CHAPTER 1508. HEALTHY TEXAS PROGRAM
INSURANCE CODE
TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES
SUBTITLE G. HEALTH COVERAGE AVAILABILITY
CHAPTER 1508. HEALTHY TEXAS PROGRAM
Text of chapter effective on September 1, 2009, but only if a
specific appropriation is provided as described by Acts 2009,
81st Leg., R.S., Ch. 721, Sec. 2.04, which states: This Act does
not make an appropriation. This Act takes effect only if a
specific appropriation for the implementation of the Act is
provided in a general appropriations act of the 81st Legislature.
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1508.001. PURPOSE. (a) The purposes of the Healthy Texas
Program are to:
(1) provide access to quality small employer health benefit
plans at an affordable price;
(2) encourage small employers to offer health benefit plan
coverage to employees and the dependents of employees; and
(3) maximize reliance on proven managed care strategies and
procedures.
(b) The Healthy Texas Program is not intended to diminish the
availability of traditional small employer health benefit plan
coverage under Chapter 1501.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.002. DEFINITIONS. In this chapter:
(1) "Dependent" has the meaning assigned by Section 1501.002(2).
(2) "Eligible employee" has the meaning assigned by Section
1501.002(3).
(3) "Fund" means the healthy Texas small employer premium
stabilization fund established under Subchapter F.
(4) "Health benefit plan" and "health benefit plan issuer" have
the meanings assigned by Sections 1501.002(5) and 1501.002(6),
respectively.
(5) "Program" means the Healthy Texas Program established under
this chapter.
(6) "Qualifying health benefit plan" means a health benefit plan
that provides benefits for health care services in the manner
described by this chapter.
(7) "Small employer" has the meaning assigned by Section
1501.002(14).
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.003. RULES. The commissioner may adopt rules as
necessary to implement this chapter.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
SUBCHAPTER B. EMPLOYER ELIGIBILITY; CONTRIBUTIONS
Sec. 1508.051. EMPLOYER ELIGIBILITY TO PARTICIPATE. (a) A
small employer may participate in the program if:
(1) during the 12-month period immediately preceding the date of
application for a qualifying health benefit plan, the small
employer does not offer employees group health benefits on an
expense-reimbursed or prepaid basis; and
(2) at least 30 percent of the small employer's eligible
employees receive annual wages from the employer in an amount
that is equal to or less than 300 percent of the poverty
guidelines for an individual, as defined and updated annually by
the United States Department of Health and Human Services.
(b) A small employer ceases to be eligible to participate in the
program if any health benefit plan that provides employee
benefits on an expense-reimbursed or prepaid basis, other than
another qualifying health benefit plan, is purchased or otherwise
takes effect after the purchase of a qualifying health benefit
plan.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.052. COMMISSIONER ADJUSTMENTS AUTHORIZED. (a) The
commissioner by rule may adjust the 12-month period described by
Section 1508.051(a)(1) to an 18-month period if the commissioner
determines that the 12-month period is insufficient to prevent
inappropriate substitution of other health benefit plans for
qualifying health benefit plan coverage under this chapter.
(b) The commissioner by rule may adjust the percentage of the
poverty guidelines described by Section 1508.051(a)(2) to a
higher or lower percentage if the commissioner determines that
the adjustment is necessary to fulfill the purposes of this
chapter. An adjustment made by the commissioner under this
subsection takes effect on the first July 1 following the
adjustment.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.053. MINIMUM EMPLOYER PARTICIPATION REQUIREMENTS. A
small employer that meets the eligibility requirements described
by Section 1508.051(a) may apply to purchase a qualifying health
benefit plan if 60 percent or more of the employer's eligible
employees elect to participate in the plan.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.054. EMPLOYER CONTRIBUTION REQUIREMENTS. (a) A small
employer that purchases a qualifying health benefit plan must:
(1) pay 50 percent or more of the premium for each employee
covered under the qualifying health benefit plan;
(2) offer coverage to all eligible employees receiving annual
wages from the employer in an amount described by Section
1508.051(a)(2) or 1508.052(b), as applicable; and
(3) contribute the same percentage of premium for each covered
employee.
