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Amend CSHB 7 on page 333, between lines 22 and 23, by
inserting a new Article 2A in the bill, to read as follows:
ARTICLE 2A. ALTERNATIVE COMPENSATION PILOT PROGRAM
SECTION 2A.001. Title 5, Labor Code, is amended by adding
Subtitle D to read as follows:
SUBTITLE D. ALTERNATIVE COMPENSATION PROGRAMS
CHAPTER 551. PILOT PROGRAM ON USE OF INSURANCE POLICY TO PROVIDE
MEDICAL AND INCOME BENEFITS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 551.001. DEFINITIONS. In this chapter:
(1) "Alternative benefit plan" means a plan of health
care benefits and wage replacement benefits offered by an employer
to an employee who sustains an injury in the course and scope of
employment in lieu of workers' compensation insurance coverage.
(2) "Commissioner" means the commissioner of
insurance.
(3) "Course and scope of employment" has the meaning
assigned by Section 401.011(12).
(4) "Department" means the Texas Department of
Insurance.
(5) "Employer" means a person who employs one or more
employees.
(6) "Employee" means a person in the service of
another under any contract of hire, whether express or implied or
oral or written. The term includes an employee employed in the
usual course and scope of the employer's business who is directed by
the employer to perform services temporarily outside the usual
course and scope of the employer's business. The term does not
include an independent contractor or the employee of an independent
contractor.
(7) "Group health insurance policy" means a group,
blanket, or franchise insurance policy that provides benefits for
health care services resulting from accident or disease. For
purposes of this chapter, the term includes a group hospital
service contract or a group subscriber contract.
(8) "Plan issuer" means:
(A) a health insurer, including a life, health,
and accident insurance company, a health and accident insurance
company, and any other person operating under Chapter 841, 842,
884, 885, 982, or 1501, Insurance Code, who is authorized to deliver
or issue for delivery group health insurance policies in this
state; or
(B) an insurer authorized by the department to
write workers' compensation insurance in this state.
(9) "Program" means the alternative benefit plan pilot
program established under this chapter.
(10) "Qualified insurance policy" means a group health
insurance policy approved by the department as provided by Section
551.051 that provides health care benefits for accident or disease
to each employee of an employer, regardless of whether the accident
or disease is caused by or directly related to the employee's
employment.
Sec. 551.002. EXPIRATION. The program is abolished and
this chapter expires effective September 1, 2009.
[Sections 551.003-551.050 reserved for expansion]
SUBCHAPTER B. GENERAL POWERS AND DUTIES OF
COMMISSIONER AND DEPARTMENT
Sec. 551.051. IMPLEMENTATION OF PROGRAM; POLICY APPROVAL
PROCESS. (a) The commissioner shall develop and operate a pilot
program under which an employer may offer an alternative benefit
plan to the employer's employees through a qualified insurance
policy offered by a plan issuer that:
(1) provides health care benefits to the employees,
including benefits for an injury sustained by an employee in the
course and scope of the employee's employment; and
(2) is in lieu of medical benefits under workers'
compensation insurance coverage as described by Subtitle A.
(b) Before a plan issuer may deliver or issue for delivery
in this state a qualified insurance policy, the plan issuer must
submit the policy to the department for approval in the manner
prescribed by the commissioner, accompanied by a filing fee set by
the commissioner by rule.
(c) The commissioner by rule shall adopt guidelines for the
approval of policies submitted to the department under this
section. The guidelines must require that the policy include
limits and coverages for health care services, including
hospitalization, that are at least equivalent to the limits and
coverages applicable to the medical benefits provided to an
employee covered under Subtitle A. The policy may provide health
care benefits using a preferred provider benefit plan subject to
Chapter 1301, Insurance Code.
(d) The commissioner shall review a policy submitted under
Subsection (b) not later than the 30th day after the date the policy
is submitted to the department. If the commissioner disapproves a
policy, the department shall notify the plan issuer who submitted
the policy not later than the fifth day after the date on which the
policy is disapproved.
(e) If the commissioner approves the policy, the department
shall notify the plan issuer not later than the 10th day after the
date of the final approval. The plan issuer may begin using the
policy as of the date of the final approval.
Sec. 551.052. ENDORSEMENTS; COVERAGE IN LIEU OF INCOME
BENEFITS; APPROVAL. (a) If a policy is approved under Section
551.051, the plan issuer shall offer the employer endorsements to
the policy that provide insurance coverage for each employee of the
employer, or the legal beneficiary of a deceased employee, against
a loss caused by:
(1) any loss of wages incurred as a result of an
accident or disease, regardless of whether the accident or disease
is caused by or directly related to the employee's employment; or
(2) the death of the employee.
(b) The plan issuer must submit an endorsement to the
commissioner for approval in the manner prescribed for approval of
a policy under Section 551.051.
(c) The commissioner by rule shall adopt guidelines for the
approval of policy endorsements submitted to the department under
this section. The guidelines must require that the endorsements
include:
(1) reasonable income replacement coverage for the
period during which the injured employee is unable to work; and
(2) limits and coverages for death and burial benefits
that are at least equivalent to the limits and coverages applicable
to the benefits provided to an employee covered under Subtitle A.
