Changes to Texas Motorcycle Helmet Law

TITLE 28. INSURANCE Proposed Section Part I. Texas Department of Insurance Page 1 of 14 Chapter 21. Trade Practices SUBCHAPTER RR. STANDARD PROOF OF HEALTH INSURANCE FOR MEDICAL BENEFITS FOR INJURIES INCURRED AS A RESULT OF A MOTORCYCLE ACCIDENT

One of the purposes of SB 1967 is to amend current law relating to the safe operation of motorcycles to provide consistency regarding the enforcement of Transportation Code §661.003 (Offenses Relating to Not Wearing Protective Headgear). Prior to the enactment of SB 1967, it was an offense under Transportation Code §661.003 to drive or ride on a motorcycle without a helmet unless the person was 21 years of age and had completed a motorcycle safety course or had health insurance. However, Texas statutes did not require all motorcyclists or the public to complete any motorcycle safety training. (TEXAS STATE SENATE TRANSPORTATION & HOMELAND SECURITY COMMITTEE, BILL ANALYSIS (ENROLLED), SB 79, 81ST Leg., R.S. (Sept. 2, 2009)). In addition, the Insurance Code did not provide a standard of proof for the health insurance component of the two exceptions to Transportation Code TITLE 28. INSURANCE Proposed Section Part I. Texas Department of Insurance Page 2 of 14 Chapter 21. Trade Practices

§661.003. SB 1967 SECTION 8(C-2) requires the Department to prescribe a standard proof of health insurance for issuance to persons who are at least 21 years of age and covered by a health insurance plan described by SB 1967 SECTION 8(C). The insurance exception to Transportation Code §661.003 provides that the excepted person must be "covered by a health insurance plan providing the person with medical benefits for injuries incurred as a result of an accident while operating or riding on a motorcycle" to qualify for the exception.

On April 15, 2010, the Department posted an informal working draft of the proposed new subchapter on the Department’s website and invited public comment. The Department held a meeting on April 29, 2010, for the stakeholder comments. The informal comment period ended on April 30, 2010. The proposal includes input from these comments.

Proposed new §21.5201 is necessary to ensure that a standard proof of health insurance exists to implement an exception to the application of the Transportation Code §661.003(a) or (b), which provides that it is an offense for a person to not wear protective headgear while operating or riding as a passenger on a motorcycle on a public street or highway. Proposed new §21.5201(a)(1) provides that the subchapter is applicable to an individual, group, blanket, or franchise insurance policy, insurance agreement, health maintenance organization evidence of coverage, group hospital services contract, or employee benefit plan that provides benefits for health care services or for medical or surgical expenses incurred as a result of an accident while operating or riding a motorcycle. Proposed new §21.5201(a)(2) expressly provides that the subchapter is not applicable to credit-only coverage, disability coverage, specified TITLE 28. INSURANCE Proposed Section Part I. Texas Department of Insurance Page 3 of 14 Chapter 21. Trade Practices

disease coverage, long-term care coverage, dental or vision-only coverage, single-service health maintenance organization coverage, accidental death and dismemberment coverage, hospital indemnity coverage, workers’ compensation coverage, or medical payments or personal injury protection coverage. Proposed new §21.5201(b) provides that upon request, a health insurance plan shall issue a standard proof of health insurance coverage identifying a person who is at least 21 years of age and covered by a health insurance plan for medical benefits for injuries incurred as a result of an accident while operating or riding a motorcycle, unless the plan already issues customary identifications cards that include the words "MOTORCYCLE HEALTH" on the face of the card. Proposed new §21.5201(c) provides two alternative ways in which a health insurance plan can remain in compliance with the subsection. Proposed new §21.5201(c)(1) provides that a health insurance plan may comply by issuing its customary identification card with the words "MOTORCYCLE HEALTH" in all capital letters, printed in at least 8-point boldface font, and prominently placed on the card. Proposed new §21.5201(c)(2) provides that a health insurance plan may comply by issuing a card, separate from its customary card, titled "Motorcycle Health: Standard Proof of Health Insurance". The separate card must contain the heading "Motorcycle Health: Standard Proof of Health Insurance," the carrier logo, the carrier name, the name of the enrollee, insured, or dependent of the enrollee or insured, the policy number, and a statement that the enrollee, insured, or dependent of the enrollee or insured is covered by a health insurance plan that provides medical benefits for injuries incurred as a result of an accident while operating or riding a motorcycle. All text TITLE 28. INSURANCE Proposed Section Part I. Texas Department of Insurance Page 4 of 14 Chapter 21. Trade Practices

printed on the separate card shall appear in upper and lower case, using at least 12-point boldface type for the heading and at least 10-point regular type for the text body.