(b) A small employer that purchases a qualifying health benefit
plan under the program may elect to pay, but is not required to
pay, all or any portion of the premium paid for dependent
coverage under the qualifying health benefit plan.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
SUBCHAPTER C. PROGRAM PARTICIPATION; REQUIRED COVERAGE AND
BENEFITS
Sec. 1508.101. PARTICIPATING PLAN ISSUERS. (a) Subject to
Subsection (b), any health benefit plan issuer may participate in
the program.
(b) The commissioner by rule may limit which health benefit plan
issuers may participate in the program if the commissioner
determines that the limitation is necessary to achieve the
purposes of this chapter.
(c) If the commissioner limits participation in the program
under Subsection (b), the commissioner shall contract on a
competitive procurement basis with one or more health benefit
plan issuers to provide qualifying health benefit plan coverage
under the program.
(d) Nothing in this chapter prohibits a regional or local health
care program described by Chapter 75, Health and Safety Code,
from participating in the program. The commissioner by rule
shall establish participation requirements applicable to regional
and local health care programs that consider the unique plan
designs, benefit levels, and participation criteria of each
program.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.102. PREEXISTING CONDITION PROVISION REQUIRED. A
health benefit plan offered under the program must include a
preexisting condition provision that meets the requirements
described by Section 1501.102.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.103. EXCEPTION FROM MANDATED BENEFIT REQUIREMENTS.
Except as expressly provided by this chapter, a small employer
health benefit plan issued under the program is not subject to a
law of this state that requires coverage or the offer of coverage
of a health care service or benefit.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.104. CERTAIN COVERAGE PROHIBITED OR REQUIRED. (a) A
qualifying health benefit plan may only provide coverage for
in-plan services and benefits, except for:
(1) emergency care; or
(2) other services not available through a plan provider.
(b) In-plan services and benefits provided under a qualifying
health benefit plan must include the following:
(1) inpatient hospital services;
(2) outpatient hospital services;
(3) physician services; and
(4) prescription drug benefits.
(c) The commissioner may approve in-plan benefits other than
those required under Subsection (b) or emergency care or other
services not available through a plan provider if the
commissioner determines the inclusion to be essential to achieve
the purposes of this chapter.
(d) The commissioner may, with respect to the categories of
services and benefits described by Subsections (b) and (c):
(1) prepare specifications for a coverage provided under this
chapter;
(2) determine the methods and procedures of claims
administration;
(3) establish procedures to decide contested cases arising from
coverage provided under this chapter;
(4) study, on an ongoing basis, the operation of all coverages
provided under this chapter, including gross and net costs,
administration costs, benefits, utilization of benefits, and
claims administration;
(5) administer the healthy Texas small employer premium
stabilization fund established under Subchapter F;
(6) provide the beginning and ending dates of coverages for
enrollees in a qualifying health benefit plan;
(7) develop basic group coverage plans applicable to all
individuals eligible to participate in the program;
(8) provide for optional group coverage plans in addition to the
basic group coverage plans described by Subdivision (7);
(9) provide, as determined to be appropriate by the
commissioner, additional statewide optional coverage plans;
(10) develop specific health benefit plans that permit access to
high-quality, cost-effective health care;
(11) design, implement, and monitor health benefit plan features
intended to discourage excessive utilization, promote efficiency,
and contain costs for qualifying health benefit plans;
(12) develop and refine, on an ongoing basis, a health benefit
strategy for the program that is consistent with evolving
benefits delivery systems;
(13) develop a funding strategy that efficiently uses employer
contributions to achieve the purposes of this chapter; and
(14) modify the copayment and deductible amounts for
prescription drug benefits under a qualifying health benefit
plan, if the commissioner determines that the modification is
necessary to achieve the purposes of this chapter.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
SUBCHAPTER D. PROGRAM ADMINISTRATION
Sec. 1508.151. EMPLOYER CERTIFICATION. (a) At the time of
initial application, a health benefit plan issuer shall obtain
from a small employer that seeks to purchase a qualifying health
benefit plan a written certification that the employer meets the
eligibility requirements described by Section 1508.051 and the
minimum employer participation requirements described by Section
1508.053.
