Bill Text: TX HB573 | 2021-2022 | 87th Legislature | Comm Sub
Bill Title: Relating to the operation of health care sharing ministries; authorizing a fee; providing a civil penalty.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Introduced - Dead) 2021-05-13 - Postponed 6/1/21 10:00 AM [HB573 Detail]
Download: Texas-2021-HB573-Comm_Sub.html
87R19880 SCL-F | |||
By: Oliverson, Sanford, Jetton | H.B. No. 573 | ||
Substitute the following for H.B. No. 573: | |||
By: Oliverson | C.S.H.B. No. 573 |
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relating to the operation of health care sharing ministries; | ||
authorizing a fee; providing a civil penalty. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Chapter 1681, Insurance Code, is transferred to | ||
Subtitle C, Title 5, Business & Commerce Code, redesignated as | ||
Chapter 113, Business & Commerce Code, and amended to read as | ||
follows: | ||
CHAPTER 113 [ |
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SUBCHAPTER A. GENERAL PROVISIONS | ||
Sec. 113.001. DEFINITIONS. In this chapter: | ||
(1) "Administrative fee" means an amount collected | ||
from members and used for a purpose other than reimbursing members | ||
for their medical expenses, including amounts used to pay for | ||
health care sharing ministry administrative expenses and the | ||
compensation of third-party vendors for services. | ||
(2) "Commissioner" means the commissioner of | ||
insurance. | ||
(3) "Department" means the Texas Department of | ||
Insurance. | ||
(4) "Health care sharing ministry" means a [ |
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faith-based, nonprofit organization described by 26 U.S.C. Section | ||
501(c)(3) and exempt from taxation under 26 U.S.C. Section 501(a) | ||
that [ |
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(A) [ |
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of a similar faith; | ||
(B) [ |
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participants who have medical bills and matches those participants | ||
with other participants with the present ability to assist those | ||
with medical bills in accordance with criteria established by the | ||
health care sharing ministry; | ||
(C) [ |
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participant through contributions from one participant to another; | ||
(D) [ |
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contribute with no assumption of risk or promise to pay among the | ||
participants and no assumption of risk or promise to pay by the | ||
health care sharing ministry to the participants; and | ||
(E) [ |
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[ |
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[ |
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as defined by Section 7001.001, Insurance Code. | ||
(5) "Member" means an individual enrolled in a health | ||
care sharing ministry to share medical expenses with other enrolled | ||
individuals. | ||
(6) "Sharing request" means a request for | ||
reimbursement of medical expenses submitted by a member to the | ||
health care sharing ministry. | ||
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Sec. 113.002 [ |
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sharing ministry that acts in accordance with this chapter is not | ||
considered to be engaging in the business of insurance. | ||
Sec. 113.003. EXEMPTION FROM HEALTH COVERAGE REQUIREMENT BY | ||
INSTITUTION OF HIGHER EDUCATION. A student at an institution of | ||
higher education who is a member of a health care sharing ministry | ||
may use the membership to comply with a requirement by the | ||
institution that the student maintain health benefit coverage. | ||
SUBCHAPTER B. FILING REQUIREMENTS | ||
Sec. 113.051. INITIAL FILING REQUIREMENT. (a) A person | ||
must file information described by Subsection (b) with the | ||
department in the form and manner prescribed by the commissioner to | ||
operate as a health care sharing ministry in this state. | ||
(b) A person intending to operate a health care sharing | ||
ministry must include in the filing described by Subsection (a) all | ||
information required by the commissioner, including: | ||
(1) the responsible director or manager of the | ||
ministry; | ||
(2) the ministry's physical, mailing, and electronic | ||
mail addresses; | ||
(3) the contact phone number for the responsible | ||
director or manager of the ministry; | ||
(4) information demonstrating that the ministry meets | ||
the definition of a health care sharing ministry under Section | ||
113.001; | ||
(5) a copy of the most recent annual audit created by | ||
