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You are here: Home . rules . 2006 . 1002-059

Subchapter LL. Health coverage awareness and education program

28 TAC §§3.9301 - 3.9306

1. INTRODUCTION. The Texas Department of Insurance proposes new Subchapter LL, §§3.9301 - 3.9306, concerning the acceptance of donations by the Texas Department of Insurance for assistance in the funding of the Health Coverage Awareness and Education Program. The proposal is necessary to implement SB 261, enacted by the 79th Legislature, Regular Session, which added Insurance Code Chapter 524. SB 261 requires the Department to develop a Health Coverage Awareness and Education Program to disseminate pertinent information to the public about health coverage options, including health savings accounts and compatible high deductible health benefit plans, and authorizes the Department to accept donations for this purpose.

The Insurance Code §524.005 requires the Department to adopt rules governing the acceptance of these donations that are consistent with Chapter 575 of the Government Code (relating to Acceptance of Gift by State Agency). In addition, the Insurance Code §524.005 also requires the Department to submit the proposed rules to the Texas Ethics Commission for review and to consider the recommendations of the Commission regarding the proposed regulations before adopting the proposed rules. The Department submitted the proposed rules to the Texas Ethics Commission in October 2005, and again in March 2006, for its consideration. In its response to the Department, the Texas Ethics Commission recommended that the Department reconsider the definitions of donation, gift, and grant and suggested that the Department consider adding provisions regarding real property, personal property, and money. The Commission also recommended that the Department expand the definition of donor to include additional persons, groups, or entities. Lastly, the Commission recommended that the Department include a definition of the term seeking to contract and that the Department consider imposing a time period from which a donor could not contract with the Department after making a donation to the Department. The Department considered the recommendations of the Texas Ethics Commission and made several changes to the proposed rules based upon those recommendations. The Department revised its definition of donation to include money, real or personal property, and any other tangible or intangible thing of value delivered to the department by gift or grant. The Department revised its definition of donor accordingly and also added the definition of offeree to distinguish between individuals and entities that have donated to the Department on previous occasions and those individuals and entities who are currently seeking or offering to make a donation to the Department. The Department also added a definition of seeking to contract and added provisions addressing certain limitations on donors and offerees.

Proposed §3.9301 specifies that the purpose of the subchapter is to establish procedures regarding the Department's acceptance of donations for assistance in the funding of the Health Coverage Awareness and Education Program and to establish procedures to govern the relationship between employees of the Department, offerees, and donors regarding the acceptance of such donations. Proposed §3.9302 sets forth definitions for use in the subchapter. Proposed §3.9303 prescribes that the Commissioner or the Commissioner's designee may accept donations on behalf of the Department and that all donations become state property and are subject to applicable federal and state laws and regulations. While proposed §3.9303 provides that the Commissioner or the Commissioner's designee may accept a donation in the manner authorized by the section, §3.9303 makes clear that only the Commissioner, in the Commissioner's sole discretion, may decline to accept a donation. Proposed §3.9304 establishes limitations for offerees and donors. Proposed §3.9304(a) addresses offerees that are seeking to contract with the Department. Proposed §3.9302 defines the term s eeking to contract as submitting a bid response to the Department. Under proposed §3.9304(a), an offeree who submits a bid response to the Department, including a formal bid response, a formal bid proposal, an informal price quote, a submission of specifications or qualifications, or direct contract negotiations must notify the Department of this fact in a form acceptable to the Department. Additionally, proposed §3.9304(a) requires offerees seeking to contract with the Department to disclose all previous donations made to the Department or any other state agency within the preceding two years. Proposed §3.9304(b) prohibits an offeree who has submitted a bid response to the Department from making a donation to the Department from the date the bid response is submitted to the Department until the 90th day after the denial of the bid response that was submitted by the offeree is announced, or one year after the award of the bid response that was submitted by the offeree is announced. Lastly, proposed §3.9304(c) prohibits a donor from submitting a bid response to the Department for a period of one year following the date the donation agreement was executed by the donor and the Commissioner or by the donor and the Commissioner's designee. Proposed §3.9305 establishes limitations for entities that are subject to Department regulation pursuant to the Insurance Code, the Labor Code, and federal law. Proposed §3.9305(a) establishes, that, prior to executing the donation agreement described by §3.9306 (relating to Procedures for Acceptance of Donations), an offeree that is subject to department regulation pursuant to the Insurance Code, the Labor Code, or federal law, shall notify the department that the offeree is involved in or is the subject of an open investigation or enforcement action of the department; is applying for a certificate of authority, license, or other department issued permit; is seeking a letter of consent pursuant to 18 U.S.C. §1033; or is the subject of an enforcement action of another state agency. Proposed §3.9305(b) makes clear that licensees; certificate holders; permit holders; applicants for a license, certificate of authority, or other department issued permit; individuals requesting letters of consent pursuant to 18 U.S.C. §1033; and employers, employees, and providers who engage in the business of insurance or participate in the worker's compensation system in this state are subject to the provisions of the section. Proposed §3.9305(c) requires the notification required by proposed §3.9305(a) to include the docket number, style, and filing date of an enforcement action, if applicable. Proposed §3.9305(d) provides that an offeree that is subject to subsection (a) of the section may not make a donation to the department from the date that an action, case, application, request, investigation, or enforcement action is initiated by the department until the 90th day after the date the action, case, application, request, investigation, or enforcement action reaches final disposition and is closed by the department. This provision imposes a longer time period than is prescribed in the Government Code §575.005, which requires that a state agency may not accept a gift from a person who is a party to a contested case before the agency until the 30th day after the date the decision in the case becomes final under §2001.144. Lastly, proposed §3.9305(e) makes clear that the notification required by subsection (a) of the section is not required for form filings, data calls, or other matters not specified in subsection (a) of the section. Prior to accepting a donation, proposed §3.9306(a) requires the offeree and the Commissioner or the Commissioner's designee to execute a donation agreement that must include several pieces of information, including a description of the donation; the name and signature of the offeree; the purpose of the donation; a statement identifying whether or not the disclosures required by §§3.9304 and 3.9305 of this subchapter (relating to Limitations on Offerees and Donors and Limitations on Entities Subject to Department Regulation) are applicable to the offeree and, if so, whether the disclosures have been received in a form that is acceptable to the Department; and a statement advising the offeree to seek any desired legal and/or tax advice from its own legal counsel. Proposed §3.9306(b) provides that the Commissioner or the Commissioner's designee may accept grant money only after the offeree and the Commissioner or the Commissioner's designee have executed the donation agreement required in subsection (a) of the section. Proposed §3.9306(c) specifies that all monetary contributions received from donations made pursuant to the Insurance Code §524.005 shall be deposited in accordance with state law and shall be used for purposes consistent with §524.005.