(b) Not later than the 90th day before the renewal date of a
qualifying health benefit plan, a health benefit plan issuer
shall obtain from the small employer that purchased the
qualifying health benefit plan a written certification that the
employer continues to meet the eligibility requirements described
by Section 1508.051 and the minimum employer participation
requirements described by Section 1508.053.
(c) A participating health benefit plan issuer may require a
small employer to submit appropriate documentation in support of
a certification described by Subsection (a) or (b).
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.152. APPLICATION PROCESS. (a) Subject to Subsection
(b), a health benefit plan issuer shall accept applications for
qualifying health benefit plan coverage from small employers at
all times throughout the calendar year.
(b) The commissioner may limit the dates on which a health
benefit plan issuer must accept applications for qualifying
health benefit plan coverage if the commissioner determines the
limitation to be necessary to achieve the purposes of this
chapter.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.153. EMPLOYEE ENROLLMENT; WAITING PERIOD. (a) A
qualifying health benefit plan must provide employees with an
initial enrollment period that is 31 days or longer, and annually
at least one open enrollment period that is 31 days or longer.
The commissioner by rule may require an additional open
enrollment period if the commissioner determines that the
additional open enrollment period is necessary to achieve the
purposes of this chapter.
(b) A small employer may establish a waiting period for
employees during which an employee is not eligible for coverage
under a qualifying health benefit plan. The last day of a
waiting period established under this subsection may not be later
than the 90th day after the date on which the employee begins
employment with the small employer.
(c) A health benefit plan issuer may not deny coverage under a
qualifying health benefit plan to a new employee of a small
employer that purchased the qualifying health benefit plan if the
health benefit plan issuer receives an application for coverage
from the employee not later than the 31st day after the latter
of:
(1) the first day of the employee's employment; or
(2) the first day after the expiration of a waiting period
established under Subsection (b).
(d) Subject to Subsection (e), a health benefit plan issuer may
deny coverage under a qualifying health benefit plan to an
employee of a small employer who applies for coverage after the
period described by Subsection (c).
(e) A health benefit plan issuer that denies an employee
coverage under Subsection (d):
(1) may only deny the employee coverage until the next open
enrollment period; and
(2) may subject the enrollee to a one-year preexisting condition
provision, as described by Section 1508.102, if the period during
which the preexisting condition provision applies does not exceed
18 months from the date of the initial application for coverage
under the qualifying health benefit plan.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.154. REPORTS. A health benefit plan issuer that
participates in the program shall submit reports to the
department in the form and at the time the commissioner
prescribes.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
SUBCHAPTER E. RATING OF QUALIFIED HEALTH BENEFIT PLANS
Sec. 1508.201. RATING; PREMIUM PRACTICES IN GENERAL. (a) A
health benefit plan issuer participating in the program must:
(1) use rating practices for qualifying health benefit plans
that are consistent with the purposes of this chapter; and
(2) in setting premiums for qualifying health benefit plans,
consider the availability of reimbursement from the fund.
(b) A health benefit plan issuer participating in the program
shall apply rating factors consistently with respect to all small
employers in a class of business.
(c) Differences in premium rates charged for qualifying health
benefit plans must be reasonable and reflect objective
differences in plan design.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.202. PREMIUM RATE DEVELOPMENT AND CALCULATION. (a)
Rating factors used to underwrite qualifying health benefit plans
must produce premium rates for identical groups that:
(1) differ only by the amounts attributable to health benefit
plan design; and
(2) do not reflect differences because of the nature of the
groups assumed to select a particular health benefit plan.
(b) A health benefit plan issuer shall treat each qualifying
health benefit plan that is issued or renewed in a calendar month
as having the same rating period.
(c) A health benefit plan issuer may use only age and gender as
case characteristics, as defined by Section 1501.201(2), in
setting premium rates for a qualifying health benefit plan.
(d) The commissioner by rule may establish additional rating
criteria and requirements for qualifying health benefit plans if
the commissioner determines that the criteria and requirements
are necessary to achieve the purposes of this chapter.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.203. FILING; APPROVAL. (a) A health benefit plan
issuer shall file with the department, for review and approval by
the commissioner, premium rates to be charged for qualifying
health benefit plans.
