) electronically submit the reports required under
772	772	this section to the lieutenant governor, the speaker of the house of
773	773	representatives, and the chairs of the standing committees of the
774	774	senate and house of representatives with primary jurisdiction over
775	775	appropriations and insurance; and
776	776	(2) post the reports on the department's Internet
777	777	website.
778	778	Sec. 1511.315. REPORTING BY HEALTH BENEFIT PLAN ISSUERS.
779	779	(a) A health benefit plan issuer must report information and
780	780	provide access to records requested by the department as the
781	781	department determines necessary for purposes of:
782	782	(1) preparing the state innovation waiver application
783	783	under Section 1511.301;
784	784	(2) determining reinsurance program terms under
785	785	Section 1511.305;
786	786	(3) determining the amount of reinsurance payments due
787	787	to a health benefit plan issuer;
788	788	(4) monitoring costs and revenue associated with the
789	789	reinsurance program;
790	790	(5) administering the reinsurance program; and
791	791	(6) ensuring compliance with all applicable federal
792	792	and state laws with respect to the reinsurance program.
793	793	(b) A health benefit plan issuer must provide information or
794	794	records requested under Subsection (a) by the department not later
795	795	than 30 days after the date that the plan issuer receives the
796	796	request or, if necessary for the department to comply with a request
797	797	from a federal or state agency, an earlier date as specified in the
798	798	request.
799	799	(c) Information and records provided to the department
800	800	under this section:
801	801	(1) may only be used by the department for the purposes
802	802	described by Subsection (a); and
803	803	(2) are confidential and not subject to disclosure
804	804	under Chapter 552, Government Code.
805	805	Sec. 1511.316. REINSURANCE FUND. (a) The reinsurance fund
806	806	is established as a revolving fund in the state treasury outside the
807	807	general revenue fund.
808	808	(b) The fund shall be administered by the department for the
809	809	purpose of the reinsurance program under this subchapter, including
810	810	the deposit of federal money available for the reinsurance program
811	811	and all other money received under or distributed in accordance
812	812	with this subchapter.
813	813	(c) Money from the fund may be used to:
814	814	(1) implement and operate the reinsurance program; and
815	815	(2) make reinsurance payments to eligible health
816	816	benefit plan issuers under the reinsurance program.
817	817	(d) In spending money from the fund, available federal money
818	818	must be used first.
819	819	(e) Interest or other income from the investment of the fund
820	820	shall be deposited to the credit of the fund.
821	821	Sec. 1511.317. REINSURANCE PROGRAM EXPENDITURES. (a) All
822	822	costs and expenses incurred from the reinsurance program must be
823	823	paid from the reinsurance fund, including compensation of employees
824	824	and independent contractors or consultants hired by the department
825	825	for purposes of operating the reinsurance program.
826	826	(b) Each fiscal year, the total amount of annual
827	827	expenditures from the reinsurance fund, including administrative
828	828	and consulting expenses, may not exceed the total amount of federal
829	829	money and money from other sources expected to be allocated to the
830	830	reinsurance fund for that fiscal year.
831	831	Sec. 1511.318. TEMPORARY EXEMPTION FROM STATE PURCHASING
832	832	PROCEDURES. (a) For purposes of implementing and operating the
833	833	reinsurance program under this subchapter, the department is not
834	834	subject to state purchasing or procurement requirements under
835	835	Subtitle D, Title 10, Government Code, or any other law. A contract
836	836	or agreement entered into before the expiration of this section may
837	837	not be for a term of more than five years.
838	838	(b) This section expires January 1, 2023.
839	839	SUBCHAPTER H. ENFORCEMENT
840	840	Sec. 1511.351. ENFORCEMENT REMEDIES. (a) On satisfactory
841	841	evidence of a violation of this chapter by a health benefit plan
842	842	issuer or other person, the commissioner may, at the commissioner's
843	843	discretion, impose any of the following enforcement remedies:
844	844	(1) suspension or revocation of the person's license
845	845	or certificate of authority;
846	846	(2) refusal to issue a new license or certificate of
847	847	authority to the person, for a period not to exceed one year; or
848	848	(3) a fine not to exceed $5,000 for each violation,
849	849	except that the fine may be up to $10,000 if the violation was
850	850	intentional.
