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  By: Duncan, Nelson S.B. No. 6
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the creation of the Healthy Texas Program.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle G, Title 8, Insurance Code, is amended
  by adding Chapter 1508 to read as follows:
  CHAPTER 1508. HEALTHY TEXAS PROGRAM
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 1508.001.  PURPOSE. (a)  The purposes of the Healthy
  Texas Program are to:
               (1)  provide access to quality small employer health
  benefit plans at an affordable price;
               (2)  encourage small employers to offer health benefit
  plan coverage to employees and the dependents of employees; and
               (3)  maximize reliance on proven managed care
  strategies and procedures.
         (b)  The Healthy Texas Program is not intended to diminish
  the availability of traditional small employer health benefit plan
  coverage under Chapter 1501.
         Sec. 1508.002.  DEFINITIONS. In this chapter:
               (1)  "Dependent" has the meaning assigned by Section
  1501.002(2).
               (2)  "Eligible employee" has the meaning assigned by
  Section 1501.002(3).
               (3)  "Fund" means the healthy Texas small employer
  premium stabilization fund established under Subchapter F.
               (4)  "Health benefit plan" and "health benefit plan
  issuer" have the meanings assigned by Sections 1501.002(5) and
  1501.002(6), respectively.
               (5)  "Program" means the Healthy Texas Program
  established under this chapter.
               (6)  "Qualifying health benefit plan" means a health
  benefit plan that provides benefits for health care services in the
  manner described by this chapter.
               (7)  "Small employer" has the meaning assigned by
  Section 1501.002(14).
         Sec. 1508.003.  RULES. The commissioner may adopt rules as
  necessary to implement this chapter.
  [Sections 1508.004-1508.050 reserved for expansion]
  SUBCHAPTER B. EMPLOYER ELIGIBILITY; CONTRIBUTIONS
         Sec. 1508.051.  EMPLOYER ELIGIBILITY TO PARTICIPATE. (a)  A
  small employer may participate in the program if:
               (1)  during the 12-month period immediately preceding
  the date of application for a qualifying health benefit plan, the
  small employer does not offer employees group health benefits on an
  expense-reimbursed or prepaid basis; and
               (2)  at least 30 percent of the small employer's
  eligible employees receive annual wages from the employer in an
  amount that is equal to or less than 300 percent of the poverty
  guidelines for an individual, as defined and updated annually by
  the United States Department of Health and Human Services.
         (b)  A small employer ceases to be eligible to participate in
  the program if any health benefit plan that provides employee
  benefits on an expense-reimbursed or prepaid basis, other than
  another qualifying health benefit plan, is purchased or otherwise
  takes effect after the purchase of a qualifying health benefit
  plan.
         Sec. 1508.052.  COMMISSIONER ADJUSTMENTS AUTHORIZED.
  (a)  The commissioner by rule may adjust the 12-month period
  described by Section 1508.051(a)(1) to an 18-month period if the
  commissioner determines that the 12-month period is insufficient to
  prevent inappropriate substitution of other health benefit plans
  for qualifying health benefit plan coverage under this chapter.
         (b)  The commissioner by rule may adjust the percentage of
  the poverty guidelines described by Section 1508.051(a)(2) to a
  higher or lower percentage if the commissioner determines that the
  adjustment is necessary to fulfill the purposes of this chapter. An
  adjustment made by the commissioner under this subsection takes
  effect on the first July 1 following the adjustment.
         Sec. 1508.053.  MINIMUM EMPLOYER PARTICIPATION
  REQUIREMENTS. A small employer that meets the eligibility
  requirements described by Section 1508.051(a) may apply to purchase
  a qualifying health benefit plan if 60 percent or more of the
  employer's eligible employees elect to participate in the plan.