(b) If the commissioner limits health benefit plan issuer
participation in the program under Section 1508.101(b), premium
rates proposed to be charged for each qualifying health benefit
plan will be considered as an element in the contract procurement
process required under that section.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
SUBCHAPTER F. HEALTHY TEXAS SMALL EMPLOYER PREMIUM STABILIZATION
FUND
Sec. 1508.251. ESTABLISHMENT OF FUND. (a) To the extent that
funds appropriated to the department are available for this
purpose, the commissioner shall establish a fund from which
health benefit plan issuers may receive reimbursement for claims
paid by the health benefit plan issuers for individuals covered
under qualifying group health plans.
(b) The fund established under this section shall be known as
the healthy Texas small employer premium stabilization fund.
(c) The commissioner shall adopt rules necessary to implement
and administer the fund, including rules that set out the
procedures for operation of the fund and distribution of money
from the fund.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.252. OPERATION OF FUND; CLAIM ELIGIBILITY. (a) A
health benefit plan issuer is eligible to receive reimbursement
in an amount that is equal to 80 percent of the dollar amount of
claims paid between $5,000 and $75,000 in a calendar year for an
enrollee in a qualifying health benefit plan.
(b) A health benefit plan issuer is eligible for reimbursement
from the fund only for the calendar year in which claims are
paid.
(c) Once the dollar amount of claims paid on behalf of a covered
individual reaches or exceeds $75,000 in a given calendar year, a
health benefit plan issuer may not receive reimbursement for any
other claims paid on behalf of the individual in that calendar
year.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.253. REIMBURSEMENT REQUEST SUBMISSION. (a) A health
benefit plan issuer seeking reimbursement from the fund shall
submit a request for reimbursement in the form prescribed by the
commissioner by rule.
(b) A health benefit plan issuer must request reimbursement from
the fund annually, not later than the date determined by the
commissioner, following the end of the calendar year for which
the reimbursement requests are made.
(c) The commissioner may require a health benefit plan issuer
participating in the program to submit claims data in connection
with reimbursement requests as the commissioner determines to be
necessary to ensure appropriate distribution of reimbursement
funds and oversee the operation of the fund. The commissioner
may require that the data be submitted on a per covered
individual, aggregate, or categorical basis.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.254. FUND AVAILABILITY. (a) The commissioner shall
compute the total claims reimbursement amount for all health
benefit plan issuers participating in the program for the
calendar year for which claims are reported and reimbursement
requested.
(b) If the total amount requested by health benefit plan issuers
participating in the program for reimbursement for a calendar
year exceeds the amount of funds available for distribution for
claims paid during that same calendar year, the commissioner
shall provide for the pro rata distribution of any available
funds. A health benefit plan issuer participating in the program
is eligible to receive a proportional amount of any available
funds that is equal to the proportion of total eligible claims
paid by all participating health benefit plan issuers that the
requesting health benefit plan issuer paid.
(c) If the amount of funds available for distribution for claims
paid by all health benefit plan issuers participating in the
program during a calendar year exceeds the total amount requested
for reimbursement by all participating health benefit plan
issuers during that calendar year, the commissioner shall carry
forward any excess funds and make those excess funds available
for distribution in the next calendar year. Excess funds carried
over under this section are added to the fund in addition to any
other money appropriated for the fund for the calendar year into
which the funds are carried forward.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.255. PROGRAM REPORTING. (a) Each health benefit plan
issuer participating in the program shall provide the department,
in the form prescribed by the commissioner, monthly reports of
total enrollment under qualifying health benefit plans.
(b) On the request of the commissioner, each health benefit plan
issuer participating in the program shall furnish to the
department, in the form prescribed by the commissioner, data
other than data described by Subsection (a) that the commissioner
determines necessary to oversee the operation of the fund.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.256. CLAIMS EXPERIENCE DATA. (a) Based on available
data and appropriate actuarial assumptions, the commissioner
shall separately estimate the per covered individual annual cost
of total claims reimbursement from the fund for qualifying health
benefit plans.
(b) On request, a health benefit plan issuer participating in
the program shall furnish to the department claims experience
data for use in the estimates described by Subsection (a).
