1-1 AN ACT
1-2 relating to the eligibility of certain children for certain health
1-3 benefit coverage.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 1(b), Article 3.51-6, Insurance Code, is
1-6 amended to read as follows:
1-7 (b) The spouse and dependents of employees or members
1-8 described by Subsections (a)(1)-(6) of this section, including an
1-9 unmarried child less than 25 years old and a [dependent] grandchild
1-10 described by Section 3E of this article, [of an employee or member
1-11 who is less than 21 years old and living with and in the household
1-12 of the employee or member, referred to in Subdivisions (a)(1)
1-13 through (a)(6) of this section] may be included within the coverage
1-14 provided in a group policy.
1-15 SECTION 2. Section 3E(b), Article 3.51-6, Insurance Code, is
1-16 amended to read as follows:
1-17 (b) A health insurance policy that provides coverage for a
1-18 child of the policyholder must upon payment of a premium provide
1-19 coverage for any unmarried child [children] of the policyholder's
1-20 child if the child is younger than 25 years of age and is a
1-21 dependent [those children are dependents] of the policyholder for
1-22 federal income tax purposes at the time application for coverage of
1-23 the child is made. Coverage for a child of the policyholder's
1-24 child under this subsection may not be terminated solely because
2-1 the covered child is no longer a dependent of the policyholder for
2-2 federal income tax purposes.
2-3 SECTION 3. Sections 2(A), (C), (L), and (M), Chapter 397,
2-4 Acts of the 54th Legislature, Regular Session, 1955 (Article
2-5 3.70-2, Vernon's Texas Insurance Code), are amended to read as
2-6 follows:
2-7 (A) No policy of accident and sickness insurance shall be
2-8 delivered or issued for delivery to any person in this state
2-9 unless:
2-10 (1) the entire money and other consideration therefor
2-11 are expressed therein or in the application, if it is made a part
2-12 of the policy; and
2-13 (2) the time at which the insurance takes effect and
2-14 terminates is expressed therein; and
2-15 (3) it purports to insure only one person, except that
2-16 a policy may insure, originally or by subsequent amendment, upon
2-17 the application of an adult member of a family who shall be deemed
2-18 the policy holder, any two or more eligible members of that family,
2-19 including husband, wife, unmarried [dependent] children under 25
2-20 years of age, including a [dependent] grandchild of the policy
2-21 holder as described by Section (L) of this article [who is less
2-22 than 21 years old and living with and in the household of the
2-23 policy holder, or any children under a specified age which shall
2-24 not exceed twenty-five years], a child the policy holder is
2-25 required to insure under a medical support order issued under
2-26 Chapter 154 [Section 14.061], Family Code, or enforceable by a
2-27 court in this state, and any other person dependent upon the policy
3-1 holder; and
3-2 (4) the style, arrangement and over-all appearance of
3-3 the policy gives no undue prominence to any portion of the text,
3-4 and unless every printed portion of the text of the policy and of
3-5 any endorsements or attached papers (except copies of applications
3-6 and identification cards) are plainly printed in lightfaced type of
3-7 a style in general use, the size of which shall be uniform and not
3-8 less than ten-point with a lower-case unspaced alphabet length not
3-9 less than one hundred and twenty-point (the "text" shall include
3-10 all printed matter except the name and address of the insurer, name
3-11 or title of the policy, the brief description, if any, and captions
3-12 and subcaptions); and
3-13 (5) the exceptions and reductions of indemnity are set
3-14 forth in the policy and, except those which are set forth in
3-15 Section 3 of this Act, are printed, at the insurer's option, either
3-16 included with the benefit provision to which they apply, or under
3-17 an appropriate caption such as "Exceptions" or "Exceptions and
3-18 Reductions"; provided that if an exception or reduction
3-19 specifically applies only to a particular benefit of the policy, a
3-20 statement of such exception or reduction shall be included with the
3-21 benefit provision to which it applies; and
3-22 (6) each such form, including riders and endorsements,
3-23 shall be identified by a form number in the lower left-hand corner
3-24 of the first page thereof; and
3-25 (7) it contains no provision purporting to make any
3-26 portion of the charter, rules, constitution, or bylaws of the
3-27 insurer a part of the policy unless such portion is set forth in
4-1 full in the policy, except in the case of the incorporation of, or
4-2 reference to, a statement of rates or classification of risks, or
4-3 shortrate table filed with the Board; and
4-4 (8) it shall have printed thereon or attached thereto
4-5 a notice stating in substance that the person to whom the policy is
4-6 issued shall be permitted to return the policy within ten (10) days
4-7 of its delivery to such person and to have the premium paid
4-8 refunded if, after examination of the policy, such person is not
4-9 satisfied with it for any reason. If such person pursuant to such
4-10 notice, returns the policy to the insurer at its home or branch
4-11 office or to the agent through whom it was purchased, it shall be
4-12 void from the beginning and the parties shall be in the same
4-13 position as if no policy had been issued. This subdivision shall
4-14 not apply to single premium nonrenewable policies.
