88R3234 MEW-F
 
  By: Oliverson H.B. No. 700
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to creation of the Texas Health Insurance Exchange;
  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. TEXAS HEALTH INSURANCE EXCHANGE
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 1511.001.  DEFINITIONS. In this chapter:
               (1)  "Board" means the board of directors of the
  exchange.
               (2)  "Exchange" means the Texas Health Insurance
  Exchange.
               (3)  "Executive commissioner" means the executive
  commissioner of the Health and Human Services Commission.
               (4)  "Qualified health plan" means a health benefit
  plan that has been certified by the board as meeting the criteria
  established under Section 1311(c), Patient Protection and
  Affordable Care Act (42 U.S.C. Section 18031(c)).
               (5)  "Secretary" means the secretary of the United
  States Department of Health and Human Services.
         Sec. 1511.002.  DEFINITION OF HEALTH BENEFIT PLAN. (a) In
  this chapter, "health benefit plan" means an insurance policy,
  insurance agreement, evidence of coverage, or other similar
  coverage document that provides coverage for medical or surgical
  expenses incurred as a result of a health condition, accident, or
  sickness that is issued by:
               (1)  an insurance company;
               (2)  a group hospital service corporation operating
  under Chapter 842;
               (3)  a health maintenance organization operating under
  Chapter 843;
               (4)  an approved nonprofit health corporation that
  holds a certificate of authority under Chapter 844;
               (5)  a multiple employer welfare arrangement that holds
  a certificate of authority under Chapter 846;
               (6)  a stipulated premium company operating under
  Chapter 884;
               (7)  a fraternal benefit society operating under
  Chapter 885; or
               (8)  an exchange operating under Chapter 942.
         (b)  In this chapter, "health benefit plan" does not include:
               (1)  a plan that provides coverage:
                     (A)  for wages or payments in lieu of wages for a
  period during which an employee is absent from work because of
  sickness or injury;
                     (B)  as a supplement to a liability insurance
  policy;
                     (C)  for credit insurance;
                     (D)  only for vision care;
                     (E)  only for hospital expenses; or
                     (F)  only for indemnity for hospital confinement;
               (2)  a Medicare supplemental policy as defined by
  Section 1882(g)(1), Social Security Act (42 U.S.C. Section
  1395ss(g)(1));
               (3)  a workers' compensation insurance policy; or
               (4)  medical payment insurance coverage provided under
  a motor vehicle insurance policy.
         Sec. 1511.003.  TREATMENT OF EMPLOYERS. (a) For purposes of
  this chapter, "small employer" means a person who employed at least
  two, and an average of not more than 50 employees during the
  preceding calendar year. This subsection expires December 31,
  2025.
         (b)  All persons treated as a single employer under Section
  414(b), (c), (m), or (o), Internal Revenue Code of 1986, are single
  employers for purposes of this chapter.
         (c)  An employer and any predecessor employer are a single
  employer for purposes of this chapter.
         (d)  In determining the number of employees of an employer
  under this section, the number of employees:
               (1)  includes part-time employees and employees who are
  not eligible for coverage through the employer; and
               (2)  for an employer that did not have employees during
  the entire preceding calendar year, is the average number of
  employees that the employer is reasonably expected to employ on
  business days in the current calendar year.
         (e)  A small employer that makes enrollment in qualified
  health plans available to its employees through the exchange and
  ceases to be a small employer by reason of an increase in the number
  of its employees continues to be a small employer for purposes of
  this chapter as long as it continuously makes enrollment through
  the exchange available to its employees.
         Sec. 1511.004.  RULEMAKING AUTHORITY. The board may adopt
  rules necessary and proper to implement this chapter. Rules adopted
  under this section may not conflict with or prevent the application
  of regulations promulgated by the secretary under the Patient
  Protection and Affordable Care Act (Pub. L. No. 111-148).
         Sec. 1511.005.  AGENCY COOPERATION. (a) The exchange, the
  department, and the Health and Human Services Commission shall
  cooperate fully in performing their respective duties under this
  code or another law of this state relating to the operation of the
  exchange.
         (b)  The exchange shall cooperate and coordinate with the
  Health and Human Services Commission to facilitate a seamless user
  experience.
         Sec. 1511.006.  EXEMPTION FROM STATE TAXES AND FEES.  The
  exchange is not subject to any state tax, regulatory fee, or
  surcharge, including a premium or maintenance tax or fee.
         Sec. 1511.007.  COMPLIANCE WITH FEDERAL LAW. The exchange
  shall comply with all applicable federal law and regulations.
         Sec. 1511.008.  EXEMPTION FROM STATE PURCHASING PROCEDURES.
