Bill Text: TX SB1271 | 2021-2022 | 87th Legislature | Introduced
Bill Title: Relating to the operation of health care sharing ministries; authorizing a fee; providing an administrative penalty.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2021-03-18 - Referred to Business & Commerce [SB1271 Detail]
Download: Texas-2021-SB1271-Introduced.html
87R209 SCL-F | ||
By: Schwertner | S.B. No. 1271 |
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relating to the operation of health care sharing ministries; | ||
authorizing a fee; providing an administrative penalty. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Chapter 1681, Insurance Code, is amended by | ||
designating Section 1681.003 as Subchapter A and adding a | ||
subchapter heading to read as follows: | ||
SUBCHAPTER A. GENERAL PROVISIONS | ||
SECTION 2. Subchapter A, Chapter 1681, Insurance Code, as | ||
added by this Act, is amended by adding Section 1681.0011 to read as | ||
follows: | ||
Sec. 1681.0011. DEFINITIONS. In this chapter: | ||
(1) "Administrative fee" means an amount collected | ||
from members and used for a purpose other than reimbursing members | ||
for their medical expenses, including amounts used to pay for | ||
health care sharing ministry administrative expenses and the | ||
compensation of third-party vendors for services. | ||
(2) "Health care sharing ministry" means an | ||
organization: | ||
(A) described by 26 U.S.C. Section 501(c)(3) and | ||
exempt from taxation under 26 U.S.C. Section 501(a); | ||
(B) in which members: | ||
(i) share a common set of ethical or | ||
religious beliefs and share medical expenses among members in | ||
accordance with those beliefs and without regard to the state in | ||
which a member resides or is employed; and | ||
(ii) retain membership even after the | ||
member develops a medical condition; | ||
(C) that has been in existence or that has a | ||
predecessor that has been in existence at all times since December | ||
31, 1999, and in which medical expenses of its members have been | ||
shared continuously and without interruption since December 31, | ||
1999; and | ||
(D) that does not assume risk or promise to pay | ||
any medical expenses for or on behalf of a member or the health care | ||
sharing ministry. | ||
(3) "Member" means an individual enrolled in a health | ||
care sharing ministry to share medical expenses with other enrolled | ||
individuals. | ||
(4) "Sharing request" means a request for | ||
reimbursement of medical expenses submitted by a member to the | ||
health care sharing ministry. | ||
SECTION 3. Chapter 1681, Insurance Code, is amended by | ||
adding Subchapters B, C, and D to read as follows: | ||
SUBCHAPTER B. CERTIFICATE OF REGISTRATION | ||
Sec. 1681.051. CERTIFICATE OF REGISTRATION REQUIRED. (a) | ||
Except as provided by Subsection (b), a person must obtain and | ||
maintain a certificate of registration from the commissioner to | ||
operate as a health care sharing ministry in this state. | ||
(b) A health care sharing ministry with an expired | ||
certificate of registration may continue to operate without a | ||
certificate until the later of the 90th day after the date of the | ||
certificate's expiration or the date on which a late application | ||
for renewal made under Section 1681.057 is approved or denied. | ||
Sec. 1681.052. APPLICATION FOR CERTIFICATE OF | ||
REGISTRATION. (a) An applicant must apply for a health care | ||
sharing ministry certificate of registration on an application form | ||
prescribed by the commissioner and in the manner prescribed by the | ||
commissioner. | ||
(b) A health care sharing ministry application must include | ||
the application form along with all information required by the | ||
commissioner, including: | ||
(1) the responsible director or manager of the | ||
applicant; | ||
(2) the applicant's physical, mailing, and electronic | ||
mail addresses; | ||
(3) the contact phone number for the responsible | ||
director or manager of the applicant; | ||
(4) information demonstrating that the applicant: | ||
(A) meets the definition of a health care sharing | ||
ministry under Section 1681.0011; and | ||
(B) complies with Section 1681.108; | ||
(5) a copy of the most recent annual audit required | ||
under 26 U.S.C. Section 5000A(d)(2)(B); | ||
(6) a list of any third-party vendors acting on behalf | ||
of the applicant in this state for the purposes of: | ||
(A) enrolling members; | ||
(B) negotiating with health care providers after | ||
services are rendered; or | ||
(C) the financial sharing of member medical | ||
needs; | ||
(7) a copy of any application forms and ministry | ||
guidelines used by the applicant; | ||
