Shown verbatim: the complete text as captured from the official PDF posted by the Tennessee General Assembly, fetched 2026-09-25. Page and line markers are part of the official record; nothing is edited or removed. This is the chaptered version. The official bill page.
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$tate of \!Cennessee
PUBLIC CHAPTER NO. 1036
HOUSE BILL NO. 2503
By Mr. Speaker Sexton, Representatives Williams, Lafferty
Substituted for: Senate Bill No. 2557
By Senators Reeves, Gardenhire
AN ACT to amend Tennessee Code Annotated, Title 3; Title 4; Title 5; Title 6; Title 7;
Title 8; Title 10; Title 12; Title 29; Title 35; Title 36; Title 37; Title 39; Title 40; Title 41; Title 42;
Title 45; Title 47; Title 49; Title 50; Title 52; Title 53; Title 56; Title 58; Title 63; Title 67; Title 68
and Title 71, relative to health insurance.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 56, Chapter 7, Part 10, is amended by
adding the following as new sections:
(a) As used in this section:
(1) "Department" means the department of commerce and insurance;
(2) "Health insurance entity" means an entity subject to the insurance
laws of this state, or subject to the jurisdiction of the commissioner, that contracts
or offers to contract to provide health insurance coverage, including an insurance
company, a health maintenance organization, or a nonprofit hospital and medical
service corporation;
(3) "Marketplace" means the federally facilitated marketplace for health
insurance policies sold in accordance with the federal Patient Protection and
Affordable Care Act (42 U.S.C. § 18011 et seq.) for this state; and
(4) "Per term" means the applicable duration or period of time for a
specific policy provision in a health insurance plan offered in accordance with this
section, including the timeframe during which a deductible or maximum allotted
benefit accumulates and is calculated.
(b) A health insurance entity may offer a short-term limited-duration plan on the
marketplace if the plan:
(1) Provides no less than the following minimum coverage and benefits:
(A) A per person deductible of no more than ten thousand dollars
($10,000) per term;
(8) A per family deductible for all covered family members of no
more than ten thousand dollars ($10,000) per term;
(C) A coinsurance of no more than twenty percent (20%) per term;
(D) A maximum out-of-pocket coinsurance of ·no more than five
thousand dollars {$5,000) per term;
(E) A maximum benefit, per person, per term, of one million
dollars ($1,000,000);
(F) Coverage with a copay of no more than fifty dollars ($50.00)
per person, per term, for a visit with a physician for the enrollee's history
and exam only;
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(G) Coverage with a copay of no more than fifty dollars ($50.00)
per person, per term, for an urgent care visit;
(H) A copay of no more than twenty percent (20%) of the
reasonable and customary charges for:
(i) A preventative care visit;
(ii) An emergency room visit for accident or illness;
(iii) An inpatient hospital service;
(iv) An outpatient surgery;
(v) A lab; and
(vi) An x-ray; and
(I) Four (4) tiers of pharmacy benefits for outpatient prescription
drugs as follows:
(i) For the first tier, coverage of preferred generic drugs
with a copay of no more than twenty-five dollars ($25.00) and no
deductible;
(ii) For the second tier, coverage of generic drugs;
(iii) For the third tier, coverage of preferred brand drugs;
and
(iv) For the fourth tier, coverage of non-preferred generic
and non-preferred brand name drugs; and
(2) Complies with the duration limitations or requirements imposed by
federal law for a short-term limited-duration plan to be offered on the
marketplace.
(c) Except as provided under subsection (d):
(1) A health insurance entity offering a plan pursuant to this section may
require an individual to meet eligibility requirements to enroll in the plan;
(2) A plan offered pursuant to this section must comply with § 56-7-2356;
and
(3) A health insurance entity may offer benefits or coverage under a
short-term limited-duration plan on the marketplace that exceed the minimum
requirements of subsection (b).
(d) If this section conflicts with federal law, then the federal law controls to the
extent of the conflict.
(e) The department shall promulgate rules to effectuate this section. The rules
must be promulgated in accordance with the Uniform Administrative Procedures Act,
compiled in title 4, chapter 5.
SECTION 2. Tennessee Code Annotated, Title 56, Chapter 7, Part 10, is amended by
adding the following as a new section:
(a) As used in this section:
(1) "Department" means the department of commerce and insurance;
(2) "Health insurance entity" means an entity subject to the insurance
laws of this state, or subject to the jurisdiction of the commissioner, that contracts
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or offers to contract to provide health insurance coverage, including an insurance
company, a health maintenance organization, or a nonprofit hospital and medical
service corporation;
(3) "Hospital indemnity coverage" means coverage that provides benefits
on an independent, noncoordinated basis and that pays a fixed amount for
specified events without regard to other insurance;
(4) "Marketplace" means the federally facilitated marketplace for health
insurance policies sold in accordance with the federal Patient Protection and
Affordable Care Act (42 U.S.C. § 18011 et seq.) for this state; and
(5) "Per term" means the applicable duration or period of time for a
specific policy provision in a health insurance plan offered in accordance with this
section, including the timeframe during which a deductible or maximum allotted
benefit accumulates and is calculated.
(b) A health insurance entity may offer hospital indemnity coverage on the
marketplace if the coverage allows an individual to choose from five (5) tiers that provide
at least the following coverage:
(1) For the first tier, a deductible of no more than two thousand five
hundred dollars ($2,500);
(2) For the second tier, a deductible of no more than five thousand dollars
($5,000);
(3) For the third tier, a deductible of no more than seven thousand five
hundred dollars ($7,500);
(4) For the fourth tier, a deductible of no more than ten thousand dollars
($10,000); and
(5) For the fifth tier, a deductible of no more than fifteen thousand dollars
($15,000).
(c) Except as provided under subsection (d):
(1) A health insurance entity offering coverage pursuant to this section
may require an individual to meet eligibility requirements to enroll in the
coverage;
(2) Coverage offered pursuant to this section must comply with § 56-7-
2356; and
(3) A health insurance entity may offer benefits or coverage under a
hospital indemnity policy on the marketplace that exceed_ the minimum
requirements of subsection (b).
(d) If this section conflicts with federal law, then the federal law controls to the
extent of the conflict.
(e) The department shall promulgate rules to effectuate this section. The rules
must be promulgated in accordance with the Uniform Administrative Procedures Act,
compiled in title 4, chapter 5.
SECTION 3. The commissioner of commerce and insurance shall notify the revisor of
statutes in the general assembly's office of legal services within thirty (30) days of the date a
federal law or regulation goes into effect allowing the sale of short-term limited-duration plans or
hospital indemnity coverage on the marketplace.
SECTION 4.
(a) Notwithstanding another law to the contrary, Section 1 of this act takes effect
on the thirtieth day following the passage or issuance of a federal law or regulation
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allowing the sale of short-term limited-duration plans on the marketplace, the public
welfare requiring it.
(b) Notwithstanding another law to the contrary, Section 2 of this act takes effect
on the thirtieth day following the passage or issuance of a federal law or regulation
allowing the sale of hospital indemnity coverage on the marketplace, the public welfare
requiring it.
(c) Section 3 of this act takes effect upon becoming a law, the public welfare
requiring it.
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HOUSE BILL NO. 2503
PASSED: April 21, 2026
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CAMERON SEXTON, SPEAKER
HOUSE OF REPRESENTATIVES
RANDY ~NALLY
SPEAKER OF THE ~ENATE
APPROVED this ;ll ~t day of ~ . 2026
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BILL LEE;"'GOVEKNUKEvery fact on this page links to its source, starting with the official bill record.