an independent certified public accounting firm in accordance with | ||
generally accepted accounting principles and which is made | ||
available to the public on request; | ||
(6) a list of any third-party vendors acting on behalf | ||
of the ministry in this state for the purposes of: | ||
(A) enrolling members; | ||
(B) negotiating with health care providers after | ||
services are rendered; or | ||
(C) the financial sharing of member medical | ||
needs; | ||
(7) a copy of any application forms and organization | ||
guidelines used by the ministry; | ||
(8) a report of the ministry's members in this state as | ||
of the date of the filing that includes the: | ||
(A) total number of enrolled members; | ||
(B) distribution of members by age; and | ||
(C) distribution of members by sex; and | ||
(9) a certification that the ministry does not | ||
compensate anyone to solicit or enroll members in this state based | ||
on the number of members solicited or enrolled or the amount of | ||
contributions received from enrolled members, including by | ||
commission, at a rate of more than five percent of the membership | ||
fee received in the first year of membership. | ||
(c) Subsection (b)(9) does not apply to: | ||
(1) a salaried individual employed by the health care | ||
sharing ministry who does not receive any form of commission, | ||
compensation, or other valuable consideration based on enrolling | ||
new members; or | ||
(2) a new member referral program providing credit for | ||
membership for existing members of a health care sharing ministry | ||
who have referred new members only if the program is limited to | ||
credit for no more than 12 months of membership for the existing | ||
members annually. | ||
Sec. 113.052. ANNUAL FILING REQUIREMENT. (a) A health care | ||
sharing ministry shall submit an annual filing of information | ||
described by Subsection (b) to the department in the form and manner | ||
prescribed by the commissioner. | ||
(b) The annual filing must include all information required | ||
by the commissioner, including: | ||
(1) an update of any changes made to documents | ||
previously filed with the department; | ||
(2) a copy of the most recent annual audit required | ||
under 26 U.S.C. Section 5000A(d)(2)(B); | ||
(3) an organization financial report detailing the | ||
following for the prior registration period: | ||
(A) the total amount of money collected from | ||
members in this state, including contributions, administrative | ||
fees, or other funds; | ||
(B) the total number of sharing requests made by | ||
members in this state; | ||
(C) the total amount of money paid for health | ||
care services for members in this state; | ||
(D) the total number of sharing requests that | ||
were denied; | ||
(E) the total amount of administrative fees | ||
collected from members in this state, including amounts paid to | ||
each third-party vendor for services provided to members in this | ||
state; and | ||
(F) the total equivalent monetary amount of | ||
membership contributions waived for participants rewarded by | ||
referring others to a new member enrollment program; | ||
(4) a report of the health care sharing ministry's | ||
members in this state as of the date of the filing that includes | ||
the: | ||
(A) total number of enrolled members; | ||
(B) distribution of members by age; and | ||
(C) distribution of members by sex; | ||
(5) a report detailing the following: | ||
(A) the number of sharing requests made by | ||
members in this state that were approved for sharing; | ||
(B) the number of sharing requests made by | ||
members in this state that were denied for sharing; and | ||
(C) the number of complaints made by members in | ||
this state; and | ||
(6) a certification that the health care sharing | ||
ministry does not compensate anyone to solicit or enroll members in | ||
this state based on the number of members solicited or enrolled or | ||
the amount of contributions received from enrolled members, | ||
including by commission, at a rate of more than five percent of the | ||
membership fee received in the first year of membership. | ||
(c) Subsection (b)(6) does not apply to: | ||
(1) a salaried individual employed by the health care | ||
sharing ministry who does not receive any form of commission, | ||
compensation, or other valuable consideration based on enrolling | ||
new members; or | ||
(2) a new member referral program providing credit for | ||
membership for existing members of a health care sharing ministry | ||
who have referred new members only if the program is limited to | ||
