HBA-NRS H.B. 471 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 471
By: Averitt
Insurance
3/2/2001
Introduced



BACKGROUND AND PURPOSE 

Currently, the smallest employers in Texas are finding it increasingly
difficult to obtain affordable health insurance for their employees.
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 notes that some small employer carriers
utilize 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.