88R3234 MEW-F
By: Oliverson H.B. No. 700
A BILL TO BE ENTITLED
AN ACT
relating to creation of the Texas Health Insurance Exchange;
authorizing an assessment.
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
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1511.001. DEFINITIONS. In this chapter:
(1) "Board" means the board of directors of the
exchange.
(2) "Exchange" means the Texas Health Insurance
Exchange.
(3) "Executive commissioner" means the executive
commissioner of the Health and Human Services Commission.
(4) "Qualified health plan" means a health benefit
plan that has been certified by the board as meeting the criteria
established under Section 1311(c), Patient Protection and
Affordable Care Act (42 U.S.C. Section 18031(c)).
(5) "Secretary" means the secretary of the United
States Department of Health and Human Services.
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; or
(4) medical payment insurance coverage provided under
a motor vehicle insurance policy.
Sec. 1511.003. TREATMENT OF EMPLOYERS. (a) For purposes of
this chapter, "small employer" means a person who employed at least
two, and an average of not more than 50 employees during the
preceding calendar year. This subsection expires December 31,
2025.
(b) All persons treated as a single employer under Section
414(b), (c), (m), or (o), Internal Revenue Code of 1986, are single
employers for purposes of this chapter.
(c) An employer and any predecessor employer are a single
employer for purposes of this chapter.
(d) In determining the number of employees of an employer
under this section, the number of employees:
(1) includes part-time employees and employees who are
not eligible for coverage through the employer; and
(2) for an employer that did not have employees during
the entire preceding calendar year, is the average number of
employees that the employer is reasonably expected to employ on
business days in the current calendar year.
(e) A small employer that makes enrollment in qualified
health plans available to its employees through the exchange and
ceases to be a small employer by reason of an increase in the number
of its employees continues to be a small employer for purposes of
this chapter as long as it continuously makes enrollment through
the exchange available to its employees.
Sec. 1511.004. RULEMAKING AUTHORITY. 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 secretary under the Patient
Protection and Affordable Care Act (Pub. L. No. 111-148).
Sec. 1511.005. AGENCY COOPERATION. (a) The exchange, 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 shall cooperate and coordinate with the
Health and Human Services Commission to facilitate a seamless user
experience.
Sec. 1511.006. EXEMPTION FROM STATE TAXES AND FEES. The
exchange is not subject to any state tax, regulatory fee, or
surcharge, including a premium or maintenance tax or fee.
Sec. 1511.007. COMPLIANCE WITH FEDERAL LAW. The exchange
shall comply with all applicable federal law and regulations.
Sec. 1511.008. EXEMPTION FROM STATE PURCHASING PROCEDURES.
The exchange is not subject to state purchasing or procurement
requirements under Subtitle D, Title 10, Government Code, or any
other law.
SUBCHAPTER B. ESTABLISHMENT AND GOVERNANCE
Sec. 1511.051. ESTABLISHMENT. The Texas Health Insurance
Exchange is established as an American Health Benefit Exchange and
a Small Business Health Options Program (SHOP) Exchange authorized
and required by Section 1311, Patient Protection and Affordable
Care Act (42 U.S.C. Section 18031).
Sec. 1511.052. GOVERNANCE OF EXCHANGE; BOARD MEMBERSHIP.
(a) The exchange is governed by a board of directors.
(b) The board consists of 11 members as follows:
(1) five members appointed by the governor, two of
whom have experience in the health insurance industry;
(2) three additional members appointed by the governor
from a list of nominees submitted by the speaker of the house of
representatives; and
(3) three members appointed by the lieutenant
governor.
(c) In making appointments or nominations under this
section, the governor, lieutenant governor, and speaker of the
house of representatives shall attempt to make appointments and
nominations that increase the board's diversity of expertise.
Sec. 1511.053. PRESIDING OFFICER. The board shall annually
designate one member of the board to serve as presiding officer.
