82R10135 TJS-F
 
  By: Ellis S.B. No. 1782
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to regulation of health benefit plan issuers in this
  state.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1.  CREATION OF THE TEXAS HEALTH INSURANCE EXCHANGE
         SECTION 1.01.  Subtitle G, Title 8, Insurance Code, is
  amended by adding Chapter 1509 to read as follows:
  CHAPTER 1509. TEXAS HEALTH INSURANCE EXCHANGE
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 1509.001.  DEFINITIONS. In this chapter:
               (1)  "Board" means the board of directors of the
  exchange.
               (2)  "Catastrophic plan" has the meaning assigned by
  Section 1302(e), Patient Protection and Affordable Care Act (Pub.
  L. No. 111-148).
               (3)  "Educated health care consumer" means an
  individual who is knowledgeable about the health care system and
  has background or experience in making informed decisions regarding
  health, medical, and scientific matters.
               (4)  "Enrollee" means an individual who is enrolled in
  a qualified health plan.
               (5)  "Exchange" means the Texas Health Insurance
  Exchange.
               (6)  "Executive commissioner" means the executive
  commissioner of the Health and Human Services Commission.
               (7)  "Qualified employer" means an employer that elects
  to make all of its full-time employees eligible for one or more
  qualified health plans offered through the exchange and, at the
  option of the employer, some or all of its part-time employees and:
                     (A)  has its principal place of business in this
  state and elects to provide coverage through the exchange to all of
  its eligible employees, wherever employed; or
                     (B)  elects to provide coverage through the
  exchange to all of its eligible employees who are principally
  employed in this state and who are eligible to participate in a
  qualified health plan.
               (8)  "Qualified health plan" means a health benefit
  plan that has been certified by the board as meeting the criteria
  specified by Section 1311(c), Patient Protection and Affordable
  Care Act (Pub. L. No. 111-148).
               (9)  "Qualified individual" means an individual,
  including a minor, who:
                     (A)  seeks to enroll in a qualified health plan
  offered to individuals through the exchange;
                     (B)  resides in this state;
                     (C)  at the time of enrollment, is not
  incarcerated, other than incarceration pending the disposition of
  charges; and
                     (D)  is, and is reasonably expected to be, for the
  entire period for which enrollment is sought, a citizen or national
  of the United States or an alien lawfully present in the United
  States.
               (10)  "Secretary" means the secretary of the United
  States Department of Health and Human Services.
               (11)  "SHOP Exchange" means a Small Business Health
  Options Program as defined by Section 1311(b)(1)(B), Patient
  Protection and Affordable Care Act (Pub. L. No. 111-148).
         Sec. 1509.002.  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 fraternal benefit society operating under
  Chapter 885;
               (4)  a stipulated premium company operating under
  Chapter 884;
               (5)  an exchange operating under Chapter 942;
               (6)  a health maintenance organization operating under
  Chapter 843;
               (7)  a multiple employer welfare arrangement that holds
  a certificate of authority under Chapter 846; or
               (8)  an approved nonprofit health corporation that
  holds a certificate of authority under Chapter 844.
         (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);
               (3)  a workers' compensation insurance policy; or
               (4)  medical payment insurance coverage provided under
  a motor vehicle insurance policy.
         Sec. 1509.003.  DEFINITION OF SMALL EMPLOYER. (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, 2013.
         (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 benefit 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. 1509.004.  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. 1509.005.  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 and the Health and Human Services
  Commission shall cooperate fully to:
               (1)  ensure that the development of eligibility and
  enrollment systems for the exchange and its tax credits are fully
  integrated with the planning and development of the Health and
  Human Services Commission's eligibility systems modernization
  efforts;
               (2)  ensure full and seamless interoperability and
  minimize duplication of cost and effort;
               (3)  develop and administer transition procedures
  that:
                     (A)  address the needs of individuals and families
  who experience a change in income that results in a change in the
  source of coverage, with a particular emphasis on children and
  adults with special health care needs and chronic illnesses,
  conditions, and disabilities, as well as all individuals who are
  also enrolled in Medicare; and
                     (B)  to the extent practicable under the Patient
  Protection and Affordable Care Act (Pub. L. No. 111-148), provide
  for the coordination of payments to Medicaid managed care
  organizations and qualified health plans that experience changes in
  enrollment resulting from changes in eligibility for Medicaid
  during an enrollment period;
               (4)  ensure consistent methods and standards,
  including formulas and verification methods, for prompt
  calculation of income based on individuals' modified adjusted gross
  incomes in order to guard against lapses in coverage and
  inconsistent eligibility determinations and procedures;
               (5)  ensure maximum access to federal data sources for
  the purpose of verifying income eligibility for Medicaid, the state
  child health plan program, premium tax credits, and cost-sharing
  reductions;
               (6)  ensure the prompt processing of applications and
  enrollment in the correct state subsidy program, regardless of
  whether the program is Medicaid, the state child health plan
  program, premium tax credits, or cost-sharing reductions;
               (7)  ensure procedures for transitioning individuals
  between Medicaid and tax-credit-based subsidies that protect
  individuals against delays in eligibility and plan enrollment;
               (8)  ensure rapid resolution of inconsistent
  information affecting eligibility and dissemination of clear and
  understandable information to applicants regarding the resolution
  process and any interim assistance that may be available while
  resolution is pending and procedures to assure that individuals are
  meaningfully informed of:
                     (A)  the potential existence of overpayments of
  advance tax credits;
                     (B)  procedures for reconciling enrollee
  liability for repayment in the event that an advance tax credit is
  subsequently proved to be an overpayment;
                     (C)  procedures by which individuals can report a
  change in income that may affect the subsequent level of advance tax
  payment or the availability of a safe harbor; and
                     (D)  information regarding safe harbors against
  overpayment liability or recoupment that may exist under federal or
  state law; and
               (9)  develop cross-market participation by:
                     (A)  encouraging the development of common
  provider networks, network performance standards for health
  benefit plans that participate in the exchange, Medicaid, and the
  state child health plan program, and developing coverage terms and
  quality standards in order to ensure maximum continuity and quality
  of care;
                     (B)  promoting participation by health benefit
  plans that satisfy both qualified health plan and Medicaid managed
  care plan criteria, in order to minimize disruption in care as a
  result of enrollment shifts between subsidy sources;
                     (C)  developing incentives, including quality
  ratings, default enrollment preferences, and other approaches, in
  order to encourage health benefit plans to participate in both
  Medicaid and the exchange; and
                     (D)  coordinating health benefit plan payments
  and timely adjustments in all markets that may result from
  enrollment changes.
         Sec. 1509.006.  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. 1509.007.  COMPLIANCE WITH FEDERAL LAW. The exchange
  shall comply with all applicable federal law and regulations.
         Sec. 1509.008.  TEMPORARY EXEMPTION FROM STATE PURCHASING
  PROCEDURES. (a) The exchange is not subject to state purchasing or
  procurement requirements under Subtitle D, Title 10, Government
  Code, or any other law.
         (b)  This section expires January 1, 2016.
  [Sections 1509.009-1509.050 reserved for expansion]
  SUBCHAPTER B. ESTABLISHMENT AND GOVERNANCE
         Sec. 1509.051.  ESTABLISHMENT. The Texas Health Insurance
  Exchange is established as the American Health Benefit Exchange and
  the Small Business Health Options Program (SHOP) Exchange
  authorized and required by Section 1311, Patient Protection and
  Affordable Care Act (Pub. L. No. 111-148).
         Sec. 1509.052.  GOVERNANCE OF EXCHANGE; BOARD MEMBERSHIP.
  (a)  The exchange is governed by a board of directors.
         (b)  The board consists of seven members as follows:
               (1)  five appointed members:
                     (A)  one of whom is appointed by the governor;
                     (B)  two of whom are appointed by the lieutenant
  governor; and
                     (C)  two of whom are appointed by the speaker of
  the house of representatives;
               (2)  the commissioner as an ex officio voting member;
  and
               (3)  the executive commissioner as an ex officio voting
  member.
         (c)  Each of the five board members appointed under
  Subsection (b)(1) must have demonstrated experience in at least two
  of the following areas:
               (1)  individual health care coverage;
               (2)  small employer health care coverage;
               (3)  health benefit plan administration;
               (4)  health care finance or economics;
               (5)  actuarial science;
               (6)  administration of a public or private health care
  delivery system; and
               (7)  purchasing health plan coverage.
         (d)  The board must include members who are health care
  consumers or small business owners.
         (e)  In making appointments under this section, the
  governor, lieutenant governor, and speaker of the house of
  representatives shall attempt to make appointments that increase
  the board's diversity of expertise.
         Sec. 1509.053.  PRESIDING OFFICER. The board shall annually
  designate one member of the board to serve as presiding officer.
         Sec. 1509.054.  TERMS; VACANCY. (a) Appointed members of
  the board serve two-year terms.
         (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. 1509.055.  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 an
  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 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. 1509.056.  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 care 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. 1509.057.  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. 1509.058.  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. 1509.059.  OPEN RECORDS AND OPEN MEETINGS. The board is
  subject to Chapters 551 and 552, Government Code.
         Sec. 1509.060.  RECORDS. The board shall keep records of the
  board's proceedings for at least seven years.
  [Sections 1509.061-1509.100 reserved for expansion]
  SUBCHAPTER C.  POWERS AND DUTIES OF EXCHANGE
         Sec. 1509.101.  EMPLOYEES; COMMITTEES. (a) The board may
  employ an executive director, a chief fiscal officer, a chief
  operations officer, a director of health plan contracting, a chief
  technology and information officer, a general counsel, 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.