4-15 (C) Any policy of accident and sickness insurance, including
4-16 policies issued by companies subject to Chapter 20, Texas Insurance
4-17 Code, as amended, delivered or issued for delivery in this state,
4-18 which provides that coverage of a [dependent] child shall terminate
4-19 upon attainment of the limiting age for [dependent] children
4-20 specified in the policy shall also provide in substance that
4-21 attainment of the limiting age shall not operate to terminate the
4-22 coverage of the child while the child is both (1) incapable of
4-23 self-sustaining employment by reason of mental retardation or
4-24 physical handicap and (2) chiefly dependent upon the insured for
4-25 support and maintenance. Proof of the incapacity and dependency
4-26 shall be furnished to the insurer by the insured within 31 days of
4-27 the child's attainment of the limiting age and subsequently as may
5-1 be required by the insurer but not more frequently than annually
5-2 after the two-year period following the child's attainment of the
5-3 limiting age.
5-4 (L) An individual or group policy of accident and sickness
5-5 insurance that is delivered, issued for delivery, or renewed in
5-6 this state, including a policy issued by a company subject to
5-7 Chapter 20, Insurance Code, evidence of coverage issued by a health
5-8 maintenance organization subject to the Texas Health Maintenance
5-9 Organization Act (Chapter 20A, Vernon's Texas Insurance Code), and
5-10 a self-funded or self-insured welfare or benefit plan or program to
5-11 the extent that regulation of the plan or program is not preempted
5-12 by federal law that provides coverage for a child of the
5-13 policyholder, must provide coverage upon payment of a premium for
5-14 any unmarried child [children] of the policyholder's child if the
5-15 child is younger than 25 years of age and is a dependent [those
5-16 children are dependents] of the policyholder for federal income tax
5-17 purposes at the time application for coverage of the child of the
5-18 policyholder's child is made or for a child for whom the group
5-19 member or insured must provide medical support under an order
5-20 issued under Chapter 154 [Section 14.061], Family Code, or
5-21 enforceable by a court in this state. Coverage for a child of the
5-22 policyholder's child may not be terminated solely because the
5-23 covered child is no longer a dependent of the policyholder for
5-24 federal income tax purposes.
5-25 (M)(1) A group or individual accident and sickness insurance
5-26 policy that provides coverage for [dependent] children of a group
5-27 member or a person insured under the policy may not exclude from or
6-1 discontinue coverage or set a different premium for the natural
6-2 born or adopted child of the group member or person insured or for
6-3 a child for whom the group member or insured must provide medical
6-4 support under an order issued under Chapter 154 [Section 14.061],
6-5 Family Code, or enforceable by a court in this state for either of
6-6 the following reasons:
6-7 (a) the child does not reside with the group
6-8 member or insured; or
6-9 (b) the group member or insured does not claim
6-10 the child as an exemption for federal income tax purposes under
6-11 Section 151(c)(1)(B), Internal Revenue Code of 1986 (26 U.S.C.
6-12 Section 151(c)(1)(B)).
6-13 (2) A group or individual accident and sickness
6-14 insurance policy that provides coverage for [dependent] children of
6-15 a group member or a person insured under the policy may not exclude
6-16 from or discontinue coverage or set a different premium for the
6-17 natural born or adopted child of the spouse of the group member or
6-18 person insured[, provided that the child resides with the group
6-19 member or person insured].
6-20 (3) Other policy provisions relating to maximum
6-21 limiting attained age and enrollment in school may be used to
6-22 establish continued eligibility for coverage of a [dependent] child
6-23 less than 25 years of age. In the event of late enrollment, the
6-24 insurance company may require evidence of insurability satisfactory
6-25 to the company before inclusion of the [dependent] child for
6-26 coverage under the policy.
