HBA-NIK, NIK H.B. 3097 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3097
By: Burnam
Insurance
3/23/1999
Introduced



BACKGROUND AND PURPOSE

Long-term disability insurance policies are sold to the general public and
employers as a means of income replacement in the event that an employee
becomes disabled.  Currently, under the majority of long-term disability
policies, if an employee becomes disabled and can no longer work, the
employee may qualify for monthly disability benefits until age 65 or until
he or she is no longer disabled.  However, these same policies limit
disability benefits to 24 months or less if the employee is disabled by a
mental illness, disease or disorder.  Although the Texas Insurance Code
provides for mental health parity in health insurance contracts, it does
not provide for parity in long-term disability policies.  H.B. 3097 grants
mental health parity in long-term disability insurance products.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter E, Chapter 3, Insurance Code, by adding
Article 3.51-6E, as follows: 

ARTICLE 3.51-6E. PARITY IN BENEFITS.

Sec. 1.  Prohibits specified insurance policies or evidence of coverage
from being delivered, issued for delivery, or renewed if the terms of the
policy or evidence of coverage excludes or reduces the payment of benefits
to or on behalf of an insured or enrollee because of a mental illness,
disease, or disorder, unless such exclusion or limitation is equally
applicable to all other physically disabling conditions.  Requires a
disability policy or plan to provide parity in benefits for mental and
physical disabilities. 

Sec. 2.  Provides that a provision in specified insurance policies or an
evidence of coverage that violates Section 1 of this article is void. 

Sec. 3.  VIOLATION; PENALTY.  Provides that a violation of this article is
an unfair and deceptive act or practice in the business of insurance for
the purposes of Article 21.21 (Unfair Competition and Unfair Practices),
Insurance Code, and is subject to the sanctions and penalties imposed under
that article.  Provides that approval by the commissioner of insurance of
the specified policy or product form or other form used by the disability
policy or plan issuer is not a defense to an action brought under Article
21.21 with respect to a violation of this article. 

SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Makes application of this Act prospective beginning January 1,
2000. 

SECTION 4.  Emergency clause.