(8) a report of the applicant's members in this state | ||
as of the date of application that includes the: | ||
(A) total number of enrolled members; | ||
(B) distribution of members by age; and | ||
(C) distribution of members by sex; | ||
(9) a certification that the applicant does not | ||
compensate anyone to solicit or enroll members in this state based | ||
on the number of members solicited or enrolled or the amount of | ||
contributions received from enrolled members, including by | ||
commission; and | ||
(10) other information as prescribed by the | ||
commissioner. | ||
Sec. 1681.053. ISSUANCE OF CERTIFICATE OF REGISTRATION. | ||
(a) The commissioner shall issue a certificate of registration to | ||
each applicant that meets the requirements of this chapter and | ||
rules adopted under this chapter. | ||
(b) The commissioner may deny an application that does not | ||
meet the requirements of this chapter and rules adopted under this | ||
chapter. | ||
(c) On the applicant's request, the commissioner shall hold | ||
a hearing on a denial of an application for a certificate of | ||
registration. The hearing is a contested case under Chapter 2001, | ||
Government Code. | ||
Sec. 1681.054. TERM OF CERTIFICATE OF REGISTRATION. A | ||
certificate of registration issued under this chapter expires one | ||
year after the date of issuance unless it is renewed as provided by | ||
Section 1681.055. | ||
Sec. 1681.055. APPLICATION FOR RENEWAL OF CERTIFICATE OF | ||
REGISTRATION. (a) Before a certificate of registration expires, a | ||
health care sharing ministry may renew it for an additional | ||
one-year term if the ministry applies for the renewal in the form | ||
and manner prescribed by the commissioner. | ||
(b) A renewal form must include all information required by | ||
the commissioner, including: | ||
(1) an update of any changes made to documents | ||
previously filed with the department; | ||
(2) a copy of the most recent annual audit required | ||
under 26 U.S.C. Section 5000A(d)(2)(B); | ||
(3) a ministry financial report detailing the | ||
following for the prior registration period: | ||
(A) the total amount collected from members in | ||
this state, including contributions, administrative fees, or other | ||
funds; | ||
(B) the total amount of sharing requests made by | ||
members in this state; | ||
(C) the total amount paid for health care | ||
services for members in this state; | ||
(D) the total amount of sharing requests that | ||
were denied; and | ||
(E) the total amount of administrative fees | ||
collected from members in this state, including amounts paid to | ||
each third-party vendor for services provided to members in this | ||
state; | ||
(4) a report of the health care sharing ministry's | ||
members in this state as of the date of application for renewal that | ||
includes the: | ||
(A) total number of enrolled members; | ||
(B) distribution of members by age; and | ||
(C) distribution of members by sex; | ||
(5) a report detailing the following: | ||
(A) the total number of sharing requests made by | ||
members in this state; | ||
(B) the number of sharing requests made by | ||
members in this state that were approved for sharing; | ||
(C) the number of sharing requests made by | ||
members in this state that were denied for sharing; and | ||
(D) the number of complaints made by members in | ||
this state; | ||
(6) a certification that the health care sharing | ||
ministry does not compensate anyone to solicit or enroll members in | ||
this state based on the number of members solicited or enrolled or | ||
the amount of contributions received from enrolled members, | ||
including by commission; and | ||
(7) other information as prescribed by the | ||
commissioner. | ||
(c) The commissioner shall send written notice of an | ||
impending expiration of a certificate of registration to a health | ||
care sharing ministry not later than 30 days before the expiration | ||
of the certificate of registration. | ||
Sec. 1681.056. ISSUANCE OF RENEWAL OF CERTIFICATE OF | ||
REGISTRATION. (a) The commissioner shall renew a certificate of | ||
registration for each health care sharing ministry that meets the | ||
requirements of this chapter and rules adopted under this chapter. | ||
(b) The commissioner may deny a renewal application that | ||
does not meet the requirements of this chapter and rules adopted | ||
under this chapter. | ||
(c) On the applicant's request, the commissioner shall hold | ||
a hearing on a denial of a renewal application. Not later than the | ||
30th day after the date of the applicant's request for a hearing, | ||
the commissioner shall request a hearing date. The hearing is a | ||
contested case under Chapter 2001, Government Code. | ||
