Bill Text: TX HB3851 | 2021-2022 | 87th Legislature | Introduced
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
87R5124 SMT-F | ||
By: Martinez Fischer | H.B. No. 3851 |
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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. |