Bill Text: TX HB2507 | 2019-2020 | 86th Legislature | Comm Sub
Bill Title: Relating to the regulation of short-term limited-duration insurance policies providing health insurance coverage.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2019-05-09 - Placed on General State Calendar [HB2507 Detail]
Download: Texas-2019-HB2507-Comm_Sub.html
86R28295 SMT-F | |||
By: Lucio III | H.B. No. 2507 | ||
Substitute the following for H.B. No. 2507: | |||
By: Lucio III | C.S.H.B. No. 2507 |
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relating to the regulation of short-term limited-duration | ||
insurance policies providing health insurance coverage. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 1201.104(a), Insurance Code, is amended | ||
to read as follows: | ||
(a) For individual accident and health insurance policies, | ||
the commissioner shall adopt rules establishing minimum standards | ||
for benefits under each of the following categories of coverage: | ||
(1) basic hospital expense; | ||
(2) basic medical-surgical expense; | ||
(3) hospital indemnity or other fixed indemnity; | ||
(4) major medical expense; | ||
(5) disability income protection; | ||
(6) accident only; | ||
(7) specified disease; | ||
(8) specified accident; [ |
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(9) limited benefit; and | ||
(10) short-term limited-duration insurance. | ||
SECTION 2. Chapter 1201, Insurance Code, is amended by | ||
adding Subchapter G to read as follows: | ||
SUBCHAPTER G. SHORT-TERM LIMITED-DURATION INSURANCE | ||
Sec. 1201.301. DEFINITIONS. In this subchapter: | ||
(1) "Health benefit exchange" has the meaning assigned | ||
by Section 1369.201. | ||
(2) "Short-term limited-duration insurance" has the | ||
meaning assigned by 26 C.F.R. Section 54.9801-2. | ||
Sec. 1201.302. ADVERTISING DISCLOSURES REQUIRED. (a) An | ||
insurer issuing a short-term limited-duration insurance policy | ||
shall display, on all sales and marketing materials, including any | ||
Internet websites advertising or selling the policy, the applicable | ||
notice under 26 C.F.R. Section 54.9801-2, including any | ||
modifications to the notice prescribed by the commissioner under | ||
Subsection (d). | ||
(b) An agent selling a short-term limited-duration | ||
insurance policy in person or through the telephone shall read out | ||
loud the disclosure required by Subsection (a) to a prospective | ||
purchaser. | ||
(c) The commissioner shall by rule prescribe a procedure to | ||
communicate the disclosure required by Subsection (a) to a | ||
prospective purchaser of a short-term limited-duration insurance | ||
policy on an Internet website that is substantially equivalent to | ||
an agent reading the disclosure aloud. | ||
(d) The commissioner may by rule prescribe modifications to | ||
the notice under 26 C.F.R. Section 54.9801-2 for the purpose of | ||
making the notice more readable. | ||
Sec. 1201.303. POLICY DISCLOSURE FORM. (a) The | ||
commissioner by rule shall prescribe a disclosure form to be | ||
provided with the short-term limited-duration insurance policy and | ||
the application. | ||
(b) The disclosure form must be in an easily readable font | ||
at least 14-point in size and include: | ||
(1) the duration of coverage; | ||
(2) a statement that: | ||
(A) the policy may be renewed only [x] times/may | ||
not be renewed; | ||
(B) the expiration of short-term coverage is not | ||
a qualifying life event that would make a person eligible for a | ||
special enrollment period; and | ||
(C) the policy may expire outside of the open | ||
enrollment period; | ||
(3) to the extent the information is available, the | ||
dates of the next three open enrollment periods under the federal | ||
Affordable Care Act following the date the policy expires; | ||
(4) whether the policy contains any limitations or | ||
exclusions to preexisting conditions; | ||
(5) the maximum dollar amount payable under the | ||
policy; | ||
(6) the deductibles under the policy and the health | ||
care services to which the deductibles apply; | ||
(7) whether the following health care services are | ||
covered, including: | ||
(A) prescription drug coverage; | ||
(B) mental health services; | ||
(C) substance abuse treatment; | ||
(D) maternity care; | ||
(E) hospitalization; | ||
(F) surgery; | ||
(G) emergency health care; and | ||
(H) preventive health care; and | ||
(8) any other information the commissioner determines | ||
is important for a purchaser of a short-term limited-duration | ||
insurance policy. | ||
(c) An insurer issuing a short-term limited-duration | ||
insurance policy shall adopt procedures in accordance with | ||
commissioner rule to obtain a signed form from the insured | ||
acknowledging receipt of the disclosure form described by this | ||
section. The rule must allow for electronic acknowledgment. The | ||
insurer shall retain an acknowledgment form until the fifth | ||
anniversary of the date the insurer receives the form, and the | ||
insurer shall make the form available to the department on request. | ||
Sec. 1201.304. RENEWAL LIMITATION. (a) An insurer may not | ||
advertise or describe a short-term limited-duration insurance | ||
policy as renewable unless: | ||
(1) the policy provides that during the initial term | ||
and any renewal period, the insurer may not change a material term | ||
in the policy without the consent of the policyholder; and | ||
(2) the policy is renewable at the sole option of the | ||
policyholder. | ||
(b) This subsection does not limit the right of an insurer | ||
to make changes in premium rates by class. | ||
Sec. 1201.305. TERMINATION. (a) Except as provided by | ||
Subsection (b), an insurer issuing a short-term limited-duration | ||
insurance policy may not terminate the policy before the policy's | ||
expiration date except: | ||
(1) for nonpayment of premiums; or | ||
(2) because the policyholder has performed an act or | ||
practice that constitutes fraud or has made an intentional | ||
misrepresentation of a material fact relating to the policy. | ||
(b) An insurer issuing a short-term limited-duration | ||
insurance policy shall provide an option under the policy for the | ||
insured to cancel the policy effective after each 30-day interval | ||
after the effective date of coverage. | ||
SECTION 3. Not later than January 1, 2020, the commissioner | ||
of insurance shall adopt rules necessary to implement Section | ||
1201.104, Insurance Code, as amended by this Act, and Subchapter G, | ||
Chapter 1201, Insurance Code, as added by this Act. | ||
SECTION 4. Subchapter G, Chapter 1201, Insurance Code, as | ||
added by this Act, applies only to an insurance policy delivered, | ||
issued for delivery, or renewed on or after January 1, 2020. An | ||
insurance policy delivered, issued for delivery, or renewed before | ||
January 1, 2020, is governed by the law as it existed immediately | ||
before the effective date of this Act, and that law is continued in | ||
effect for that purpose. | ||
SECTION 5. This Act takes effect September 1, 2019. |