         (d)  The board shall set the salary for an agent or employee
  position under this section in an amount reasonably necessary to
  attract and retain individuals of superior qualifications. In
  determining the compensation for these positions, the board shall
  conduct, through the use of independent outside advisors, salary
  surveys of both other state and federal health insurance exchanges
  that are most comparable to the exchange and other relevant labor
  pools.
         (e)  The salaries established by the board under this section
  may not exceed the highest comparable salary for a position of that
  type, as determined by the salary surveys in Subsection (d).
         (f)  The board shall publish the salaries under this section
  in the board's annual budget and post the budget on an Internet
  website maintained by the exchange.
         Sec. 1509.102.  ADVISORY COMMITTEE. The board shall 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. 1509.103.  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 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. 1509.104.  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. 1509.105.  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. 1509.106.  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. 1509.107.  FUNCTIONS. (a)  The exchange shall make
  qualified health plans available to qualified individuals and
  qualified employers.
         (b)  The exchange may not make available any health benefit
  plan that is not a qualified health plan.
         (c)  The exchange may allow a health benefit plan issuer to
  offer a plan that provides limited scope dental benefits meeting
  the requirements of Section 9832(c)(2)(A), Internal Revenue Code of
  1986, through the exchange, either separately or in conjunction
  with a qualified health plan, if the plan provides pediatric dental
  benefits meeting the requirements of Section 1302(b)(1)(J),
  Patient Protection and Affordable Care Act (Pub. L. No. 111-148).
         (d)  The exchange, or an issuer offering a health benefit
  plan through the exchange, may not charge an individual a fee or
  penalty for termination of coverage if the individual enrolls in
  another type of minimum essential coverage because the individual
  has become eligible for that coverage or because the individual's
  employer-sponsored coverage has become affordable under the
  standards of Section 36B(c)(2)(C), Internal Revenue Code of 1986.
         (e)  In implementing the requirements of this section, the
  exchange shall:
               (1)  by rule establish procedures consistent with
  federal law and regulations for the certification,
  recertification, and decertification of health benefit plans as
  qualified health plans;
               (2)  provide for the operation of a toll-free telephone
  hotline to respond to requests for assistance, utilizing staff that
  is trained to provide assistance in a culturally and linguistically
  appropriate manner;
               (3)  provide oral interpretation services in any
  language for individuals seeking coverage through the exchange and
  make available a toll-free telephone number for the hearing and
  speech impaired;
               (4)  maintain an Internet website through which an
  enrollee or prospective enrollee may obtain standardized
  comparative information on a qualified health plan's premiums,
  coverage, cost-sharing, ratings, enrollee satisfaction, quality
  measures, and other relevant information;
               (5)  use a standardized format for presenting health
  benefit options in the exchange, including the use of the uniform
  outline of coverage established under Section 2715, Public Health
  Service Act (42 U.S.C. Section 300gg-51);
               (6)  assign a rating to each qualified health plan
  certified by the exchange based on criteria developed by the
  secretary;
               (7)  ensure that written information made available by
  the exchange is presented in a plainly worded, easily
  understandable format and made available in prevalent languages;
               (8)  determine each qualified health plan's level of
  coverage in accordance with regulations issued by the secretary
  under Section 1302(d)(2)(A), Patient Protection and Affordable
  Care Act (Pub. L. No. 111-148); and
               (9)  in accordance with federal law and regulations,
  inform individuals of eligibility requirements for Medicaid, the
  state child health plan program, or any applicable state or local
  public program and if through screening of the application by the
  exchange, the exchange determines that an individual is eligible
  for such program, enroll the individual in the program.
         (f)  In addition to performing the duties described by
  Subsection (e), and consistent with Section 1413, Patient
  Protection and Affordable Care Act (Pub. L. No. 111-148), the
  exchange shall:
               (1)  enter into data-sharing agreements with relevant
  state and federal agencies to facilitate eligibility
  determinations and enrollment;
               (2)  provide enrollment information and other relevant
  data, consistent with federal and state privacy rules, to the
  qualified health plan in which a qualified individual or qualified
  small employer is enrolled;
               (3)  conduct redeterminations of eligibility for
  subsidies and assist in reenrollment as necessary, if an individual
  experiences changes in income or circumstances;
               (4)  inform individuals of the potential for
  overpayments of advance premium tax credits and of procedures by
  which individuals can report a change of income that may affect the
  subsequent level of premium tax credits, including the availability
  of any safe harbor from recoupment of any overpayment, to the extent
  permitted by that Act or any federal regulations promulgated under
  that Act;
               (5)  establish, and make available electronically, a
  calculator designed to:
                     (A)  enable consumers to determine the actual cost
  of coverage after the application of any premium tax credit or
  cost-sharing subsidy available under federal law; and
                     (B)  provide consumers with information on
  out-of-pocket costs for in-network and, if feasible,
  out-of-network services, taking into account any cost-sharing
  reductions;
               (6)  establish capability through which qualified
  employers may access coverage for their employees, and which shall
  enable any qualified employer to specify a level of coverage so that
  any of its employees may enroll in any qualified health plan offered
  through the exchange at the specified level of coverage;
               (7)  subject to Section 1411, Patient Protection and
  Affordable Care Act (Pub. L. No. 111-148), grant a certification
  attesting that, for purposes of the individual responsibility
  penalty under Section 5000A, Internal Revenue Code of 1986, an
  individual is exempt from the individual responsibility
  requirement or from the penalty imposed by that section because:
                     (A)  there is no affordable qualified health plan
  available through the exchange, or the individual's employer,
  covering the individual; or
                     (B)  the individual meets the requirements for any
  other such exemption from the individual responsibility
  requirement or penalty;
               (8)  transfer to the United States secretary of the
  treasury the following:
                     (A)  a list of the individuals who are issued a
  certification under Subdivision (7), including the name and
  taxpayer identification number of each individual;
                     (B)  the name and taxpayer identification number
  of each individual who was an employee of an employer but who was
  determined to be eligible for the premium tax credit under Section
  36B, Internal Revenue Code of 1986, because the employer did not
  provide minimum essential coverage, or the employer provided the
  minimum essential coverage, but it was determined under Section
  36B(c)(2)(C) of that code to be either unaffordable to the employee
  or not provide the required minimum actuarial value; and
                     (C)  the name and taxpayer identification number
  of each individual who notifies the exchange under Section
  1411(b)(4), Patient Protection and Affordable Care Act (Pub. L. No.
  111-148), that he or she has changed employers and each individual
  who ceases coverage under a qualified health plan during a plan
  year, and the effective date of that cessation;
               (9)  provide to each employer the name of each employee
  of the employer described above who ceases coverage under a
  qualified health plan during a plan year and the effective date of
  the cessation;
               (10)  perform duties required of the exchange by the
  secretary or the United States secretary of the treasury related to
  determining eligibility for premium tax credits, reduced
  cost-sharing, or individual responsibility requirement exemptions;
               (11)  select entities qualified to serve as Navigators
  in accordance with Section 1311(i), Patient Protection and
  Affordable Care Act (Pub. L. No. 111-148), and standards developed
  by the secretary; and
               (12)  award grants to enable Navigators to:
                     (A)  conduct public education activities to raise
  awareness of the availability of qualified health plans;
                     (B)  distribute fair and impartial information
  concerning enrollment in qualified health plans, and the
  availability of premium tax credits under Section 36B, Internal
  Revenue Code of 1986, and cost-sharing reductions under Section
  1402, Patient Protection and Affordable Care Act (Pub. L. No.
  111-148);
                     (C)  facilitate enrollment in qualified health
  plans;
                     (D)  provide referrals to any applicable office of
  health insurance consumer assistance or health insurance ombudsman
  established under Section 2793, Public Health Service Act (42
  U.S.C. Section 300gg-93), or any other appropriate state agency or
  agencies, for any enrollee with a grievance, complaint, or question
  regarding the enrollee's health benefit plan or coverage or a
  determination under that plan or coverage;
                     (E)  provide information in a manner that is
  culturally and linguistically appropriate to the needs of the
  population being served by the exchange; and
                     (F)  counsel exchange participants about the
  exchange, Medicaid, and the state child health plan program
  markets, including selection of plans and transition procedures for
  transitioning among Medicaid, the state child health plan program,
  exchange plans, and other coverage;
               (13)  ensure that there is a sufficient number of
  Navigators that possess the experience and capacity to serve
  disadvantaged, hard-to-reach, and culturally or linguistically
  isolated populations;
               (14)  certify Navigators as able to carry out the
  duties required by Section 1311(i)(3), Patient Protection and
  Affordable Care Act (Pub. L. No. 111-148);
               (15)  review the rate of premium growth within the
  exchange and outside the exchange and consider the information in
  developing recommendations on whether to continue limiting
  qualified employer status to small employers;
               (16)  credit the amount of any free choice voucher to
  the monthly premium of the plan in which a qualified employee is
  enrolled, in accordance with Section 10108, Patient Protection and
  Affordable Care Act (Pub. L. No. 111-148), and collect the amount
  credited from the offering employer;
               (17)  consult with stakeholders relevant to carrying
  out the activities required under this chapter, including:
                     (A)  educated health care consumers who are
  enrollees in qualified health plans;
                     (B)  individuals and entities with experience in
  facilitating enrollment in qualified health plans;
                     (C)  representatives of small businesses and
  self-employed individuals;
                     (D)  the Health and Human Services Commission; and
                     (E)  advocates for enrolling hard-to-reach
  populations;
               (18)  meet the following financial integrity
  requirements:
                     (A)  keep an accurate accounting of all
  activities, receipts, and expenditures and annually submit to the
  secretary, the governor, the commissioner, and the legislature a
  report concerning such accountings; and
                     (B)  fully cooperate with any investigation
  conducted by the secretary pursuant to the secretary's authority
  under the Patient Protection and Affordable Care Act (Pub. L. No.
