Bill Text: TX HB2383 | 2013-2014 | 83rd Legislature | Enrolled


Bill Title: Relating to life settlement contracts for the payment of long-term care services and support and the consideration of a life insurance policy in determining eligibility for medical assistance.

Spectrum: Moderate Partisan Bill (Republican 4-1)

Status: (Passed) 2013-06-14 - Effective immediately [HB2383 Detail]

Download: Texas-2013-HB2383-Enrolled.html
 
 
  H.B. No. 2383
 
 
 
 
AN ACT
  relating to life settlement contracts for the payment of long-term
  care services and support and the consideration of a life insurance
  policy in determining eligibility for medical assistance.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter B, Chapter 32, Human Resources Code,
  is amended by adding Section 32.02613 to read as follows:
         Sec. 32.02613.  LIFE INSURANCE ASSETS; LIFE INSURANCE POLICY
  CONVERSION. (a)  For purposes of this section, "long-term care
  services and support" includes home health care, assisted living,
  and nursing home services.
         (b)  The owner of a life insurance policy with a face amount
  of more than $10,000 may enter into a life settlement contract under
  Chapter 1111A, Insurance Code, for the benefit of a recipient of
  long-term care services and support in exchange for direct payments
  to:
               (1)  a health care provider for the provision of those
  services to that recipient; or
               (2)  the state to offset the costs of providing those
  services to that recipient under the medical assistance program.
         (c)  The proceeds of a life settlement contract entered into
  under this section must be used for the payment of long-term care
  services and support, except for the amount specified in Subsection
  (d)(1).  To the extent feasible and allowed under federal law, the
  medical assistance program may act only as the secondary payor for
  long-term care services and support provided to a person who is
  eligible for medical assistance and for whose benefit an owner of a
  life insurance policy has entered into a life settlement contract
  under this section.
         (d)  In addition to the requirements under Chapter 1111A,
  Insurance Code, a life settlement contract entered into under this
  section must:
               (1)  provide that the lesser of five percent of the face
  amount of the life insurance policy or $5,000 is reserved and is
  payable to the owner's estate or a named beneficiary for funeral
  expenses;
               (2)  provide that the balance of proceeds under the
  life settlement contract that are unpaid on the death of the owner
  must be paid to the owner's estate or a named beneficiary; and
               (3)  specify the total amount payable for the benefit
  of the recipient of long-term care services and support under the
  life settlement contract.
         (e)  All proceeds of a life settlement contract entered into
  under this section must be held in an irrevocable state or federally
  insured account for the benefit of the recipient of long-term care
  services and support or for payment as otherwise required by this
  section.
         (f)  Only a recipient of long-term care services and support
  for whose benefit an owner enters into a life settlement contract
  under this section may choose the provider and type of services
  provided to the recipient and paid for out of an account described
  by Subsection (e). Any attempt by a person to require the recipient
  to choose a specific provider is strictly prohibited and
  constitutes an unfair method of competition or an unfair or
  deceptive act or practice under the Insurance Code.
         (g)  A person who enters into a life settlement contract with
  an owner of a life insurance policy under this section must
  maintain:
               (1)  a surety bond executed and issued by an insurer
  authorized to issue surety bonds in this state;
               (2)  a policy of errors and omissions insurance; or
               (3)  a deposit in the amount of $500,000 in any
  combination of cash, certificates of deposit, or securities.
         (h)  In accordance with the requirements of Chapter 1111A,
  Insurance Code, a life settlement contract provider who enters into
  life settlement contracts with owners of life insurance policies
  under this section must file with the Texas Department of
  Insurance:
               (1)  all life settlement contract forms used by the
  provider; and
               (2)  all advertising and marketing materials used by
  the provider.
         (i)  Section 1111A.022(a)(2)(A), Insurance Code, does not
  apply to a life insurance policy that is the subject of a life
  settlement contract entered into under this section if the contract
  has been in force at least five years.
         (j)  A claim against a life settlement contract provider with
  whom an owner of a life insurance policy enters into a life
  settlement contract under this section by the owner, the owner's
  estate, a named beneficiary, or any other person with respect to the
  contract may not exceed the face amount of the policy, less the
  proceeds paid under the contract, plus the total amount of premiums
  paid by the owner since entering into the contract. A life
  settlement contract provider must pay a claim under this subsection
  from the funds in an account described by Subsection (e).
         (k)  In accordance with Chapter 1111A, Insurance Code, the
  Texas Department of Insurance may conduct periodic market
  examinations of each life settlement contract provider who enters
  into a life settlement contract with an owner of a life insurance
  policy under this section.
         (l)  The department shall educate applicants for long-term
  care services and support under the medical assistance program
  about options for life insurance policies, including options that
  do not allow a life insurance policy to be considered as an asset or
  resource in determining eligibility for medical assistance.
         (m)  The executive commissioner of the Health and Human
  Services Commission, in consultation with the commissioner of
  insurance, shall adopt rules necessary to implement this section.
  The rules must ensure that:
               (1)  proceeds from a life settlement contract are used
  to reimburse a provider of long-term care services and support or
  the state to offset the cost of medical assistance long-term care
  services and support;
               (2)  eligibility and need for medical assistance are
  determined without considering the balance of proceeds from a life
  settlement contract as provided in this section; and
               (3)  payments to a provider of long-term care services
  and support and applied income payments are made in accordance with
  this chapter.
         (n)  The entry into a life settlement contract by an owner of
  a life insurance policy under this section is not the only method by
  which the owner may avoid having the policy considered as an asset
  or resource in determining the eligibility of the owner for medical
  assistance.
         (o)  Notwithstanding the provisions of this section, the
  department may not implement a provision of this section if the
  commission determines that implementation of the provision is not
  cost-effective or feasible.
         SECTION 2.  Subject to Section 32.02613(o), Human Resources
  Code, as added by this Act, the executive commissioner of the Health
  and Human Services Commission shall adopt rules necessary to
  implement Section 32.02613, Human Resources Code, as added by this
  Act, not later than January 1, 2014.
         SECTION 3.  The change in law made by this Act applies only
  to a determination of eligibility of a person for medical
  assistance benefits made on or after January 1, 2014, subject to
  Section 32.02613(o), Human Resources Code, as added by this Act. A
  determination of eligibility made before January 1, 2014, is
  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 4.  If before implementing any provision of this Act
  a state agency determines that a waiver or authorization from a
  federal agency is necessary for implementation of that provision,
  the agency affected by the provision shall request the waiver or
  authorization and may delay implementing that provision until the
  waiver or authorization is granted.
         SECTION 5.  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, 2013.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 2383 was passed by the House on May 4,
  2013, by the following vote:  Yeas 114, Nays 17, 4 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 2383 on May 23, 2013, by the following vote:  Yeas 134, Nays 5,
  2 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 2383 was passed by the Senate, with
  amendments, on May 21, 2013, by the following vote:  Yeas 25, Nays
  6.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor       
feedback