Sec. 1511.054. TERMS; VACANCY. (a) Appointed members of
the board serve two-year terms, with the members' terms expiring
February 1 of each odd-numbered year.
(b) The appropriate appointing authority 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. 1511.055. CONFLICT OF INTEREST. (a) Any board member
or a member of a committee formed by the board with a direct
interest in a matter, personally or through an employer, before the
board shall abstain from deliberations and actions on the matter in
which the conflict of interest arises and shall further abstain
from any vote on the matter, and may not otherwise participate in a
decision on the matter.
(b) Each board member shall file a conflict of interest
statement and a statement of ownership interests with the board to
ensure disclosure of all existing and potential personal interests
related to board business.
(c) A member of the board or of the staff of the exchange may
not be employed by, affiliated with, a consultant to, a member of
the board of directors of, or otherwise a representative of a health
benefit plan issuer or other insurer, an agent or broker, a health
care provider, or a health care facility or health clinic while
serving on the board or on the staff of the exchange.
(d) A member of the board or of the staff of the exchange may
not be a member, a board member, or an employee of a trade
association of health benefit plan issuers, health facilities,
health clinics, or health care providers while serving on the board
or on the staff of the exchange.
(e) A member of the board or of the staff of the exchange may
not be a health care provider unless the member receives no
compensation for rendering services as a health care provider and
does not have an ownership interest in a professional health care
practice.
Sec. 1511.056. GENERAL DUTIES OF BOARD MEMBERS. (a) Each
board member has the responsibility and duty to meet the
requirements of this title and applicable state and federal laws
and regulations, to serve the public interest of the individuals
and small businesses seeking health benefit plan coverage through
the exchange, and to ensure the operational well-being and fiscal
solvency of the exchange.
(b) A member of the board may not make, participate in
making, or in any way attempt to use the board member's official
position to influence the making of any decision that the board
member knows or has reason to know will have a material financial
effect, distinguishable from its effect on the public generally, on
the board member or the board member's immediate family, or on:
(1) any source of income, other than gifts and loans by
a commercial lending institution in the regular course of business
on terms available to the public generally, aggregating $250 or
more in value, provided or promised to the member within the 12
months immediately preceding the date the decision is made; or
(2) any business entity in which the member is a
director, officer, partner, trustee, or employee, or holds any
position of management.
Sec. 1511.057. REIMBURSEMENT. A member of the board is not
entitled to compensation but is entitled to reimbursement for
travel or other expenses incurred while performing duties as a
board member in the amount provided by the General Appropriations
Act for state officials.
Sec. 1511.058. MEMBER'S IMMUNITY. (a) A member of the
board is not liable for an act or omission made in good faith in the
performance of powers and duties under this chapter.
(b) A cause of action does not arise against a member of the
board for an act or omission described by Subsection (a).
Sec. 1511.059. OPEN RECORDS AND OPEN MEETINGS. The board is
subject to Chapters 551 and 552, Government Code.
Sec. 1511.060. RECORDS. The board shall keep records of the
board's proceedings for at least seven years.
SUBCHAPTER C. POWERS AND DUTIES OF EXCHANGE
Sec. 1511.101. 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 in
carrying out its responsibilities and functions.
(b) The executive director shall organize, administer, and
manage the operations of the exchange. The executive director may
hire other employees as necessary to carry out the responsibilities
of the exchange.
(c) The exchange 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.
Sec. 1511.102. ADVISORY COMMITTEE. The board may appoint
an advisory committee to allow for the involvement of the health
care and health insurance industries and other stakeholders in the
operation of the exchange. The advisory committee may provide
expertise and recommendations to the board but may not adopt rules
or enter into contracts on behalf of the exchange.
Sec. 1511.103. CONTRACTS. (a) Except as provided by
Subsection (b), the exchange may enter into any contract that the
exchange considers necessary to implement or administer this
chapter, including a contract with the department, the Health and
Human Services Commission, or an entity that has experience in
individual and small group health insurance, benefit
administration, or other experience relevant to the
responsibilities assumed by the entity, to perform functions or
provide services in connection with the operation of the exchange.