  111-148) and allow the secretary, in coordination with the
  inspector general of the United States Department of Health and
  Human Services, to investigate the affairs of the exchange, examine
  the books and records of the exchange, and require periodic reports
  in relation to the activities undertaken by the exchange;
               (19)  use a single application for enrollment in
  Medicaid, the state child health plan program, and health benefit
  plans offered in the exchange, including establishing eligibility
  for premium tax credits and cost-sharing reductions, that may be:
                     (A)  the single application form developed by the
  secretary under Section 1413(b), Patient Protection and Affordable
  Care Act (Pub. L. No. 111-148); or
                     (B)  an application form developed in cooperation
  with the Health and Human Services Commission for that purpose;
               (20)  undertake activities necessary to market and
  publicize the availability of health care coverage and federal
  subsidies through the exchange;
               (21)  undertake outreach and enrollment activities
  that seek to assist enrollees and potential enrollees with
  enrolling and reenrolling in the exchange in the least burdensome
  manner, including populations that may experience barriers to
  enrollment, such as the disabled and those with limited English
  language proficiency;
               (22)  provide for:
                     (A)  the processing of applications for coverage
  under a qualified health plan;
                     (B)  the enrollment of persons in qualified health
  plans;
                     (C)  the disenrollment of enrollees from
  qualified health plans; and
                     (D)  for individual coverage, the collection of
  premiums and assistance in the administration of subsidies, as the
  board considers appropriate; and
               (23)  for small employers, collect and aggregate
  premiums and administer all other necessary and related tasks,
  including enrollment and plan payment, in order to make the
  offering of employee plan choice as simple as possible for
  qualified small employers.
         Sec. 1509.108.  CERTIFICATION OF PLAN. The exchange shall
  certify a health benefit plan as a qualified health plan if:
               (1)  the plan provides the essential health benefits
  package described by Section 1302(a), Patient Protection and
  Affordable Care Act (Pub. L. No. 111-148), except that the plan is
  not required to provide essential benefits that duplicate the
  minimum benefits of qualified dental plans, if:
                     (A)  the exchange has determined that at least one
  qualified dental plan is available to supplement the plan's
  coverage; and
                     (B)  the issuer makes prominent disclosure at the
  time it offers the plan, in a form approved by the exchange, that
  the plan does not provide the full range of essential pediatric
  benefits and that qualified dental plans providing those benefits
  and other dental benefits not covered by the plan are offered
  through the exchange;
               (2)  the premium rates and contract language have been
  approved by the commissioner;
               (3)  the plan provides at least a bronze level of
  coverage, as described by Section 1302(d), Patient Protection and
  Affordable Care Act (Pub. L. No. 111-148), unless the plan is a
  catastrophic plan and is offered only to individuals eligible for
  catastrophic coverage;
               (4)  the plan's cost-sharing requirements do not exceed
  the limits established under Section 1302(c)(1), Patient
  Protection and Affordable Care Act (Pub. L. No. 111-148), and if the
  plan is offered to small employers, the plan's deductible does not
  exceed the limits established under Section 1302(c)(2) of that Act;
               (5)  the health benefit plan issuer offering the plan:
                     (A)  is licensed and in good standing to offer
  health insurance coverage in this state;
                     (B)  offers at least one qualified health plan in
  the silver level and at least one plan in the gold level as
  described by Section 1302(d), Patient Protection and Affordable
  Care Act (Pub L. No. 111-148);
                     (C)  charges the same premium rate for each
  qualified health plan without regard to whether the plan is offered
  through the exchange and without regard to whether the plan is
  offered directly from the issuer or through an insurance producer;
  and
                     (D)  complies with the regulations developed by
  the secretary under Section 1311(d), Patient Protection and
  Affordable Care Act (Pub. L. No. 111-148), and other requirements
  the exchange establishes;
               (6)  the plan meets the requirements of certification
  under this chapter and any rules promulgated by the secretary under
  Section 1311(c), Patient Protection and Affordable Care Act (Pub.
  L. No. 111-148), including minimum standards in the areas of
  marketing practices, network adequacy, essential community
  providers in underserved areas, accreditation, quality
  improvement, uniform enrollment forms and descriptions of
  coverage, and information on quality measures for health benefit
  plan performance; and
               (7)  the exchange determines that making the plan
  available through the exchange is in the interest of qualified
  individuals and qualified employers in this state.
         Sec. 1509.109.  PROHIBITED BASES FOR DENIAL OF
  CERTIFICATION. The exchange may not deny certification to a health
  benefit plan on the ground that the plan:
               (1)  is a fee-for-service plan; or
               (2)  provides treatments necessary to prevent patients'
  deaths in circumstances the exchange determines are inappropriate
  or too costly.
         Sec. 1509.110.  PREREQUISITES TO CERTIFICATION. (a)  The
  exchange shall require each health benefit plan issuer seeking
  certification of a plan as a qualified health plan to:
               (1)  submit a justification for any premium increase
  before implementation of that increase;
               (2)  prominently display the justification for any
  premium increase on the health benefit plan issuer's Internet
  website;
               (3)  make available to the public, in plain language as
  that term is defined in Section 1311(e)(3)(B), Patient Protection
  and Affordable Care Act (Pub. L. No. 111-148), and submit to the
  exchange, the secretary, and the commissioner, accurate and timely
  disclosure of:
                     (A)  claims payment policies and practices;
                     (B)  periodic financial disclosures;
                     (C)  data on enrollment;
                     (D)  data on disenrollment;
                     (E)  data on the number of claims that are denied;
                     (F)  data on rating practices;
                     (G)  information on cost-sharing and payments
  with respect to any out-of-network coverage;
                     (H)  information on enrollee and participant
  rights under Title I, Patient Protection and Affordable Care Act
  (Pub. L. No. 111-148); and
                     (I)  other information as determined appropriate
  by the secretary;
               (4)  on request, inform an individual of the amount of
  cost-sharing, including deductibles, copayments, and coinsurance,
  under the individual's plan or coverage that the individual would
  be responsible for paying with respect to the furnishing of a
  specific item or service by a participating provider;
               (5)  make the information required to be disclosed
  under Subdivision (4) made available to the individual on an
  Internet website and by other means for individuals without access
  to the Internet;
               (6)  promptly notify affected individuals of price and
  benefit changes or other changes in circumstance that could
  materially impact enrollment or coverage;
               (7)  make available to the exchange and regularly
  update an electronic directory of contracting health care providers
  so that individuals seeking coverage through the exchange can
  search by health care provider name to determine which health plans
  in the exchange include that health care provider in their network;
  and
               (8)  as the board considers necessary, provide
  regularly updated information to the exchange as to whether a
  health care provider is accepting new patients for a particular
  health plan.
         (b)  In determining whether to certify an issuer, the
  exchange shall consider premium increase justification information
  obtained under Subsection (a), together with information and
  recommendations provided by the commissioner under Section
  2794(b), Public Health Service Act (42 U.S.C. Section 300gg-94(b)).
         Sec. 1509.111.  ADDITIONAL REQUIREMENTS RELATING TO
  RULEMAKING BY BOARD. In adopting rules under this chapter, the
  board shall:
               (1)  standardize benefits and cost-sharing within
  tiers for products to be offered through the exchange;
               (2)  establish and use a competitive process, which is
  not required to comply with Chapter 2151, Government Code, to
  select participating health benefit plan issuers;
               (3)  determine the minimum requirements an issuer must
  meet to be considered for participation in the exchange and the
  standards and criteria for selecting qualified health plans to be
  offered through the exchange that are in the best interests of
  qualified individuals and qualified small employers;
               (4)  consistently and uniformly apply any
  requirements, standards, and criteria under this chapter to all
  issuers;
               (5)  in the course of selectively contracting for
  health care coverage offered to qualified individuals and qualified
  small employers through the exchange, seek to contract with issuers
  to provide health care coverage choices that offer the optimal
  combination of choice, value, quality, and service;
               (6)  ensure, in each region of the state, a choice of
  qualified health plans at each of the five tiers of coverage
  contained in Sections 1302(d) and (e), Patient Protection and
  Affordable Care Act (Pub. L. No. 111-148);
               (7)  require issuers, as a condition of participation
  in the exchange, to fairly and affirmatively offer, market, and
  sell in the exchange at least one product within each of the five
  levels of coverage described by Sections 1302(d) and (e), Patient
  Protection and Affordable Care Act (Pub. L. No. 111-148), and, as
  the board considers necessary, to offer additional products within
  each of the five levels of coverage described by Section 1302(d) of
  that Act; and
               (8)  require, as a condition of participation in the
  exchange, issuers that sell any products outside the exchange to
  fairly and affirmatively offer, market, and sell:
                     (A)  all products made available to individuals in
  the exchange to individuals purchasing coverage outside the
  exchange; or
                     (B)  all products made available to small
  employers in the exchange to small employers purchasing coverage
  outside the exchange.
         Sec. 1509.112.  EXEMPTION FROM STANDARDS PROHIBITED. (a)  
  The exchange may not exempt any health benefit plan issuer seeking
  certification of a qualified health plan, regardless of the type or
  size of the issuer, from state licensing or solvency requirements.
         (b)  The exchange shall apply the criteria of this section in
  a manner that assures a fair competitive market between or among
  health benefit plan issuers participating in the exchange.
