Insurance Code §1652.051 provides, in part, that the commissioner must adopt reasonable rules to establish specific standards for provisions in Medicare supplement benefit plans and standards for facilitating comparisons of different Medicare supplement benefit plans. The standards are in addition to and must be in accordance with applicable laws of this state; applicable federal law, rules, regulations, and standards; and any model rules and regulations required by federal law, including 42 U.S.C. §1395ss. The standards may include provisions relating to terms of renewability; benefit limitations, exceptions, and reductions; and exclusions required by state or federal law.

Insurance Code §1652.052(a) provides that the commissioner must adopt reasonable rules to establish minimum standards for benefits and claim payments under Medicare supplement benefit plans. Insurance Code §1652.052(b) states that the standards for benefits and claim payments must include the requirements for certification of Medicare supplement benefit plans under 42 U.S.C. §1395ss.

Insurance Code §1652.151 provides, in part, that the rules adopted under §1652.152 must include provisions and requirements that are at least equal to those required by federal law, including the rules, regulations, and standards adopted under 42 U.S.C. §1395ss.

Issuers are permitted, but not required, to replace a certificate issued in Texas with a certificate of the same standardized plan type approved in a certificate holder's new state of residence. Any associated cost is attributable to the issuer's decision to replace the certificate and does not result from the enforcement or administration of the proposed new subsection.

Insurance Code §1652.152(b) provides that the commissioner by rule must prescribe the format and content of the outline of coverage required by subsection (a). The rules must address the style, arrangement, and overall appearance of the outline of coverage, including the size, color, and prominence of type and the arrangement of text and captions.

Issuers must update outline-of-coverage forms to comply with the proposed new LHL 050 Rev. 12/17 form and file the form with the department for review. The costs associated with implementation are the result of the enactment of MACRA and the requirements under Insurance Code Chapter 1652 for the commissioner to adopt reasonable rules necessary and proper to carry out Chapter 1652. This includes model rules adopted under federal law relating to the regulation of Medicare supplement benefit plan coverage and that are necessary for this state to retain certification as a state with an approved regulatory program for Medicare supplement insurance. Therefore, the costs associated with changing the outline-of-coverage form do not result from the enforcement or administration of the proposed amendments and repeal.

The department estimates that there are no measurable additional costs in the submission of the electronic refund calculation reporting form over the internet. Insurance Code §1652.102(c) provides that the commissioner may adopt rules relating to filing requirements for rates, rating schedules, and loss ratios. The proposed amendment to require electronic submission of the refund calculation reporting form will benefit both the issuers reporting and the department. Issuers will not have to print and scan the reports to submit them to the department. The department will not have to print the reports to manually enter the information into the database, which is time consuming and can lead to data entry errors. Because of the integrated error checking, the department will spend less time corresponding with issuers about data errors.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. The department has determined that the proposed amendments and repeal will not have an adverse economic effect or a disproportionate impact on small or micro businesses or on rural communities. Any costs are the result of implementation of federal and state law requirements, which do not permit lowered requirements for small businesses. Additionally, the proposal permits, but does not require, issuers to replace a Texas certificate with a certificate of the same standardized benefit plan type, approved by the new state of residence, when an individual who is a certificate holder in a group Medicare supplement policy moves out of the state. The proposed new refund calculation data reporting form requires electronic submission, which will ease the reporting and submission process and should result in no measurable costs to issuers. As a result, and in accordance with Government Code §2006.002(c), the department is not required to prepare a regulatory flexibility analysis.

EXAMINATION OF COSTS UNDER GOVERNMENT CODE §2001.0045. The department has determined that the proposed amendments are required by and are consistent with federal law (MACRA) and Insurance Code Chapter 1652 and do not impose requirements on any individual or entity other than those imposed under federal and state laws. Any costs to such persons result from the federal enactment of MACRA and Insurance Code Chapter 1652 and are not the result of the adoption, enforcement, or administration of the proposed amendments and repeal. In addition, Government Code §2001.0045 does not apply to this proposal because it is necessary to implement MACRA under Insurance Code §§1652.005, 1652.051, 1652.052, 1652.151, 1652.152, and 42 U.S.C. §1395ss to ensure that Texas retains certification as a state with an approved regulatory program for Medicare supplement insurance.