(b) This exchange may not enter into a contract with a
health benefit plan issuer under this section.
Sec. 1511.104. INFORMATION SHARING AND CONFIDENTIALITY.
The exchange may enter into information-sharing agreements with
federal and state agencies to carry out the exchange's
responsibilities under this chapter. 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. 1511.105. MEMORANDUM OF UNDERSTANDING. The exchange
shall enter into a memorandum of understanding with the department
and the Health and Human Services Commission regarding the exchange
of information and the division of regulatory functions among the
exchange, the department, and the commission.
Sec. 1511.106. LEGAL ACTION. (a) The exchange may sue or
be sued.
(b) The exchange may take any legal action necessary to
recover or collect amounts due the exchange, including:
(1) assessments due the exchange;
(2) amounts erroneously or improperly paid by the
exchange; and
(3) amounts paid by the exchange as a mistake of fact
or law.
Sec. 1511.107. FUNCTIONS. The exchange shall perform all
functions and duties related to state-based exchanges required by
applicable state and federal law.
Sec. 1511.108. HEALTH CARE PROVIDER DIRECTORY AND
INFORMATION. (a) The exchange may provide an integrated and
uniform consumer directory of health care providers indicating
which health benefit plan issuers the providers contract with and
whether the providers are currently accepting new patients.
(b) The exchange may establish methods by which health care
providers may transmit relevant information directly to the
exchange, rather than through an issuer.
Sec. 1511.109. STATE-ADMINISTERED SUBSIDY PROGRAM. (a) Not
later than July 1, 2024, the exchange, in coordination with the
department, shall review and make recommendations to the Senate
Business and Commerce Committee and the House of Representatives
Insurance Committee regarding the feasibility of implementing a
state-administered subsidy program for individuals, families, and
small employers to purchase health benefit plan coverage.
(b) With the input and approval of the Senate Business and
Commerce Committee and the House of Representatives Insurance
Committee, the exchange may develop and implement a
state-administered subsidy program.
Sec. 1511.110. FEDERAL WAIVERS. (a) Not later than July 1,
2024, the exchange, in coordination with the department, shall
review and make recommendations to the Senate Business and Commerce
Committee and the House of Representatives Insurance Committee
regarding the submission of a state innovation waiver that may be
granted under Section 1332, Patient Protection and Affordable Care
Act (42 U.S.C. Section 18052), with respect to health benefit plan
coverage or health insurance products in this state, including
recommendations on:
(1) risk stabilization strategies aimed at addressing
risk associated with individuals with high health care costs;
(2) individual coverage health reimbursement
arrangements for employees of large and small businesses in this
state;
(3) financial assistance for different types of health
benefit plan coverage, including non-qualified health plans for
individuals purchasing coverage; and
(4) the establishment of account-based premium
credits for individuals and families enrolled in coverage through
the exchange.
(b) With the input and approval of the Senate Business and
Commerce Committee and the House of Representatives Insurance
Committee, the exchange may submit one or more applications to the
secretary to obtain a waiver of any applicable provisions of the
Patient Protection and Affordable Care Act (Pub. L. No. 111-148).
(c) On approval by the secretary of a waiver under
Subsection (b), the exchange may implement the approved waiver.
SUBCHAPTER D. ASSESSMENTS FOR OPERATION OF EXCHANGE
Sec. 1511.151. ASSESSMENTS. (a) The exchange may charge
the issuers of health benefit plans in this state, including
qualified health plans, an assessment as reasonable and necessary
to cover the exchange's organizational and operating expenses and
expenses related to health coverage programs associated with the
exchange. Assessments must be determined annually. The exchange
may charge interest for late assessments.
(b) The commissioner shall adopt rules to implement and
enforce the assessment of health benefit plan issuers under this
section.
