Bill Text: TX HB3851 | 2021-2022 | 87th Legislature | Introduced

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Bill Title: Relating to the creation of a health insurance risk pool for certain health benefit plan enrollees; authorizing an assessment.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2021-03-24 - Referred to Insurance [HB3851 Detail]

Download: Texas-2021-HB3851-Introduced.html

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87R5124 SMT-F
By: Martinez Fischer H.B. No. 3851

A BILL TO BE ENTITLED
AN ACT
relating to the creation of a health insurance risk pool for certain
health benefit plan enrollees; authorizing an assessment.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle G, Title 8, Insurance Code, is amended
by adding Chapter 1511 to read as follows:
CHAPTER 1511. HEALTH INSURANCE RISK POOL
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1511.0001. DEFINITIONS. In this chapter:
(1) "Board" means the board of directors appointed
under this chapter.
(2) "Pool" means a health insurance risk pool
established under this chapter and administered by the board.
Sec. 1511.0002. WAIVER. The commissioner shall:
(1) apply to the United States secretary of health and
human services under 42 U.S.C. Section 18052 for a waiver of Section
1312(c)(1) of the Patient Protection and Affordable Care Act (Pub.
L. No. 111-148) and any applicable regulations or guidance
beginning with the 2022 plan year;
(2) take any action the commissioner considers
appropriate to make an application under Subdivision (1); and
(3) implement a state plan that meets the requirements
of a waiver granted in response to an application under Subdivision
(1) if the plan is:
(A) consistent with state and federal law; and
(B) approved by the United States secretary of
health and human services.
Sec. 1511.0003. EXEMPTION FROM STATE TAXES AND FEES.
Notwithstanding any other law, a program created under this chapter
is not subject to any state tax, regulatory fee, or surcharge,
including a premium or maintenance tax or fee.
Sec. 1511.0004. NOTICE AND COMMENT. Following the grant of
a waiver under Section 1511.0002 and before the commissioner
implements a state plan under that section, the commissioner shall
hold a public hearing to solicit stakeholder comments regarding the
establishment of a health insurance risk pool under this chapter.
SUBCHAPTER B. ESTABLISHMENT AND PURPOSE
Sec. 1511.0051. ESTABLISHMENT OF HEALTH INSURANCE RISK
POOL. To the extent that federal money is available and only if the
United States secretary of health and human services grants the
waiver application submitted under Section 1511.0002, the
commissioner shall:
(1) apply for the federal money;
(2) use the federal money to establish a pool for the
purpose of this chapter; and
(3) authorize the board to use the federal money to
administer a pool for the purpose of this chapter.
Sec. 1511.0052. PURPOSE OF POOL. The purpose of the pool is
to provide a reinsurance mechanism to:
(1) meaningfully reduce health benefit plan premiums
in the individual market by mitigating the impact of high-risk
individuals on rates;
(2) maximize available federal money to assist
residents of this state to obtain guaranteed issue health benefit
coverage without increasing the federal deficit; and
(3) increase enrollment in guaranteed issue,
individual market health benefit plans that provide benefits and
coverage and cost-sharing protections against out-of-pocket costs
comparable to and as comprehensive as health benefit plans that
would be available without the pool.
SUBCHAPTER C. ADMINISTRATION
Sec. 1511.0101. BOARD OF DIRECTORS. (a) The pool is
governed by a board of directors.
(b) The board consists of nine members appointed by the
commissioner as follows:
(1) at least two, but not more than four, members must
be individuals who are affiliated with a health benefit plan issuer
authorized to write health benefit plans in this state;
(2) at least two members must be:
(A) individuals or the parents of individuals who
are covered by the pool or are reasonably expected to qualify for
coverage by the pool; or
(B) individuals who work as advocates for
individuals described by Paragraph (A); and
(3) the other members may be selected from individuals
such as:
(A) a physician licensed to practice in this
state by the Texas State Board of Medical Examiners;
(B) a hospital administrator;
(C) an advanced nurse practitioner; or
(D) a representative of the public who is not:
(i) employed by or affiliated with an
insurance company or insurance plan, group hospital service
corporation, or health maintenance organization;
(ii) related within the first degree of
consanguinity or affinity to an individual described by
Subparagraph (i); or
(iii) licensed as, employed by, or
affiliated with a physician, hospital, or other health care
provider.