  The exchange is not subject to state purchasing or procurement
  requirements under Subtitle D, Title 10, Government Code, or any
  other law.
  SUBCHAPTER B. ESTABLISHMENT AND GOVERNANCE
         Sec. 1511.051.  ESTABLISHMENT. The Texas Health Insurance
  Exchange is established as an American Health Benefit Exchange and
  a Small Business Health Options Program (SHOP) Exchange authorized
  and required by Section 1311, Patient Protection and Affordable
  Care Act (42 U.S.C. Section 18031).
         Sec. 1511.052.  GOVERNANCE OF EXCHANGE; BOARD MEMBERSHIP.
  (a)  The exchange is governed by a board of directors.
         (b)  The board consists of 11 members as follows:
               (1)  five members appointed by the governor, two of
  whom have experience in the health insurance industry;
               (2)  three additional members appointed by the governor
  from a list of nominees submitted by the speaker of the house of
  representatives; and
               (3)  three members appointed by the lieutenant
  governor.
         (c)  In making appointments or nominations under this
  section, the governor, lieutenant governor, and speaker of the
  house of representatives shall attempt to make appointments and
  nominations that increase the board's diversity of expertise.
         Sec. 1511.053.  PRESIDING OFFICER. The board shall annually
  designate one member of the board to serve as presiding officer.
         Sec. 1511.054.  TERMS; VACANCY. (a) Appointed members of
  the board serve two-year terms, with the members' terms expiring
  February 1 of each odd-numbered year.
         (b)  The appropriate appointing authority 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. 1511.055.  CONFLICT OF INTEREST. (a) Any board member
  or a member of a committee formed by the board with a direct
  interest in a matter, personally or through an employer, before the
  board shall abstain from deliberations and actions on the matter in
  which the conflict of interest arises and shall further abstain
  from any vote on the matter, and may not otherwise participate in a
  decision on the matter.
         (b)  Each board member shall file a conflict of interest
  statement and a statement of ownership interests with the board to
  ensure disclosure of all existing and potential personal interests
  related to board business.
         (c)  A member of the board or of the staff of the exchange may
  not be employed by, affiliated with, a consultant to, a member of
  the board of directors of, or otherwise a representative of a health
  benefit plan issuer or other insurer, an agent or broker, a health
  care provider, or a health care facility or health clinic while
  serving on the board or on the staff of the exchange.
         (d)  A member of the board or of the staff of the exchange may
  not be a member, a board member, or an employee of a trade
  association of health benefit plan issuers, health facilities,
  health clinics, or health care providers while serving on the board
  or on the staff of the exchange.
         (e)  A member of the board or of the staff of the exchange may
  not be a health care provider unless the member receives no
  compensation for rendering services as a health care provider and
  does not have an ownership interest in a professional health care
  practice.
         Sec. 1511.056.  GENERAL DUTIES OF BOARD MEMBERS. (a) Each
  board member has the responsibility and duty to meet the
  requirements of this title and applicable state and federal laws
  and regulations, to serve the public interest of the individuals
  and small businesses seeking health benefit plan coverage through
  the exchange, and to ensure the operational well-being and fiscal
  solvency of the exchange.
         (b)  A member of the board may not make, participate in
  making, or in any way attempt to use the board member's official
  position to influence the making of any decision that the board
  member knows or has reason to know will have a material financial
  effect, distinguishable from its effect on the public generally, on
  the board member or the board member's immediate family, or on:
               (1)  any source of income, other than gifts and loans by
  a commercial lending institution in the regular course of business
  on terms available to the public generally, aggregating $250 or
  more in value, provided or promised to the member within the 12
  months immediately preceding the date the decision is made; or
               (2)  any business entity in which the member is a
  director, officer, partner, trustee, or employee, or holds any
  position of management.
         Sec. 1511.057.  REIMBURSEMENT. A member of the board is not
  entitled to compensation but is entitled to reimbursement for
  travel or other expenses incurred while performing duties as a
  board member in the amount provided by the General Appropriations
  Act for state officials.
         Sec. 1511.058.  MEMBER'S IMMUNITY. (a) A member of the
  board 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 member of the
  board for an act or omission described by Subsection (a).
         Sec. 1511.059.  OPEN RECORDS AND OPEN MEETINGS. The board is
  subject to Chapters 551 and 552, Government Code.
         Sec. 1511.060.  RECORDS. The board shall keep records of the
  board's proceedings for at least seven years.
  SUBCHAPTER C.  POWERS AND DUTIES OF EXCHANGE
         Sec. 1511.101.  EMPLOYEES; COMMITTEES. (a) The board may
  employ an executive director and any other agents and employees
  that the board considers necessary to assist the exchange in
  carrying out its responsibilities and functions.