Sec. 1681.057. LATE RENEWAL OF CERTIFICATE OF REGISTRATION. | ||
(a) The commissioner shall renew a certificate of registration in | ||
accordance with Section 1681.056 if a request is made by the health | ||
care sharing ministry within 90 days after the expiration of the | ||
certificate. | ||
(b) A health care sharing ministry that fails to timely | ||
renew a certificate of registration must pay the following fee: | ||
(1) $250 for an application for renewal filed 1 to 30 | ||
days late; | ||
(2) $500 for an application for renewal filed 31 to 60 | ||
days late; or | ||
(3) $1,000 for an application for renewal filed 61 to | ||
90 days late. | ||
(c) If a health care sharing ministry fails to apply to | ||
renew a certificate of registration within 90 days after the | ||
expiration of the certificate, the ministry may not reapply for a | ||
certificate of registration for two years. | ||
Sec. 1681.058. FEES. Except as provided by Section | ||
1681.057, the commissioner by rule shall set a fee for an | ||
application for the issuance or renewal of a certificate of | ||
registration under this chapter in an amount not to exceed $100. | ||
SUBCHAPTER C. REGULATION OF HEALTH CARE SHARING MINISTRIES | ||
Sec. 1681.101. NAME. A health care sharing ministry may not | ||
operate under any name other than the name for which the ministry's | ||
certificate of registration has been issued. | ||
Sec. 1681.102. MARKETING AND COMMUNICATION. (a) Except | ||
for a health care sharing ministry making its annual audit | ||
available to the public, the ministry may not make a direct or | ||
indirect representation that it: | ||
(1) is operating in a financially sound manner; or | ||
(2) has a successful history of meeting members' | ||
medical costs. | ||
(b) In all communications with members or the public, a | ||
health care sharing ministry may not: | ||
(1) use insurance terms that may mislead or confuse a | ||
member or prospective member, including terms such as premium, | ||
copay, deductible, coverage, network, and benefit plan; or | ||
(2) make a direct or indirect representation that a | ||
health care service is free or included with membership. | ||
Sec. 1681.103. COMPENSATION FOR SERVICES. A health care | ||
sharing ministry may not compensate anyone for services provided to | ||
members in this state based on the number of members solicited or | ||
enrolled or the amount of contributions received from enrolled | ||
members, including by commission. | ||
Sec. 1681.104. ENROLLMENT DISCLOSURES. A health care | ||
sharing ministry shall disclose the following information in | ||
writing for each calendar year from the previous five calendar | ||
years in a prominent and conspicuous manner before and at the time | ||
an individual is enrolled as a member: | ||
(1) total member contributions; | ||
(2) total amounts paid for sharing requests; | ||
(3) total administrative fees paid by members; and | ||
(4) the percentage of money paid by members that was | ||
paid toward the following: | ||
(A) sharing requests; and | ||
(B) administrative fees. | ||
Sec. 1681.105. MONTHLY STATEMENTS. A health care sharing | ||
ministry must provide a prominent and conspicuous written monthly | ||
and annual statement to all members that includes the following: | ||
(1) the number of members participating that month and | ||
for that calendar year; | ||
(2) the amount of money contributed by members that | ||
month and for that calendar year; | ||
(3) the number of and monetary amount of all sharing | ||
requests submitted that month and for that calendar year; | ||
(4) the number of and monetary amount of sharing | ||
requests paid that month and for that calendar year; | ||
(5) the amount of member contributions remaining for | ||
future sharing requests for that month and for that calendar year; | ||
(6) the amount of administrative fees for that month | ||
and for that calendar year, including: | ||
(A) the purpose of the administrative fee; | ||
(B) the amount paid for each type of | ||
administrative fee; and | ||
(C) any third-party vendor to which the fee is | ||
paid; and | ||
(7) the percentage of money paid by members that was | ||
paid toward the following for that month and for that calendar year: | ||
(A) sharing requests; | ||
(B) administrative fees; and | ||
(C) any amount remaining that is designated for | ||
the payment of future sharing requests. | ||
Sec. 1681.107. ANNUAL AUDIT. A health care sharing | ||
ministry shall conduct an annual audit that is: | ||
(1) performed by an independent certified public | ||
accounting firm in accordance with generally accepted accounting | ||
principles; and | ||
