BILL ANALYSIS C.S.H.B. 139 By: Dean Insurance Committee Report (Substituted) BACKGROUND AND PURPOSE According to the U.S. Census Bureau, Texas has the largest percentage of uninsured individuals of any state at nearly twice the national average. A Texas 2036 report states that 16.6 percent of the Texas population, 4.9 million people, lack health insurance and as a result are skipping critical health care, utilizing emergency services, and taking on high-interest debt or not paying the debt at all. According to the report, the majority of these uninsured people are actually employed. The bill author has informed the committee that many Texas employers, despite their desire to provide insurance, cannot afford to do so. A Texas Association of Business survey has shown that 75 percent of Texas employers that do not offer health insurance indicate that the cost of providing the insurance is the primary reason they do not and that over two-thirds of the respondents would like the state to give them the opportunity to purchase a more affordable option. Insurance is expensive in Texas. According to Forbes, Texas has the fifth highest health care costs in the nation when comparing premiums for employer-provided health insurance plus deductibles for employer-provided health insurance. Additionally, Texas has many mandates. Based on information from the last time the Texas Department of Insurance released data in 2017, Texas had more benefit mandates than every other state except two, indicating that a plan with more mandates may be more expensive. Therefore, an option to offer less coverage may be less expensive, increasing the number of Texans who can afford some insurance. C.S.H.B. 139 seeks to address this issue for the employed but uninsured population by providing employers with another health insurance option that would be more affordable and customized to what each employer's workforce needs, while still meeting all federally required essential health benefits. To do this, the bill creates as such an option a group health benefit plan, known as an employer choice of benefits plan, offered to an employer that, wholly or partly, does not offer or provide state-mandated health benefits but that provides coverage with fewer state-imposed mandates and regulations that still meets all federal requirements while maintaining patient and provider protections. CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision. RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is expressly granted to the commissioner of insurance in SECTION 5 of this bill. ANALYSIS C.S.H.B. 139 amends the Insurance Code to authorize a health benefit plan issuer to offer one or more employer choice of benefits plans, as later defined. Such a plan must include coverage for an essential health benefits package as determined by the commissioner of insurance based on specified federal regulations regarding essential health benefits requirements, including the following: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventative and wellness services and chronic disease management; and pediatric services, including oral and vision care. The bill prohibits such a plan from including a preexisting condition exclusion. The bill requires the commissioner to adopt rules necessary to implement the bill's provisions regarding such plans. C.S.H.B. 139 requires each employer choice of benefits plan and each written application to enroll in such a plan to contain language, as specified by the bill, at the beginning of the document in bold type giving notice to the enrollee that the plan does not provide all coverage or features normally required in health benefit plans in Texas. Moreover, the bill requires a health benefit plan issuer, before the issuer may contract to provide an employer choice of benefits plan to an employer, to provide the employer with a written disclosure statement that does the following: acknowledges that the employer health benefit plan being contracted for does not provide some or all state-mandated health benefits; and lists the state-mandated health benefits not included in the plan. Furthermore, the bill requires an employer entering into a contract for an employer choice of benefits plan to sign the disclosure statement and return the statement to the issuer. The bill requires the health benefit plan issuer to retain the signed disclosure statement in the health benefit plan issuer's records and, on request from the commissioner, provide the signed disclosure statement to the Texas Department of Insurance (TDI). C.S.H.B. 139 requires a health benefit plan issuer that offers one or more employer choice of benefits plans to also offer employers at least one group health benefit plan that provides state‑mandated health benefits and is otherwise authorized under the Insurance Code. The bill exempts an employer choice of benefits plan provided under the bill's provisions from any other insurance law that does not expressly apply to the plan or the bill's provisions. However, the bill establishes that an employer choice of benefits plan is not exempt from the requirements imposed by the following provisions of the Insurance Code: provisions relating to TDI generally; TDI's funds, fees, and taxes; the regulation of solvency; the protection of consumer interests; the organization of insurers and related entities; life and health coverages; and the regulation of professionals, as applicable, except that an employer choice of benefits plan offered by a health maintenance organization (HMO) is exempt from requirements imposed by the Texas Health Maintenance Organization Act to the extent that those requirements