Sec. 551.053. RULEMAKING. The commissioner shall adopt
rules as necessary to implement the duties of the department under
this chapter.
Sec. 551.054. REPORT TO LEGISLATURE. Not later than
December 1 of each year, the commissioner shall submit a report to
the governor, the lieutenant governor, the speaker of the house of
representatives, and the members of the legislature regarding the
status and results of the program.
[Sections 551.055-551.100 reserved for expansion]
SUBCHAPTER C. OPERATION OF PROGRAM
Sec. 551.101. EMPLOYER AUTHORIZATION TO OFFER ALTERNATIVE
BENEFIT PLAN. (a) Notwithstanding Subtitle A, an employer who
elects to participate in the program may offer an alternative
benefit plan to provide benefits to an employee who sustains an
injury in the course and scope of the employee's employment. An
employer may not offer an alternative benefit plan other than
through the program as provided by this chapter.
(b) An employer may offer an alternative benefit plan only
through:
(1) insurance coverage provided through a qualified
insurance policy; and
(2) endorsements to that policy approved by the
commissioner.
Sec. 551.102. WAIVER PROHIBITED; USE OF ARBITRATION. (a)
Unless the commissioner determines that the plan offers benefits to
an employee that are at least equivalent to the medical benefits and
income benefits required under Subtitle A, an employer may not
require an employee who is covered under an alternative benefit
plan to waive:
(1) a right of action of the employee or a legal
beneficiary of the employee at common law or under a statute of this
state to recover damages for personal injuries or death sustained
in the course and scope of the employment; or
(2) a right established under this chapter.
(b) An alternative benefit plan may not require an employee
or a legal beneficiary of an employee to submit a claim for personal
injuries or death sustained in the course and scope of the
employment to binding arbitration.
Sec. 551.103. PROVISION OF ALTERNATIVE BENEFIT PLAN
OPTIONAL. An employer who does not elect to obtain workers'
compensation insurance coverage under Subtitle A is not required by
this chapter to participate in the program. This chapter does not
affect the application of Section 406.033 to such an employer.
[Sections 551.104-551.150 reserved for expansion]
SUBCHAPTER D. PROVISION OF ALTERNATIVE BENEFIT PLAN
THROUGH QUALIFIED INSURANCE POLICY AND ENDORSEMENTS
Sec. 551.151. RESPONSIBILITIES OF EMPLOYER. (a) An
employer who elects to provide coverage under this chapter shall:
(1) pay any coinsurance or deductible otherwise
imposed on the insured employee; and
(2) continue the payment of wages to an insured
employee until that employee begins to receive insurance payments
in lieu of wages under the insurance coverage provided through
endorsements to the qualified insurance policy.
(b) If an employee receives benefits under an alternative
benefit plan, the employer shall maintain a qualified insurance
policy and endorsements for the benefit of that employee until the
benefits to which the employee is entitled have been paid. A
qualified insurance policy and endorsements required to be
maintained under this subsection must provide benefits adequate to
pay all benefits to which the employee is entitled.
Sec. 551.152. SUBROGATION. (a) This section applies to an
action to recover damages for personal injuries or death sustained
by an employee in the course and scope of employment against:
(1) an employer who has obtained a qualified insurance
policy and endorsements covering that employee; or
(2) a third party.
(b) A judgment against an employer shall be reduced to the
extent that the employee has been compensated or is entitled to be
compensated under the employer's qualified insurance policy or
endorsements. A judgment reduced under this subsection shall be
reinstated to the extent that the qualified insurance policy or
endorsements are canceled or otherwise fail to fully compensate the
employee or a legal beneficiary of the employee to the extent
provided by the policy or endorsements.
(c) An insurance company that is liable for the payment of
benefits to the employee or a legal beneficiary of the employee is
subrogated to the rights of the employee or legal beneficiary
against a third party.
[Sections 551.153-551.200 reserved for expansion]
SUBCHAPTER E. EFFECT OF ALTERNATIVE BENEFIT PLAN
Sec. 551.201. EFFECT OF ALTERNATIVE BENEFIT PLAN. (a)
Except as specifically provided by this chapter, Subtitle A does
not apply to an employer who provides an alternative benefit plan.
(b) An action brought to recover damages against an employer
for personal injury or death sustained by an employee in the course
and scope of employment is governed by this chapter only if the
employee or the employee's beneficiaries are covered by an
alternative benefit plan on the date that the cause of action
accrues.
Sec. 551.202. CONTRACT REQUIREMENTS. A person who
requires an employer, as a prerequisite to entering into a contract
with that employer, to present evidence of workers' compensation
insurance coverage shall accept instead of that evidence a
qualified insurance policy and endorsements issued under this
chapter from an employer who obtains and maintains in effect a
qualified insurance policy and endorsements.
SECTION 2A.002. (a) The commissioner of insurance shall
adopt rules as required by this article not later than January 1,
2006.
(b) Subchapter E, Chapter 551, Labor Code, as added by this
article, takes effect March 1, 2006, and applies only to an
alternative benefit plan entered into on or after that date.
SECTION 2A.003. Except as provided by Section 2A.002(b) of
this article, this article takes effect September 1, 2005.