(2) made available to the public on request. | ||
Sec. 1681.108. COMPLIANCE WITH CERTAIN FEDERAL LAW | ||
REQUIRED. A health care sharing ministry shall operate in | ||
accordance with 26 U.S.C. Section 5000A(d)(2)(B). | ||
SUBCHAPTER D. ENFORCEMENT | ||
Sec. 1681.151. ENFORCEMENT ACTIONS. If a health care | ||
sharing ministry is violating or has violated this chapter or other | ||
law, the commissioner may: | ||
(1) suspend or revoke a certificate of registration | ||
issued to the ministry under this chapter; | ||
(2) impose a sanction under Chapter 82; | ||
(3) issue a cease and desist order under Chapter 83; | ||
(4) impose an administrative penalty under Chapter 84; | ||
or | ||
(5) any combination of Subdivisions (1) through (4). | ||
Sec. 1681.152. INJUNCTION. If the commissioner believes | ||
that a health care sharing ministry or another person is violating | ||
or has violated this chapter, the attorney general at the request of | ||
the commissioner may bring an action in a Travis County district | ||
court to enjoin the violation, order restitution, and obtain other | ||
relief the court considers appropriate. | ||
Sec. 1681.153. REMEDIES CUMULATIVE. A remedy or action | ||
authorized by this subchapter is in addition to any other civil, | ||
administrative, or criminal action provided by law. | ||
SECTION 4. Section 1681.002, Insurance Code, is transferred | ||
to Subchapter C, Chapter 1681, Insurance Code, as added by this Act, | ||
redesignated as Section 1681.106, Insurance Code, and amended to | ||
read as follows: | ||
Sec. 1681.106 [ |
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sharing ministry shall provide written notice on or accompanying | ||
all applications, guideline materials, and written advertisements, | ||
including print and digital advertisements, distributed by or on | ||
behalf of the ministry. | ||
(b) The notice described by Subsection (a) must be in at | ||
least 10-point font, in a prominent and conspicuous place, and [ |
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as follows: | ||
"Notice: Payment of your medical expenses is not guaranteed. | ||
This health care sharing ministry facilitates the sharing of | ||
medical expenses and is not an insurance company, and neither its | ||
guidelines nor its plan of operation is an insurance policy. | ||
Whether anyone chooses to assist you with your medical bills will be | ||
totally voluntary because no other participant will be compelled by | ||
law to contribute toward your medical bills. As such, participation | ||
in the ministry or a subscription to any of its documents should | ||
never be considered to be insurance. Regardless of whether you | ||
receive any payment for medical expenses or whether this ministry | ||
continues to operate, you are always personally responsible for the | ||
payment of your own medical bills. Complaints concerning this | ||
health care sharing ministry may be reported to the Texas | ||
Department of Insurance [ |
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(c) A health care sharing ministry shall provide the | ||
following notice in any audio or visual advertisement clearly, | ||
conspicuously, and in a manner that a listener would hear and | ||
understand: | ||
"Payment of your medical expenses is not guaranteed. This | ||
health care sharing ministry facilitates the sharing of medical | ||
expenses, is not an insurance company, and is not offering an | ||
insurance policy. Regardless of whether you receive any payment for | ||
medical expenses or whether this ministry continues to operate, you | ||
are always personally responsible for the payment of your own | ||
medical bills." | ||
SECTION 5. Section 1681.001, Insurance Code, is repealed. | ||
SECTION 6. (a) Notwithstanding Section 1681.051, Insurance | ||
Code, as added by this Act, a health care sharing ministry operating | ||
in this state immediately before the effective date of this Act is | ||
not required to apply for a certificate of registration under | ||
Chapter 1681, Insurance Code, as amended by this Act, before March | ||
1, 2022. The ministry may continue operating without a certificate | ||
of registration until the application is approved or denied. | ||
(b) A health care sharing ministry described by Subsection | ||
(a) of this section that fails to apply for a certificate of | ||
registration under Chapter 1681, Insurance Code, as amended by this | ||
Act, before March 1, 2022, or whose application for registration | ||
made before that date is denied, may not apply for a certificate of | ||
registration under Section 1681.052, Insurance Code, as added by | ||
this Act, before March 1, 2024. | ||
SECTION 7. This Act takes effect September 1, 2021. |