Bill Text: TX SB120 | 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) 2021-03-03 - Referred to Business & Commerce [SB120 Detail]

Download: Texas-2021-SB120-Introduced.html

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87R1805 SMT-F
By: Johnson S.B. No. 120

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 may:
(1) apply to the United States secretary of health and
human services under 42 U.S.C. Section 18052 for a waiver of
applicable provisions of the Patient Protection and Affordable Care
Act (Pub. L. No. 111-148) and any applicable regulations or
guidance;
(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.
SUBCHAPTER B. ESTABLISHMENT AND PURPOSE
Sec. 1511.0051. ESTABLISHMENT OF HEALTH INSURANCE RISK
POOL. To the extent that federal funds are available, the
commissioner may:
(1) apply for the federal funds;
(2) use the federal funds to establish a pool for the
purpose of this chapter; and
(3) authorize the board to use the federal funds to
administer a pool for the purpose of this chapter.
Sec. 1511.0052. PURPOSE OF POOL. (a) The purpose of the
pool is to provide a mechanism to meaningfully reduce health
benefit plan premiums in the individual health benefit plan market
by maximizing available federal funds to assist residents of this
state to obtain guaranteed issue health benefit coverage.
(b) The pool may not be used to expand the Medicaid program,
including the program administered under Chapter 32, Human
Resources Code, and the program administered under Chapter 533,
Government Code.
SUBCHAPTER C. ADMINISTRATION
Sec. 1511.0101. BOARD OF DIRECTORS. The pool is governed by
a nine-member board of directors appointed by the commissioner.
Sec. 1511.0102. PRESIDING OFFICER. The commissioner shall
designate one board member to serve as presiding officer at the
pleasure of the commissioner.
Sec. 1511.0103. TERMS. Board members serve staggered
six-year terms.
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 that are adopted by the board.
(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 funds for the
pool, the board may use money from the pool to achieve lower
enrollee premium rates by providing to health benefit plan issuers
writing guaranteed issue coverage in the individual market:
(1) a reinsurance program; or
(2) direct funding if the health benefit plan issuer's
plan provides coverage for individuals described by Section
1511.0152.
Sec. 1511.0152. ACCESS TO GUARANTEED ISSUE COVERAGE. The
board shall use pool funds to enhance 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 money from the pool.
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
commissioner may allocate to the board funds appropriated to the
department for the exclusive purposes of this chapter to 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. (a) The commissioner may use
funds appropriated to the department to:
(1) apply for federal funds and grants; and
(2) implement this chapter.
(b) Notwithstanding Section 6(e)(2)(B), Chapter 615 (S.B.
1367), Acts of the 83rd Legislature, Regular Session, 2013, the
commissioner may use money appropriated to the department from the
healthy Texas small employer premium stabilization fund for the
exclusive purposes of this chapter, other than for paying salaries
and salary-related benefits.
(c) Notwithstanding Section 6(e)(2)(B), Chapter 615 (S.B.
1367), Acts of the 83rd Legislature, Regular Session, 2013, the
commissioner shall transfer money from the healthy Texas small
employer premium stabilization fund to the Texas Department of
Insurance operating account in an amount equal to the amount of
money appropriated to the department from that fund, as described
by Subsection (b), for the direct and indirect costs of the
exclusive purposes of this chapter.
(d) Except as provided by this section, the commissioner may
not use any state funds to fund the pool unless the funds are
specifically appropriated for that purpose.
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 determined by the
board under Section 1511.0203 and recovered from health benefit
plan issuers 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, held by the comptroller, and
administered by the commissioner. 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. (a) For the first year of operation of the pool, the
board shall determine the amount of money required by the pool to
reduce the amount of premiums an enrollee would otherwise pay in
that year by 15 percent in accordance with this chapter after
applying the federal funds obtained under this chapter and funding
authorized by Section 1511.0201.
(b) 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 maintain a 15 percent reduction in the amount of
premiums an enrollee would otherwise pay in that year in accordance
with this chapter after applying the federal funds obtained under
this chapter and funding authorized by Section 1511.0201.
Sec. 1511.0204. ASSESSMENTS TO COVER POOL FUNDING
REQUIREMENTS. (a) The board shall recover an amount equal to the
funding required as estimated 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 subject to 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;
(E) only for a specified disease or illness;
(F) only for indemnity for hospital confinement;
(G) only for accident; or
(H) only for fixed indemnity;
(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
summarize the activities conducted under this chapter in the
calendar year preceding the year in which the report is submitted.
SECTION 2. Notwithstanding Section 6(d)(2), Chapter 615
(S.B. 1367), Acts of the 83rd Legislature, Regular Session, 2013,
on the effective date of this Act, the commissioner of insurance
shall transfer any money remaining outside the state treasury in
the Texas Treasury Safekeeping Trust Company account established
under Section 6(c), Chapter 615 (S.B. 1367), Acts of the 83rd
Legislature, Regular Session, 2013, to the health insurance risk
pool established by Chapter 1511, Insurance Code, as added by this
Act.
SECTION 3. 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.