851	851	(b) Fines imposed by the commissioner against an individual
852	852	health benefit plan issuer may not exceed an aggregate amount of
853	853	$500,000 during a single calendar year.
854	854	(c) Fines imposed against a person not described by
855	855	Subsection (b) may not exceed an aggregate amount of $100,000
856	856	during a single calendar year.
857	857	(d) The enforcement remedies under Subsection (a) are in
858	858	addition to any other remedies or penalties that may be imposed
859	859	under other law.
860	860	SUBCHAPTER I. TRANSITION PERIOD FOR ESTABLISHMENT OF EXCHANGE
861	861	Sec. 1511.401. BUDGET FOR EXCHANGE. (a) In developing the
862	862	exchange, the exchange authority, in coordination with the
863	863	department, shall create a budget to fully implement the purposes
864	864	and functions of the exchange authority and the exchange under this
865	865	chapter.
866	866	(b) The exchange authority shall conduct a fiscal analysis
867	867	to determine ways in which the exchange authority can achieve the
868	868	purposes of this chapter while spending less on exchange user fees
869	869	than was spent for the federally facilitated exchange. The
870	870	exchange authority must include in the fiscal analysis any funding
871	871	sources available for specific purposes or functions under this
872	872	chapter, including federal Medicaid matching funds.
873	873	Sec. 1511.402. ENROLLMENT INCREASE TARGETS. (a) For the
874	874	period of transition during which the exchange is being established
875	875	and for the following five years, the department shall establish
876	876	clearly stated numeric targets of increased enrollment in the
877	877	exchange, the state Medicaid program, and the child health plan
878	878	program under Chapter 62, Health and Safety Code.
879	879	(b) The department shall take immediate steps to increase
880	880	enrollment, including by lengthening open enrollment periods and
881	881	streamlining special enrollment periods.
882	882	Sec. 1511.403. INCREASED ENROLLMENT ADVISORY COMMITTEE.
883	883	(a) The department shall create an advisory committee to:
884	884	(1) study ways to increase enrollment in this state;
885	885	and
886	886	(2) help develop the five-year plan to reach the
887	887	numeric targets established under Section 1511.402.
888	888	(b) The department shall provide funding to the advisory
889	889	committee for the purpose of employing staff and contracting with a
890	890	person or entity to provide expertise, actuarial services, or other
891	891	services as needed.
892	892	(c) The advisory committee shall provide recommendations to
893	893	the department and the exchange authority regarding strategies for
894	894	increasing enrollment, including recommending the percentage of
895	895	the exchange user fee imposed on premiums for health benefit plans
896	896	on the exchange that the exchange authority should set aside to
897	897	enhance subsidies for health benefit plans.
898	898	Sec. 1511.404. EXPIRATION OF SUBCHAPTER. This subchapter
899	899	expires September 1, 2027.
900	900	SECTION 2. (a) As soon as practicable after the effective
901	901	date of this Act, but not later than October 1, 2021, the governor
902	902	shall appoint the initial members of the board of directors of the
903	903	Texas Health Insurance Exchange Authority. The initial board
904	904	members shall draw lots to achieve staggered terms, with two of the
905	905	directors serving a term expiring February 1, 2023, two of the
906	906	directors serving a term expiring February 1, 2025, and three of the
907	907	directors serving a term expiring February 1, 2027.
908	908	(b) As soon as practicable after the effective date of this
909	909	Act, but not later than March 1, 2022, the board of directors of the
910	910	Texas Health Insurance Exchange Authority shall adopt rules and
911	911	procedures necessary to implement Chapter 1511, Insurance Code, as
912	912	added by this Act.
913	913	(c) Until the board of directors of the Texas Health
914	914	Insurance Exchange Authority adopts rules under Subsection (b) of
915	915	this section, the exchange authority shall operate the exchange in
916	916	accordance with:
917	917	(1) any applicable federal rules, regulations, or
918	918	guidance; or
919	919	(2) interim state guidelines consistent with Chapter
920	920	1511, Insurance Code, as added by this Act.
921	921	SECTION 3. This Act takes effect immediately if it receives
922	922	a vote of two-thirds of all the members elected to each house, as
923	923	provided by Section 39, Article III, Texas Constitution. If this
924	924	Act does not receive the vote necessary for immediate effect, this
925	925	Act takes effect September 1, 2021.