         Sec. 1508.054.  EMPLOYER CONTRIBUTION REQUIREMENTS. (a)  A
  small employer that purchases a qualifying health benefit plan
  must:
               (1)  pay 50 percent or more of the premium for each
  employee covered under the qualifying health benefit plan;
               (2)  offer coverage to all eligible employees receiving
  annual wages from the employer in an amount described by Section
  1508.051(a)(2) or 1508.052(b), as applicable; and
               (3)  contribute the same percentage of premium for each
  covered employee.
         (b)  A small employer that purchases a qualifying health
  benefit plan under the program may elect to pay, but is not required
  to pay, all or any portion of the premium paid for dependent
  coverage under the qualifying health benefit plan.
  [Sections 1508.055-1508.100 reserved for expansion]
  SUBCHAPTER C. PROGRAM PARTICIPATION; REQUIRED COVERAGE AND
  BENEFITS
         Sec. 1508.101.  PARTICIPATING PLAN ISSUERS. (a)  Subject to
  Subsection (b), any health benefit plan issuer may participate in
  the program.
         (b)  The commissioner by rule may limit which health benefit
  plan issuers may participate in the program if the commissioner
  determines that the limitation is necessary to achieve the purposes
  of this chapter.
         (c)  If the commissioner limits participation in the program
  under Subsection (b), the commissioner shall contract on a
  competitive procurement basis with one or more health benefit plan
  issuers to provide qualifying health benefit plan coverage under
  the program.
         (d)  Nothing in this chapter prohibits a regional or local
  health care program described by Chapter 75, Health and Safety
  Code, from participating in the program.  The commissioner by rule
  shall establish participation requirements applicable to regional
  and local health care programs that consider the unique plan
  designs, benefit levels, and participation criteria of each
  program.
         Sec. 1508.102.  PREEXISTING CONDITION PROVISION REQUIRED. A
  health benefit plan offered under the program must include a
  preexisting condition provision that meets the requirements
  described by Section 1501.102.
         Sec. 1508.103.  EXCEPTION FROM MANDATED BENEFIT
  REQUIREMENTS. Except as expressly provided by this chapter, a
  small employer health benefit plan issued under the program is not
  subject to a law of this state that requires coverage or the offer
  of coverage of a health care service or benefit.
         Sec. 1508.104.  CERTAIN COVERAGE PROHIBITED OR REQUIRED.
  (a)  A qualifying health benefit plan may only provide coverage for
  in-plan services and benefits, except for:
               (1)  emergency care; or
               (2)  other services not available through a plan
  provider.
         (b)  In-plan services and benefits provided under a
  qualifying health benefit plan must include the following:
               (1)  inpatient hospital services;
               (2)  outpatient hospital services;
               (3)  physician services; and
               (4)  prescription drug benefits.
         (c)  The commissioner may approve in-plan benefits other
  than those required under Subsection (b) or emergency care or other
  services not available through a plan provider if the commissioner
  determines the inclusion to be essential to achieve the purposes of
  this chapter.
         (d)  The commissioner may, with respect to the categories of
  services and benefits described by Subsections (b) and (c):
               (1)  prepare specifications for a coverage provided
  under this chapter;
               (2)  determine the methods and procedures of claims
  administration;
               (3)  establish procedures to decide contested cases
  arising from coverage provided under this chapter;
               (4)  study, on an ongoing basis, the operation of all
  coverages provided under this chapter, including gross and net
  costs, administration costs, benefits, utilization of benefits,
  and claims administration;
               (5)  administer the healthy Texas small employer
  premium stabilization fund established under Subchapter F;
               (6)  provide the beginning and ending dates of
  coverages for enrollees in a qualifying health benefit plan;
               (7)  develop basic group coverage plans applicable to
  all individuals eligible to participate in the program;
               (8)  provide for optional group coverage plans in
  addition to the basic group coverage plans described by Subdivision
  (7);
               (9)  provide, as determined to be appropriate by the
  commissioner, additional statewide optional coverage plans;
               (10)  develop specific health benefit plans that permit
  access to high-quality, cost-effective health care;
               (11)  design, implement, and monitor health benefit
  plan features intended to discourage excessive utilization,
  promote efficiency, and contain costs for qualifying health benefit
  plans;
               (12)  develop and refine, on an ongoing basis, a health
  benefit strategy for the program that is consistent with evolving
  benefits delivery systems;
               (13)  develop a funding strategy that efficiently uses
  employer contributions to achieve the purposes of this chapter; and
               (14)  modify the copayment and deductible amounts for
  prescription drug benefits under a qualifying health benefit plan,
  if the commissioner determines that the modification is necessary
  to achieve the purposes of this chapter.
