HBA-JEK H.B. 1865 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1865
By: Averitt
Insurance
4/22/2001
Introduced



BACKGROUND AND PURPOSE 

Legislation passed in 1997 provided that a small employer carrier may elect
not to offer health benefit plans to a small employer who offers multiple
plans if the small employer carrier would have less than 75 percent of the
small employer's eligible employees enrolled collectively in all the plans,
rather than 75 percent enrolled in each plan.  Because of unclear or
ambiguous language in statute, some small employers are still unable to
obtain coverage from small employer carriers or health maintenance
organizations under the collective enrollment provisions.  House Bill 1865
provides that an employee who is covered under another health benefit plan
or who neither works nor resides in the service area is not eligible for a
small or large employer health benefit plan and may not be counted in the
collective enrollment figures that determine whether a small employer
carrier is required to offer a health benefit plan. 

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. 

ANALYSIS

House Bill 1865 amends the Insurance Code to provide that an employee who
is covered under another health benefit plan, including a plan issued by
the employee's spouse's employer, the employee's former employer, or the
employee's current employer, is not included in the definition of eligible
employee in the Health Insurance Portability and Availability Act (HIPAA).
An employee of a small employer carrier who neither resides nor works in a
geographic service area of the employer is not an eligible employee for
purposes of the small employer provisions of HIPAA. 

H.B. 1865 applies general insurance availability and purchasing
cooperatives provisions to a group health benefit plan that covers two or
more eligible employees of a small employer under certain conditions.  The
bill excludes ineligible employees from the collective enrollment figures
that determine whether a small employer carrier is required to offer a
health benefit plan to a small employer who offers multiple health benefit
plans.  The bill sets forth definitions for "collective enrollment" and
"collective number of eligible employees," and specifies that if a small
employer offers multiple health benefit plans, the collective enrollment of
all those plans must be at least 75 percent of the collective number of the
small employer's eligible employees, or, if applicable, the lower
participation level offered by the small employer carrier. 

EFFECTIVE DATE

September 1, 2001.  The Act applies only to a health benefit plan that is
delivered, issued for delivery, or renewed on or after January 1, 2002.