conflict with the bill's provisions regarding employer choice of benefits plans; statutory provisions relating to the contents of evidence of coverage, commissioner approval, and schedule of charges under benefits provided by HMOs; and statutory provisions relating to the identification card or other similar document or other information issued to an enrollee by an HMO or an issuer of an exclusive provider benefit plan, preferred provider benefit plan, or health benefit plan that provides pharmacy benefits to enrollees. C.S.H.B. 139 defines the following terms for purposes of the bill's provisions relating to the employer choice of benefits plans: "employer choice of benefits plan" as a group health benefit plan offered to an employer that, wholly or partly, does not offer or provide state-mandated health benefits, but that provides creditable coverage as defined by statutory provisions establishing the type of plan, policy, evidence of coverage, program, or risk pool under which an individual's coverage is creditable and by reference to the meaning assigned to that term under the preexisting condition provision of the Health Insurance Portability and Availability Act; "health benefit plan issuer" as any entity authorized under the Insurance Code or another state insurance law to provide health insurance or health benefits in Texas, including an insurance company and an HMO operating under the Texas Health Maintenance Organization Act; and "state-mandated health benefits" as coverage or another feature required under the Insurance Code or other state law to be provided in a group health benefit plan that meets the following criteria: o includes coverage for specific health care services or benefits; o places limitations or restrictions on deductibles, coinsurance, copayments, or any annual or lifetime maximum benefit amounts, including limitations provided by commissioner rule; o includes a specific category of licensed health care practitioner from whom an enrollee is entitled to receive care; o requires standard provisions or rights that are unrelated to a specific health illness, injury, or condition of an enrollee; o requires the health benefit plan to provide coverage for health care services or benefits in excess of federal requirements; or o is a requirement for which an exemption is provided under the bill's provisions. C.S.H.B. 139 makes the following Insurance Code provisions applicable to a plan offered under the bill: statutory provisions, as applicable to group accident and health insurance, requiring an employer to provide certain statements and notices regarding an applicable benefit plan; and statutory provisions relating to balance billing prohibitions and out-of-network claim dispute resolution for certain plans. C.S.H.B. 139 repeals the following provisions of the Health Insurance Portability and Availability Act with respect to coverage under small employer health benefit plans: the provision, with respect to a small employer health benefit plan issuer, that does the following: o requires the issuer to offer a standard health benefit plan as authorized by provisions of the Insurance Code governing consumer choice of benefits plans, including consumer choice of benefits health insurance plans and consumer choice of benefits HMO plans; o authorizes the issuer to offer to a small employer additional benefit riders to the standard health benefit plan or to design and offer standard health benefit plans with additional mandatory benefits; and o requires the issuer to also offer to a small employer at least one other health benefit plan authorized under the Insurance Code that provides state-mandated health benefits; and the provision, with respect to an HMO, that does the following: o requires the HMO to offer at least one state-approved basic health care plan that complies with the following laws and rules adopted under those laws and authorizes the HMO to offer additional such plans: the Health Insurance Portability and Availability Act; the Texas Health Maintenance Organization Act; managed care provisions governing the benefits provided by HMOs, evidence of coverage, and certain related charges; managed care provisions governing the delegation of certain functions by an HMO; provisions regarding the coverage of children; provisions regarding the credentialing of physicians and providers by an HMO; provisions governing consumer choice of benefits under HMO plans; and provisions of federal law setting out applicable HMO requirements for basic and supplemental health services to its members; o requires the HMO to offer a standard health benefit plan under provisions regarding consumer choice of benefits under HMO plans and authorizes the HMO to offer additional benefit riders to the standard health benefit plan or offer standard health benefit plans with additional mandatory benefits; and o authorizes the HMO to offer a point-of-service contract in connection with an insurer that includes optional coverage for out-of-area services, emergency care, or out-of-network care. C.S.H.B. 139 repeals the following provisions of the Insurance Code: Section 1501.213(a); Section 1501.252; Section 1501.254; Section 1501.255; and Section 1501.259. EFFECTIVE DATE On passage, or, if the bill does not receive the necessary vote, September 1, 2025. COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 139 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. The substitute includes provisions absent from the introduced making the following Insurance Code provisions applicable to an employer choice of benefits plan offered under the bill's provisions: statutory provisions, as applicable to