  [Sections 1508.105-1508.150 reserved for expansion]
  SUBCHAPTER D. PROGRAM ADMINISTRATION
         Sec. 1508.151.  EMPLOYER CERTIFICATION. (a)  At the time of
  initial application, a health benefit plan issuer shall obtain from
  a small employer that seeks to purchase a qualifying health benefit
  plan a written certification that the employer meets the
  eligibility requirements described by Section 1508.051 and the
  minimum employer participation requirements described by Section
  1508.053.
         (b)  Not later than the 90th day before the renewal date of a
  qualifying health benefit plan, a health benefit plan issuer shall
  obtain from the small employer that purchased the qualifying health
  benefit plan a written certification that the employer continues to
  meet the eligibility requirements described by Section 1508.051 and
  the minimum employer participation requirements described by
  Section 1508.053.
         (c)  A participating health benefit plan issuer may require a
  small employer to submit appropriate documentation in support of a
  certification described by Subsection (a) or (b).
         Sec. 1508.152.  APPLICATION PROCESS. (a)  Subject to
  Subsection (b), a health benefit plan issuer shall accept
  applications for qualifying health benefit plan coverage from small
  employers at all times throughout the calendar year.
         (b)  The commissioner may limit the dates on which a health
  benefit plan issuer must accept applications for qualifying health
  benefit plan coverage if the commissioner determines the limitation
  to be necessary to achieve the purposes of this chapter.
         Sec. 1508.153.  EMPLOYEE ENROLLMENT; WAITING PERIOD. (a)  A
  qualifying health benefit plan must provide employees with an
  initial enrollment period that is 31 days or longer, and annually at
  least one open enrollment period that is 31 days or longer. The
  commissioner by rule may require an additional open enrollment
  period if the commissioner determines that the additional open
  enrollment period is necessary to achieve the purposes of this
  chapter.
         (b)  A small employer may establish a waiting period for
  employees during which an employee is not eligible for coverage
  under a qualifying health benefit plan. The last day of a waiting
  period established under this subsection may not be later than the
  90th day after the date on which the employee begins employment with
  the small employer.
         (c)  A health benefit plan issuer may not deny coverage under
  a qualifying health benefit plan to a new employee of a small
  employer that purchased the qualifying health benefit plan if the
  health benefit plan issuer receives an application for coverage
  from the employee not later than the 31st day after the latter of:
               (1)  the first day of the employee's employment; or
               (2)  the first day after the expiration of a waiting
  period established under Subsection (b).
         (d)  Subject to Subsection (e), a health benefit plan issuer
  may deny coverage under a qualifying health benefit plan to an
  employee of a small employer who applies for coverage after the
  period described by Subsection (c).
         (e)  A health benefit plan issuer that denies an employee
  coverage under Subsection (d):
               (1)  may only deny the employee coverage until the next
  open enrollment period; and
               (2)  may subject the enrollee to a one-year preexisting
  condition provision, as described by Section 1508.102, if the
  period during which the preexisting condition provision applies
  does not exceed 18 months from the date of the initial application
  for coverage under the qualifying health benefit plan.
         Sec. 1508.154.  REPORTS. A health benefit plan issuer that
  participates in the program shall submit reports to the department
  in the form and at the time the commissioner prescribes.