2. FISCAL NOTE. Jennifer Ahrens, Associate Commissioner for the Life, Health & Licensing Division, has determined that for each year of the first five years the proposed sections are in effect, while there will be no fiscal impact to state government as a result of the proposal, there may be, however, as a result of the enactment of SB 261, which authorizes the Department to accept gifts and grants, a possible increase in the amount of funds and/or property available to the Department for purposes authorized under SB 261.

3. PUBLIC BENEFIT/COST NOTE. Ms. Ahrens has also determined that for each year of the first five years the proposed sections are in effect, the anticipated public benefit from enforcing and administering the sections will be an increase in funds or property to use to increase public awareness of health coverage options available in this state through the dissemination of educational materials to the public. The increased ability to disseminate educational materials to the public will increase public awareness of health coverage options available in this state and will allow for better education on the value of health coverage. Additionally, the increased funds will allow the program to develop and make public service announcements to educate consumers and employers about the availability of health coverage in this state. The funds will allow the department to develop an Internet website designed to educate the public about the availability of health coverage in this state, including information about health savings accounts and compatible high deductible health benefit plans. There are no costs to individuals to comply with the proposal because it pertains only to those procedures the Department will follow for the acceptance of donations. As these are voluntary actions, there is no difference in impact on a person or entity qualifying as a small or micro-business under the Government Code §2006.001 compared to a large business.

4. REQUEST FOR PUBLIC COMMENT. To be considered, all comments on the proposal must be submitted in writing no later than 5:00 p.m. on November 13, 2006, to Gene C. Jarmon, General Counsel & Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714‑9104. An additional copy of the comment must be simultaneously submitted to Bill Bingham, Deputy Commissioner for Regulatory Matters, Life, Health & Licensing Program, Mail Code 107-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714‑9104. Any request for a public hearing should be submitted separately to the Office of the Chief Clerk before the close of the public comment period. If a hearing is held, oral and written comments presented at the hearing will be considered.

5. STATUTORY AUTHORITY. The new sections are proposed pursuant to the Insurance Code §§524.005 and 36.001. Insurance Code §524.005 requires the Department to adopt rules governing the acceptance of donations that will fund the Health Coverage Awareness and Education Program and requires that these rules be consistent with the Government Code Chapter 575. Section 36.001 of the Insurance Code provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.

6. CROSS REFERENCE TO STATUTE. The following statutes are affected by the proposed sections:

Rule Number Statute

§§3.9301 - 3.9306 Insurance Code §524.005 and

Government Code, Chapter 575

7. TEXT.

§3.9301. Purpose. This subchapter establishes procedures for the acceptance of donations by the Texas Department of Insurance to assist with the funding of the Health Coverage Awareness and Education Program and to establish procedures to govern the relationships between employees of the department, offerees, and donors regarding the acceptance of such donations, as authorized in the Insurance Code §524.005.

§3.9302. Definitions. For purposes of this subchapter, the following words and terms shall have the following meanings, unless the context clearly indicates otherwise.

(1) Bid response--A response to a departmental request for goods or services, including a formal bid response, a formal bid proposal, an informal price quote, a submission of specifications or qualifications, direct contract negotiations, or any other similar submission or communication.

(2) Commissioner--The Commissioner of Insurance.

(3) Department--The Texas Department of Insurance.

(4) Donation-- Money, real or personal property, or any other tangible or intangible thing of value delivered to the department by gift or grant.

