HBA-ATS H.B. 1498 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1498
By: Janek
Insurance
3/2/1999
Introduced



BACKGROUND AND PURPOSE 

State law gives an insured covered by a health insurance policy the right
to select a primary care physician as long as the practitioner is licensed
to provide the services and benefits included in the plan.  Under a health
maintenance organization (HMO), choices are usually limited to the list of
participating providers.  H.B. 1498 permits employees under an employer's
health benefit plan to choose their own primary care physician by requiring
a health maintenance organization to offer an optional non-network plan to
all eligible employees, if the HMO's own network-based coverage is
currently the only coverage offered.  The premium for the optional
non-network plan is the responsibility of the employee, but the premium
must be based on the actuarial value of that coverage. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Commissioner of Insurance in
SECTION 3 (Article 3.64, Insurance Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter E, Chapter 21, Insurance Code, by adding
Article 21.74, as follows: 

Art. 21.74.  AVAILABILITY OF HEALTH BENEFIT COVERAGE OPTIONS.

Sec. 1.  DEFINITIONS.  Defines "non-network plan," "point-of-service plan,"
and "preferred provider benefit plan." 

Sec. 2.  OFFERING OF HEALTH BENEFIT COVERAGE OPTIONS.  (a) Provides that a
health maintenance organization (HMO) must offer an optional non-network
plan to all eligible employees under an employer's health benefit plan at
the time of enrollment and at least annually, if the HMO's own
network-based coverage is currently the only coverage offered.  Authorizes
such coverage to be provided through a point of service plan, a preferred
provider benefit plan, or any coverage arrangement that allows access to
services outside the HMO's delivery network. 

(b) Requires the premium for the optional non-network plan to be based on
the actuarial value of that coverage.  Authorizes that premium to be
different than the premium for the HMO coverage. 

(c) Authorizes the imposition of different cost sharing provisions for the
point of service option.  Authorizes those cost sharing provisions to be
higher than cost sharing provisions for in-network HMO coverage. 

(d) Provides that any additional costs for the non-network plan are the
responsibility of the employee who chooses the non-network plan.
Authorizes the employer to impose a reasonable administrative cost for
providing the non-network plan option. 

(e) Provides that this article does not apply to an employer who employed
an average of  at least two but not more than 50 eligible employees on
business days during the preceding calendar year and who employs at least
two eligible employees on the first day of the plan year. 

SECTION 2.  Bill contains no SECTION 2.

SECTION 3.  Amends Subchapter F, Chapter 3, Insurance Code, by adding
Article 3.64, as follows: 

Art. 3.64.  INSURERS CONTRACTING WITH HEALTH MAINTENANCE ORGANIZATIONS.
(a) DEFINITIONS.  Defines "insurance carrier," "health maintenance
organization," "point of service plan," and "blended contract" for purposes
of this article. 


(b) Authorizes an insurance carrier to contract with an HMO to provide a
point-of-service benefit, including optional coverage for out-of-area
services or out-of-network care. 

(c) Authorizes an insurance carrier and an HMO to offer a blended contract
if indemnity benefits are combined with HMO benefits.  Provides that the
use of a blended contract is limited to point-of-service arrangements
between an insurance carrier and an HMO. 

(d) Provides that a blended contract delivered, issued, or used in this
state is subject to and must be filed with the Texas Department of
Insurance (department) for approval as provided by Articles 3.42 (Policy
Form Approval) and 20A.09(a)(5) (Evidence of Coverage and Charges). 

(e) Authorizes indemnity benefits and services provided under a
point-of-service plan to be limited to those services as defined by the
blended contract.  Authorizes indemnity benefits and services provided
under a point-of-service plan to be subject to different cost sharing
provisions.  Authorizes the cost sharing provisions for the indemnity
benefits to be higher than cost sharing provisions for in-network HMO
coverage. 

(f) Authorizes the Commissioner of Insurance to adopt rules to implement
this article. 

SECTION 4.  Amends Section 2, Article 20A.02, Insurance Code (Texas Health
Maintenance Organization Act), by amending Subsection (i) and by adding
Subsections (aa) and (bb), as follows: 

(i) Includes a blended contract within the definition of "evidence of
coverage." 

(aa) Defines "blended contract."

(bb) Defines "point of service plan."

SECTION 5.Effective date: September 1, 1999.
Makes application of this Act prospective for a health benefit plan that is
delivered, issued for delivery, or renewed on or after January 1, 2000. 

SECTION 6.Emergency clause.