group accident and health insurance, requiring an employer to provide certain statements and notices regarding an applicable benefit plan; and statutory provisions relating to provisions governing balance billing prohibitions and out-of-network claim dispute resolutions for certain plans. The substitute does not include the provisions present in the introduced version's definition of "health benefit plan issuer" specifying that the term includes the following: a group hospital service corporation operating under applicable state law governing such corporations; and a stipulated premium company operating under applicable state law governing the certification of certain nonprofit health corporations. The substitute and the introduced both define "state-mandated health benefits," but they differ as follows with respect to the coverages or features defined as being provided in a group health benefit plan: the substitute describes one of the coverages of a mandated benefit as one that requires the plan to provide coverage for health care services or benefits in excess of federal requirements, whereas the introduced described it as requiring the plan to exceed federal requirements but without specification; and the substitute includes as one of the features of a mandated benefit plan a feature that is a requirement for which an exemption is provided under the bill's provisions, whereas the introduced did not include this feature. Both the substitute and the introduced include a substantially similar provision requiring coverage for the same essential health benefits as defined by the applicable federal regulation and federal law. The substitute specifies that the coverage is for an essential health benefits package as determined by the commissioner of insurance based on the specified federal law and listed those essential benefits, whereas the introduced did not require that determination by the commissioner and did not list the benefits. Both the substitute and the introduced set out the contents of a required written notice to enrollees that is substantially similar in its descriptions of a plan. The substitute refers to coverage or features that the plan does not provide, whereas the introduced referred to state‑mandated health benefits that the plan does not provide. Both the substitute and the introduced require an employer entering into a contract for a plan to sign and return to the issuer a disclosure statement. The substitute makes the requirement applicable to any such contract, but the introduced made it applicable only to an initial contract. Both the substitute and the introduced exempt a plan for any other insurance law that does not expressly apply to either the plan or the bill's provisions establishing the plan. The introduced also exempted a plan from common law, but the substitute does not include that exemption for a plan. The substitute includes a provision absent from the introduced setting out the Insurance Code provisions from which a plan is not exempt. The substitute repeals certain provisions of the Health Insurance Portability and Availability Act with respect to coverage under small employer health benefit plans, which the introduced did not.
BILL ANALYSIS
# BILL ANALYSIS
C.S.H.B. 139
By: Dean
Insurance
Committee Report (Substituted)
C.S.H.B. 139
By: Dean
Insurance
Committee Report (Substituted)
BACKGROUND AND PURPOSE According to the U.S. Census Bureau, Texas has the largest percentage of uninsured individuals of any state at nearly twice the national average. A Texas 2036 report states that 16.6 percent of the Texas population, 4.9 million people, lack health insurance and as a result are skipping critical health care, utilizing emergency services, and taking on high-interest debt or not paying the debt at all. According to the report, the majority of these uninsured people are actually employed. The bill author has informed the committee that many Texas employers, despite their desire to provide insurance, cannot afford to do so. A Texas Association of Business survey has shown that 75 percent of Texas employers that do not offer health insurance indicate that the cost of providing the insurance is the primary reason they do not and that over two-thirds of the respondents would like the state to give them the opportunity to purchase a more affordable option. Insurance is expensive in Texas. According to Forbes, Texas has the fifth highest health care costs in the nation when comparing premiums for employer-provided health insurance plus deductibles for employer-provided health insurance. Additionally, Texas has many mandates. Based on information from the last time the Texas Department of Insurance released data in 2017, Texas had more benefit mandates than every other state except two, indicating that a plan with more mandates may be more expensive. Therefore, an option to offer less coverage may be less expensive, increasing the number of Texans who can afford some insurance. C.S.H.B. 139 seeks to address this issue for the employed but uninsured population by providing employers with another health insurance option that would be more affordable and customized to what each employer's workforce needs, while still meeting all federally required essential health benefits. To do this, the bill creates as such an option a group health benefit plan, known as an employer choice of benefits plan, offered to an employer that, wholly or partly, does not offer or provide state-mandated health benefits but that provides coverage with fewer state-imposed mandates and regulations that still meets all federal requirements while maintaining patient and provider protections.
CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is expressly granted to the commissioner of insurance in SECTION 5 of this bill.
ANALYSIS C.S.H.B. 139 amends the Insurance Code to authorize a health benefit plan issuer to offer one or more employer choice of benefits plans, as later defined. Such a plan must include coverage for an essential health benefits package as determined by the commissioner of insurance based on specified federal regulations regarding essential health benefits requirements, including the following: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventative and wellness services and chronic disease management; and pediatric services, including oral and vision care. The bill prohibits such a plan from including a preexisting condition exclusion. The bill requires the commissioner to adopt rules necessary to implement the bill's provisions regarding such plans. C.S.H.B. 139 requires each employer choice of benefits plan and each written application to enroll in such a plan to contain language, as specified by the bill, at the beginning of the document in bold type giving notice to the enrollee that the plan does not provide all coverage or features normally required in health benefit plans in Texas. Moreover, the bill requires a health benefit plan issuer, before the issuer may contract to provide an employer choice of benefits plan to an employer, to provide the employer with a written disclosure statement that does the following: acknowledges that the employer health benefit plan being contracted for does not provide some or all state-mandated health benefits; and lists the state-mandated health benefits not included in the plan. Furthermore, the bill requires an employer entering into a contract for an employer choice of benefits plan to sign the disclosure statement and return the statement to the issuer. The bill requires the health benefit plan issuer to retain the signed disclosure statement in the health benefit plan issuer's records and, on request from the commissioner, provide the signed disclosure statement to the Texas Department of Insurance (TDI). C.S.H.B. 139 requires a health benefit plan issuer that offers one or more employer choice of benefits plans to also offer employers at least one group health benefit plan that provides state‑mandated health benefits and is otherwise authorized under the Insurance Code. The bill exempts an employer choice of benefits plan provided under the bill's provisions from any other insurance law that does not expressly apply to the plan or the bill's provisions. However, the bill establishes that an employer choice of benefits plan is not exempt from the requirements imposed by the following provisions of the Insurance Code: provisions relating to TDI generally; TDI's funds, fees, and taxes; the regulation of solvency; the protection of consumer interests; the organization of insurers and related entities; life and health coverages; and the regulation of professionals, as applicable, except that an employer choice of benefits plan offered by a health maintenance organization (HMO) is exempt from requirements imposed by the Texas Health Maintenance Organization Act to the extent that those requirements conflict with the bill's provisions regarding employer choice of benefits plans; statutory provisions relating to the contents of evidence of coverage, commissioner approval, and schedule of charges under benefits provided by HMOs; and statutory provisions relating to the identification card or other similar document or other information issued to an enrollee by an HMO or an issuer of an exclusive provider benefit plan, preferred provider benefit plan, or health benefit plan that provides pharmacy benefits to enrollees. C.S.H.B. 139 defines the following terms for purposes of the bill's provisions relating to the employer choice of benefits plans: "employer choice of benefits plan" as a group health benefit plan offered to an employer that, wholly or partly, does not offer or provide state-mandated health benefits, but that provides creditable coverage as defined by statutory provisions establishing the type of plan, policy, evidence of coverage, program, or risk pool under which an individual's coverage is creditable and by reference to the meaning assigned to that term under the preexisting condition provision of the Health Insurance Portability and Availability Act; "health benefit plan issuer" as any entity authorized under the Insurance Code or another state insurance law to provide health insurance or health benefits in Texas, including an insurance company and an HMO operating under the Texas Health Maintenance Organization Act; and "state-mandated health benefits" as coverage or another feature required under the Insurance Code or other state law to be provided in a group health benefit plan that meets the following criteria: o includes coverage for specific health care services or benefits; o places limitations or restrictions on deductibles, coinsurance, copayments, or any annual or lifetime maximum benefit amounts, including limitations provided by commissioner rule; o includes a specific category of licensed health care practitioner from whom an enrollee is entitled to receive care; o requires standard provisions or rights that are unrelated to a specific health illness, injury, or condition of an enrollee; o requires the health benefit plan to provide coverage for health care services or benefits in excess of federal requirements; or o is a requirement for which an exemption is provided under the bill's provisions. C.S.H.B. 139 makes the following Insurance Code provisions applicable to a plan offered under the bill: statutory provisions, as applicable to group accident and health insurance, requiring an employer to provide certain statements and notices regarding an applicable benefit plan; and statutory provisions relating to balance billing prohibitions and out-of-network claim dispute resolution for certain plans. C.S.H.B. 139 repeals the following provisions of the