CHAPTER 1508. HEALTHY TEXAS PROGRAM

State Codes and Statutes

Statutes > Texas > Insurance-code > Title-8-health-insurance-and-other-health-coverages > Chapter-1508-healthy-texas-program

INSURANCE CODE

TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES

SUBTITLE G. HEALTH COVERAGE AVAILABILITY

CHAPTER 1508. HEALTHY TEXAS PROGRAM

Text of chapter effective on September 1, 2009, but only if a

specific appropriation is provided as described by Acts 2009,

81st Leg., R.S., Ch. 721, Sec. 2.04, which states: This Act does

not make an appropriation. This Act takes effect only if a

specific appropriation for the implementation of the Act is

provided in a general appropriations act of the 81st Legislature.

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1508.001. PURPOSE. (a) The purposes of the Healthy Texas

Program are to:

(1) provide access to quality small employer health benefit

plans at an affordable price;

(2) encourage small employers to offer health benefit plan

coverage to employees and the dependents of employees; and

(3) maximize reliance on proven managed care strategies and

procedures.

(b) The Healthy Texas Program is not intended to diminish the

availability of traditional small employer health benefit plan

coverage under Chapter 1501.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.002. DEFINITIONS. In this chapter:

(1) "Dependent" has the meaning assigned by Section 1501.002(2).

(2) "Eligible employee" has the meaning assigned by Section

1501.002(3).

(3) "Fund" means the healthy Texas small employer premium

stabilization fund established under Subchapter F.

(4) "Health benefit plan" and "health benefit plan issuer" have

the meanings assigned by Sections 1501.002(5) and 1501.002(6),

respectively.

(5) "Program" means the Healthy Texas Program established under

this chapter.

(6) "Qualifying health benefit plan" means a health benefit plan

that provides benefits for health care services in the manner

described by this chapter.

(7) "Small employer" has the meaning assigned by Section

1501.002(14).

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.003. RULES. The commissioner may adopt rules as

necessary to implement this chapter.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

SUBCHAPTER B. EMPLOYER ELIGIBILITY; CONTRIBUTIONS

Sec. 1508.051. EMPLOYER ELIGIBILITY TO PARTICIPATE. (a) A

small employer may participate in the program if:

(1) during the 12-month period immediately preceding the date of

application for a qualifying health benefit plan, the small

employer does not offer employees group health benefits on an

expense-reimbursed or prepaid basis; and

(2) at least 30 percent of the small employer's eligible

employees receive annual wages from the employer in an amount

that is equal to or less than 300 percent of the poverty

guidelines for an individual, as defined and updated annually by

the United States Department of Health and Human Services.

(b) A small employer ceases to be eligible to participate in the

program if any health benefit plan that provides employee

benefits on an expense-reimbursed or prepaid basis, other than

another qualifying health benefit plan, is purchased or otherwise

takes effect after the purchase of a qualifying health benefit

plan.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.052. COMMISSIONER ADJUSTMENTS AUTHORIZED. (a) The

commissioner by rule may adjust the 12-month period described by

Section 1508.051(a)(1) to an 18-month period if the commissioner

determines that the 12-month period is insufficient to prevent

inappropriate substitution of other health benefit plans for

qualifying health benefit plan coverage under this chapter.

(b) The commissioner by rule may adjust the percentage of the

poverty guidelines described by Section 1508.051(a)(2) to a

higher or lower percentage if the commissioner determines that

the adjustment is necessary to fulfill the purposes of this

chapter. An adjustment made by the commissioner under this

subsection takes effect on the first July 1 following the

adjustment.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.053. MINIMUM EMPLOYER PARTICIPATION REQUIREMENTS. A

small employer that meets the eligibility requirements described

by Section 1508.051(a) may apply to purchase a qualifying health

benefit plan if 60 percent or more of the employer's eligible

employees elect to participate in the plan.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.054. EMPLOYER CONTRIBUTION REQUIREMENTS. (a) A small

employer that purchases a qualifying health benefit plan must:

(1) pay 50 percent or more of the premium for each employee

covered under the qualifying health benefit plan;

(2) offer coverage to all eligible employees receiving annual

wages from the employer in an amount described by Section

1508.051(a)(2) or 1508.052(b), as applicable; and

(3) contribute the same percentage of premium for each covered

employee.