TAKINGS IMPACT ASSESSMENT. The department has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action, and so does not constitute a taking or require a takings impact assessment under Government Code §2007.043.

REQUEST FOR PUBLIC COMMENT. Submit any written comments on the proposal no later than 5:00 p.m., Central time, on January 22, 2018, by mail to the Office of the Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104; or by email to chiefclerk@tdi.texas.gov. Simultaneously submit an additional copy of the comments to Patricia Brewer, Regulatory Initiatives Team, Life and Health Lines Office, Mail Code 106-1D, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104; or by email to lhlcomments@tdi.texas.gov. Separately submit any request for a public hearing to the Texas Department of Insurance, Office of the Chief Clerk, Mail Code 113-2A, P.O. Box 149104, Austin, Texas 78714-9104, or by email to chiefclerk@tdi.texas.gov, before the close of the public comment period. If the department holds a hearing, the commissioner will consider written and oral comments presented at the hearing.

STATUTORY AUTHORITY. The amended sections are proposed under Insurance Code §§1652.005, 1652.051, 1652.052, 1652.102, 1652.151, 1652.152, and 36.001; and 42 U.S.C. §1395ss.

Insurance Code §1652.005 provides that, in addition to other rules required or authorized by this chapter, the commissioner must adopt reasonable rules necessary and proper to carry out Chapter 1652, including rules adopted in accordance with federal law relating to the regulation of Medicare supplement benefit plan coverage that are necessary for this state to obtain or retain certification as a state with an approved regulatory program.

Insurance Code §1652.051 provides, in part, that the commissioner must adopt reasonable rules to establish specific standards for provisions in Medicare supplement benefit plans and standards for facilitating comparisons of different Medicare supplement benefit plans. The standards are in addition to and must be in accordance with applicable laws of this state; applicable federal law, rules, regulations, and standards; and any model rules and regulations required by federal law, including 42 U.S.C. §1395ss. The standards may include provisions relating to terms of renewability; benefit limitations, exceptions, and reductions; and exclusions required by state or federal law.

Insurance Code §1652.052(a) provides that the commissioner must adopt reasonable rules to establish minimum standards for benefits and claim payments under Medicare supplement benefit plans. Insurance Code §1652.052(b) states that the standards for benefits and claim payments must include the requirements for certification of Medicare supplement benefit plans under 42 U.S.C. §1395ss.

Insurance Code §1652.102(c) provides that the commissioner may adopt rules relating to filing requirements for rates, rating schedules, and loss ratios.

Insurance Code §1652.151 provides, in part, that the rules adopted under §1652.152 must include provisions and requirements that are at least equal to those required by federal law, including the rules, regulations, and standards adopted under 42 U.S.C. §1395ss.

Insurance Code §1652.152(a) provides that for full and fair disclosure in the sale of Medicare supplement benefit plans, a Medicare supplement benefit plan or certificate may not be delivered or issued for delivery in Texas unless an outline of coverage that complies with §1652.152 is delivered to the applicant when the applicant applies for the coverage, and Insurance Code §1652.152(b) provides that the commissioner by rule must prescribe the format and content of the outline of coverage required by §1652.152(a). The rules must address the style, arrangement, and overall appearance of the outline of coverage, including the size, color, and prominence of type and the arrangement of text and captions.

Insurance Code §36.001 provides that the commissioner may adopt any rules necessary and appropriate to implement the powers and duties of the department under the Insurance Code and other laws of Texas.

Title 42 U.S.C. §1395ss(a)(2)(A) provides, in part, that no Medicare supplemental policy may be issued in a state on or after the date specified, unless the state’s regulatory program provides for the application and enforcement of the NAIC Model Standards and requirements.

CROSS REFERENCE TO STATUTE. Amendments to 28 TAC §§3.3302 - 3.3308, 3.3312, 3.3316, 3.3317, and 3.3323 - 3.3325 affect Insurance Code §§1652.005, 1652.051, 1652.052, 1652.102, 1652.151, 1652.152, and 36.001; and 42 U.S.C. §1395ss.