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.257. TOTAL ELIGIBLE ENROLLMENT DETERMINATION. (a)
The commissioner shall determine total eligible enrollment under
qualifying health benefit plans by dividing the total funds
available for distribution from the fund by the estimated per
covered individual annual cost of total claims reimbursement from
the fund.
(b) At the end of the first year of enrollment and annually
thereafter, the commissioner shall submit a report to the
governor and the legislature regarding enrollment for the
previous year and limitations on future enrollment that ensure
that the program does not necessitate a substantial increase in
funding to continue the program, as consistent with Section
1508.001.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.258. EVALUATION AND PROTECTION OF FUND; EMPLOYER
ENROLLMENT SUSPENSION. (a) The commissioner shall suspend the
enrollment of new employers in qualifying health benefit plans if
the commissioner determines that the total enrollment reported by
all health benefit plan issuers under qualifying health benefit
plans exceeds the total eligible enrollment determined under
Section 1508.257 and is likely to result in anticipated annual
expenditures from the fund in excess of the total funds available
for distribution from the fund.
(b) The commissioner shall provide a health benefit plan issuer
participating in the program with notification of any enrollment
suspension under Subsection (a) as soon as practicable after:
(1) receipt of all enrollment data; and
(2) determination of the need to suspend enrollment.
(c) A suspension of issuance of qualifying health benefit plans
to employers under Subsection (a) does not preclude the addition
of new employees of an employer already covered under a
qualifying health benefit plan or new dependents of employees
already covered under a qualifying health benefit plan.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.259. EMPLOYER ENROLLMENT REACTIVATION. If, at any
point during a suspension of enrollment under Section 1508.258,
the commissioner determines that funds are sufficient to provide
for the addition of new enrollments, the commissioner:
(1) may reactivate new enrollments; and
(2) shall notify all participating group health benefit plan
issuers that enrollment of new employers may be resumed.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.260. FUND ADMINISTRATOR. (a) The commissioner may
obtain the services of an independent organization to administer
the fund.
(b) The commissioner shall establish guidelines for the
submission of proposals by organizations for the purposes of
administering the fund and may approve, disapprove, or recommend
modification to the proposal of an applicant to administer the
fund.
(c) An organization approved to administer the fund shall submit
reports to the commissioner, in the form and at the times
required by the commissioner, as necessary to facilitate
evaluation and ensure orderly operation of the fund, including an
annual report of the affairs and operations of the fund. The
annual report must also be delivered to the governor, the
lieutenant governor, and the speaker of the house of
representatives.
(d) An organization approved to administer the fund shall
maintain records in the form prescribed by the commissioner and
make those records available for inspection by or at the request
of the commissioner.
(e) The commissioner shall determine the amount of compensation
to be allocated to an approved organization as payment for fund
administration. Compensation is payable only from the fund.
(f) The commissioner may remove an organization approved to
administer the fund from fund administration. An organization
removed from fund administration under this subsection must
cooperate in the orderly transition of services to another
approved organization or to the commissioner.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.261. STOP-LOSS INSURANCE; REINSURANCE. (a) The
administrator of the fund, on behalf of and with the prior
approval of the commissioner, may purchase stop-loss insurance or
reinsurance from an insurance company licensed to write that
coverage in this state.
(b) Stop-loss insurance or reinsurance may be purchased to the
extent that the commissioner determines funds are available for
the purchase of that insurance.
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.
Sec. 1508.262. PUBLIC EDUCATION AND OUTREACH. (a) The
commissioner may use an amount of the fund, not to exceed eight
percent of the annual amount of the fund, for purposes of
developing and implementing public education, outreach, and
facilitated enrollment strategies targeted to small employers who
do not provide health insurance.
(b) The commissioner shall solicit and accept recommendations
concerning the development and implementation of education,
outreach, and enrollment strategies under Subsection (a) from
agents licensed under Title 13 to write health benefit plans in
this state.
(c) The commissioner may contract with marketing organizations
to perform or provide assistance with education, outreach, and
enrollment strategies described by Subsection (a).
Added by Acts 2009, 81st Leg., R.S., Ch.
721, Sec. 2.01, eff. September 1, 2009.