         Sec. 1509.113.  DENTAL PLANS. (a)  This chapter applies to
  dental plans as provided in this section.
         (b)  A health benefit plan issuer may be certified to offer
  dental coverage, without being certified to offer other health
  coverages.
         (c)  A plan may be limited to dental and oral health benefits
  without substantially duplicating the benefits typically offered
  by health benefit plans that do not offer dental coverage.
         (d)  To be certified under this chapter, a dental plan must
  include, at a minimum, the essential pediatric dental benefits
  prescribed by the secretary pursuant to Section 1302(b)(1)(J),
  Patient Protection and Affordable Care Act (Pub. L. No. 111-148),
  and any other dental benefits the exchange or the secretary
  specifies by regulation.
         (e)  An issuer may offer jointly with another issuer a
  comprehensive plan through the exchange in which dental benefits
  are provided by an issuer through a qualified dental plan and the
  other benefits are provided by an issuer through a qualified health
  plan. Plans offered under this subsection must be priced
  separately and made available for purchase separately at the same
  price at which they are offered together.
         Sec. 1509.114.  (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.
  [Sections 1509.115-1509.150 reserved for expansion]
  SUBCHAPTER D. ASSESSMENTS FOR OPERATION OF EXCHANGE
         Sec. 1509.151.  ASSESSMENTS; PENALTY FOR NONPAYMENT. (a)
  The exchange may charge the issuers of health benefit plans in this
  state, including qualified health plans, an assessment as
  reasonable and necessary for the exchange's organizational and
  operating expenses.  Assessments must be determined annually. The
  exchange may charge interest for late assessments.
         (b)  The exchange may refuse to recertify or may decertify a
  health benefit plan as a qualified health plan if the issuer of the
  plan fails or refuses to pay an assessment under this section.
         (c)  The commissioner shall adopt rules to implement and
  enforce the assessment of health benefit plan issuers under this
  section.
         Sec. 1509.152.  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. 1509.153.  USE OF EXCHANGE ASSETS; ANNUAL REPORT. (a)
  The assets of the exchange may be used only to pay the costs of the
  administration and operation of 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. 1509.154.  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.
  [Sections 1509.155-1509.200 reserved for expansion]
  SUBCHAPTER E. TRUST FUND
         Sec. 1509.201.  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.
  [Sections 1509.202-1509.250 reserved for expansion]
  SUBCHAPTER F. LEVEL PLAYING FIELD
         Sec. 1509.251.  LEVEL PLAYING FIELD. (a)  The commissioner
  shall adopt rules to ensure a level playing field and a fair
  competitive market environment among issuers that offer qualified
  health plans through the exchange and issuers that offer health
  benefit plans or other health insurance coverage outside of the
  exchange. Notwithstanding any other law, the rules shall, to the
  extent practicable, ensure against adverse selection either in
  favor of or against exchange-participating issuers.
         (b)  To discourage adverse selection or steering of
  enrollees to or from the exchange, if the board opts to pay agents
  helping people enroll in exchange-participating, qualified plans a
  fee, instead of using existing compensation structures directly
  from issuers, the exchange shall survey the market outside of the
  exchange to determine prevailing agent commission rates and set
  exchange fees in a manner that is consistent with prevailing rates
  in the market outside of the exchange. This section does not
  prohibit the exchange from paying a per member per month fee or
  using another fee structure if:
               (1)  prevailing rates in the market outside of the
  exchange are paid a percentage of premiums; and
               (2)  the total fee amounts earned are reasonably
  expected to be similar.
         (c)  The department shall coordinate with the exchange as
  necessary to survey the market on commission rates and identify
  prevailing practices. Agent fees paid inside or outside of the
  exchange must be fully transparent and clearly disclosed to the
  purchaser.
         SECTION 1.02.  Effective January 1, 2014, Section 1509.004,
  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 1.03.  (a)  As soon as practicable after the
  effective date of this Act, but not later than October 31, 2011, the
  governor, lieutenant governor, and speaker of the house of
  representatives 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, 2011, 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
  1509, 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, 2012, the board of directors of
  the Texas Health Insurance Exchange shall adopt rules and
  procedures necessary to implement Chapter 1509, Insurance Code, as
  added by this Act.
         (d)  Not later than January 1, 2017, the board shall issue a
  report to the 85th Legislature recommending whether to adopt the
  option in Section 1312(c), Patient Protection and Affordable Care
  Act (Pub. L. No. 111-148), to merge the individual and small
  employer markets. In the report, the board shall provide
  information, based on at least two years of data from the exchange,
  on the potential impact on rates paid by individuals and by small
  employers in a merged individual and small employer market, as
  compared to the rates paid by individuals and small employers if a
  separate individual and small employer market is maintained.
         (e)  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), the Texas Department of Insurance becomes aware of any
  planning and establishment grants as described by Section 1311,
  Patient Protection and Affordable Care Act (Pub. L. No. 111-148),
  or any other public or private funding source, the department may
  apply for funding from that source.
         (f)  The exchange may not begin operations without adequate
  funding.
         (g)  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, 2015.  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, 2015.
  ARTICLE 2.  EMERGENCY COVERAGE UNDER CERTAIN MANAGED CARE PLANS
         SECTION 2.01.  Section 843.107, Insurance Code, is amended
  to read as follows:
         Sec. 843.107.  INDEMNITY BENEFITS; POINT-OF-SERVICE
  PROVISIONS.  (a) A health maintenance organization may offer:
               (1)  indemnity benefits covering out-of-area emergency
  care;
               (2)  indemnity benefits, in addition to those relating
  to out-of-area and emergency care, provided through an insurer or
  group hospital service corporation;
               (3)  a point-of-service plan under Subchapter A,
  Chapter 1273; or
               (4)  a point-of-service rider under Section 843.108.
         (b)  A health maintenance organization that offers indemnity
  benefits covering out-of-area emergency care under this section
  shall apply the same cost-sharing requirement to the emergency care
  as it applies to emergency care provided in-area.
         SECTION 2.02.  Section 843.348, Insurance Code, is amended
  by adding Subsection (k) to read as follows:
         (k)  A health maintenance organization may not require
  preauthorization for emergency care.
         SECTION 2.03.  Sections 1271.155(a) and (b), Insurance Code,
  are amended to read as follows:
         (a)  A health maintenance organization shall pay for
  emergency care performed by non-network physicians or providers at
  the same rate the health maintenance organization pays for
  emergency care performed by network physicians or providers [at the
  usual and customary rate or at an agreed rate].
         (b)  A health care plan of a health maintenance organization
  must provide the following coverage of emergency care:
               (1)  a medical screening examination or other
  evaluation required by state or federal law necessary to determine
  whether an emergency medical condition exists shall be provided to
  covered enrollees in a hospital emergency facility or comparable
  facility;
               (2)  necessary emergency care shall be provided to
  covered enrollees, including the treatment and stabilization of an
  emergency medical condition; [and]
               (3)  services originated in a hospital emergency
  facility, freestanding emergency medical care facility, or
  comparable emergency facility following treatment or stabilization
  of an emergency medical condition shall be provided to covered
  enrollees as approved by the health maintenance organization,
  subject to Subsections (c) and (d); and
               (4)  as required by Section 1867, Social Security Act
  (42 U.S.C. Section 1395dd), medical screening examinations that are
  within the capability of the emergency department of a hospital,
  including ancillary services routinely available to the emergency
  department to evaluate the patient's condition and any further
  medical examination and treatment necessary to stabilize the
  patient within the capabilities of the staff and facilities
  available at the hospital shall be provided to covered enrollees.
         SECTION 2.04.  Section 1273.004, Insurance Code, is amended
  to read as follows:
         Sec. 1273.004.  LIMITED BENEFITS AND SERVICES; COST-SHARING
  PROVISIONS.  (a)  Indemnity benefits and services provided under a
  point-of-service plan may be limited to those services described by
  the blended contract and may be subject to different cost-sharing
  provisions. The cost-sharing provisions for indemnity benefits may
  be higher than the cost-sharing provisions for in-network health
  maintenance organization coverage. For an enrollee in a limited
  provider network, higher cost-sharing may be imposed only when the
  enrollee obtains benefits or services outside the health
  maintenance organization delivery network.
         (b)  Notwithstanding Subsection (a), indemnity benefits and
  services provided under a point-of-service plan that covers
  emergency care may not be subject to different cost-sharing
  provisions.  The cost-sharing provisions for indemnity benefits
  related to emergency care may not be higher than the cost-sharing
  provisions for in-network health maintenance organization
  coverage.  For an enrollee in a limited provider network, higher
  cost-sharing provisions may not be imposed when the enrollee
  obtains emergency care outside the health maintenance organization
  delivery network.
         SECTION 2.05.  Section 1301.135, Insurance Code, is amended
  by adding Subsection (i) to read as follows:
         (i)  An insurer that uses a preauthorization process for
  medical care and health care services may not require
  preauthorization for emergency care.
         SECTION 2.06.  Section 1301.155(b), Insurance Code, is
  amended to read as follows:
         (b)  If an insured cannot reasonably reach a preferred
  provider, an insurer shall provide reimbursement for the following
  emergency care services at the preferred level of benefits until
  the insured can reasonably be expected to transfer to a preferred
  provider:
               (1)  a medical screening examination or other
  evaluation required by state or federal law to be provided in the
  emergency facility of a hospital that is necessary to determine
  whether a medical emergency condition exists;
               (2)  necessary emergency care services, including the
  treatment and stabilization of an emergency medical condition;
  [and]
               (3)  services originating in a hospital emergency
  facility or freestanding emergency medical care facility following
  treatment or stabilization of an emergency medical condition; and
               (4)  as required by Section 1867, Social Security Act
  (42 U.S.C. Section 1395dd), medical screening examinations that are
  within the capability of the emergency department of a hospital,
  including ancillary services routinely available to the emergency
  department to evaluate the patient's condition and any further
  medical examination and treatment necessary to stabilize the
  patient within the capabilities of the staff and facilities
  available at the hospital.
