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.