6-27 SECTION 4. Section 2(5), Article 3.77, Insurance Code, is
7-1 amended to read as follows:
7-2 (5) "Dependent" means a resident spouse or unmarried
7-3 child younger than 25 years of [under the] age [of 18 years], a
7-4 child who is a full-time student younger than 25 [under the age of
7-5 23] years of age and who is financially dependent upon the parent,
7-6 a child who is [over] 18 years of age or older and for whom a
7-7 person may be obligated to pay child support, or a child of any age
7-8 who is disabled and dependent upon the parent.
7-9 SECTION 5. Section 10(e), Article 3.77, Insurance Code, is
7-10 amended to read as follows:
7-11 (e) Pool coverage shall cease:
7-12 (1) on the date a person is no longer a resident of
7-13 this state, except for a child who is a student under 25 [the age
7-14 of 23] years of age and who is financially dependent upon the
7-15 parent, a child for whom a person may be obligated to pay child
7-16 support, or a child of any age who is disabled and dependent upon
7-17 the parent;
7-18 (2) on the date a person requests coverage to end;
7-19 (3) upon the death of the covered person;
7-20 (4) on the date state law requires cancellation of the
7-21 policy;
7-22 (5) at the option of the pool, 30 days after the pool
7-23 sends to the person any inquiry concerning the person's
7-24 eligibility, including an inquiry concerning the person's
7-25 residence, to which the person does not reply;
7-26 (6) on the 31st day after the day on which a premium
7-27 payment for pool coverage becomes due if the payment is not made
8-1 before that date; or
8-2 (7) at such time as the person ceases to meet the
8-3 eligibility requirements of this section.
8-4 SECTION 6. Article 3.95-4.2, Insurance Code, is amended to
8-5 read as follows:
8-6 Art. 3.95-4.2. [DEPENDENT] CHILDREN. (a) A multiple
8-7 employer welfare arrangement's plan document may not limit or
8-8 exclude initial coverage of a newborn child of a participating
8-9 employee. Any coverage of a newborn child of a participating
8-10 employee under this subsection terminates on the 32nd day after the
8-11 date of the birth of the child unless:
8-12 (1) [dependent] children are eligible for coverage
8-13 under the multiple employer welfare arrangement's plan document;
8-14 and
8-15 (2) notification of the birth and any required
8-16 additional premium are received by the multiple employer welfare
8-17 arrangement not later than the 31st day after the date of birth.
8-18 (b) If [dependent] children are eligible for coverage under
8-19 the terms of a multiple employer welfare arrangement's plan
8-20 document, the plan document may not limit or exclude initial
8-21 coverage of an adopted child of a participating employee. A child
8-22 is considered to be the child of a participating employee if the
8-23 participating employee is a party in a suit in which the adoption
8-24 of the child by the participating employee is sought.
8-25 (c) If [dependent] children are eligible for coverage under
8-26 the terms of a multiple employer welfare arrangement's plan
8-27 document, an adopted child of a participating employee may be
9-1 enrolled, at the option of the participating employee, within
9-2 either:
9-3 (1) 31 days after the participating employee is a
9-4 party in a suit for adoption; or
9-5 (2) 31 days of the date the adoption is final.
9-6 (d) Coverage of an adopted child of an employee under this
9-7 article terminates unless notification of the adoption and any
9-8 required additional premiums are received by the multiple employer
9-9 welfare arrangement not later than either:
9-10 (1) the 31st day after the participating employee
9-11 becomes a party in a suit in which the adoption of the child by the
9-12 participating employee is sought; or
9-13 (2) the 31st day after the date of the adoption.
9-14 (e) If children are eligible for coverage under the terms of
9-15 a multiple employer welfare arrangement's plan document, any
9-16 limiting age applicable to an unmarried child of an enrollee is 25
9-17 years of age.
9-18 SECTION 7. Section 9(k), Texas Health Maintenance
9-19 Organization Act (Article 20A.09, Vernon's Texas Insurance Code)
9-20 (former Subsection (j)), as amended by Chapters 905 and 1026, Acts
9-21 of the 75th Legislature, Regular Session, 1997, is redesignated as
9-22 Section 9H, Texas Health Maintenance Organization Act (Article
9-23 20A.9H, Vernon's Texas Insurance Code), and amended to read as
9-24 follows:
9-25 Sec. 9H. CHILDREN AND GRANDCHILDREN. (a) If children are
9-26 eligible for coverage under the terms of an evidence of coverage,
9-27 any limiting age applicable to an unmarried child of an enrollee,
10-1 including an unmarried grandchild of an enrollee, is 25 years of
10-2 age. The limiting age applicable to a child must be stated in the
10-3 evidence of coverage.