         SECTION 2.07.  The changes in law made by this article apply
  only to a health insurance policy or contract or health maintenance
  organization contract or agreement that is delivered, issued for
  delivery, or renewed on or after January 1, 2012. A health
  insurance policy or contract or health maintenance organization
  contract or agreement that is delivered, issued for delivery, or
  renewed before January 1, 2012, is covered by the law in effect
  immediately before the effective date of this Act, and that law is
  continued in effect for that purpose.
         ARTICLE 3.  SELECTION OF PRIMARY CARE PHYSICIANS AND PROVIDERS
  UNDER PREFERRED PROVIDER BENEFIT PLANS AND HEALTH MAINTENANCE
  ORGANIZATIONS
         SECTION 3.01.  Section 843.203, Insurance Code, is amended
  by amending Subsection (b) and adding Subsections (d) and (e) to
  read as follows:
         (b)  An enrollee shall at all times have the right to select
  or change a primary care physician or primary care provider within
  the health maintenance organization network of available primary
  care physicians and primary care providers[, except that a health
  maintenance organization may limit an enrollee's request to change
  physicians or providers to not more than four changes in a 12-month
  period].  An enrollee may designate any participating primary care
  physician or primary care provider who is available to accept the
  individual.
         (d)  For an enrollee who is a child, the health maintenance
  organization must allow the child's parent or guardian to designate
  as the child's primary care physician or primary care provider a
  participating physician who specializes in pediatrics.
         (e)  A health maintenance organization shall notify each
  enrollee of the enrollee's rights under Subsections (b) and (d).
         SECTION 3.02.  Subchapter D, Chapter 1301, Insurance Code,
  is amended by adding Section 1301.164 to read as follows:
         Sec. 1301.164.  SELECTION OF PRIMARY CARE PHYSICIAN OR
  PROVIDER.  (a)  If a preferred provider benefit plan requires or
  provides for designation by an insured of a participating primary
  care physician or primary care provider, the insurer shall allow an
  insured to designate any participating primary care physician or
  primary care provider who is available to accept the individual.
         (b)  For an enrollee who is a child, the insurer must allow
  the child's parent or guardian to designate as the child's primary
  care physician or primary care provider a participating physician
  who specializes in pediatrics.
         (c)  An insurer shall notify each insured of the insured's
  rights under this section.
         SECTION 3.03.  The change in law made by this article applies
  only to a health insurance policy or contract or health maintenance
  organization contract or agreement that is delivered or issued for
  delivery on or after January 1, 2012. An insurance policy or
  contract or health maintenance organization contract or agreement
  that is delivered or issued for delivery before January 1, 2012, is
  governed by the law as it existed immediately before the effective
  date of this Act, and that law is continued in effect for that
  purpose.
  ARTICLE 4.  HEALTH BENEFIT PLAN COVERAGE OF CERTAIN DEPENDENTS
         SECTION 4.01.  Section 846.260, Insurance Code, is amended
  to read as follows:
         Sec. 846.260.  LIMITING AGE APPLICABLE TO UNMARRIED CHILD.
  If children are eligible for coverage under the terms of a multiple
  employer welfare arrangement's plan document, any limiting age
  applicable to an unmarried child of an enrollee is 26 [25] years of
  age.
         SECTION 4.02.  Section 1201.053(b), Insurance Code, is
  amended to read as follows:
         (b)  On the application of an adult member of a family, an
  individual accident and health insurance policy may, at the time of
  original issuance or by subsequent amendment, insure two or more
  eligible members of the adult's family, including a spouse,
  unmarried children younger than 26 [25] years of age, including a
  grandchild of the adult as described by Section 1201.062(a)(1), a
  child the adult is required to insure under a medical support order
  issued under Chapter 154, Family Code, or enforceable by a court in
  this state, a foster child, a stepchild, a child of a domestic
  partner if the domestic partner is eligible to be insured and is
  insured under the policy, and any other individual dependent on the
  adult.
         SECTION 4.03.  Section 1201.062(a), Insurance Code, is
  amended to read as follows:
         (a)  An individual or group accident and health insurance
  policy that is delivered, issued for delivery, or renewed in this
  state, including a policy issued by a corporation operating under
  Chapter 842, or a self-funded or self-insured welfare or benefit
  plan or program, to the extent that regulation of the plan or
  program is not preempted by federal law, that provides coverage for
  a child of an insured or group member, on payment of a premium, must
  provide coverage for:
               (1)  each grandchild of the insured or group member if
  the grandchild is:
                     (A)  unmarried;
                     (B)  younger than 26 [25] years of age; and
                     (C)  a dependent of the insured or group member
  for federal income tax purposes at the time application for
  coverage of the grandchild is made; and
               (2)  each child for whom the insured or group member
  must provide medical support under an order issued under Chapter
  154, Family Code, or enforceable by a court in this state.
         SECTION 4.04.  Section 1201.065(a), Insurance Code, is
  amended to read as follows:
         (a)  An individual or group accident and health insurance
  policy may contain criteria relating to a maximum age or enrollment
  in school to establish continued eligibility for coverage of a
  child 26 [25] years of age or older.
         SECTION 4.05.  Section 1251.151(a), Insurance Code, is
  amended to read as follows:
         (a)  A group policy or contract of insurance for hospital,
  surgical, or medical expenses incurred as a result of accident or
  sickness, including a group contract issued by a group hospital
  service corporation, that provides coverage under the policy or
  contract for a child of an insured must, on payment of a premium,
  provide coverage for any grandchild of the insured if the
  grandchild is:
               (1)  unmarried;
               (2)  younger than 26 [25] years of age; and
               (3)  a dependent of the insured for federal income tax
  purposes at the time the application for coverage of the grandchild
  is made.
         SECTION 4.06.  Section 1251.152(a), Insurance Code, is
  amended to read as follows:
         (a)  For purposes of this section:
               (1)  "Child," with respect to an individual, includes
  the individual's stepchild or foster child or a child of the
  individual's domestic partner if the domestic partner is eligible
  for coverage and is covered under the group policy or contract.
               (2)  "Dependent" [, "dependent"] includes:
                     (A) [(1)]  a child of an employee or member who
  is:
                           (i) [(A)]  unmarried; and
                           (ii) [(B)]  younger than 26 [25] years of
  age; and
                     (B) [(2)]  a grandchild of an employee or member
  who is:
                           (i) [(A)]  unmarried;
                           (ii) [(B)]  younger than 26 [25] years of
  age; and
                           (iii) [(C)]  a dependent of the insured for
  federal income tax purposes at the time the application for
  coverage of the grandchild is made.
         SECTION 4.07.  Section 1271.006(a), Insurance Code, is
  amended to read as follows:
         (a)  If children are eligible for coverage under the terms of
  an evidence of coverage, any limiting age applicable to an
  unmarried child of an enrollee, including an unmarried grandchild
  of an enrollee, a stepchild of an enrollee, a child of an enrollee's
  domestic partner if the domestic partner is eligible to be enrolled
  and is enrolled, an adopted child of an enrollee, and a foster child
  of an enrollee, is 26 [25] years of age. The limiting age
  applicable to a child must be stated in the evidence of coverage.
         SECTION 4.08.  Section 1501.002(2), Insurance Code, is
  amended to read as follows:
               (2)  "Dependent" means:
                     (A)  a spouse;
                     (B)  a child younger than 26 [25] years of age,
  including a newborn child;
                     (C)  a child of any age who is:
                           (i)  medically certified as disabled; and
                           (ii)  dependent on the parent;
                     (D)  an individual who must be covered under:
                           (i)  Section 1251.154; or
                           (ii)  Section 1201.062; and
                     (E)  any other child eligible under an employer's
  health benefit plan, including a child described by Section
  1503.003, a stepchild, a child of an employee's domestic partner if
  the domestic partner is eligible to receive and does receive
  coverage under the plan, or a foster child.
         SECTION 4.09.  Section 1501.609(b), Insurance Code, is
  amended to read as follows:
         (b)  Any limiting age applicable under a large employer
  health benefit plan to an unmarried child of an enrollee is 26 [25]
  years of age.
         SECTION 4.10.  Sections 1503.003(a) and (b), Insurance Code,
  are amended to read as follows:
         (a)  A health benefit plan may not condition coverage for a
  child younger than 26 [25] years of age on the child's being
  enrolled at an educational institution.
         (b)  A health benefit plan that requires as a condition of
  coverage for a child 26 [25] years of age or older that the child be
  a full-time student at an educational institution must provide the
  coverage:
               (1)  for the entire academic term during which the
  child begins as a full-time student and remains enrolled,
  regardless of whether the number of hours of instruction for which
  the child is enrolled is reduced to a level that changes the child's
  academic status to less than that of a full-time student; and
               (2)  continuously until the 10th day of instruction of
  the subsequent academic term, on which date the health benefit plan
  may terminate coverage for the child if the child does not return to
  full-time student status before that date.
         SECTION 4.11.  Section 1506.003, Insurance Code, is amended
  to read as follows:
         Sec. 1506.003.  DEFINITION OF DEPENDENT. In this chapter:
               (1)  "Child," with respect to an individual, includes
  the individual's stepchild or foster child.