(b) A small employer that purchases a qualifying health benefit

plan under the program may elect to pay, but is not required to

pay, all or any portion of the premium paid for dependent

coverage under the qualifying health benefit plan.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

SUBCHAPTER C. PROGRAM PARTICIPATION; REQUIRED COVERAGE AND

BENEFITS

Sec. 1508.101. PARTICIPATING PLAN ISSUERS. (a) Subject to

Subsection (b), any health benefit plan issuer may participate in

the program.

(b) The commissioner by rule may limit which health benefit plan

issuers may participate in the program if the commissioner

determines that the limitation is necessary to achieve the

purposes of this chapter.

under Subsection (b), the commissioner shall contract on a

competitive procurement basis with one or more health benefit

plan issuers to provide qualifying health benefit plan coverage

under the program.

(d) Nothing in this chapter prohibits a regional or local health

care program described by Chapter 75, Health and Safety Code,

from participating in the program. The commissioner by rule

shall establish participation requirements applicable to regional

and local health care programs that consider the unique plan

designs, benefit levels, and participation criteria of each

program.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.102. PREEXISTING CONDITION PROVISION REQUIRED. A

health benefit plan offered under the program must include a

preexisting condition provision that meets the requirements

described by Section 1501.102.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.103. EXCEPTION FROM MANDATED BENEFIT REQUIREMENTS.

Except as expressly provided by this chapter, a small employer

health benefit plan issued under the program is not subject to a

law of this state that requires coverage or the offer of coverage

of a health care service or benefit.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.104. CERTAIN COVERAGE PROHIBITED OR REQUIRED. (a) A

qualifying health benefit plan may only provide coverage for

in-plan services and benefits, except for:

(1) emergency care; or

(2) other services not available through a plan provider.

(b) In-plan services and benefits provided under a qualifying

health benefit plan must include the following:

(1) inpatient hospital services;

(2) outpatient hospital services;

(3) physician services; and

(4) prescription drug benefits.

those required under Subsection (b) or emergency care or other

services not available through a plan provider if the

commissioner determines the inclusion to be essential to achieve

the purposes of this chapter.

(d) The commissioner may, with respect to the categories of

services and benefits described by Subsections (b) and (c):

(1) prepare specifications for a coverage provided under this

chapter;

(2) determine the methods and procedures of claims

administration;

(3) establish procedures to decide contested cases arising from

coverage provided under this chapter;

(4) study, on an ongoing basis, the operation of all coverages

provided under this chapter, including gross and net costs,

administration costs, benefits, utilization of benefits, and

claims administration;

(5) administer the healthy Texas small employer premium

stabilization fund established under Subchapter F;

(6) provide the beginning and ending dates of coverages for

enrollees in a qualifying health benefit plan;

(7) develop basic group coverage plans applicable to all

individuals eligible to participate in the program;

(8) provide for optional group coverage plans in addition to the

basic group coverage plans described by Subdivision (7);

(9) provide, as determined to be appropriate by the

commissioner, additional statewide optional coverage plans;

(10) develop specific health benefit plans that permit access to

high-quality, cost-effective health care;

(11) design, implement, and monitor health benefit plan features

intended to discourage excessive utilization, promote efficiency,

and contain costs for qualifying health benefit plans;

(12) develop and refine, on an ongoing basis, a health benefit

strategy for the program that is consistent with evolving

benefits delivery systems;

(13) develop a funding strategy that efficiently uses employer

contributions to achieve the purposes of this chapter; and

(14) modify the copayment and deductible amounts for

prescription drug benefits under a qualifying health benefit

plan, if the commissioner determines that the modification is

necessary to achieve the purposes of this chapter.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

SUBCHAPTER D. PROGRAM ADMINISTRATION

Sec. 1508.151. EMPLOYER CERTIFICATION. (a) At the time of

initial application, a health benefit plan issuer shall obtain

from a small employer that seeks to purchase a qualifying health

benefit plan a written certification that the employer meets the

eligibility requirements described by Section 1508.051 and the

minimum employer participation requirements described by Section

1508.053.

