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 |
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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 |