HBA-TYH, NIK H.B. 1627 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 1627
By: Maxey
Insurance
6/7/1999
Enrolled



BACKGROUND AND PURPOSE 

Prior to the 76th Legislature, some insurers "qualified" their bids to a
city or municipality (city), which means that such insurers could modify
their rates or limit coverage to certain employees or dependents after the
city accepts the bid.  

H.B. 1627 requires bids by stop-loss insurers to contain no qualifications
that would permit the insurers to modify or limit terms of insurance after
the contract is made.  This bill also prohibits exclusion or assignment of
a higher deductible to individual city employees by insurers. 

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. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter E, Chapter 21, Insurance Code, by adding
Article 21.49-16, as follows: 

Art. 21.49-16.  BID REQUIREMENTS FOR INSURERS WHO CONTRACT WITH
MUNICIPALITIES 

Sec. 1.  DEFINITIONS.  Defines "insurer" and "municipality."

Sec. 2.  REQUIREMENTS.  (a)  Prohibits an insurer who bids on a contract
subject to the competitive bidding and competitive proposal requirements
adopted under Section 252.021 (Competitive Bidding and Competitive Proposal
Requirements), Local Government Code, from submitting a bid for a contract,
subject to any qualification imposed by the insurer,  that permits the
insurer to modify or limit the terms of insurance coverage to be provided
after the contract has been made.  Provides that an insurer's bid submitted
under Section 252.021, Local Government Code, must contain the offer made
by the insurer. 

(b)  Prohibits an insurer who provides stop-loss or other insurance
coverage for health benefits under a contract subject to this article from
excluding an individual who is otherwise eligible from coverage or
assigning a higher deductible, based on the individual's prior medical
history. 

SECTION 2.  Makes application of this Act prospective to a contract entered
into on or after the effective date. 

SECTION 3.  Effective date: September 1, 1999.

SECTION 4.  Emergency clause.