(c) For purposes of Subsection (b), an individual who is
required to register under Chapter 305, Government Code, because of
the individual's activities with respect to health benefit
plan-related matters is affiliated with a health benefit plan
issuer.
(d) An individual is not disqualified under Subsection
(b)(3)(D)(i) from representing the public if the individual's only
affiliation with an insurance company or insurance plan, group
hospital service corporation, or health maintenance organization
is as an insured or as an individual who has coverage through a plan
provided by the corporation or organization.
Sec. 1511.0102. TERMS; VACANCY. (a) Board members serve
staggered six-year terms.
(b) The commissioner shall fill a vacancy on the board by
appointing, for the unexpired term, an individual who has the
appropriate qualifications to fill that position.
Sec. 1511.0103. PRESIDING OFFICER. The commissioner shall
designate one board member to serve as presiding officer at the
pleasure of the commissioner.
Sec. 1511.0104. PER DIEM; REIMBURSEMENT. A board member is
not entitled to compensation for service on the board but is
entitled to:
(1) a per diem in the amount provided by the General
Appropriations Act for state officials for each day the member
performs duties as a board member; and
(2) reimbursement of expenses incurred while
performing duties as a board member in the amount provided by the
General Appropriations Act for state officials.
Sec. 1511.0105. MEMBER'S IMMUNITY. (a) A board member is
not liable for an act or omission made in good faith in the
performance of powers and duties under this chapter.
(b) A cause of action does not arise against a board member
for an act or omission described by Subsection (a).
Sec. 1511.0106. ADDITIONAL POWERS AND DUTIES. The
commissioner by rule may establish powers and duties of the board in
addition to those provided by this chapter.
Sec. 1511.0107. PLAN OF OPERATION. (a) Operation and
management of the pool are governed by a plan of operation adopted
by the board and approved by the commissioner. The plan of
operation includes the articles, bylaws, and operating rules of the
pool.
(b) The plan of operation must ensure the fair, reasonable,
and equitable administration of the pool.
(c) The board shall amend the plan of operation as necessary
to carry out this chapter. An amendment to the plan of operation
must be approved by the commissioner before the board may adopt the
amendment.
SUBCHAPTER D. POWERS AND DUTIES
Sec. 1511.0151. METHODS TO REDUCE PREMIUM IN INDIVIDUAL
MARKET. Subject to any requirements to obtain federal money for the
pool, the board may use pool money to achieve lower enrollee premium
rates by establishing a reinsurance mechanism for health benefit
plan issuers writing comprehensive, guaranteed issue coverage in
the individual market.
Sec. 1511.0152. INCREASED ACCESS TO GUARANTEED ISSUE
COVERAGE. The board shall use pool money to increase enrollment in
guaranteed issue coverage in the individual market in a manner that
ensures that the benefits and cost-sharing protections available in
the individual market are maintained in the same manner the
benefits and protections would be maintained without the waiver
described by Section 1511.0002.
Sec. 1511.0153. CONTRACTS AND AGREEMENTS. The board may
enter into a contract or agreement that the board determines is
appropriate to carry out this chapter, including a contract or
agreement with:
(1) a similar pool in another state for the joint
performance of common administrative functions;
(2) another organization for the performance of
administrative functions; or
(3) a federal agency.
Sec. 1511.0154. RULES. The commissioner and board may
adopt rules necessary to implement this chapter, including rules to
administer the pool and distribute pool money.
Sec. 1511.0155. PROCEDURES, CRITERIA, AND FORMS. The board
by rule shall provide the procedures, criteria, and forms necessary
to implement, collect, and deposit assessments under Subchapter E.
Sec. 1511.0156. PUBLIC EDUCATION AND OUTREACH. (a) The
board may develop and implement public education, outreach, and
facilitated enrollment strategies under this chapter.
(b) The board may contract with marketing organizations to
perform or provide assistance with the strategies described by
Subsection (a).
Sec. 1511.0157. AUTHORITY TO ACT AS REINSURER. In addition
to the powers granted to the board under this chapter, the board may
exercise any authority that may be exercised under the law of this
state by a reinsurer.
SUBCHAPTER E. FUNDING
Sec. 1511.0201. FUNDING. The commissioner may use money
appropriated to the department to:
(1) apply for federal money and grants; and
(2) implement this chapter.
