HBA-JEK C.S.H.B. 1865 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1865 By: Averitt Insurance 4/26/2001 Committee Report (Substituted) 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. C.S.H.B.1865 provides that an employee who is covered under another health benefit plan or who does not work or reside 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 C.S.H.B. 1865 amends the Insurance Code to provide that an employee who is covered under another health benefit plan, including a plan issued to or sponsored by the employer of the employee, the employer of the employee's spouse, or a former employer of the employee, 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 does not reside or work in a geographic service area of the employer is not an eligible employee for purposes of the small employer provisions of HIPAA. C.S.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. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 1865 differs from the original bill by conforming to Texas Legislative Council style and format.