  [Sections 1508.155-1508.200 reserved for expansion]
  SUBCHAPTER E. RATING OF QUALIFIED HEALTH BENEFIT PLANS
         Sec. 1508.201.  RATING; PREMIUM PRACTICES IN GENERAL.
  (a)  A health benefit plan issuer participating in the program
  must:
               (1)  use rating practices for qualifying health benefit
  plans that are consistent with the purposes of this chapter; and
               (2)  in setting premiums for qualifying health benefit
  plans, consider the availability of reimbursement from the fund.
         (b)  A health benefit plan issuer participating in the
  program shall apply rating factors consistently with respect to all
  small employers in a class of business.
         (c)  Differences in premium rates charged for qualifying
  health benefit plans must be reasonable and reflect objective
  differences in plan design.
         Sec. 1508.202.  PREMIUM RATE DEVELOPMENT AND CALCULATION.
  (a)  Rating factors used to underwrite qualifying health benefit
  plans must produce premium rates for identical groups that:
               (1)  differ only by the amounts attributable to health
  benefit plan design; and
               (2)  do not reflect differences because of the nature
  of the groups assumed to select a particular health benefit plan.
         (b)  A health benefit plan issuer shall treat each qualifying
  health benefit plan that is issued or renewed in a calendar month as
  having the same rating period.
         (c)  A health benefit plan issuer may use only age and gender
  as case characteristics, as defined by Section 1501.201(2), in
  setting premium rates for a qualifying health benefit plan.
         (d)  The commissioner by rule may establish additional
  rating criteria and requirements for qualifying health benefit
  plans if the commissioner determines that the criteria and
  requirements are necessary to achieve the purposes of this chapter.
         Sec. 1508.203.  FILING; APPROVAL. (a)  A health benefit
  plan issuer shall file with the department, for review and approval
  by the commissioner, premium rates to be charged for qualifying
  health benefit plans.
         (b)  If the commissioner limits health benefit plan issuer
  participation in the program under Section 1508.101(b), premium
  rates proposed to be charged for each qualifying health benefit
  plan will be considered as an element in the contract procurement
  process required under that section.
  [Sections 1508.204-1508.250 reserved for expansion]
  SUBCHAPTER F. HEALTHY TEXAS SMALL EMPLOYER PREMIUM STABILIZATION
  FUND
         Sec. 1508.251.  ESTABLISHMENT OF FUND. (a)  To the extent
  that funds appropriated to the department are available for this
  purpose, the commissioner shall establish a fund from which health
  benefit plan issuers may receive reimbursement for claims paid by
  the health benefit plan issuers for individuals covered under
  qualifying group health plans.
         (b)  The fund established under this section shall be known
  as the healthy Texas small employer premium stabilization fund.
         (c)  The commissioner shall adopt rules necessary to
  implement and administer the fund, including rules that set out the
  procedures for operation of the fund and distribution of money from
  the fund.
         Sec. 1508.252.  OPERATION OF FUND; CLAIM ELIGIBILITY.
  (a)  A health benefit plan issuer is eligible to receive
  reimbursement in an amount that is equal to 80 percent of the dollar
  amount of claims paid between $5,000 and $75,000 in a calendar year
  for an enrollee in a qualifying health benefit plan.
         (b)  A health benefit plan issuer is eligible for
  reimbursement from the fund only for the calendar year in which
  claims are paid.
         (c)  Once the dollar amount of claims paid on behalf of a
  covered individual reaches or exceeds $75,000 in a given calendar
  year, a health benefit plan issuer may not receive reimbursement
  for any other claims paid on behalf of the individual in that
  calendar year.
         Sec. 1508.253.  REIMBURSEMENT REQUEST SUBMISSION. (a)  A
  health benefit plan issuer seeking reimbursement from the fund
  shall submit a request for reimbursement in the form prescribed by
  the commissioner by rule.
