HBA-TYH H.B. 3273 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3273 By: Averitt Insurance 4/5/1999 Introduced BACKGROUND AND PURPOSE Allowing group health insurers to offer their products through nonprofit corporate entities may improve the accessibility and affordability of group health coverage for employer purchasers. H.B. 3274 refers to such an entity as "HealthMart." Each HealthMart would have the authority to sponsor the plans of a variety of group health insurers. HealthMarts would also offer a variety of products through each of its insurer participants. In effect, each HealthMart would function as a large group plan across which premium rating would be distributed for all participating employers. H.B. 3273 authorizes the establishment of HealthMarts, sets forth the administrative details of a HealthMart, and establishes conditions under which contracts may be signed between either a HealthMart and a health provider or a HealthMart and a purchaser. 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 B, Chapter 26, Insurance Code, by adding Section 26.15A, as follows: Art. 26.15A. HEALTHMARTS. (a) Authorizes a cooperative, in addition to the powers and duties set forth in this subchapter, to make available health benefit coverage as a HealthMart within this state, as described in this article. (b) Requires the board of trustees of the cooperative, if a cooperative elects to operate as a HealthMart, to include representatives of health care providers and representatives of health carriers. (c) Provides that a HealthMart is a group health plan for the purposes of the Employee Retirement Income Security Act of 1974 (ERISA) and its amendments, for as long as that statute and its amendments and successor statutes shall be effective. (d) A HealthMart is a program of group health insurance in which the enumerated functions are carried out. (e) Provides that any health benefits coverage offered through a HealthMart need to meet the enumerated requirements. (f) Authorizes the health benefits coverage made available through a HealthMart to include, but is not limited to any of the enumerated coverages, as long as such forms of coverage are offered by health carriers and meet the other requirements of this article. (g) Provides that subject to the provisions of this article, a HealthMart: (1) is required to permit any large or small employer to contract with the HealthMart for the purchase of health benefits coverage for its employees and dependents of those employees, and (2) is prohibited from varying conditions of eligibility, including premium rates and membership fees of an employer to be a purchaser. (h) Prohibits anything in this article from being construed as preventing an association or a licensed health insurance agent from assisting or representing a HealthMart or large or small employers from entering into appropriate arrangements to carry out this title. (i) Requires the contract between a HealthMart and a purchaser to provide that the purchaser agrees not to obtain or to sponsor health benefits coverage on behalf of any eligible employees and their dependents, other than through the HealthMart. Provides that this provision does not apply to an eligible individual who resides in an area for which no coverage is offered by any health carrier through the HealthMart. (j) Requires membership rights of persons enrolled in a HealthMart to include the enumerated items. (k) Requires the contract between a HealthMart and a health carrier to provide for the payment of the premiums collected by the HealthMart (or its contractor) for coverage for enrolled members. Authorizes the contract to also provide for a predetermined administrative charge negotiated by the HealthMart and the carrier. (l) Requires a HealthMart to enter into contracts with one or more health carriers so that members are provided at least two health insurance options in each geographic area covered by the HealthMart. (m) Prohibits a member of a board of trustees of a cooperative acting as a HealthMart from serving as an employee or paid consultant to the HealthMart. Authorizes a member to receive reasonable reimbursement for travel and other expenses relating to service on the board of trustees. (n) Provides that an individual is not eligible to serve in any capacity on the board of trustees or as an employee of a HealthMart, if the individual is employed by, represents, owns, or controls any ownership interest in an organization from which the HealthMart receives contributions, grants, or other funds not connected with a contract for coverage through the HealthMart. (o) Authorizes a cooperative, without limitation of its other rights under this subchapter, to engage in any of the enumerated activities. SECTION 2.Effective date: September 1, 1999. SECTION 3.Emergency clause.