Sec. 1511.0202. ASSESSMENTS. (a) The board may assess
health benefit plan issuers, including making advance interim
assessments, as reasonable and necessary for the pool's
organizational and interim operating expenses.
(b) The board shall credit an interim assessment as an
offset against any regular assessment that is due after the end of
the fiscal year.
(c) The regular assessment is the amount calculated under
Section 1511.0204.
(d) The board shall deposit money from the interim and
regular assessments described by this section in an account
established outside the treasury and administered by the board.
Money in the account may be spent without an appropriation and may
be used only for purposes authorized by this chapter.
Sec. 1511.0203. DETERMINATION OF POOL FUNDING
REQUIREMENTS. After the end of each fiscal year, the board shall
determine for the next calendar year the amount of money required by
the pool to reduce enrollee premiums in accordance with this
chapter after applying the federal money obtained under this
chapter.
Sec. 1511.0204. ASSESSMENTS TO COVER POOL FUNDING
REQUIREMENTS. (a) The board shall recover an amount equal to the
funding required as determined under Section 1511.0203 by assessing
each health benefit plan issuer an amount determined annually by
the board based on information in annual statements, the health
benefit plan issuer's annual report to the board under Sections
1511.0251 and 1511.0252, and any other reports required by and
filed with the board.
(b) The board shall use the total number of enrolled
individuals reported by all health benefit plan issuers under
Section 1511.0252 as of the preceding December 31 to compute the
amount of a health benefit plan issuer's assessment, if any, in
accordance with this subsection. The board shall allocate the
total amount to be assessed based on the total number of enrolled
individuals covered by excess loss, stop-loss, or reinsurance
policies and on the total number of other enrolled individuals as
determined under Section 1511.0252. To compute the amount of a
health benefit plan issuer's assessment:
(1) for the issuer's enrolled individuals covered by
an excess loss, stop-loss, or reinsurance policy, the board shall:
(A) divide the allocated amount to be assessed by
the total number of enrolled individuals covered by excess loss,
stop-loss, or reinsurance policies, as determined under Section
1511.0252, to determine the per capita amount; and
(B) multiply the number of a health benefit plan
issuer's enrolled individuals covered by an excess loss, stop-loss,
or reinsurance policy, as determined under Section 1511.0252, by
the per capita amount to determine the amount assessed to that
health benefit plan issuer; and
(2) for the issuer's enrolled individuals not covered
by excess loss, stop-loss, or reinsurance policies, the board,
using the gross health benefit plan premiums reported for the
preceding calendar year by health benefit plan issuers under
Section 1511.0253, shall:
(A) divide the gross premium collected by a
health benefit plan issuer by the gross premium collected by all
health benefit plan issuers; and
(B) multiply the allocated amount to be assessed
by the fraction computed under Paragraph (A) to determine the
amount assessed to that health benefit plan issuer.
(c) A small employer health benefit plan described by
Chapter 1501 is not subject to an assessment under this section.
Sec. 1511.0205. ASSESSMENT DUE DATE; INTEREST. (a) An
assessment is due on the date specified by the board that is not
earlier than the 30th day after the date written notice of the
assessment is transmitted to the health benefit plan issuer.
(b) Interest accrues on the unpaid amount of an assessment
at a rate equal to the prime lending rate, as published in the most
recent issue of the Wall Street Journal and determined as of the
first day of each month during which the assessment is delinquent,
plus three percent.
Sec. 1511.0206. ABATEMENT OR DEFERMENT OF ASSESSMENT. (a)
A health benefit plan issuer may petition the board for an abatement
or deferment of all or part of an assessment imposed by the board.
The board may abate or defer all or part of the assessment if the
board determines that payment of the assessment would endanger the
ability of the health benefit plan issuer to fulfill its
contractual obligations.
(b) If all or part of an assessment against a health benefit
plan issuer is abated or deferred, the amount of the abatement or
deferment shall be assessed against the other health benefit plan
issuers in a manner consistent with the method for computing
assessments under this chapter.
(c) A health benefit plan issuer receiving an abatement or
deferment under this section remains liable to the pool for the
deficiency.
Sec. 1511.0207. USE OF EXCESS FROM ASSESSMENTS. If the
total amount of the assessments exceeds the pool's actual losses
and administrative expenses, the board shall credit each health
benefit plan issuer with the excess in an amount proportionate to
the amount the health benefit plan issuer paid in assessments. The
credit may be paid to the health benefit plan issuer or applied to
future assessments under this chapter.