(b) Not later than the 90th day before the renewal date of a

qualifying health benefit plan, a health benefit plan issuer

shall obtain from the small employer that purchased the

qualifying health benefit plan a written certification that the

employer continues to meet the eligibility requirements described

by Section 1508.051 and the minimum employer participation

requirements described by Section 1508.053.

small employer to submit appropriate documentation in support of

a certification described by Subsection (a) or (b).

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.152. APPLICATION PROCESS. (a) Subject to Subsection

(b), a health benefit plan issuer shall accept applications for

qualifying health benefit plan coverage from small employers at

all times throughout the calendar year.

(b) The commissioner may limit the dates on which a health

benefit plan issuer must accept applications for qualifying

health benefit plan coverage if the commissioner determines the

limitation to be necessary to achieve the purposes of this

chapter.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.153. EMPLOYEE ENROLLMENT; WAITING PERIOD. (a) A

qualifying health benefit plan must provide employees with an

initial enrollment period that is 31 days or longer, and annually

at least one open enrollment period that is 31 days or longer.

The commissioner by rule may require an additional open

enrollment period if the commissioner determines that the

additional open enrollment period is necessary to achieve the

purposes of this chapter.

(b) A small employer may establish a waiting period for

employees during which an employee is not eligible for coverage

under a qualifying health benefit plan. The last day of a

waiting period established under this subsection may not be later

than the 90th day after the date on which the employee begins

employment with the small employer.

qualifying health benefit plan to a new employee of a small

employer that purchased the qualifying health benefit plan if the

health benefit plan issuer receives an application for coverage

from the employee not later than the 31st day after the latter

of:

(1) the first day of the employee's employment; or

(2) the first day after the expiration of a waiting period

established under Subsection (b).

(d) Subject to Subsection (e), a health benefit plan issuer may

deny coverage under a qualifying health benefit plan to an

employee of a small employer who applies for coverage after the

period described by Subsection (c).

(e) A health benefit plan issuer that denies an employee

coverage under Subsection (d):

(1) may only deny the employee coverage until the next open

enrollment period; and

(2) may subject the enrollee to a one-year preexisting condition

provision, as described by Section 1508.102, if the period during

which the preexisting condition provision applies does not exceed

18 months from the date of the initial application for coverage

under the qualifying health benefit plan.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.154. REPORTS. A health benefit plan issuer that

participates in the program shall submit reports to the

department in the form and at the time the commissioner

prescribes.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

SUBCHAPTER E. RATING OF QUALIFIED HEALTH BENEFIT PLANS

Sec. 1508.201. RATING; PREMIUM PRACTICES IN GENERAL. (a) A

health benefit plan issuer participating in the program must:

(1) use rating practices for qualifying health benefit plans

that are consistent with the purposes of this chapter; and

(2) in setting premiums for qualifying health benefit plans,

consider the availability of reimbursement from the fund.

(b) A health benefit plan issuer participating in the program

shall apply rating factors consistently with respect to all small

employers in a class of business.

benefit plans must be reasonable and reflect objective

differences in plan design.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.202. PREMIUM RATE DEVELOPMENT AND CALCULATION. (a)

Rating factors used to underwrite qualifying health benefit plans

must produce premium rates for identical groups that:

(1) differ only by the amounts attributable to health benefit

plan design; and

(2) do not reflect differences because of the nature of the

groups assumed to select a particular health benefit plan.

(b) A health benefit plan issuer shall treat each qualifying

health benefit plan that is issued or renewed in a calendar month

as having the same rating period.

case characteristics, as defined by Section 1501.201(2), in

setting premium rates for a qualifying health benefit plan.

(d) The commissioner by rule may establish additional rating

criteria and requirements for qualifying health benefit plans if

the commissioner determines that the criteria and requirements

are necessary to achieve the purposes of this chapter.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.203. FILING; APPROVAL. (a) A health benefit plan

issuer shall file with the department, for review and approval by

the commissioner, premium rates to be charged for qualifying

health benefit plans.