10-4 (b) [(k) (r)] A health maintenance organization may provide
10-5 benefits under a health care plan to a dependent grandchild of an
10-6 enrollee who is [when the dependent grandchild is less than 21
10-7 years old and] living with and in the household of the enrollee.
10-8 SECTION 8. Article 21.24-2, Insurance Code, is amended to
10-9 read as follows:
10-10 Art. 21.24-2. [GROUP] COVERAGE OF CERTAIN STUDENTS
10-11 Sec. 1. DEFINITION. In this article, "health benefit plan"
10-12 means a [group] plan described by Section 2 of this article.
10-13 Sec. 2. SCOPE OF ARTICLE. (a) This article applies to a
10-14 health benefit plan that:
10-15 (1) provides [group] benefits for medical or surgical
10-16 expenses incurred as a result of a health condition, accident, or
10-17 sickness, including:
10-18 (A) an individual, [a] group, blanket, or
10-19 franchise insurance policy or insurance agreement, a group hospital
10-20 service contract, or an individual or [a] group evidence of
10-21 coverage that is offered by:
10-22 (i) an insurance company;
10-23 (ii) a group hospital service corporation
10-24 operating under Chapter 20 of this code;
10-25 (iii) a fraternal benefit society
10-26 operating under Chapter 10 of this code;
10-27 (iv) a stipulated premium insurance
11-1 company operating under Chapter 22 of this code; or
11-2 (v) a health maintenance organization
11-3 operating under the Texas Health Maintenance Organization Act
11-4 (Chapter 20A, Vernon's Texas Insurance Code); or
11-5 (B) to the extent permitted by the Employee
11-6 Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et
11-7 seq.), a health benefit plan that is offered by:
11-8 (i) a multiple employer welfare
11-9 arrangement as defined by Section 3, Employee Retirement Income
11-10 Security Act of 1974 (29 U.S.C. Section 1002); or
11-11 (ii) another analogous benefit
11-12 arrangement;
11-13 (2) is offered by an approved nonprofit health
11-14 corporation that is certified under Section 162.001, Occupations
11-15 Code [5.01(a), Medical Practice Act (Article 4495b, Vernon's Texas
11-16 Civil Statutes)], and that holds a certificate of authority issued
11-17 by the commissioner under Article 21.52F of this code; or
11-18 (3) is offered by any other entity not licensed under
11-19 this code or another insurance law of this state that contracts
11-20 directly for health care services on a risk-sharing basis,
11-21 including an entity that contracts for health care services on a
11-22 capitation basis.
11-23 (b) This article does not apply to:
11-24 (1) a plan that provides coverage:
11-25 (A) only for a specified disease;
11-26 (B) only for accidental death or dismemberment;
11-27 (C) for wages or payments in lieu of wages for a
12-1 period during which an employee is absent from work because of
12-2 sickness or injury; or
12-3 (D) as a supplement to liability insurance;
12-4 (2) a small employer health benefit plan written under
12-5 Chapter 26 of this code;
12-6 (3) a Medicare supplemental policy as defined by
12-7 Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss);
12-8 (4) workers' compensation insurance coverage;
12-9 (5) medical payment insurance issued as part of a
12-10 motor vehicle insurance policy; or
12-11 (6) a long-term care policy, including a nursing home
12-12 fixed indemnity policy, unless the commissioner determines that the
12-13 policy provides benefit coverage so comprehensive that the policy
12-14 is a health benefit plan as described by Subsection (a) of this
12-15 section.
12-16 Sec. 3. COVERAGE OF CERTAIN STUDENTS. (a) Each health
12-17 benefit plan that conditions [dependent] coverage for a child up to
12-18 25 [21] years of age [or older] on the child's being a full-time
12-19 student at an educational institution shall provide the coverage
12-20 for an entire academic term during which the child begins as a
12-21 full-time student and remains enrolled, regardless of whether the
12-22 number of hours of instruction for which the child is enrolled is
12-23 reduced to a level that changes the child's academic status to less
12-24 than that of a full-time student. Additionally, the health benefit
12-25 plan shall provide the coverage continuously until the 10th day of
12-26 instruction of the subsequent academic term on which date the
12-27 health benefit plan may terminate coverage of the child if the
13-1 child does not return to full-time student status before that date.