(5) Donation agreement--A written document executed by the commissioner or the commissioner's designee and an offeree that includes the information required in §3.9306 of this subchapter (relating to Procedures for Acceptance of Donations).

(6) Donor--An individual, corporation, association, firm, partnership, committee, club organization, person, group of persons, or other entity that has made a donation to the department.

(7) Employee--An individual employed by the department in a full or part time capacity.

(8) Offeree--An individual, corporation, association, firm, partnership, committee, club organization, person, group of persons, or other entity that offers or seeks to make a donation to the department.

(9) Program--The Health Coverage Awareness and Education Program, as authorized in the Insurance Code Chapter 524.

(10) Seeking to contract--Submitting a bid response to the department.

§3.9303. Acceptance of Donations.

(a) The commissioner or the commissioner's designee may only accept a donation for the purposes authorized in the Insurance Code Chapter 524 in the manner authorized in this subchapter. All donations must be accepted on behalf of the department and not in an individual capacity.

(b) The commissioner, in the commissioner's sole discretion, may decline to accept any donation.

(c) Donations accepted by the commissioner or the commissioner's designee become state property and are subject to all applicable federal and state laws and regulations.

§3.9304. Limitations on Offerees and Donors.

(a) Prior to executing the donation agreement described by §3.9306 of this subchapter (relating to Procedures for Acceptance of Donations), an offeree seeking to contract with the department shall:

(1) notify the department, in a form acceptable to the department, that the offeree is seeking to contract with the department; and

(2) disclose all previous donations made to the department or any other state agency within the preceding two years. The disclosure shall be in a form acceptable to the department and shall include the nature and value of the donation and the date the donation was made. If the donation is ongoing, the date of the donation shall be the last date the donation was delivered to the department or other state agency.

(b) An offeree who has submitted a bid response to the department may not make a donation from the date the bid response is submitted to the department until:

(1) the 90th day after the denial of the bid response that was submitted by the offeree is announced, or

(2) one year after the award of the bid response that was submitted by the offeree is announced.

(c) A donor who has made a donation to the department may not submit a bid response to the department for a period of one year following the date the donation agreement was executed by the donor and the commissioner or by the donor and the commissioner's designee.

§3.9305. Limitations on Entities Subject to Department Regulation.

(a) Prior to executing the donation agreement described by §3.9306 of this subchapter (relating to Procedures for Acceptance of Donations), an offeree that is subject to department regulation pursuant to the Insurance Code, the Labor Code, or federal law, shall, on a form that is acceptable to the department, notify the department that the offeree is:

(1) involved in or is the subject of an open investigation or enforcement action of the department;

(2) applying for a certificate of authority, license, or other department issued permit; or

(3) seeking a letter of consent pursuant to 18 U.S.C. §1033; or

(4) is the subject of an enforcement action of another state agency.

(b) Individuals and entities subject to subsection (a) of this section include:

(1) licensees; certificate holders; permit holders; applicants for a license, certificate of authority, or other department issued permit;

(2) individuals requesting letters of consent pursuant to 18 U.S.C. §1033; and

(3) employers, employees, and providers who engage in the business of insurance or participate in the worker's compensation system in this state.

(c) The notification required in subsection (a) of this section must include the docket number, style, and filing date of the enforcement action, if applicable.

(d) An offeree that is subject to subsection (a) of this section may not make a donation to the department from the date that an action, case, application, request, investigation, or enforcement action is initiated by the department or other state agency, if applicable, until the 90th day after the date the action, case, application, request, investigation, or enforcement action reaches final disposition and is closed by the department, or other state agency, if applicable.

( e) A notification pursuant to subsection (a) of this section is not required for form filings, data calls, or other matters not specified in subsection (a) of this section.

§3.9306. Procedures for Acceptance of Donations.

(a) Donation agreement. Prior to accepting any donation, the offeree and the commissioner or the commissioner's designee shall execute a donation agreement that includes the following information:

(1) the name of the offeree;

(2) a description of the donation, including a determination of the value;

(3) a statement by the offeree attesting to its ownership rights in the property, including intellectual property ownership rights;

(4) the signature of the offeree if the offeree is an individual or its official representative if the offeree is a business organization;

(5) the signature of the commissioner or the commissioner's designee;

(6) the purpose of the donation;

(7) the mailing address of the offeree and principal place of business if the offeree is a business entity;

(8) a statement identifying any official relationship between the offeree and the department;

(9) a statement identifying whether the disclosures required by §§3.9304 and 3.9305 of this subchapter (relating to Limitations on Offeree and Donors and Limitations on Entities Subject to Department Regulation) are applicable to the offeree, and, if so, whether the offeree has tendered the disclosures to the department in a form acceptable to the department; and

(10) a statement advising the offeree to seek any desired legal and/or tax advice from its own legal counsel.

(b) Grants. The commissioner or the commissioner's designee may accept grant money only after the offeree and the commissioner or the commissioner's designee have executed the donation agreement required in subsection (a) of this section.

(c) Deposited funds. Monetary contributions received from donations made pursuant to the Insurance Code §524.005 shall be deposited in accordance with state law. All monetary contributions from donations received pursuant to the Insurance Code §524.005 shall be used for purposes consistent with §524.005.

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