Additionally, proposed new §21.5201 is not applicable to personal injury protection (PIP) and medical payment (Med Pay) coverages. The Transportation Code §661.003(c) provides that a person covered by a "health insurance plan" providing the person with medical benefits for injuries incurred as a result of an accident while operating or riding a motorcycle is exempted from committing the offense of not wearing protective headgear. Section 661.003(i) defines "health insurance plan" as an "individual, group, blanket, or franchise insurance policy, insurance agreement, evidence of coverage, group hospital services contract, health maintenance organization membership, or employee benefit plan that provides benefits for health care services or for medical or surgical expenses incurred as a result of an accident." PIP and Med Pay coverages are not considered health insurance plans under the Insurance Code. For instance, §1952.151 of the Insurance Code states that "personal injury protection" coverage "consists of provisions of an automobile liability insurance policy that provide for payment . . . for expenses that arise from an accident. . . ." Section 2251.202 of the Insurance Code requires the Commissioner to publish a standard rate index of rates "for each of the following coverages under a personal automobile insurance policy," including "personal injury protection" and "medical payments." Finally, a large number of other sections of the Insurance Code distinguish between coverage under a health benefit plan and medical payment insurance coverage under an automobile insurance policy, including §§544.152, 546.003, 846.001, 1274.001, 1352.002, 1357.003, 1357.053, 1358.003, 1360.003, 1366.054, and TITLE 28. INSURANCE Proposed Section Part I. Texas Department of Insurance Page 5 of 14 Chapter 21. Trade Practices

1501.002. Since the term "health insurance plan" under the Transportation Code does not specifically include automobile coverages providing for medical benefits, and because the Insurance Code does not treat PIP or Med Pay as falling within the general scope of health insurance, such coverages will not qualify for the exemption from the offense found in the Transportation Code.

following paragraphs on April 15, 2010, and requested input on the costs associated with the rule. The Department also held a stakeholder meeting on April 29, 2010. No comments on the potential costs of the rule were received. The Department has drafted the proposed amendments to maximize public benefits while mitigating costs.

The cost to persons required to comply with the proposal are as follows:

required.

All of the analyses in this cost note are equally applicable to and do not vary for small or micro businesses.

that such a business may not have more than 20 employees. The Government Code §2006.002(f) requires a state agency to adopt provisions concerning micro businesses that are uniform with those provisions outlined in the Government Code §2006.002(b) - (d) for small businesses.

As required by the Government Code §2006.002(c), the Department has determined that the proposal may have an adverse economic effect on approximately 30 to 40 small or micro-businesses that are required to comply with the proposed rules. This estimate is based on an estimated 30 to 40 health insurers and HMOs that qualify as small or micro businesses. The cost of compliance with the proposal will not vary between large businesses and small or micro-businesses, and the Department’s cost analysis and resulting estimated costs for insurers in the Public Benefit/Cost Note portion of this proposal is equally applicable to small or micro-businesses.

The Department has considered the purpose of the Transportation Code §661.003(c) and (c-2) and the proposed new subchapter, which is to provide motorcyclists proof of health insurance coverage, and has determined that it is neither legal nor feasible to waive the provisions of the proposal for small or micro businesses. It is the Department’s position that to waive or modify the requirements of the proposal for small and micro businesses would result in a disparate effect on policyholders and other persons affected by the proposal. The Department has also determined that the proposal is consistent with the health, safety, and environmental and economic welfare of the state, because providing a standard proof of health insurance for issuance to persons who are at least 21 years of age and covered by a health insurance plan for medical benefits for injuries incurred as a result of an accident while operating or riding TITLE 28. INSURANCE Proposed Section Part I. Texas Department of Insurance Page 9 of 14 Chapter 21. Trade Practices

a motorcycle encourages motorcyclist to carry health insurance prior to engaging in the operation of a motorcycle. Therefore, the Department has determined in accordance with §2006.002(c-1) of the Government Code, for the above cited reasons there are no regulatory alternatives to this proposal that would meet the objectives of the proposal and be consistent with the health, safety, and environmental and economic welfare of the state.

