HBA-NIK H.B. 1627 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1627 By: Maxey Insurance 3/10/1999 Introduced BACKGROUND AND PURPOSE Currently, some insurers "qualify" their bids to a city or municipality (city), which means that such insurers can modify their rates or limit coverage to certain employees or dependants 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: Article 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.