Health Insurance Portability and Availability Act with respect to coverage under small employer health benefit plans: the provision, with respect to a small employer health benefit plan issuer, that does the following: o requires the issuer to offer a standard health benefit plan as authorized by provisions of the Insurance Code governing consumer choice of benefits plans, including consumer choice of benefits health insurance plans and consumer choice of benefits HMO plans; o authorizes the issuer to offer to a small employer additional benefit riders to the standard health benefit plan or to design and offer standard health benefit plans with additional mandatory benefits; and o requires the issuer to also offer to a small employer at least one other health benefit plan authorized under the Insurance Code that provides state-mandated health benefits; and the provision, with respect to an HMO, that does the following: o requires the HMO to offer at least one state-approved basic health care plan that complies with the following laws and rules adopted under those laws and authorizes the HMO to offer additional such plans: the Health Insurance Portability and Availability Act; the Texas Health Maintenance Organization Act; managed care provisions governing the benefits provided by HMOs, evidence of coverage, and certain related charges; managed care provisions governing the delegation of certain functions by an HMO; provisions regarding the coverage of children; provisions regarding the credentialing of physicians and providers by an HMO; provisions governing consumer choice of benefits under HMO plans; and provisions of federal law setting out applicable HMO requirements for basic and supplemental health services to its members; o requires the HMO to offer a standard health benefit plan under provisions regarding consumer choice of benefits under HMO plans and authorizes the HMO to offer additional benefit riders to the standard health benefit plan or offer standard health benefit plans with additional mandatory benefits; and o authorizes the HMO to offer a point-of-service contract in connection with an insurer that includes optional coverage for out-of-area services, emergency care, or out-of-network care. C.S.H.B. 139 repeals the following provisions of the Insurance Code: Section 1501.213(a); Section 1501.252; Section 1501.254; Section 1501.255; and Section 1501.259.
EFFECTIVE DATE On passage, or, if the bill does not receive the necessary vote, September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 139 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. The substitute includes provisions absent from the introduced making the following Insurance Code provisions applicable to an employer choice of benefits plan offered under the bill's provisions: statutory provisions, as applicable to group accident and health insurance, requiring an employer to provide certain statements and notices regarding an applicable benefit plan; and statutory provisions relating to provisions governing balance billing prohibitions and out-of-network claim dispute resolutions for certain plans. The substitute does not include the provisions present in the introduced version's definition of "health benefit plan issuer" specifying that the term includes the following: a group hospital service corporation operating under applicable state law governing such corporations; and a stipulated premium company operating under applicable state law governing the certification of certain nonprofit health corporations. The substitute and the introduced both define "state-mandated health benefits," but they differ as follows with respect to the coverages or features defined as being provided in a group health benefit plan: the substitute describes one of the coverages of a mandated benefit as one that requires the plan to provide coverage for health care services or benefits in excess of federal requirements, whereas the introduced described it as requiring the plan to exceed federal requirements but without specification; and the substitute includes as one of the features of a mandated benefit plan a feature that is a requirement for which an exemption is provided under the bill's provisions, whereas the introduced did not include this feature. Both the substitute and the introduced include a substantially similar provision requiring coverage for the same essential health benefits as defined by the applicable federal regulation and federal law. The substitute specifies that the coverage is for an essential health benefits package as determined by the commissioner of insurance based on the specified federal law and listed those essential benefits, whereas the introduced did not require that determination by the commissioner and did not list the benefits. Both the substitute and the introduced set out the contents of a required written notice to enrollees that is substantially similar in its descriptions of a plan. The substitute refers to coverage or features that the plan does not provide, whereas the introduced referred to state‑mandated health benefits that the plan does not provide. Both the substitute and the introduced require an employer entering into a contract for a plan to sign and return to the issuer a disclosure statement. The substitute makes the requirement applicable to any such contract, but the introduced made it applicable only to an initial contract. Both the substitute and the introduced exempt a plan for any other insurance law that does not expressly apply to either the plan or the bill's provisions establishing the plan. The introduced also exempted a plan from common law, but the substitute does not include that exemption for a plan. The substitute includes a provision absent from the introduced setting out the Insurance Code provisions from which a plan is not exempt. The substitute repeals certain provisions of the Health Insurance Portability and Availability Act with respect to coverage under small employer health benefit plans, which the introduced did not.