Sec. 1511.0208. COLLECTION OF ASSESSMENTS. The pool may
recover or collect assessments made under this subchapter.
SUBCHAPTER F. REPORTING
Sec. 1511.0251. ANNUAL ISSUER REPORT TO BOARD: REQUESTED
INFORMATION. Each health benefit plan issuer shall report to the
board the information requested by the board, as of December 31 of
the preceding year.
Sec. 1511.0252. ANNUAL ISSUER REPORT TO BOARD: ENROLLED
INDIVIDUALS. (a) Each health benefit plan issuer shall report to
the board the number of residents of this state enrolled, as of
December 31 of the preceding year, in the issuer's health benefit
plans providing coverage for residents in this state, as:
(1) an employee under a group health benefit plan; or
(2) an individual policyholder or subscriber.
(b) In determining the number of individuals to report under
Subsection (a)(1), the health benefit plan issuer shall include
each employee for whom a premium is paid and coverage is provided
under an excess loss, stop-loss, or reinsurance policy issued by
the issuer to an employer or group health benefit plan providing
coverage for employees in this state. A health benefit plan issuer
providing excess loss insurance, stop-loss insurance, or
reinsurance, as described by this subsection, for a primary health
benefit plan issuer may not report individuals reported by the
primary health benefit plan issuer.
(c) Ten employees covered by a health benefit plan issuer
under a policy of excess loss insurance, stop-loss insurance, or
reinsurance count as one employee for purposes of determining that
health benefit plan issuer's assessment.
(d) In determining the number of individuals to report under
this section, the health benefit plan issuer shall exclude:
(1) the dependents of the employee or an individual
policyholder or subscriber; and
(2) individuals who are covered by the health benefit
plan issuer under a Medicare supplement benefit plan subject to
Chapter 1652.
(e) In determining the number of enrolled individuals to
report under this section, the health benefit plan issuer shall
exclude individuals who are retired employees 65 years of age or
older.
Sec. 1511.0253. ANNUAL ISSUER REPORT TO BOARD: GROSS
PREMIUMS. (a) Each health benefit plan issuer shall report to the
board the gross premiums collected for the preceding calendar year
for health benefit plans.
(b) For purposes of this section, gross health benefit plan
premiums do not include premiums collected for:
(1) coverage under a Medicare supplement benefit plan
subject to Chapter 1652;
(2) coverage under a small employer health benefit
plan subject to Chapter 1501;
(3) coverage:
(A) for wages or payments in lieu of wages for a
period during which an employee is absent from work because of
accident or disability;
(B) as a supplement to a liability insurance
policy;
(C) for credit insurance;
(D) only for dental or vision care; or
(E) only for a specified disease or illness;
(4) a workers' compensation insurance policy;
(5) medical payment insurance coverage provided under
a motor vehicle insurance policy;
(6) a long-term care policy, including a nursing home
fixed indemnity policy, unless the commissioner determines that the
policy provides comprehensive health benefit plan coverage;
(7) liability insurance coverage, including general
liability insurance and automobile liability insurance;
(8) coverage for on-site medical clinics;
(9) insurance coverage under which benefits are
payable with or without regard to fault and that is statutorily
required to be contained in a liability insurance policy or
equivalent self-insurance; or
(10) other similar insurance coverage, as specified by
federal regulations issued under the Health Insurance Portability
and Accountability Act of 1996 (Pub. L. No. 104-191), under which
benefits for medical care are secondary or incidental to other
insurance benefits.
Sec. 1511.0254. ANNUAL BOARD REPORT OF POOL ACTIVITIES.
(a) Beginning June 1, 2022, not later than June 1 of each year, the
board shall submit a report to the governor, lieutenant governor,
and speaker of the house of representatives.
(b) The report submitted under Subsection (a) must include:
(1) a summary of the activities conducted under this
chapter in the calendar year preceding the year in which the report
is submitted;
(2) the average amount by which health benefit plan
premiums were reduced in this state and in each rating region;
(3) the average change in each rating region in the
amount of health benefit plan premiums paid by individuals who
receive a premium subsidy under the Patient Protection and
Affordable Care Act (Pub. L. No. 111-148); and
(4) an estimate of the change in each rating region in
enrollment in health benefit plans due to the reduction in
premiums.
SECTION 2. 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, 2021.