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You are here: Home . bulletins . 2002 . b-0024-2
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COMMISSIONER'S BULLETIN # B-0024-02

April 26, 2002


To: ALL INSURERS LICENSED TO WRITE HEALTH INSURANCE, ALL HEALTH MAINTENANCE ORGANIZATIONS AND ALL THIRD PARTY ADMINISTRATORS


Re: STUDENT ACCIDENT INSURANCE COVERAGE

The purpose of this bulletin is to provide carriers with information relating to Senate Bill (S.B.) 333 passed by the 77th Texas Legislature. It has come to the Department's attention that carriers may be misinterpreting S.B. 333, which addresses the payment of benefits under the Texas Children's Health Insurance Program (CHIP).

The 76th Texas Legislature in 1999 enacted S.B. 445, which created CHIP. The objective of CHIP as stated in the Texas Health and Safety Code, Section 62.001 is "… provide primary and preventative health care to low-income, uninsured children of this state… who are not served by or eligible for other state assisted health insurance programs ." (emphasis added)

The 77th Texas Legislature in 2001 amended Section 6 of S.B. 445 to add the following language:

The state child health plan or a health benefit plan provider that provides health benefits coverage to a child enrolled in the state child health plan shall be the secondary plan when coordinating benefits with any form of group or individual private health benefits coverage or private insurance covering the child. Accordingly, any benefits paid for the child under the state child health plan shall pay benefits only after private coverage benefits have been exhausted.

The Digest and Purpose of the Bill Analysis of S.B. 333¹ explains that:

… Texas insurance law applying to child health plans, when two or more health insurance plans cover the same individual the plans are required to coordinate the payment of benefits. S.B. 333 amends the child health plan statute to clarify that child health plans are secondary plans in all cases . (emphasis added)

Moreover, in laying out S.B. 333 before the Health and Human Services Committee², Senator Moncrief, the bill's author, stated that:

Although public health programs are typically payors of last resort, there is no provision granting the CHIP program the same authority in SB 445 enacted by the last session. This amendment simply clarifies that CHIP plans are secondary plans in all cases…

House sponsor Representative Capelo echoed Senator Moncrief's remarks in laying out the bill before the House Public Health Committee on May 10, 2001³.

Neither CHIP coverage nor student accident insurance qualifies as a "plan" subject to the coordination of benefits rules at 28 TAC Section 3.3501 et seq., which were adopted prior to the enactment of S.B. 333. When both these types of insurance cover a single incident, however, coordination of benefits is inevitable, as the language of S.B. 333 contemplates. In such situations the Legislature has mandated that CHIP coverage shall be secondary to any other type of health coverage or insurance. Accordingly, in covering such incidents, the student accident-type insurance policy would pay benefits to the extent of its policy limits, and CHIP coverage would then pay benefits for any amounts that remain unpaid to the extent of its policy limits.

Companies writing student accident insurance should review their claim procedures to ensure that they are in compliance with the recent changes in the law.

For inquiries, please contact Cindy Carpenter of the Life/Health Division by phone at 512-322-3409 or e-mail at Cindy.Carpenter@tdi.state.tx.us@tdi.state.tx.us or Patricia Brewer of the HMO Division by phone at 512-322-4266 or e-mail at Pat.Brewer@tdi.state.tx.us@tdi.state.tx.us.




_______________________
KIMBERLY STOKES
SENIOR ASSOCIATE COMMISSIONER
LIFE, HEALTH & LICENSING PROGRAM


1. http://tlo2.tlc.state.tx.us/cgi-bin/tlo/textframe.cmd? LEG=77&SESS=R&CHAMBER=S&BILLTYPE= B&BILLSUFFIX=00333&VERSION=5&TYPE=A
2. >http://www.senate.state.tx.us/75r/senate/commit/c610/c610.htm
3. (No Longer Available Online) http://www.house.state.tx.us/house/commit/archive/c410.htm



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