Sec. 1511.152. GRANTS AND FEDERAL FUNDS. (a) The exchange
may accept a grant from a public or private organization and may
spend those funds to pay the costs of program administration and
operations.
(b) The exchange may accept federal funds and shall use
those funds in compliance with applicable federal law, regulations,
and guidelines.
Sec. 1511.153. USE OF EXCHANGE ASSETS; ANNUAL REPORT. (a)
The assets of the exchange may be used only to pay the costs:
(1) of the administration and operation of the
exchange; and
(2) associated with any health coverage programs
associated with the exchange.
(b) The exchange shall prepare annually a complete and
detailed written report accounting for all funds received and
disbursed by the exchange during the preceding fiscal year. The
report must meet any reporting requirements provided in the General
Appropriations Act, regardless of whether the exchange receives any
funds under that Act. The exchange shall submit the report to the
governor, the legislature, the commissioner, and the executive
commissioner not later than January 31 of each year.
(c) General revenue may not be appropriated for the
exchange.
Sec. 1511.154. PUBLICATION OF FINANCIAL INFORMATION. The
exchange shall publish the average costs of licensing, regulatory
fees, and any other payments required by the exchange, and the
administrative costs of the exchange, on an Internet website to
educate consumers on those costs. This information must include
information on losses due to waste, fraud, and abuse.
SUBCHAPTER E. TRUST FUND
Sec. 1511.201. TRUST FUND. (a) The exchange fund is
established as a special trust fund outside of the state treasury in
the custody of the comptroller separate and apart from all public
money or funds of this state.
(b) The exchange may deposit assessments, gifts or
donations, and any federal funding obtained by the exchange in the
exchange fund in accordance with procedures established by the
comptroller.
(c) Interest or other income from the investment of the fund
shall be deposited to the credit of the fund.
SECTION 2. Effective January 1, 2026, Section 1511.003,
Insurance Code, as added by this Act, is amended by adding
Subsection (a-1) to read as follows:
(a-1) For purposes of this chapter, "small employer" means a
person who employed an average of not more than 100 employees during
the preceding calendar year.
SECTION 3. (a) As soon as practicable after the effective
date of this Act, but not later than October 31, 2023, the governor
and lieutenant governor shall appoint the initial members of the
board of directors of the Texas Health Insurance Exchange.
(b) As soon as practicable after the appointments required
by Subsection (a) of this section are made, but not later than
November 30, 2023, the board of directors of the Texas Health
Insurance Exchange shall hold a special meeting to discuss the
adoption of rules and procedures necessary to implement Chapter
1511, Insurance Code, as added by this Act.
(c) As soon as practicable after the effective date of this
Act, but not later than January 31, 2024, the board of directors of
the Texas Health Insurance Exchange shall adopt rules and
procedures necessary to implement Chapter 1511, Insurance Code, as
added by this Act.
(d) If, after the effective date of this Act but before the
initial members of the board of directors of the Texas Health
Insurance Exchange have been appointed as required by Subsection
(a) of this section, the Texas Department of Insurance becomes
aware of any planning and establishment grants as described by
Section 1311, Patient Protection and Affordable Care Act (42 U.S.C.
Section 18031), or any other public or private funding source, the
department may apply for funding from that source.
(e) The exchange may not begin operations without adequate
funding.
(f) The board of directors of the Texas Health Insurance
Exchange may adopt rules on an emergency basis in accordance with
Section 2001.034, Government Code. Notwithstanding Section
2001.034(c), Government Code, a rule adopted under this subsection
may remain in effect until January 1, 2027. Rules adopted under
this subsection shall be deemed necessary for the immediate
preservation of the public peace, health, safety, and general
welfare and an additional finding under Sections 2001.034(a)(1) and
(2), Government Code, is not required. The authority to adopt rules
under this subsection expires January 1, 2027.
SECTION 4. 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, 2023.