               (2)  "Dependent" [, "dependent"] means:
                     (A) [(1)]  a resident spouse or unmarried child
  younger than 26 [25] years of age; or
                     (B) [(2)]  a child who is:
                           (i) [(A)]  a full-time student younger than
  26 [25] years of age who is financially dependent on the parent;
                           (ii) [(B)]  18 years of age or older and is
  an individual for whom a person may be obligated to pay child
  support; or
                           (iii) [(C)]  disabled and dependent on the
  parent regardless of the age of the child.
         SECTION 4.12.  Section 1506.158(a), Insurance Code, is
  amended to read as follows:
         (a)  An individual's pool coverage ends:
               (1)  on the date the individual ceases to be a legally
  domiciled resident of this state, unless the individual:
                     (A)  is a student younger than 26 [25] years of age
  and is financially dependent on a parent covered by the pool;
                     (B)  is a child for whom an individual covered by
  the pool may be obligated to pay child support; or
                     (C)  is a child who is disabled and dependent on a
  parent covered by the pool, regardless of the age of the child;
               (2)  on the first day of the month following the date
  the individual requests coverage to end;
               (3)  on the date the individual covered by the pool
  dies;
               (4)  on the date state law requires cancellation of the
  coverage;
               (5)  at the option of the pool, on the 31st day after
  the date the pool sends to the individual any inquiry concerning the
  individual's eligibility, including an inquiry concerning the
  individual's residence, to which the individual does not reply;
               (6)  on the 31st day after the date a premium payment
  for pool coverage becomes due if the payment is not made before that
  day;
               (7)  on the date the individual is 65 years of age and
  eligible for coverage under Medicare, unless the coverage received
  from the pool is Medicare supplement coverage issued by the pool; or
               (8)  at the time the individual ceases to meet the
  eligibility requirements for coverage.
         SECTION 4.13.  Section 1551.004(a), Insurance Code, is
  amended to read as follows:
         (a)  In this chapter, "dependent" with respect to an
  individual eligible to participate in the group benefits program
  under Section 1551.101 or 1551.102 means the individual's:
               (1)  spouse;
               (2)  unmarried child younger than 26 [25] years of age;
               (3)  child of any age who the board of trustees
  determines lives with or has the child's care provided by the
  individual on a regular basis if:
                     (A)  the child is mentally retarded or physically
  incapacitated to the extent that the child is dependent on the
  individual for care or support, as determined by the board of
  trustees;
                     (B)  the child's coverage under this chapter has
  not lapsed; and
                     (C)  the child is at least 26 [25] years old and
  was enrolled as a participant in the health benefits coverage under
  the group benefits program on the date of the child's 26th [25th]
  birthday;
               (4)  child of any age who is unmarried, for purposes of
  health benefit coverage under this chapter, on expiration of the
  child's continuation coverage under the Consolidated Omnibus
  Budget Reconciliation Act of 1985 (Pub. L. No. 99-272) and its
  subsequent amendments; and
               (5)  ward, as that term is defined by Section 601, Texas
  Probate Code.
         SECTION 4.14.  Section 1551.158(a), Insurance Code, is
  amended to read as follows:
         (a)  A dependent child who is unmarried and whose coverage
  under this chapter ends when the child becomes 26 [25] years of age
  may, on expiration of continuation coverage under the Consolidated
  Omnibus Budget Reconciliation Act of 1985 (Pub. L. No. 99-272),
  reinstate health benefit plan coverage under this chapter if the
  child, or the child's participating parent or guardian, pays the
  full cost of the health benefit plan coverage.
         SECTION 4.15.  Section 1575.003(1), Insurance Code, is
  amended to read as follows:
               (1)  "Dependent" means:
                     (A)  the spouse of a retiree;
                     (B)  an unmarried child of a retiree or deceased
  active member if the child is younger than 26 [25] years of age,
  including:
                           (i)  an adopted child;
                           (ii)  a foster child, stepchild, or other
  child who is in a regular parent-child relationship; or
                           (iii)  a recognized natural child;
                     (C)  a retiree's recognized natural child,
  adopted child, foster child, stepchild, or other child who is in a
  regular parent-child relationship and who lives with or has his or
  her care provided by the retiree or surviving spouse on a regular
  basis regardless of the child's age, if the child is mentally
  retarded or physically incapacitated to an extent that the child is
  dependent on the retiree or surviving spouse for care or support, as
  determined by the trustee; or
                     (D)  a deceased active member's recognized
  natural child, adopted child, foster child, stepchild, or other
  child who is in a regular parent-child relationship, without regard
  to the age of the child, if, while the active member was alive, the
  child:
                           (i)  lived with or had the child's care
  provided by the active member on a regular basis; and
                           (ii)  was mentally retarded or physically
  incapacitated to an extent that the child was dependent on the
  active member or surviving spouse for care or support, as
  determined by the trustee.
         SECTION 4.16.  Section 1579.004, Insurance Code, is amended
  to read as follows:
         Sec. 1579.004.  DEFINITION OF DEPENDENT. In this chapter,
  "dependent" means:
               (1)  a spouse of a full-time employee or part-time
  employee;
               (2)  an unmarried child of a full-time or part-time
  employee if the child is younger than 26 [25] years of age,
  including:
                     (A)  an adopted child;
                     (B)  a foster child, stepchild, or other child who
  is in a regular parent-child relationship; and
                     (C)  a recognized natural child;
               (3)  a full-time or part-time employee's recognized
  natural child, adopted child, foster child, stepchild, or other
  child who is in a regular parent-child relationship and who lives
  with or has his or her care provided by the employee or the
  surviving spouse on a regular basis, regardless of the child's age,
  if the child is mentally retarded or physically incapacitated to an
  extent that the child is dependent on the employee or surviving
  spouse for care or support, as determined by the board of trustees;
  and
               (4)  notwithstanding any other provision of this code,
  any other dependent of a full-time or part-time employee specified
  by rules adopted by the board of trustees.
         SECTION 4.17.  Section 1601.004(a), Insurance Code, is
  amended to read as follows:
         (a)  In this chapter, "dependent," with respect to an
  individual eligible to participate in the uniform program under
  Section 1601.101 or 1601.102, means the individual's:
               (1)  spouse;
               (2)  unmarried child younger than 26 [25] years of age;
  and
               (3)  child of any age who lives with or has the child's
  care provided by the individual on a regular basis if the child is
  mentally retarded or physically incapacitated to the extent that
  the child is dependent on the individual for care or support, as
  determined by the system.
         SECTION 4.18.  The changes in law made by this article apply
  only to a health benefit plan that is delivered, issued for
  delivery, or renewed on or after January 1, 2012. A health benefit
  plan that is delivered, issued for delivery, or renewed before
  January 1, 2012, is covered by the law in effect immediately before
  the effective date of this Act, and that law is continued in effect
  for that purpose.
  ARTICLE 5.  RESCISSION OF HEALTH BENEFIT PLAN
         SECTION 5.01.  Chapter 1202, Insurance Code, is amended by
  adding Subchapter C to read as follows:
  SUBCHAPTER C. RESCISSION OF HEALTH BENEFIT PLAN
         Sec. 1202.101.  DEFINITION. In this subchapter,
  "rescission" means the termination of an insurance agreement,
  contract, evidence of coverage, insurance policy, or other similar
  coverage document in which the health benefit plan issuer, as
  applicable, refunds premium payments or demands the recoupment of
  any benefit already paid under the plan.
         Sec. 1202.102.  APPLICABILITY. (a)  This subchapter applies
  only to a health benefit plan, including a small or large employer
  health benefit plan written under Chapter 1501, that provides
  benefits for medical or surgical expenses incurred as a result of a
  health condition, accident, or sickness, including an individual,
  group, blanket, or franchise insurance policy or insurance
  agreement, a group hospital service contract, or an individual or
  group evidence of coverage or similar coverage document that is
  offered by:
               (1)  an insurance company;
               (2)  a group hospital service corporation operating
  under Chapter 842;
               (3)  a fraternal benefit society operating under
  Chapter 885;
               (4)  a stipulated premium company operating under
  Chapter 884;
               (5)  a reciprocal exchange operating under Chapter 942;
               (6)  a Lloyd's plan operating under Chapter 941;
               (7)  a health maintenance organization operating under
  Chapter 843;
               (8)  a multiple employer welfare arrangement that holds
  a certificate of authority under Chapter 846; or
               (9)  an approved nonprofit health corporation that
  holds a certificate of authority under Chapter 844.
         (b)  This subchapter does not apply to:
               (1)  a health benefit plan that provides coverage:
                     (A)  only for a specified disease or for another
  limited benefit other than an accident policy;
                     (B)  only for accidental death or dismemberment;
                     (C)  for wages or payments in lieu of wages for a
  period during which an employee is absent from work because of
  sickness or injury;
                     (D)  as a supplement to a liability insurance
  policy;
                     (E)  for credit insurance;
                     (F)  only for dental or vision care;
                     (G)  only for hospital expenses; or
                     (H)  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),
  as amended;
               (3)  a workers' compensation insurance policy;
               (4)  medical payment insurance coverage provided under
  a motor vehicle insurance policy;
               (5)  a long-term care insurance policy, including a
  nursing home fixed indemnity policy, unless the commissioner
  determines that the policy provides benefit coverage so
  comprehensive that the policy is a health benefit plan described by
  Subsection (a);
               (6)  a Medicaid managed care plan offered under Chapter
  533, Government Code;
               (7)  any policy or contract of insurance with a state
  agency, department, or board providing health services to eligible
  individuals under Chapter 32, Human Resources Code; or
               (8)  a child health plan offered under Chapter 62,
  Health and Safety Code, or a health benefits plan offered under
  Chapter 63, Health and Safety Code.