13-2 A health benefit plan may not condition coverage for a child
13-3 younger than 25 years of age on the child's being enrolled at an
13-4 educational institution.
13-5 (b) For purposes of this section, determination of the
13-6 full-time student status of a child subject to this article is made
13-7 in the manner provided by the educational institution at which the
13-8 child is enrolled.
13-9 SECTION 9. Subdivision (8), Article 26.02, Insurance Code, is
13-10 amended to read as follows:
13-11 (8) "Dependent" means:
13-12 (A) a spouse;
13-13 (B) a newborn child;
13-14 (C) a child younger than 25 [under the age of
13-15 19] years of age;
13-16 (D) [a child who is a full-time student under
13-17 the age of 23 years and who is financially dependent on the parent;]
13-18 [(E)] a child of any age who is medically
13-19 certified as disabled and dependent on the parent;
13-20 (E) [(F)] any person who must be covered under:
13-21 (i) Section 3D or 3E, Article 3.51-6, of
13-22 this code; or
13-23 (ii) Section 2(L), Chapter 397, Acts of
13-24 the 54th Legislature, Regular Session, 1955 (Article 3.70-2,
13-25 Vernon's Texas Insurance Code); and
13-26 (F) [(G)] any other child [included as an]
13-27 eligible [dependent] under an employer's benefit plan, including a
14-1 child described by Section 3, Article 21.24-2, of this code.
14-2 SECTION 10. Article 26.84, Insurance Code, is amended to read
14-3 as follows:
14-4 Art. 26.84. [DEPENDENT] CHILDREN. (a) A large employer
14-5 health benefit plan may not limit or exclude initial coverage of a
14-6 newborn child of a covered employee. Any coverage of a newborn
14-7 child of a covered employee under this subsection terminates on the
14-8 32nd day after the date of the birth of the child unless:
14-9 (1) [dependent] children are eligible for coverage
14-10 under the large employer health benefit plan; and
14-11 (2) notification of the birth and any required
14-12 additional premium are received by the large employer carrier not
14-13 later than the 31st day after the date of birth.
14-14 (b) If [dependent] children are eligible for coverage under
14-15 the large employer health benefit plan, a large employer health
14-16 benefit plan may not limit or exclude initial coverage of an
14-17 adopted child of an insured. A child is considered to be the child
14-18 of an insured if the insured is a party in a suit in which the
14-19 adoption of the child by the insured is sought.
14-20 (c) If [dependent] children are eligible for coverage under
14-21 the large employer health benefit plan an adopted child of an
14-22 insured may be enrolled, at the option of the insured, within
14-23 either:
14-24 (1) 31 days after the insured is a party in a suit for
14-25 adoption; or
14-26 (2) 31 days of the date the adoption is final.
14-27 (d) Coverage of an adopted child of an employee under this
15-1 article terminates unless notification of the adoption and any
15-2 required additional premiums are received by the large employer
15-3 carrier not later than either:
15-4 (1) the 31st day after the insured becomes a party in
15-5 a suit in which the adoption of the child by the insured is sought;
15-6 or
15-7 (2) the 31st day after the date of the adoption.
15-8 (e) If children are eligible for coverage under the terms of
15-9 a large employer health benefit plan, any limiting age applicable
15-10 to an unmarried child of an enrollee is 25 years of age.
15-11 SECTION 11. This Act applies only to a policy, plan,
15-12 contract, or evidence of coverage delivered, issued for delivery,
15-13 or renewed on or after January 1, 2002. A policy, plan, contract,
15-14 or evidence of coverage delivered, issued for delivery, or renewed
15-15 before January 1, 2002, is governed by the law as it existed
15-16 immediately before the effective date of this Act, and that law is
15-17 continued in effect for that purpose.
15-18 SECTION 12. This Act takes effect September 1, 2001.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1440 was passed by the House on May
10, 2001, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 1440 was passed by the Senate on May
22, 2001, by the following vote: Yeas 30, Nays 0, 1 present, not
voting.
_______________________________
Secretary of the Senate
APPROVED: __________________________
Date
__________________________
Governor