In accordance with the Government Code §2006.002(c-1), the Department has determined that even though the proposal may have an adverse economic effect on small or micro-businesses that are required to comply with the proposal, the proposal does not require a regulatory flexibility analysis that is mandated by §2006.002(c)(2) of the Government Code. Section 2006.002(c)(2) requires that a state agency, before adopting a rule that may have an adverse economic effect on small businesses, prepare a regulatory flexibility analysis that includes the agency’s consideration of alternative methods of achieving the purpose of the proposed rule. Section 2006.002(c-1) of the Government Code requires that the regulatory flexibility analysis "consider, if consistent with the health, safety, and environmental and economic welfare of the state, using regulatory methods that will accomplish the objectives of applicable rules while minimizing adverse impacts on small businesses." Therefore, an agency is not required to consider alternatives that, while possibly minimizing adverse impacts on small and micro-businesses, would not be protective of the health, safety, and environmental and economic welfare of the state. TITLE 28. INSURANCE Proposed Section Part I. Texas Department of Insurance Page 10 of 14 Chapter 21. Trade Practices

person with medical benefits for injuries incurred as a result of an accident while operating or riding on a motorcycle. The Transportation Code §661.003(c-2) provides that the Department of Insurance shall prescribe a standard of proof of health insurance for issuance to persons who are at least 21 years of age and covered by a health insurance plan described by §661.003(c). The Insurance Code §36.001 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.

Rule Statute

§21.5201 Transportation Code §661.003(c) and (c-2)

(a) Applicability.

(1) This subchapter is applicable to an individual, group, blanket, or franchise insurance policy, insurance agreement, health maintenance organization evidence of coverage, group hospital services contract, or employee benefit plan that provides benefits for health care services or for medical or surgical expenses incurred as a result of an accident while operating or riding on a motorcycle.

(2) This subchapter is not applicable to: TITLE 28. INSURANCE Proposed Section Part I. Texas Department of Insurance Page 12 of 14 Chapter 21. Trade Practices

(A) credit-only coverage;

(B) disability coverage;

(C) specified disease coverage;

(D) long-term care coverage;

(E) dental or vision-only coverage;

(F) single-service health maintenance organization coverage;

(G) accidental death and dismemberment coverage;

(H) hospital indemnity coverage;

(I) workers' compensation coverage; or

(J) medical payments or personal injury protection coverage provided under an automobile policy.

(b) Standard Proof of Health Insurance. Upon request, a health insurance plan, as defined by the Transportation Code §661.003(i), shall issue a standard proof of health insurance coverage that satisfies the content requirements under subsection (c) of this section and identifies a person who is at least 21 years of age and covered by the health insurance plan for medical benefits for injuries incurred as a result of an accident while operating or riding on a motorcycle. A request can be made by a person who is an enrollee or an insured of the health insurance plan or who is a dependent of an enrollee or insured of the health insurance plan.

(c) Contents of Standard Proof of Health Insurance. A health insurance plan shall issue the standard proof of health insurance coverage described by subsection (b) of this section through one of the methods set forth in either paragraph (1) or paragraph (2) of this subsection: TITLE 28. INSURANCE Proposed Section Part I. Texas Department of Insurance Page 13 of 14 Chapter 21. Trade Practices

(1) The health insurance plan may elect to add to its customary identification card the words "MOTORCYCLE HEALTH." By including the words "MOTORCYCLE HEALTH" on its customary identification card, a health insurance plan affirms that the person named on the card is covered by a health insurance plan that provides medical benefits for injuries incurred as a result of an accident while operating or riding on a motorcycle, as addressed by the Transportation Code §661.003(c). The words "MOTORCYCLE HEALTH" must be:

(A) printed in all capital letters;

(B) printed in at least 8-point boldface font; and

(C) located in a prominent place on the card.

(2) The health insurance plan may elect to issue a card, separate from its customary identification card, titled "Motorcycle Health: Standard Proof of Health Insurance."

(A) The separate card must contain at least the following:

(i) a heading that includes only the words "Motorcycle Health: Standard Proof of Health Insurance;"

(ii) the carrier logo;

(iii) the carrier name;

(iv) the name of the enrollee, insured, or dependent of the enrollee or insured;

(v) the policy number; and

(vi) the statement: "[name of enrollee, insured, or dependent of the enrollee or insured] is covered by a health insurance plan that TITLE 28. INSURANCE Proposed Section Part I. Texas Department of Insurance Page 14 of 14 Chapter 21. Trade Practices

provides medical benefits for injuries incurred as a result of an accident while operating or riding on a motorcycle, as addressed by the Transportation Code §661.003(c)."

(B) All text printed on the separate card shall appear in upper and lower case as appropriate.

(C) The text body shall appear in at least 10 point regular type.

(D) The heading shall appear in at least 12 point boldface type.