credit for no more than 12 months of membership for the existing | ||
members annually. | ||
Sec. 113.053. LATE FILING. (a) A health care sharing | ||
ministry that fails to timely submit a filing required by this | ||
subchapter must pay the following fee to the department: | ||
(1) $250 for a filing submitted 1 to 30 days late; | ||
(2) $500 for a filing submitted 31 to 60 days late; or | ||
(3) $1,000 for a filing submitted 61 to 90 days late. | ||
(b) If a health care sharing ministry fails to submit a | ||
filing required by this subchapter within 90 days after the | ||
filing's deadline, the ministry may not operate as a health care | ||
sharing ministry for two years. | ||
Sec. 113.054. FEES. Except as provided by Section 113.053, | ||
the commissioner by rule shall set a fee for a filing required under | ||
this subchapter in an amount not to exceed $100. A fee collected | ||
under this section shall be deposited to the credit of the Texas | ||
Department of Insurance operating account. | ||
SUBCHAPTER C. REGULATION OF HEALTH CARE SHARING MINISTRIES | ||
Sec. 113.101. NAME. A health care sharing ministry may not | ||
operate under any name other than the name under which the ministry | ||
has submitted a filing under Subchapter B. | ||
Sec. 113.102. MARKETING AND COMMUNICATION. (a) In all | ||
communications with the public, a health care sharing ministry may | ||
not: | ||
(1) make a direct or indirect representation that: | ||
(A) the ministry provides insurance; or | ||
(B) a health care service is free or included | ||
with membership; or | ||
(2) include "premium," "copay," "deductible," | ||
"coverage," "network," "benefit plan," or a similar term in | ||
marketing except to explain the differences between a health care | ||
sharing ministry and insurance. | ||
(b) A violation of this section is a false, misleading, or | ||
deceptive act or practice in violation of Section 17.46. | ||
Sec. 113.103. PROHIBITED COMPENSATION. (a) A health care | ||
sharing ministry may not compensate anyone to solicit or enroll | ||
members in this state based on the number of members solicited or | ||
enrolled or the amount of contributions received from enrolled | ||
members, including by commission, at a rate of more than five | ||
percent of the membership fee received in the first year of | ||
membership. | ||
(b) This section does not apply to: | ||
(1) a salaried individual employed by the health care | ||
sharing ministry who does not receive any form of commission, | ||
compensation, or other valuable consideration based on enrolling | ||
new members; or | ||
(2) a new member referral program providing credit for | ||
membership for existing members of a health care sharing ministry | ||
who have referred new members only if the program is limited to | ||
credit for no more than 12 months of membership for the existing | ||
members annually. | ||
Sec. 113.104. ENROLLMENT DISCLOSURES. A health care | ||
sharing ministry shall disclose the following information in | ||
writing for each calendar year from the previous five calendar | ||
years in a prominent and conspicuous manner before and at the time | ||
an individual is enrolled as a member: | ||
(1) total member contributions; | ||
(2) total amounts paid for sharing requests; | ||
(3) total administrative fees paid by members; and | ||
(4) the percentage of money paid by members that was | ||
paid toward the following: | ||
(A) sharing requests; and | ||
(B) administrative fees. | ||
Sec. 113.105. QUARTERLY STATEMENTS. A health care sharing | ||
ministry must provide a prominent and conspicuous written quarterly | ||
and annual statement to all members that includes the following: | ||
(1) the number of members participating that quarter | ||
and for that calendar year; | ||
(2) the amount of money contributed by members that | ||
quarter and for that calendar year; | ||
(3) the number of and monetary amount of all sharing | ||
requests submitted that quarter and for that calendar year; | ||
(4) the number of and monetary amount of sharing | ||
requests paid that quarter and for that calendar year; | ||
(5) the amount of member contributions remaining for | ||
future sharing requests for that quarter and for that calendar | ||
year; | ||
(6) the amount of administrative fees for services to | ||
members for that quarter and for that calendar year, including: | ||
(A) the purpose of the administrative fee; | ||
(B) the amount paid for each type of | ||
administrative fee; and | ||
(C) any third-party vendor to which the fee is | ||
paid; | ||
(7) the percentage of money paid by members that was | ||