         (b)  The executive director shall organize, administer, and
  manage the operations of the exchange. The executive director may
  hire other employees as necessary to carry out the responsibilities
  of the exchange.
         (c)  The exchange may appoint appropriate legal, actuarial,
  and other committees necessary to provide technical assistance in
  operating the exchange and performing any of the functions of the
  exchange.
         Sec. 1511.102.  ADVISORY COMMITTEE. The board may appoint
  an advisory committee to allow for the involvement of the health
  care and health insurance industries and other stakeholders in the
  operation of the exchange. The advisory committee may provide
  expertise and recommendations to the board but may not adopt rules
  or enter into contracts on behalf of the exchange.
         Sec. 1511.103.  CONTRACTS. (a)  Except as provided by
  Subsection (b), the exchange may enter into any contract that the
  exchange considers necessary to implement or administer this
  chapter, including a contract with the department, the Health and
  Human Services Commission, or an entity that has experience in
  individual and small group health insurance, benefit
  administration, or other experience relevant to the
  responsibilities assumed by the entity, to perform functions or
  provide services in connection with the operation of the exchange.
         (b)  This exchange may not enter into a contract with a
  health benefit plan issuer under this section.
         Sec. 1511.104.  INFORMATION SHARING AND CONFIDENTIALITY.
  The exchange may enter into information-sharing agreements with
  federal and state agencies to carry out the exchange's
  responsibilities under this chapter. An agreement entered into
  under this section must include adequate protection with respect to
  the confidentiality of any information shared and comply with all
  applicable state and federal law.
         Sec. 1511.105.  MEMORANDUM OF UNDERSTANDING. The exchange
  shall enter into a memorandum of understanding with the department
  and the Health and Human Services Commission regarding the exchange
  of information and the division of regulatory functions among the
  exchange, the department, and the commission.
         Sec. 1511.106.  LEGAL ACTION. (a) The exchange may sue or
  be sued.
         (b)  The exchange may take any legal action necessary to
  recover or collect amounts due the exchange, including:
               (1)  assessments due the exchange;
               (2)  amounts erroneously or improperly paid by the
  exchange; and
               (3)  amounts paid by the exchange as a mistake of fact
  or law.
         Sec. 1511.107.  FUNCTIONS. The exchange shall perform all
  functions and duties related to state-based exchanges required by
  applicable state and federal law.
         Sec. 1511.108.  HEALTH CARE PROVIDER DIRECTORY AND
  INFORMATION.  (a)  The exchange may provide an integrated and
  uniform consumer directory of health care providers indicating
  which health benefit plan issuers the providers contract with and
  whether the providers are currently accepting new patients.
         (b)  The exchange may establish methods by which health care
  providers may transmit relevant information directly to the
  exchange, rather than through an issuer.
         Sec. 1511.109.  STATE-ADMINISTERED SUBSIDY PROGRAM.  (a) Not
  later than July 1, 2024, the exchange, in coordination with the
  department, shall review and make recommendations to the Senate
  Business and Commerce Committee and the House of Representatives
  Insurance Committee regarding the feasibility of implementing a
  state-administered subsidy program for individuals, families, and
  small employers to purchase health benefit plan coverage.
         (b)  With the input and approval of the Senate Business and
  Commerce Committee and the House of Representatives Insurance
  Committee, the exchange may develop and implement a
  state-administered subsidy program.
         Sec. 1511.110.  FEDERAL WAIVERS.  (a)  Not later than July 1,
  2024, the exchange, in coordination with the department, shall
  review and make recommendations to the Senate Business and Commerce
  Committee and the House of Representatives Insurance Committee
  regarding the submission of a state innovation waiver that may be
  granted under Section 1332, Patient Protection and Affordable Care
  Act (42 U.S.C. Section 18052), with respect to health benefit plan
  coverage or health insurance products in this state, including
  recommendations on:
               (1)  risk stabilization strategies aimed at addressing
  risk associated with individuals with high health care costs;
               (2)  individual coverage health reimbursement
  arrangements for employees of large and small businesses in this
  state;
               (3)  financial assistance for different types of health
  benefit plan coverage, including non-qualified health plans for
  individuals purchasing coverage; and
               (4)  the establishment of account-based premium
  credits for individuals and families enrolled in coverage through
  the exchange.
         (b)  With the input and approval of the Senate Business and
  Commerce Committee and the House of Representatives Insurance
  Committee, the exchange may submit one or more applications to the
  secretary to obtain a waiver of any applicable provisions of the
  Patient Protection and Affordable Care Act (Pub. L. No. 111-148).
         (c)  On approval by the secretary of a waiver under
  Subsection (b), the exchange may implement the approved waiver.
