H.B. No. 2064

	AN ACT
	relating to premium discounts for certain participants in the Texas
	Health Insurance Risk Pool and to funding for those discounts
	through certain penalties.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 843.342, Insurance Code, is amended by
	adding Subsections (m) and (n) to read as follows:
	(m)  Notwithstanding any other provision of this section,
	this subsection governs the payment of a penalty under this
	section.  For a penalty under this section relating to a clean claim
	submitted by a physician or provider other than an institutional
	provider, the health maintenance organization shall pay the entire
	penalty to the physician or provider, except for any interest
	computed under Subsection (c), which shall be paid to the Texas
	Health Insurance Risk Pool.  For a penalty under this section
	relating to a clean claim submitted by an institutional provider,
	the health maintenance organization shall pay 50 percent of the
	total penalty amount computed under this section, including
	interest, to the institutional provider and the remaining 50
	percent of that amount to the Texas Health Insurance Risk Pool.
	(n)  In this section, "institutional provider" means a
	hospital or other medical or health-related service facility that
	provides care for the sick or injured or other care that may be
	covered in an evidence of coverage.
	SECTION 2.  Section 1301.137, Insurance Code, is amended by
	adding Subsection (l) to read as follows:
	(l)  Notwithstanding any other provision of this section,
	this subsection governs the payment of a penalty under this
	section.  For a penalty under this section relating to a clean claim
	submitted by a preferred provider other than an institutional
	provider, the insurer shall pay the entire penalty to the preferred
	provider, except for any interest computed under Subsection (c),
	which shall be paid to the Texas Health Insurance Risk Pool.  For a
	penalty under this section relating to a clean claim submitted by an
	institutional provider, the insurer shall pay 50 percent of the
	penalty amount computed under this section, including interest, to
	the institutional provider and the remaining 50 percent of that
	amount to the Texas Health Insurance Risk Pool.
	SECTION 3.  Section 1506.105, Insurance Code, is amended by
	amending Subsection (e) and adding Subsection (e-1) to read as
	follows:
	(e)  Premium rates shall be established to provide fully for
	all of the expected costs of claims, including recovery of prior
	losses, expenses of operation, investment income from claim
	reserves, and any other cost factors, subject to the limitations
	[limitation] described in this subsection and Subsection (e-1). In
	no event may pool premium rates exceed 200 percent of the standard
	risk rate described by Subsection (d) [rates applicable to
	individual standard risks].
	(e-1)  Subject to the availability of funds under Section
	1506.260, discounted premiums shall be offered on a sliding scale,
	based on financial need, as follows:
	(1)  for an individual whose household income is below
	200 percent of the federal poverty measure, determined under the
	United States Department of Health and Human Services poverty
	guidelines in effect at the time coverage is provided, premium
	rates shall equal the standard risk rate described by Subsection
	(d); and
	(2)  for an individual whose household income is at or
	below 300 percent, but not less than 200 percent, of the federal
	poverty measure, determined under the United States Department of
	Health and Human Services poverty guidelines in effect at the time
	coverage is provided, premium rates shall equal 140 percent of the
	standard risk rate described by Subsection (d).
	SECTION 4.  Subchapter F, Chapter 1506, Insurance Code, is
	amended by adding Section 1506.260 to read as follows:
	Sec. 1506.260.  FUNDING FOR PREMIUM DISCOUNTS.  The board
	shall collect penalty payments and interest paid by health
	maintenance organizations as provided by Section 843.342 and
	insurers as provided by Section 1301.137. The board may use funds
	collected under this section only to finance premium discounts
	under Section 1506.105(e-1).  The board may require a health
	maintenance organization or an insurer to make payments under this
	section and make reports concerning those payments in a manner
	determined by the board.
	SECTION 5.  (a)  Sections 843.342 and 1301.137, Insurance
	Code, as amended by this Act, apply only to a penalty or interest on
	a penalty owed with respect to a clean claim paid on or after the
	effective date of this Act. A penalty or interest on a penalty owed
	with respect to a clean claim paid before the effective date of this
	Act is governed by the law in effect immediately before that date,
	and that law is continued in effect for that purpose.
	(b)  This Act applies only to premium rates for coverage
	through the Texas Health Insurance Risk Pool under Chapter 1506,
	Insurance Code, as amended by this Act, that is in effect on or
	after January 1, 2011. Premium rates for coverage in effect before
	January 1, 2011, are governed by the law in effect immediately
	before the effective date of this Act, and the former law is
	continued in effect for that purpose.
	SECTION 6.  This Act takes effect January 1, 2010.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 2064 was passed by the House on April
	8, 2009, by the following vote:  Yeas 145, Nays 0, 1 present, not
	voting; and that the House concurred in Senate amendments to H.B.
	No. 2064 on May 18, 2009, by the following vote:  Yeas 141, Nays 0,
	1 present, not voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 2064 was passed by the Senate, with
	amendments, on May 12, 2009, by the following vote:  Yeas 30, Nays
	1.
	______________________________
	Secretary of the Senate
	APPROVED: __________________
	Date
	__________________
	Governor