HBA-NRS H.B. 471 77(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 471 By: Averitt Insurance 7/19/2001 Enrolled BACKGROUND AND PURPOSE The smallest employers in Texas are finding it increasingly difficult to obtain affordable health insurance for their employees. In the past, certain insurance carriers have taken advantage of the inconsistencies in the Insurance Code and adopted strategies which minimize the likelihood that these carriers will have to insure small employers. For example, The Texas Department of Insurance noted that some small employer carriers were using agent commission schedules to discourage agents from selling to very small groups. House Bill 471 prohibits a small employer carrier from implementing agent commission schedules that vary the level of agent commissions based on the size of the group, or otherwise reduce access to small employer health benefit plans. 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 471 amends the Insurance Code to prohibit a small employer carrier from implementing agent commission schedules that vary the level of agent commissions based on the size of the group, or otherwise reduce access to small employer health benefit plans. Notwithstanding this prohibition, the bill authorizes a small employer carrier to: _vary agent commission amounts or percentages based on group size if the variation is inversely related to the size of the group; _vary agent commission amounts or percentages based on the cumulative premium paid by a single small employer over a specific period if the variation is inversely related to the cumulative premium paid during the period; or _pay agent commissions as a percentage of premium charged to a small employer if the commission percentage is based on all premium paid by the small employer. EFFECTIVE DATE September 1, 2001, and applies only to a small employer health benefit plan that is delivered or issued for delivery on or after January 1, 2002.