HBA-TYH, ATS H.B. 2969 76(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 2969 By: Averitt Insurance 7/22/1999 Enrolled BACKGROUND AND PURPOSE Prior to the 76th Legislature, each small and large employer health carrier was required to certify to the commissioner of insurance (commissioner), by March 1 of each year, whether, as of January 1 of that year, it was offering a health benefit plan subject to Chapter 26 (Health Insurance Availability), Insurance Code. A carrier who elected to offer such a health benefit plan after March 1 could delay notifying the commissioner until the following March. H.B. 2969 deletes the condition that each health carrier is required to certify to the commissioner by March 1 of each year whether, as of January 1 of that year, it will offer a health benefit plan. The small employer certification needed to list each other health insurance coverage that the small employer health carrier was offering, delivering, issuing for delivery, or renewing to or through small employers in this state, and that was not subject to Chapter 26 because it was listed as excluded from the definition of a health benefit plan under Article 26.02, Insurance Code. This required information had not been useful in identifying issues that small employers face or abuses in the small employer market. H.B. 2969 requires each small or large employer health carrier to certify, in accordance with rules adopted by the commissioner, that the carrier is offering, delivering, issuing for delivery, or renewing, or that the carrier intends to offer, deliver, issue for delivery, or renew a health benefit plan to or through a small or large employer plan in this state that is subject to Chapter 26. In addition, this bill provides that a carrier must submit a revised certification to the commissioner only if the carrier changes its status as a small employer carrier or large employer carrier. A small and large employer carrier could have elected to discontinue a particular type of coverage only if the carrier provided notice to each employer of the discontinuation before the 90th day preceding the date of the discontinuation of the coverage, among other requirements. A carrier did not have to notify the commissioner. Moreover, the order of the statutory language could have led to the conclusion that a carrier was not required to notify or offer other coverage it was offering at the same time it notified a small or large employer that it was discontinuing coverage. H.B. 2969 sets forth that, before the 90th day preceding the date a carrier discontinues coverage, a small or large employer health carrier must provide notice of the discontinuation to the employer and the commissioner. A large employer carrier could have required a large employer to meet minimum contribution or participation requirements as a condition of issuance and renewal. The participation requirements could have determined the percentage of individuals that needed to be enrolled in the plan in accordance with the participation criteria established by the employer. The law did not explicitly state whether employers are authorized to require participation from employees and their dependents. H.B. 2969 authorizes a large employer carrier to apply minimum participation requirements as a condition of issuance or renewal to the employer's eligible employees, but prohibits the large employer carrier from applying those requirements to eligible dependents. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the commissioner of insurance in SECTIONS 1 (Article 26.07, Insurance Code) and 3 (Article 26.82, Insurance Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Article 26.07, Insurance Code, as follows: Art. 26.07. CERTIFICATION. (a) Requires each health carrier (carrier) to certify, in accordance with rules adopted by the commissioner of insurance (commissioner), that the carrier is offering, delivering, issuing for delivery, or renewing, or that the carrier intends to offer, deliver, issue for delivery, or renew a health benefit plan to or through a small employer plan in this state that is subject to this chapter under Article 26.06(a) (Applicability). Deletes the condition that each health carrier is required to certify by March 1 of each year. Deletes the condition that each health carrier is required to determine whether, as of January 1 of that year, it will offer a health benefit plan. (b) Provides that a carrier must submit a revised certification to the commissioner only if the carrier changes its status as a small employer carrier or changes its intent to become a small employer health carrier to the extent that its previous certification ceases to be accurate. Deletes the requirement that the certification list each other health insurance coverage that is not subject to this chapter because it is listed as excluded from the definition of a health benefit plan under Article 26.02 (Definitions). Makes a conforming change. (c) Requires the certification to include a statement that the health carrier is complying with this chapter to the extent it is applicable to the carrier. Makes a conforming change. SECTION 2. Amends Article 26.24(d), Insurance Code, to set forth that a small employer health carrier that discontinues a particular type of small employer coverage must provide notice of the discontinuation to the employer and the commissioner, rather than notice to each employer. Redesignates existing Subdivision (2) to Paragraph (B) and existing Subdivision (3) to Subdivision (2). SECTION 3. Amends Article 26.82, Insurance Code, as follows: Art. 26.82. CERTIFICATION. (a) Requires each carrier to certify, in accordance with rules adopted by the commissioner, that the carrier is offering, delivering, issuing for delivery, or renewing, or that the carrier intends to offer, deliver, issue for delivery, or renew a health benefit plan to or through a large employer plan in this state that is subject to this chapter under Article 26.81 (Applicability). Deletes the condition that each health carrier is required to certify by March 1 of each year. Deletes the condition that each health carrier is required to determine whether, as of January 1 of that year, it will offer a health benefit plan. (b) Provides that a carrier must submit a revised certification to the commissioner only if the carrier changes its status as a large employer carrier or changes its intent to become a small employer health carrier to the extent that its previous certification ceases to be accurate. (c) Requires the certification to include a statement that the health carrier is complying with this chapter to the extent it is applicable to the carrier. SECTION 4. Amends Article 26.83(e), Insurance Code, to authorize a large employer carrier to apply minimum participation requirements as a condition of issuance or renewal to the employer's eligible employees, but prohibits the large employer carrier from applying those requirements to eligible dependents. Makes a nonsubstantive change. SECTION 5. Amends Article 26.87(d), Insurance Code, to set forth that a large employer health carrier that discontinues a particular type of large employer coverage must provide notice of the discontinuation to the employer and the commissioner, rather than notice to each employer. Redesignates existing Subdivision (2) to Paragraph (B) and existing Subdivision (3) to Subdivision (2). SECTION 6. (a) Effective date: September 1, 1999. (b) Requires the commissioner to adopt the rules necessary to implement this Act by January 1, 2000. (c) Requires a small employer health carrier and a large employer health carrier to provide the certification required by this Act by March 1, 2000. SECTION 7. Emergency clause.