         (b)  A health benefit plan issuer must request reimbursement
  from the fund annually, not later than the date determined by the
  commissioner, following the end of the calendar year for which the
  reimbursement requests are made.
         (c)  The commissioner may require a health benefit plan
  issuer participating in the program to submit claims data in
  connection with reimbursement requests as the commissioner
  determines to be necessary to ensure appropriate distribution of
  reimbursement funds and oversee the operation of the fund. The
  commissioner may require that the data be submitted on a per covered
  individual, aggregate, or categorical basis.
         Sec. 1508.254.  FUND AVAILABILITY. (a)  The commissioner
  shall compute the total claims reimbursement amount for all health
  benefit plan issuers participating in the program for the calendar
  year for which claims are reported and reimbursement requested.
         (b)  If the total amount requested by health benefit plan
  issuers participating in the program for reimbursement for a
  calendar year exceeds the amount of funds available for
  distribution for claims paid during that same calendar year, the
  commissioner shall provide for the pro rata distribution of any
  available funds. A health benefit plan issuer participating in the
  program is eligible to receive a proportional amount of any
  available funds that is equal to the proportion of total eligible
  claims paid by all participating health benefit plan issuers that
  the requesting health benefit plan issuer paid.
         (c)  If the amount of funds available for distribution for
  claims paid by all health benefit plan issuers participating in the
  program during a calendar year exceeds the total amount requested
  for reimbursement by all participating health benefit plan issuers
  during that calendar year, the commissioner shall carry forward any
  excess funds and make those excess funds available for distribution
  in the next calendar year. Excess funds carried over under this
  section are added to the fund in addition to any other money
  appropriated for the fund for the calendar year into which the funds
  are carried forward.
         Sec. 1508.255.  PROGRAM REPORTING. (a)  Each health benefit
  plan issuer participating in the program shall provide the
  department, in the form prescribed by the commissioner, monthly
  reports of total enrollment under qualifying health benefit plans.
         (b)  On the request of the commissioner, each health benefit
  plan issuer participating in the program shall furnish to the
  department, in the form prescribed by the commissioner, data other
  than data described by Subsection (a) that the commissioner
  determines necessary to oversee the operation of the fund.
         Sec. 1508.256.  CLAIMS EXPERIENCE DATA. (a)  Based on
  available data and appropriate actuarial assumptions, the
  commissioner shall separately estimate the per covered individual
  annual cost of total claims reimbursement from the fund for
  qualifying health benefit plans.
         (b)  On request, a health benefit plan issuer participating
  in the program shall furnish to the department claims experience
  data for use in the estimates described by Subsection (a).
         Sec. 1508.257.  TOTAL ELIGIBLE ENROLLMENT DETERMINATION.
  The commissioner shall determine total eligible enrollment under
  qualifying health benefit plans by dividing the total funds
  available for distribution from the fund by the estimated per
  covered individual annual cost of total claims reimbursement from
  the fund.
         Sec. 1508.258.  EVALUATION AND PROTECTION OF FUND; EMPLOYER
  ENROLLMENT SUSPENSION. (a)  The commissioner shall suspend the
  enrollment of new employers in qualifying health benefit plans if
  the commissioner determines that the total enrollment reported by
  all health benefit plan issuers under qualifying health benefit
  plans exceeds the total eligible enrollment determined under
  Section 1508.257 and is likely to result in anticipated annual
  expenditures from the fund in excess of the total funds available
  for distribution from the fund.
         (b)  The commissioner shall provide a health benefit plan
  issuer participating in the program with notification of any
  enrollment suspension under Subsection (a) as soon as practicable
  after:
               (1)  receipt of all enrollment data; and
               (2)  determination of the need to suspend enrollment.
         (c)  A suspension of issuance of qualifying health benefit
  plans to employers under Subsection (a) does not preclude the
  addition of new employees of an employer already covered under a
  qualifying health benefit plan or new dependents of employees
  already covered under a qualifying health benefit plan.