         Sec. 1202.103.  RESCISSION PROHIBITED; EXCEPTION. (a)  
  Notwithstanding any other law, except as provided by Subsection
  (b), a health benefit plan issuer may not rescind coverage under a
  health benefit plan with respect to an enrollee in the plan.
         (b)  A health benefit plan issuer may rescind coverage under
  a health benefit plan with respect to an enrollee if the enrollee
  engages in conduct that constitutes fraud or makes an intentional
  misrepresentation of a material fact.
         Sec. 1202.104.  NOTICE OF INTENT TO RESCIND. (a)  A health
  benefit plan issuer may not rescind a health benefit plan on the
  basis of a material misrepresentation without first notifying the
  affected enrollee in writing of the issuer's intent to rescind the
  health benefit plan.
         (b)  The notice required under Subsection (a) must include,
  as applicable:
               (1)  the principal reasons for the decision to rescind
  the health benefit plan;
               (2)  the date on which the rescission is effective and
  the prior date to which the rescission retroactively reaches;
               (3)  an itemized list of any pending or paid claims the
  health benefit plan issuer intends to recoup following the
  rescission;
               (4)  an explanation of how the enrollee may obtain any
  documentation used by the health benefit plan issuer to justify the
  rescission;
               (5)  a statement that the enrollee is entitled to
  appeal a rescission decision to an independent review organization
  and that the health benefit plan issuer bears the burden of proof on
  appeal;
               (6)  an explanation of any time limit with which the
  enrollee must comply to appeal the rescission decision to an
  independent review organization, and a description of the
  consequences of failure to appeal within that time limit; and
               (7)  a statement that there is no cost to the individual
  to appeal the rescission decision to an independent review
  organization.
         Sec. 1202.105.  INDEPENDENT REVIEW PROCESS; PAYMENT OF
  CLAIMS.  (a)  An enrollee may appeal a health benefit plan issuer's
  rescission decision to an independent review organization in the
  manner prescribed by the commissioner by rule.
         (b)  A health benefit plan issuer shall comply with all
  requests for information made by the independent review
  organization and with the independent review organization's
  determination regarding the appropriateness of the issuer's
  decision to rescind.
         (c)  A health benefit plan issuer shall pay all otherwise
  valid medical claims under an individual's plan until the later of:
               (1)  the date on which an independent review
  organization determines that the decision to rescind is
  appropriate; or
               (2)  the time to appeal to an independent review
  organization has expired without an affected individual initiating
  an appeal.
         (d)  The commissioner shall adopt rules necessary to
  implement and enforce this section, including rules establishing
  certification standards for independent review organizations for
  purposes of this chapter.
         Sec. 1202.106.  BURDEN OF PROOF. In an appeal to an
  independent review organization under Section 1202.105 or an
  enforcement action or cause of action based on a violation of this
  subchapter by a health benefit plan issuer, the health benefit plan
  issuer must prove that the issuer did not violate this subchapter.
         SECTION 5.02.  The change in law made by this article applies
  only to a health benefit plan that is delivered, issued for
  delivery, or renewed on or after January 1, 2012. A health benefit
  plan that is delivered, issued for delivery, or renewed before
  January 1, 2012, is governed by the law as it existed immediately
  before the effective date of this Act, and that law is continued in
  effect for that purpose.
  ARTICLE 6.  HEALTH BENEFIT PLAN COVERAGE FOR CERTAIN CHILDREN
         SECTION 6.01.  Subtitle G, Title 8, Insurance Code, is
  amended by adding Chapter 1521 to read as follows:
  CHAPTER 1521.  COVERAGE FOR CHILDREN; PREEXISTING CONDITIONS;
  ENROLLMENT IN PLANS
         Sec. 1521.001.  DEFINITION. In this chapter, "preexisting
  condition" means a condition present before the effective date of
  an individual's coverage under a health benefit plan.
         Sec. 1521.002.  APPLICABILITY OF CHAPTER. (a)  This chapter
  applies only to a health benefit plan that provides benefits for
  medical or surgical expenses incurred as a result of a health
  condition, accident, or sickness, including an individual, group,
  blanket, or franchise insurance policy or insurance agreement, a
  group hospital service contract, or an individual or group evidence
  of coverage or similar coverage document that is offered by:
               (1)  an insurance company;
               (2)  a group hospital service corporation operating
  under Chapter 842;
               (3)  a fraternal benefit society operating under
  Chapter 885;
               (4)  a stipulated premium company operating under
  Chapter 884;
               (5)  an exchange operating under Chapter 942;
               (6)  a health maintenance organization operating under
  Chapter 843;
               (7)  a multiple employer welfare arrangement that holds
  a certificate of authority under Chapter 846; or
               (8)  an approved nonprofit health corporation that
  holds a certificate of authority under Chapter 844.
         (b)  This chapter applies to group health coverage made
  available by a school district in accordance with Section 22.004,
  Education Code.
         (c)  Notwithstanding Section 172.014, Local Government Code,
  or any other law, this chapter applies to health and accident
  coverage provided by a risk pool created under Chapter 172, Local
  Government Code.
         (d)  Notwithstanding any provision in Chapter 1551, 1575,
  1579, or 1601 or any other law, this chapter applies to:
               (1)  a basic coverage plan under Chapter 1551;
               (2)  a basic plan under Chapter 1575;
               (3)  a primary care coverage plan under Chapter 1579;
  and
               (4)  basic coverage under Chapter 1601.
         (e)  Notwithstanding Section 1501.251 or any other law, this
  chapter applies to coverage under a small or large employer health
  benefit plan subject to Chapter 1501.
         (f)  Notwithstanding Section 1507.003 or 1507.053, this
  chapter applies to a standard health benefit plan provided under
  Chapter 1507.
         Sec. 1521.003.  EXCEPTION.  This chapter does not apply to:
               (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 dental or 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);
               (3)  a workers' compensation insurance policy;
               (4)  medical payment insurance coverage provided under
  a motor vehicle insurance policy; or
               (5)  a long-term care policy, including a nursing home
  fixed indemnity policy, unless the commissioner determines that the
  policy provides benefit coverage so comprehensive that the policy
  is a health benefit plan as described by Section 1521.002.
         Sec. 1521.004.  PREEXISTING CONDITION PROVISION PROHIBITED.  
  A health benefit plan issuer may not, with respect to an individual
  younger than 19 years of age:
               (1)  deny the individual's application for coverage due
  to a preexisting condition;
               (2)  limit or deny coverage under the health benefit
  plan to the individual on the basis that the benefits requested are
  required to treat a preexisting condition; or
               (3)  charge the individual a premium in an amount that
  is more than two times the premium charged by the health benefit
  plan issuer to an individual younger than 19 years of age who does
  not have a preexisting condition, if the individual enrolls in a
  health benefit plan described by Section 1521.006 during an
  enrollment period described by Section 1521.006.
         Sec. 1521.005.  COVERAGE FOR CERTAIN DEPENDENTS REQUIRED.
  If a health benefit plan includes dependent coverage, the health
  benefit plan issuer shall approve the enrollment of an individual
  who is the minor child of an enrollee in the health benefit plan.
         Sec. 1521.006.  CHILD-ONLY PLANS REQUIRED; PENALTY. (a) A
  health benefit plan issuer shall offer, market, and sell health
  benefit plans in this state that exclusively cover individuals
  younger than 19 years of age.
         (b)  A health benefit plan issuer that does not comply with
  Subsection (a) may not issue new individual health benefit plans of
  any nature in this state.
         (c)  The department by rule shall require a health benefit
  plan issuer to have, and shall adopt rules concerning, enrollment
  periods for applicants described by Subsection (a).  A health
  benefit plan issuer must have at least two enrollment periods per
  year of at least 60 days each.
         (d)  During a required enrollment period, a health benefit
  plan issuer must issue individual health benefit plan coverage on a
  guaranteed issue basis to an applicant younger than 19 years of age
  and may not issue a health benefit plan with a preexisting condition
  exclusion rider or endorsement described by Section 1521.004.
         (e)  The department by rule shall adopt standard special
  enrollment procedures in which an applicant described by Subsection
  (a) may enroll in an individual health benefit plan under this
  section on a guaranteed issue basis during a period other than an
  enrollment period under Subsection (c) if the applicant or a
  parent, managing conservator, or legal guardian of the applicant
  experiences a qualifying event under the Health Insurance
  Portability and Accountability Act of 1996 (42 U.S.C. Section 1320d
  et seq.).
         Sec. 1521.007.  CONFLICT WITH OTHER LAW. If this chapter
  conflicts with another law relating to coverage provided by a
  health benefit plan to an individual who is younger than 19 years of
  age, including a provision of Chapter 846, 1201, 1251, 1252, 1501,
  1504, 1507, 1508, 1575, 1579, 1625, 1651, or 1652, this chapter
  controls.
         SECTION 6.02.  Each health benefit plan issuer required to
  issue individual health benefit plan coverage under Section
  1521.005, Insurance Code, as added by this article, shall offer an
  initial enrollment period satisfying the requirements of Section
  1521.006(d), Insurance Code, as added by this article, beginning
  not later than March 1, 2012.  Notwithstanding Section 1521.005,
  Insurance Code, as added by this article, the initial enrollment
  period required by this section must be at least 90 days.