  SUBCHAPTER D. ASSESSMENTS FOR OPERATION OF EXCHANGE
         Sec. 1511.151.  ASSESSMENTS. (a) The exchange may charge
  the issuers of health benefit plans in this state, including
  qualified health plans, an assessment as reasonable and necessary
  to cover the exchange's organizational and operating expenses and
  expenses related to health coverage programs associated with the
  exchange.  Assessments must be determined annually. The exchange
  may charge interest for late assessments.
         (b)  The commissioner shall adopt rules to implement and
  enforce the assessment of health benefit plan issuers under this
  section.
         Sec. 1511.152.  GRANTS AND FEDERAL FUNDS. (a)  The exchange
  may accept a grant from a public or private organization and may
  spend those funds to pay the costs of program administration and
  operations.
         (b)  The exchange may accept federal funds and shall use
  those funds in compliance with applicable federal law, regulations,
  and guidelines.
         Sec. 1511.153.  USE OF EXCHANGE ASSETS; ANNUAL REPORT. (a)
  The assets of the exchange may be used only to pay the costs:
               (1)  of the administration and operation of the
  exchange; and
               (2)  associated with any health coverage programs
  associated with the exchange.
         (b)  The exchange shall prepare annually a complete and
  detailed written report accounting for all funds received and
  disbursed by the exchange during the preceding fiscal year. The
  report must meet any reporting requirements provided in the General
  Appropriations Act, regardless of whether the exchange receives any
  funds under that Act. The exchange shall submit the report to the
  governor, the legislature, the commissioner, and the executive
  commissioner not later than January 31 of each year.
         (c)  General revenue may not be appropriated for the
  exchange.
         Sec. 1511.154.  PUBLICATION OF FINANCIAL INFORMATION. The
  exchange shall publish the average costs of licensing, regulatory
  fees, and any other payments required by the exchange, and the
  administrative costs of the exchange, on an Internet website to
  educate consumers on those costs. This information must include
  information on losses due to waste, fraud, and abuse.
  SUBCHAPTER E. TRUST FUND
         Sec. 1511.201.  TRUST FUND. (a) The exchange fund is
  established as a special trust fund outside of the state treasury in
  the custody of the comptroller separate and apart from all public
  money or funds of this state.
         (b)  The exchange may deposit assessments, gifts or
  donations, and any federal funding obtained by the exchange in the
  exchange fund in accordance with procedures established by the
  comptroller.
         (c)  Interest or other income from the investment of the fund
  shall be deposited to the credit of the fund.
         SECTION 2.  Effective January 1, 2026, Section 1511.003,
  Insurance Code, as added by this Act, is amended by adding
  Subsection (a-1) to read as follows:
         (a-1)  For purposes of this chapter, "small employer" means a
  person who employed an average of not more than 100 employees during
  the preceding calendar year.
         SECTION 3.  (a)  As soon as practicable after the effective
  date of this Act, but not later than October 31, 2023, the governor
  and lieutenant governor shall appoint the initial members of the
  board of directors of the Texas Health Insurance Exchange.
         (b)  As soon as practicable after the appointments required
  by Subsection (a) of this section are made, but not later than
  November 30, 2023, the board of directors of the Texas Health
  Insurance Exchange shall hold a special meeting to discuss the
  adoption of rules and procedures necessary to implement Chapter
  1511, Insurance Code, as added by this Act.
         (c)  As soon as practicable after the effective date of this
  Act, but not later than January 31, 2024, the board of directors of
  the Texas Health Insurance Exchange shall adopt rules and
  procedures necessary to implement Chapter 1511, Insurance Code, as
  added by this Act.
         (d)  If, after the effective date of this Act but before the
  initial members of the board of directors of the Texas Health
  Insurance Exchange have been appointed as required by Subsection
  (a) of this section, the Texas Department of Insurance becomes
  aware of any planning and establishment grants as described by
  Section 1311, Patient Protection and Affordable Care Act (42 U.S.C.
  Section 18031), or any other public or private funding source, the
  department may apply for funding from that source.
         (e)  The exchange may not begin operations without adequate
  funding.
         (f)  The board of directors of the Texas Health Insurance
  Exchange may adopt rules on an emergency basis in accordance with
  Section 2001.034, Government Code.  Notwithstanding Section
  2001.034(c), Government Code, a rule adopted under this subsection
  may remain in effect until January 1, 2027.  Rules adopted under
  this subsection shall be deemed necessary for the immediate
  preservation of the public peace, health, safety, and general
  welfare and an additional finding under Sections 2001.034(a)(1) and
  (2), Government Code, is not required.  The authority to adopt rules
  under this subsection expires January 1, 2027.
         SECTION 4.  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, 2023.