BACKGROUND AND PURPOSE
According to the U.S. Census Bureau, Texas has the largest percentage of uninsured individuals of any state at nearly twice the national average. A Texas 2036 report states that 16.6 percent of the Texas population, 4.9 million people, lack health insurance and as a result are skipping critical health care, utilizing emergency services, and taking on high-interest debt or not paying the debt at all. According to the report, the majority of these uninsured people are actually employed. The bill author has informed the committee that many Texas employers, despite their desire to provide insurance, cannot afford to do so. A Texas Association of Business survey has shown that 75 percent of Texas employers that do not offer health insurance indicate that the cost of providing the insurance is the primary reason they do not and that over two-thirds of the respondents would like the state to give them the opportunity to purchase a more affordable option.
Insurance is expensive in Texas. According to Forbes, Texas has the fifth highest health care costs in the nation when comparing premiums for employer-provided health insurance plus deductibles for employer-provided health insurance. Additionally, Texas has many mandates. Based on information from the last time the Texas Department of Insurance released data in 2017, Texas had more benefit mandates than every other state except two, indicating that a plan with more mandates may be more expensive. Therefore, an option to offer less coverage may be less expensive, increasing the number of Texans who can afford some insurance.
C.S.H.B. 139 seeks to address this issue for the employed but uninsured population by providing employers with another health insurance option that would be more affordable and customized to what each employer's workforce needs, while still meeting all federally required essential health benefits. To do this, the bill creates as such an option a group health benefit plan, known as an employer choice of benefits plan, offered to an employer that, wholly or partly, does not offer or provide state-mandated health benefits but that provides coverage with fewer state-imposed mandates and regulations that still meets all federal requirements while maintaining patient and provider protections.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is expressly granted to the commissioner of insurance in SECTION 5 of this bill.
ANALYSIS
C.S.H.B. 139 amends the Insurance Code to authorize a health benefit plan issuer to offer one or more employer choice of benefits plans, as later defined. Such a plan must include coverage for an essential health benefits package as determined by the commissioner of insurance based on specified federal regulations regarding essential health benefits requirements, including the following:
ambulatory patient services;
emergency services;
hospitalization;
maternity and newborn care;
mental health and substance use disorder services, including behavioral health treatment;
prescription drugs;
rehabilitative and habilitative services and devices;
laboratory services;
preventative and wellness services and chronic disease management; and
pediatric services, including oral and vision care.
The bill prohibits such a plan from including a preexisting condition exclusion. The bill requires the commissioner to adopt rules necessary to implement the bill's provisions regarding such plans.
C.S.H.B. 139 requires each employer choice of benefits plan and each written application to enroll in such a plan to contain language, as specified by the bill, at the beginning of the document in bold type giving notice to the enrollee that the plan does not provide all coverage or features normally required in health benefit plans in Texas. Moreover, the bill requires a health benefit plan issuer, before the issuer may contract to provide an employer choice of benefits plan to an employer, to provide the employer with a written disclosure statement that does the following:
acknowledges that the employer health benefit plan being contracted for does not provide some or all state-mandated health benefits; and
lists the state-mandated health benefits not included in the plan.