         SECTION 6.03.  This article applies only to a health benefit
  plan that is delivered, issued for delivery, or renewed on or after
  January 1, 2012. A health benefit plan that is delivered, issued
  for delivery, or renewed before January 1, 2012, is governed by the
  law as it existed immediately before the effective date of this Act,
  and that law is continued in effect for that purpose.
  ARTICLE 7.  HEALTH BENEFIT PLAN COVERAGE FOR CERTAIN PREVENTIVE
  CARE SERVICES
         SECTION 7.01.  Subtitle G, Title 8, Insurance Code, is
  amended by adding Chapter 1522 to read as follows:
  CHAPTER 1522.  PREVENTIVE CARE SERVICES
         Sec. 1522.001.  APPLICABILITY OF CHAPTER. (a)  This chapter
  applies only to a health benefit plan that provides benefits for
  medical or surgical expenses incurred as a result of a health
  condition, accident, or sickness, including an individual, group,
  blanket, or franchise insurance policy or insurance agreement, a
  group hospital service contract, or an individual or group evidence
  of coverage or similar coverage document that is offered by:
               (1)  an insurance company;
               (2)  a group hospital service corporation operating
  under Chapter 842;
               (3)  a fraternal benefit society operating under
  Chapter 885;
               (4)  a stipulated premium company operating under
  Chapter 884;
               (5)  an exchange operating under Chapter 942;
               (6)  a health maintenance organization operating under
  Chapter 843;
               (7)  a multiple employer welfare arrangement that holds
  a certificate of authority under Chapter 846; or
               (8)  an approved nonprofit health corporation that
  holds a certificate of authority under Chapter 844.
         (b)  This chapter applies to group health coverage made
  available by a school district in accordance with Section 22.004,
  Education Code.
         (c)  Notwithstanding Section 172.014, Local Government Code,
  or any other law, this chapter applies to health and accident
  coverage provided by a risk pool created under Chapter 172, Local
  Government Code.
         (d)  Notwithstanding any provision in Chapter 1551, 1575,
  1579, or 1601 or any other law, this chapter applies to:
               (1)  a basic coverage plan under Chapter 1551;
               (2)  a basic plan under Chapter 1575;
               (3)  a primary care coverage plan under Chapter 1579;
  and
               (4)  basic coverage under Chapter 1601.
         (e)  Notwithstanding Section 1501.251 or any other law, this
  chapter applies to coverage under a small or large employer health
  benefit plan subject to Chapter 1501.
         (f)  Notwithstanding Section 1507.003 or 1507.053, this
  chapter applies to a standard health benefit plan provided under
  Chapter 1507.
         Sec. 1522.002.  EXCEPTION.  This chapter does not apply to:
               (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 dental or 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);
               (3)  a workers' compensation insurance policy;
               (4)  medical payment insurance coverage provided under
  a motor vehicle insurance policy; or
               (5)  a long-term care policy, including a nursing home
  fixed indemnity policy, unless the commissioner determines that the
  policy provides benefit coverage so comprehensive that the policy
  is a health benefit plan as described by Section 1522.001.
         Sec. 1522.003.  CERTAIN COST-SHARING PROVISIONS PROHIBITED.
  A health benefit plan issuer may not impose a deductible,
  copayment, coinsurance, or other cost-sharing provision applicable
  to benefits for:
               (1)  a preventive item or service that has in effect a
  rating of "A" or "B" in the most recent recommendations of the
  United States Preventive Services Task Force;
               (2)  an immunization recommended for routine use in the
  most recent immunization schedules published by the United States
  Centers for Disease Control and Prevention of the United States
  Public Health Service; or
               (3)  preventive care and screenings supported by the
  most recent comprehensive guidelines adopted by the United States
  Health Resources and Services Administration.
         Sec. 1522.004.  CONFLICT WITH OTHER LAW. If this chapter
  conflicts with another law relating to the imposition of a
  deductible, copayment, coinsurance, or other cost-sharing
  provision, this chapter controls.
         SECTION 7.02.  This article applies only to a health benefit
  plan that is delivered or issued for delivery on or after January 1,
  2012. A health benefit plan that is delivered or issued for
  delivery before January 1, 2012, is governed by the law as it
  existed immediately before the effective date of this Act, and that
  law is continued in effect for that purpose.
  ARTICLE 8.  CERTAIN LIFETIME AND ANNUAL LIMITATIONS ON HEALTH
  BENEFIT PLAN COVERAGE
         SECTION 8.01.  Subtitle G, Title 8, Insurance Code, is
  amended by adding Chapter 1523 to read as follows:
  CHAPTER 1523.  CERTAIN LIFETIME AND ANNUAL LIMITATIONS ON COVERAGE
  PROHIBITED
         Sec. 1523.001.  APPLICABILITY OF CHAPTER. (a)  This chapter
  applies only to a health benefit plan that provides benefits for
  medical or surgical expenses incurred as a result of a health
  condition, accident, or sickness, including an individual, group,
  blanket, or franchise insurance policy or insurance agreement, a
  group hospital service contract, or an individual or group evidence
  of coverage or similar coverage document that is offered by:
               (1)  an insurance company;
               (2)  a group hospital service corporation operating
  under Chapter 842;
               (3)  a fraternal benefit society operating under
  Chapter 885;
               (4)  a stipulated premium company operating under
  Chapter 884;
               (5)  an exchange operating under Chapter 942;
               (6)  a health maintenance organization operating under
  Chapter 843;
               (7)  a multiple employer welfare arrangement that holds
  a certificate of authority under Chapter 846; or
               (8)  an approved nonprofit health corporation that
  holds a certificate of authority under Chapter 844.
         (b)  This chapter applies to group health coverage made
  available by a school district in accordance with Section 22.004,
  Education Code.
         (c)  Notwithstanding Section 172.014, Local Government Code,
  or any other law, this chapter applies to health and accident
  coverage provided by a risk pool created under Chapter 172, Local
  Government Code.
         (d)  Notwithstanding any provision in Chapter 1551, 1575,
  1579, or 1601 or any other law, this chapter applies to:
               (1)  a basic coverage plan under Chapter 1551;
               (2)  a basic plan under Chapter 1575;
               (3)  a primary care coverage plan under Chapter 1579;
  and
               (4)  basic coverage under Chapter 1601.
         (e)  Notwithstanding Section 1501.251 or any other law, this
  chapter applies to coverage under a small or large employer health
  benefit plan subject to Chapter 1501.
         (f)  Notwithstanding Section 1507.003 or 1507.053, this
  chapter applies to a standard health benefit plan provided under
  Chapter 1507.
         Sec. 1523.002.  EXCEPTION.  This chapter does not apply to:
               (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 dental or 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);
               (3)  a workers' compensation insurance policy;
               (4)  medical payment insurance coverage provided under
  a motor vehicle insurance policy; or
               (5)  a long-term care policy, including a nursing home
  fixed indemnity policy, unless the commissioner determines that the
  policy provides benefit coverage so comprehensive that the policy
  is a health benefit plan as described by Section 1523.001.
         Sec. 1523.003.  CERTAIN ANNUAL AND LIFETIME LIMITS
  PROHIBITED; REENROLLMENT REQUIRED. A health benefit plan issuer
  may not establish:
               (1)  a lifetime or annual benefit amount for an
  enrollee in relation to essential health benefits listed in 42
  U.S.C. Section 18022(b)(1) and other benefits identified by the
  United States secretary of health and human services as essential
  health benefits; or
               (2)  an annual limit on the services for which the
  health benefit plan will provide coverage, including an annual
  limit on an enrollee's number of:
                     (A)  visits to a physician;
                     (B)  days of inpatient or outpatient treatment; or
                     (C)  prescription refills.
         Sec. 1523.004.  REINSTATEMENT OF COVERAGE. (a)  A health
  benefit plan issuer, with relation to a former enrollee whose
  participation in or benefits under a health benefit plan terminated
  by reason of the enrollee exceeding a lifetime maximum benefit,
  shall:
               (1)  notify the former enrollee:
                     (A)  that the lifetime maximum benefit no longer
  applies to the former enrollee; and
                     (B)  that the former enrollee is eligible to
  reenroll in a health benefit plan issued by the health benefit plan
  issuer; and
               (2)  on request of the former enrollee, enroll the
  former enrollee in a health benefit plan that is identical or
  substantially similar to the enrollee's former health benefit plan.
         (b)  The notice required by Subsection (a) must be mailed to
  the former enrollee at the enrollee's last known address as shown in
  the records of the health benefit plan issuer.
         Sec. 1523.005.  CONFLICT WITH OTHER LAW. If this chapter
  conflicts with another law relating to lifetime or annual benefit
  limits or annual limits for specified services under a health
  benefit plan, this chapter controls.
         SECTION 8.02.  Each health benefit plan issuer required to
  offer to former enrollees reenrollment in a health benefit plan
  under Section 1523.004, Insurance Code, as added by this article,
  shall send to each former enrollee entitled to a notice under that
  section the notice required by that section not later than December
  1, 2011.
         SECTION 8.03.  (a)  Except as provided by Subsection (b) of
  this section, this article applies only to a health benefit plan
  that is delivered, issued for delivery, or renewed on or after
  January 1, 2012. A health benefit plan that is delivered, issued
  for delivery, or renewed before January 1, 2012, is governed by the
  law as it existed immediately before the effective date of this Act,
  and that law is continued in effect for that purpose.
         (b)  The change in law made by Section 1523.004, Insurance
  Code, as added by this article, applies to a health benefit plan
  that is delivered, issued for delivery, or renewed before, on, or
  after January 1, 2012.
  ARTICLE 9.  EFFECTIVE DATE
         SECTION 9.01.  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, 2011.