(b) If the commissioner limits health benefit plan issuer

participation in the program under Section 1508.101(b), premium

rates proposed to be charged for each qualifying health benefit

plan will be considered as an element in the contract procurement

process required under that section.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

SUBCHAPTER F. HEALTHY TEXAS SMALL EMPLOYER PREMIUM STABILIZATION

FUND

Sec. 1508.251. ESTABLISHMENT OF FUND. (a) To the extent that

funds appropriated to the department are available for this

purpose, the commissioner shall establish a fund from which

health benefit plan issuers may receive reimbursement for claims

paid by the health benefit plan issuers for individuals covered

under qualifying group health plans.

(b) The fund established under this section shall be known as

the healthy Texas small employer premium stabilization fund.

and administer the fund, including rules that set out the

procedures for operation of the fund and distribution of money

from the fund.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.252. OPERATION OF FUND; CLAIM ELIGIBILITY. (a) A

health benefit plan issuer is eligible to receive reimbursement

in an amount that is equal to 80 percent of the dollar amount of

claims paid between $5,000 and $75,000 in a calendar year for an

enrollee in a qualifying health benefit plan.

(b) A health benefit plan issuer is eligible for reimbursement

from the fund only for the calendar year in which claims are

paid.

individual reaches or exceeds $75,000 in a given calendar year, a

health benefit plan issuer may not receive reimbursement for any

other claims paid on behalf of the individual in that calendar

year.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.253. REIMBURSEMENT REQUEST SUBMISSION. (a) A health

benefit plan issuer seeking reimbursement from the fund shall

submit a request for reimbursement in the form prescribed by the

commissioner by rule.

(b) A health benefit plan issuer must request reimbursement from

the fund annually, not later than the date determined by the

commissioner, following the end of the calendar year for which

the reimbursement requests are made.

participating in the program to submit claims data in connection

with reimbursement requests as the commissioner determines to be

necessary to ensure appropriate distribution of reimbursement

funds and oversee the operation of the fund. The commissioner

may require that the data be submitted on a per covered

individual, aggregate, or categorical basis.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.254. FUND AVAILABILITY. (a) The commissioner shall

compute the total claims reimbursement amount for all health

benefit plan issuers participating in the program for the

calendar year for which claims are reported and reimbursement

requested.

(b) If the total amount requested by health benefit plan issuers

participating in the program for reimbursement for a calendar

year exceeds the amount of funds available for distribution for

claims paid during that same calendar year, the commissioner

shall provide for the pro rata distribution of any available

funds. A health benefit plan issuer participating in the program

is eligible to receive a proportional amount of any available

funds that is equal to the proportion of total eligible claims

paid by all participating health benefit plan issuers that the

requesting health benefit plan issuer paid.

paid by all health benefit plan issuers participating in the

program during a calendar year exceeds the total amount requested

for reimbursement by all participating health benefit plan

issuers during that calendar year, the commissioner shall carry

forward any excess funds and make those excess funds available

for distribution in the next calendar year. Excess funds carried

over under this section are added to the fund in addition to any

other money appropriated for the fund for the calendar year into

which the funds are carried forward.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.255. PROGRAM REPORTING. (a) Each health benefit plan

issuer participating in the program shall provide the department,

in the form prescribed by the commissioner, monthly reports of

total enrollment under qualifying health benefit plans.

(b) On the request of the commissioner, each health benefit plan

issuer participating in the program shall furnish to the

department, in the form prescribed by the commissioner, data

other than data described by Subsection (a) that the commissioner

determines necessary to oversee the operation of the fund.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.256. CLAIMS EXPERIENCE DATA. (a) Based on available

data and appropriate actuarial assumptions, the commissioner

shall separately estimate the per covered individual annual cost

of total claims reimbursement from the fund for qualifying health

benefit plans.

(b) On request, a health benefit plan issuer participating in

the program shall furnish to the department claims experience

data for use in the estimates described by Subsection (a).