paid toward the following for that quarter and for that calendar | ||
year: | ||
(A) sharing requests; | ||
(B) administrative fees; and | ||
(C) any amount remaining that is designated for | ||
the payment of future sharing requests; and | ||
(8) the total amount of membership contributions | ||
waived for that quarter and for that calendar year for participants | ||
in a new member enrollment program. | ||
Sec. 113.106. NOTICE; DISCLOSURE. (a) A health care | ||
sharing ministry shall provide written notice on or accompanying | ||
all applications, guideline materials, and written advertisements, | ||
including print and digital advertisements, distributed by or on | ||
behalf of the ministry. | ||
(b) The notice described by Subsection (a) must be in at | ||
least 10-point font, in a prominent and conspicuous place, and read | ||
as follows: | ||
"Notice: Payment of your medical expenses is not guaranteed. | ||
This health care sharing ministry facilitates the sharing of | ||
medical expenses and is not an insurance company, and neither its | ||
guidelines nor its plan of operation is an insurance policy. | ||
Whether anyone chooses to assist you with your medical bills will be | ||
totally voluntary because no other participant will be compelled by | ||
law to contribute toward your medical bills. As such, | ||
participation in the ministry or a subscription to any of its | ||
documents should never be considered to be insurance. Regardless | ||
of whether you receive any payment for medical expenses or whether | ||
this ministry continues to operate, you are always personally | ||
responsible for the payment of your own medical bills. Complaints | ||
concerning this health care sharing ministry may be reported to the | ||
office of the Texas attorney general." | ||
(c) A health care sharing ministry shall provide the | ||
following notice in any audio or visual advertisement clearly, | ||
conspicuously, and in a manner that a listener would hear and | ||
understand: | ||
"Payment of your medical expenses is not guaranteed. This | ||
health care sharing ministry facilitates the sharing of medical | ||
expenses, is not an insurance company, and is not offering an | ||
insurance policy. Regardless of whether you receive any payment for | ||
medical expenses or whether this ministry continues to operate, you | ||
are always personally responsible for the payment of your own | ||
medical bills." | ||
(d) A health care sharing ministry shall provide a written | ||
disclosure to a member at enrollment that states: | ||
(1) the member may not be exempt from Section | ||
5000A(d)(2)(B) of the Internal Revenue Code; and | ||
(2) the member may be subject to a tax if Congress | ||
reinstates the tax. | ||
Sec. 113.107. ANNUAL AUDIT. A health care sharing ministry | ||
shall conduct an annual audit that is: | ||
(1) performed by an independent certified public | ||
accounting firm in accordance with generally accepted accounting | ||
principles; and | ||
(2) made available to the public on request. | ||
Sec. 113.108. EXCESS BENEFIT TRANSACTIONS PROHIBITED. A | ||
health care sharing ministry may not conduct an excess benefit | ||
transaction as defined by 26 U.S.C. Section 4958. | ||
SUBCHAPTER D. ENFORCEMENT | ||
Sec. 113.151. CEASE AND DESIST ORDER. (a) The attorney | ||
general ex parte may issue an emergency cease and desist order if | ||
the attorney general believes that: | ||
(1) a person is operating a health care sharing | ||
ministry in violation of this chapter; and | ||
(2) the alleged conduct: | ||
(A) is fraudulent; | ||
(B) is hazardous or creates an immediate danger | ||
to public safety; or | ||
(C) is causing or can be reasonably expected to | ||
cause public injury that: | ||
(i) is likely to occur at any moment; | ||
(ii) is incapable of being repaired or | ||
rectified; and | ||
(iii) has or is likely to have influence or | ||
effect. | ||
(b) The cease and desist order must: | ||
(1) be served on the person by registered or certified | ||
mail, return receipt requested, at the person's last known address; | ||
(2) contain a statement of the charges; and | ||
(3) require the person to immediately cease and desist | ||
from the acts, methods, or practices stated in the order. | ||
(c) A person affected by the cease and desist order is | ||
entitled to request a hearing to contest the order. The hearing is | ||
a contested case under Chapter 2001, Government Code. | ||
(d) An order is final on the 31st day after the date it is | ||
received unless the affected person requests a hearing under | ||
Subsection (c). Pending a hearing under this section, the order | ||