Furthermore, the bill requires an employer entering into a contract for an employer choice of benefits plan to sign the disclosure statement and return the statement to the issuer. The bill requires the health benefit plan issuer to retain the signed disclosure statement in the health benefit plan issuer's records and, on request from the commissioner, provide the signed disclosure statement to the Texas Department of Insurance (TDI).
C.S.H.B. 139 requires a health benefit plan issuer that offers one or more employer choice of benefits plans to also offer employers at least one group health benefit plan that provides state‑mandated health benefits and is otherwise authorized under the Insurance Code. The bill exempts an employer choice of benefits plan provided under the bill's provisions from any other insurance law that does not expressly apply to the plan or the bill's provisions. However, the bill establishes that an employer choice of benefits plan is not exempt from the requirements imposed by the following provisions of the Insurance Code:
provisions relating to TDI generally; TDI's funds, fees, and taxes; the regulation of solvency; the protection of consumer interests; the organization of insurers and related entities; life and health coverages; and the regulation of professionals, as applicable, except that an employer choice of benefits plan offered by a health maintenance organization (HMO) is exempt from requirements imposed by the Texas Health Maintenance Organization Act to the extent that those requirements conflict with the bill's provisions regarding employer choice of benefits plans;
statutory provisions relating to the contents of evidence of coverage, commissioner approval, and schedule of charges under benefits provided by HMOs; and
statutory provisions relating to the identification card or other similar document or other information issued to an enrollee by an HMO or an issuer of an exclusive provider benefit plan, preferred provider benefit plan, or health benefit plan that provides pharmacy benefits to enrollees.
C.S.H.B. 139 defines the following terms for purposes of the bill's provisions relating to the employer choice of benefits plans:
"employer choice of benefits plan" as a group health benefit plan offered to an employer that, wholly or partly, does not offer or provide state-mandated health benefits, but that provides creditable coverage as defined by statutory provisions establishing the type of plan, policy, evidence of coverage, program, or risk pool under which an individual's coverage is creditable and by reference to the meaning assigned to that term under the preexisting condition provision of the Health Insurance Portability and Availability Act;
"health benefit plan issuer" as any entity authorized under the Insurance Code or another state insurance law to provide health insurance or health benefits in Texas, including an insurance company and an HMO operating under the Texas Health Maintenance Organization Act; and
"state-mandated health benefits" as coverage or another feature required under the Insurance Code or other state law to be provided in a group health benefit plan that meets the following criteria:
o includes coverage for specific health care services or benefits;
o places limitations or restrictions on deductibles, coinsurance, copayments, or any annual or lifetime maximum benefit amounts, including limitations provided by commissioner rule;
o includes a specific category of licensed health care practitioner from whom an enrollee is entitled to receive care;
o requires standard provisions or rights that are unrelated to a specific health illness, injury, or condition of an enrollee;
o requires the health benefit plan to provide coverage for health care services or benefits in excess of federal requirements; or
o is a requirement for which an exemption is provided under the bill's provisions.
C.S.H.B. 139 makes the following Insurance Code provisions applicable to a plan offered under the bill:
statutory provisions, as applicable to group accident and health insurance, requiring an employer to provide certain statements and notices regarding an applicable benefit plan; and
statutory provisions relating to balance billing prohibitions and out-of-network claim dispute resolution for certain plans.