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.257. TOTAL ELIGIBLE ENROLLMENT DETERMINATION. (a)

The commissioner shall determine total eligible enrollment under

qualifying health benefit plans by dividing the total funds

available for distribution from the fund by the estimated per

covered individual annual cost of total claims reimbursement from

the fund.

(b) At the end of the first year of enrollment and annually

thereafter, the commissioner shall submit a report to the

governor and the legislature regarding enrollment for the

previous year and limitations on future enrollment that ensure

that the program does not necessitate a substantial increase in

funding to continue the program, as consistent with Section

1508.001.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.258. EVALUATION AND PROTECTION OF FUND; EMPLOYER

ENROLLMENT SUSPENSION. (a) The commissioner shall suspend the

enrollment of new employers in qualifying health benefit plans if

the commissioner determines that the total enrollment reported by

all health benefit plan issuers under qualifying health benefit

plans exceeds the total eligible enrollment determined under

Section 1508.257 and is likely to result in anticipated annual

expenditures from the fund in excess of the total funds available

for distribution from the fund.

(b) The commissioner shall provide a health benefit plan issuer

participating in the program with notification of any enrollment

suspension under Subsection (a) as soon as practicable after:

(1) receipt of all enrollment data; and

(2) determination of the need to suspend enrollment.

to employers under Subsection (a) does not preclude the addition

of new employees of an employer already covered under a

qualifying health benefit plan or new dependents of employees

already covered under a qualifying health benefit plan.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.259. EMPLOYER ENROLLMENT REACTIVATION. If, at any

point during a suspension of enrollment under Section 1508.258,

the commissioner determines that funds are sufficient to provide

for the addition of new enrollments, the commissioner:

(1) may reactivate new enrollments; and

(2) shall notify all participating group health benefit plan

issuers that enrollment of new employers may be resumed.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.260. FUND ADMINISTRATOR. (a) The commissioner may

obtain the services of an independent organization to administer

the fund.

(b) The commissioner shall establish guidelines for the

submission of proposals by organizations for the purposes of

administering the fund and may approve, disapprove, or recommend

modification to the proposal of an applicant to administer the

fund.

reports to the commissioner, in the form and at the times

required by the commissioner, as necessary to facilitate

evaluation and ensure orderly operation of the fund, including an

annual report of the affairs and operations of the fund. The

annual report must also be delivered to the governor, the

lieutenant governor, and the speaker of the house of

representatives.

(d) An organization approved to administer the fund shall

maintain records in the form prescribed by the commissioner and

make those records available for inspection by or at the request

of the commissioner.

(e) The commissioner shall determine the amount of compensation

to be allocated to an approved organization as payment for fund

administration. Compensation is payable only from the fund.

(f) The commissioner may remove an organization approved to

administer the fund from fund administration. An organization

removed from fund administration under this subsection must

cooperate in the orderly transition of services to another

approved organization or to the commissioner.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.261. STOP-LOSS INSURANCE; REINSURANCE. (a) The

administrator of the fund, on behalf of and with the prior

approval of the commissioner, may purchase stop-loss insurance or

reinsurance from an insurance company licensed to write that

coverage in this state.

(b) Stop-loss insurance or reinsurance may be purchased to the

extent that the commissioner determines funds are available for

the purchase of that insurance.

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

Sec. 1508.262. PUBLIC EDUCATION AND OUTREACH. (a) The

commissioner may use an amount of the fund, not to exceed eight

percent of the annual amount of the fund, for purposes of

developing and implementing public education, outreach, and

facilitated enrollment strategies targeted to small employers who

do not provide health insurance.

(b) The commissioner shall solicit and accept recommendations

concerning the development and implementation of education,

outreach, and enrollment strategies under Subsection (a) from

agents licensed under Title 13 to write health benefit plans in

this state.

to perform or provide assistance with education, outreach, and

enrollment strategies described by Subsection (a).

Added by Acts 2009, 81st Leg., R.S., Ch.

721, Sec. 2.01, eff. September 1, 2009.

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