         Sec. 1508.259.  EMPLOYER ENROLLMENT REACTIVATION. If, at
  any point during a suspension of enrollment under Section 1508.258,
  the commissioner determines that funds are sufficient to provide
  for the addition of new enrollments, the commissioner:
               (1)  may reactivate new enrollments; and
               (2)  shall notify all participating group health
  benefit plan issuers that enrollment of new employers may be
  resumed.
         Sec. 1508.260.  FUND ADMINISTRATOR. (a)  The commissioner
  may obtain the services of an independent organization to
  administer the fund.
         (b)  The commissioner shall establish guidelines for the
  submission of proposals by organizations for the purposes of
  administering the fund and may approve, disapprove, or recommend
  modification to the proposal of an applicant to administer the
  fund.
         (c)  An organization approved to administer the fund shall
  submit reports to the commissioner, in the form and at the times
  required by the commissioner, as necessary to facilitate evaluation
  and ensure orderly operation of the fund, including an annual
  report of the affairs and operations of the fund. The annual report
  must also be delivered to the governor, the lieutenant governor,
  and the speaker of the house of representatives.
         (d)  An organization approved to administer the fund shall
  maintain records in the form prescribed by the commissioner and
  make those records available for inspection by or at the request of
  the commissioner.
         (e)  The commissioner shall determine the amount of
  compensation to be allocated to an approved organization as payment
  for fund administration. Compensation is payable only from the
  fund.
         (f)  The commissioner may remove an organization approved to
  administer the fund from fund administration. An organization
  removed from fund administration under this subsection must
  cooperate in the orderly transition of services to another approved
  organization or to the commissioner.
         Sec. 1508.261.  STOP-LOSS INSURANCE; REINSURANCE. (a)  The
  administrator of the fund, on behalf of and with the prior approval
  of the commissioner, may purchase stop-loss insurance or
  reinsurance from an insurance company licensed to write that
  coverage in this state.
         (b)  Stop-loss insurance or reinsurance may be purchased to
  the extent that the commissioner determines funds are available for
  the purchase of that insurance.
         Sec. 1508.262.  PUBLIC EDUCATION AND OUTREACH. (a)  The
  commissioner may use an amount of the fund, not to exceed eight
  percent of the annual amount of the fund, for purposes of developing
  and implementing public education, outreach, and facilitated
  enrollment strategies targeted to small employers who do not
  provide health insurance.
         (b)  The commissioner shall solicit and accept
  recommendations concerning the development and implementation of
  education, outreach, and enrollment strategies under Subsection
  (a) from agents licensed under Title 13 to write health benefit
  plans in this state.
         (c)  The commissioner may contract with marketing
  organizations to perform or provide assistance with education,
  outreach, and enrollment strategies described by Subsection (a).
         SECTION 2.  The commissioner of insurance shall adopt any
  rules necessary to implement the change in law made by this Act not
  later than January 4, 2010.
         SECTION 3.  (a)  The commissioner of insurance shall make an
  initial determination concerning limitation of health benefit plan
  issuer participation in the program established under Chapter 1508,
  Insurance Code, as added by this Act, not later than January 18,
  2010. If the commissioner determines that limited participation is
  necessary to achieve the purposes of Chapter 1508, Insurance Code,
  as added by this Act, the commissioner shall issue a request for
  proposal from health benefit plan issuers to participate in the
  program not later than May 1, 2010.
         (b)  The commissioner of insurance shall ensure that the
  Healthy Texas Program is fully operational in a manner that allows
  health benefit plan issuers participating in the program to make
  the first annual request for reimbursement on January 1, 2011.
         SECTION 4.  This Act does not make an appropriation.  This
  Act takes effect only if a specific appropriation for the
  implementation of the Act is provided in a general appropriations
  act of the 81st Legislature.
         SECTION 5.  This Act takes effect September 1, 2009.