C.S.H.B. 139 repeals the following provisions of the Health Insurance Portability and Availability Act with respect to coverage under small employer health benefit plans:
the provision, with respect to a small employer health benefit plan issuer, that does the following:
o requires the issuer to offer a standard health benefit plan as authorized by provisions of the Insurance Code governing consumer choice of benefits plans, including consumer choice of benefits health insurance plans and consumer choice of benefits HMO plans;
o authorizes the issuer to offer to a small employer additional benefit riders to the standard health benefit plan or to design and offer standard health benefit plans with additional mandatory benefits; and
o requires the issuer to also offer to a small employer at least one other health benefit plan authorized under the Insurance Code that provides state-mandated health benefits; and
the provision, with respect to an HMO, that does the following:
o requires the HMO to offer at least one state-approved basic health care plan that complies with the following laws and rules adopted under those laws and authorizes the HMO to offer additional such plans:
the Health Insurance Portability and Availability Act;
the Texas Health Maintenance Organization Act;
managed care provisions governing the benefits provided by HMOs, evidence of coverage, and certain related charges;
managed care provisions governing the delegation of certain functions by an HMO;
provisions regarding the coverage of children;
provisions regarding the credentialing of physicians and providers by an HMO;
provisions governing consumer choice of benefits under HMO plans; and
provisions of federal law setting out applicable HMO requirements for basic and supplemental health services to its members;
o requires the HMO to offer a standard health benefit plan under provisions regarding consumer choice of benefits under HMO plans and authorizes the HMO to offer additional benefit riders to the standard health benefit plan or offer standard health benefit plans with additional mandatory benefits; and
o authorizes the HMO to offer a point-of-service contract in connection with an insurer that includes optional coverage for out-of-area services, emergency care, or out-of-network care.
C.S.H.B. 139 repeals the following provisions of the Insurance Code:
Section 1501.213(a);
Section 1501.252;
Section 1501.254;
Section 1501.255; and
Section 1501.259.
EFFECTIVE DATE
On passage, or, if the bill does not receive the necessary vote, September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE
While C.S.H.B. 139 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.
The substitute includes provisions absent from the introduced making the following Insurance Code provisions applicable to an employer choice of benefits plan offered under the bill's provisions:
statutory provisions, as applicable to group accident and health insurance, requiring an employer to provide certain statements and notices regarding an applicable benefit plan; and
statutory provisions relating to provisions governing balance billing prohibitions and out-of-network claim dispute resolutions for certain plans.
The substitute does not include the provisions present in the introduced version's definition of "health benefit plan issuer" specifying that the term includes the following:
a group hospital service corporation operating under applicable state law governing such corporations; and
a stipulated premium company operating under applicable state law governing the certification of certain nonprofit health corporations.
The substitute and the introduced both define "state-mandated health benefits," but they differ as follows with respect to the coverages or features defined as being provided in a group health benefit plan:
the substitute describes one of the coverages of a mandated benefit as one that requires the plan to provide coverage for health care services or benefits in excess of federal requirements, whereas the introduced described it as requiring the plan to exceed federal requirements but without specification; and
the substitute includes as one of the features of a mandated benefit plan a feature that is a requirement for which an exemption is provided under the bill's provisions, whereas the introduced did not include this feature.
Both the substitute and the introduced include a substantially similar provision requiring coverage for the same essential health benefits as defined by the applicable federal regulation and federal law. The substitute specifies that the coverage is for an essential health benefits package as determined by the commissioner of insurance based on the specified federal law and listed those essential benefits, whereas the introduced did not require that determination by the commissioner and did not list the benefits.
Both the substitute and the introduced set out the contents of a required written notice to enrollees that is substantially similar in its descriptions of a plan. The substitute refers to coverage or features that the plan does not provide, whereas the introduced referred to state‑mandated health benefits that the plan does not provide.
Both the substitute and the introduced require an employer entering into a contract for a plan to sign and return to the issuer a disclosure statement. The substitute makes the requirement applicable to any such contract, but the introduced made it applicable only to an initial contract.
Both the substitute and the introduced exempt a plan for any other insurance law that does not expressly apply to either the plan or the bill's provisions establishing the plan. The introduced also exempted a plan from common law, but the substitute does not include that exemption for a plan.
The substitute includes a provision absent from the introduced setting out the Insurance Code provisions from which a plan is not exempt.
The substitute repeals certain provisions of the Health Insurance Portability and Availability Act with respect to coverage under small employer health benefit plans, which the introduced did not.