continues in effect unless the order is stayed by the attorney | ||
general. | ||
(e) The attorney general shall provide to the affected | ||
person with the order written notice of the opportunity to request a | ||
contested case hearing under Chapter 2001, Government Code. | ||
(f) If the affected person requests a hearing under | ||
Subsection (c), the attorney general shall set a contested case | ||
hearing under Chapter 2001, Government Code, and notify the person | ||
of the hearing. | ||
(g) The administrative law judge shall make findings of fact | ||
and conclusions of law and promptly issue to the attorney general a | ||
proposal for a decision regarding the order. | ||
Sec. 113.152. CIVIL PENALTY. (a) A person who violates | ||
this chapter, including a cease and desist order issued under | ||
Section 113.151, is liable to this state for a civil penalty in an | ||
amount not to exceed $25,000 for each violation. | ||
(b) In determining the amount of the civil penalty, the | ||
court shall consider: | ||
(1) the seriousness of the violation, including: | ||
(A) the nature, circumstances, extent, and | ||
gravity of the violation; and | ||
(B) the hazard or potential hazard created to the | ||
health, safety, or economic welfare of the public; | ||
(2) the economic harm to the public interest or public | ||
confidence caused by the violation; | ||
(3) the history of previous violations; | ||
(4) the amount necessary to deter future violations; | ||
(5) efforts to correct the violation; | ||
(6) whether the violation was intentional; and | ||
(7) any other matter that justice may require. | ||
Sec. 113.153. ENFORCEMENT ACTION. If the attorney general | ||
believes that a health care sharing ministry or another person is | ||
violating or has violated this chapter, the attorney general may | ||
bring an action in a Travis County district court to enjoin the | ||
violation, recover a civil penalty under Section 113.152, order | ||
restitution, and obtain other relief the court considers | ||
appropriate. | ||
Sec. 113.154. REMEDIES CUMULATIVE. A remedy or action | ||
authorized by this subchapter is in addition to any other civil, | ||
administrative, or criminal action provided by law. | ||
SECTION 2. Section 562.0041, Insurance Code, is amended to | ||
read as follows: | ||
Sec. 562.0041. EXEMPTION. This chapter does not apply to a | ||
health care sharing ministry operated under Chapter 113, Business & | ||
Commerce Code [ |
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SECTION 3. Section 651.002(c), Insurance Code, is amended | ||
to read as follows: | ||
(c) This chapter does not apply to a health care sharing | ||
ministry operated under Chapter 113, Business & Commerce Code | ||
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SECTION 4. Section 4151.0022, Insurance Code, is amended to | ||
read as follows: | ||
Sec. 4151.0022. NONAPPLICABILITY. This chapter does not | ||
apply to a health care sharing ministry operated under Chapter 113, | ||
Business & Commerce Code [ |
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SECTION 5. Section 7001.002, Insurance Code, is amended to | ||
read as follows: | ||
Sec. 7001.002. EXEMPTION. This chapter does not apply to a | ||
program operator who is an insurer and who holds a certificate of | ||
authority under Title 6, or a health care sharing ministry operated | ||
under Chapter 113, Business & Commerce Code [ |
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SECTION 6. Section 7002.004, Insurance Code, is amended to | ||
read as follows: | ||
Sec. 7002.004. EXEMPTION. This chapter does not apply to a | ||
health care sharing ministry operated under Chapter 113, Business & | ||
Commerce Code [ |
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SECTION 7. (a) Notwithstanding Section 113.051, Business & | ||
Commerce Code, as added by this Act, a health care sharing ministry | ||
operating in this state immediately before the effective date of | ||
this Act is not required to submit a filing under Subchapter B, | ||
Chapter 113, Business & Commerce Code, as added by this Act, before | ||
March 1, 2022. The ministry may continue operating without a filing | ||
until April 1, 2022. | ||
(b) A health care sharing ministry described by Subsection | ||
(a) of this section that fails to submit a filing under Subchapter | ||
B, Chapter 113, Business & Commerce Code, as added by this Act, | ||
before March 1, 2022, may not operate as a health care sharing | ||
ministry until the ministry submits a filing on or after March 1, | ||
2024. | ||
SECTION 8. This Act takes effect September 1, 2021. |