Relating to health benefits offered by postsecondary educational institutions to students and their families, the official text

S.B. No. 1409

AN ACT

relating to health benefits offered by postsecondary educational

institutions to students and their families.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 1275.002, Insurance Code, is amended to

read as follows:

Sec. 1275.002. APPLICABILITY OF CHAPTER. This chapter

applies only to:

(1) a health benefit plan offered by a nonprofit

agricultural organization under Chapter 1682; [and]

(2) a health benefit plan:

(A) that is a self-insured or self-funded plan

established by an employer for the benefit of the employer's

employees in accordance with the Employee Retirement Income

Security Act of 1974 (29 U.S.C. Section 1001 et seq.); and

(B) for which the plan sponsor has made an

election, submitted to the commissioner in the form and manner

prescribed by the commissioner, to apply this chapter to the plan

for the relevant plan year; and

(3) a health benefit plan offered by a postsecondary

educational institution under Chapter 1683.

SECTION 2. Subtitle K, Title 8, Insurance Code, is amended

by adding Chapter 1683 to read as follows:

CHAPTER 1683. HEALTH BENEFITS PROVIDED BY CERTAIN POSTSECONDARY

EDUCATIONAL INSTITUTIONS

Sec. 1683.001. DEFINITIONS. In this chapter:

(1) "Higher education health benefits" means health

benefits:

(A) sponsored by a postsecondary educational

institution;

(B) offered only to:

(i) students enrolled at the postsecondary

educational institution; and

(ii) family members of students enrolled at

the postsecondary educational institution;

(C) that are not provided through an insurance

policy or other product the offering or issuance of which is

regulated as the business of insurance in this state; and

(D) that are deemed by the postsecondary

educational institution to be important in assisting its students

and their families to live long and productive lives.

(2) "Postsecondary educational institution" means an

institution of higher education or a private or independent

institution of higher education, as those terms are defined by

Section 61.003, Education Code.

(3) "Preexisting condition" means a condition present

before the effective date of an individual's enrollment in higher

education health benefits.

Sec. 1683.002. HIGHER EDUCATION HEALTH BENEFITS

AUTHORIZED. A postsecondary educational institution may offer in

this state higher education health benefits. A postsecondary

educational institution that offers higher education health

benefits under this chapter may not require a student to enroll in

the benefits.

Sec. 1683.003. WAITING PERIOD FOR PREEXISTING CONDITION.

Notwithstanding any other provision of this chapter, a

postsecondary educational institution that offers higher education

health benefits may not require a waiting period of more than six

months for treatment of a preexisting condition otherwise included

in higher education health benefits.

Sec. 1683.004. REQUIRED DISCLOSURE FOR HIGHER EDUCATION

HEALTH BENEFITS. (a) A postsecondary educational institution that

offers higher education health benefits must provide to an

individual applying for higher education health benefits written

notice that the benefits are not provided through an insurance

policy or other product the offering or issuance of which is

regulated as the business of insurance in this state.

(b) An individual must sign and return to the postsecondary

educational institution the notice described by Subsection (a)

before the individual may enroll in higher education health

benefits. The postsecondary educational institution must:

(1) maintain a copy of the signed written notice for

the duration of the term during which the higher education health

benefits are provided to the individual; and

(2) at the request of the individual, provide a copy of

the written notice to the individual.

Sec. 1683.005. POSTSECONDARY EDUCATIONAL INSTITUTION NOT

ENGAGED IN BUSINESS OF HEALTH INSURANCE; REGISTRATION REQUIRED.

(a) Notwithstanding any other provision of this code, for the

purposes of offering higher education health benefits, a

postsecondary educational institution that acts in accordance with

this chapter is not a health insurer and is not engaging in the

business of health insurance in this state.

(b) A postsecondary educational institution that offers

higher education health benefits must register with the department

and provide information as needed to facilitate compliance with

Chapter 1467, as applicable to those benefits under Section

1275.004.

Sec. 1683.006. RISK TRANSFER OR COVERAGE. A postsecondary

educational institution that offers higher education health

benefits under this chapter may contract with a company authorized

to engage in the business of insurance in this state that is not

under common control with the postsecondary educational

institution to:

(1) transfer to that company all or a portion of the

organization's risks arising from higher education health benefits

offered under this chapter; or

(2) obtain insurance coverage from the company

guarantying the postsecondary educational institution's

obligations arising from higher education health benefits offered

under this chapter.

Sec. 1683.007. ACTUARIAL SOUNDNESS. (a) A postsecondary

educational institution that offers higher education health

benefits under this chapter shall administer the benefits in a

manner that is actuarially sound.

(b) The postsecondary educational institution shall ensure

the higher education health benefits offered by the postsecondary

educational institution are actuarially sound by:

(1) obtaining an actuarial opinion from an actuary who

is a fellow of the Society of Actuaries or a member of the American

Academy of Actuaries that recommends the amount of cash reserves

and the level of specific and aggregate stop-loss insurance the

postsecondary educational institution should maintain for purposes

of administering the benefits; and

(2) maintaining the levels of cash reserves and

stop-loss insurance recommended by the actuarial opinion obtained

under Subdivision (1).

SECTION 3. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.

______________________________
______________________________

President of the Senate
Speaker of the House

I hereby certify that S.B. No. 1409 passed the Senate on

April 16, 2025, by the following vote: Yeas 29, Nays 2.

______________________________

Secretary of the Senate

I hereby certify that S.B. No. 1409 passed the House on

April 29, 2025, by the following vote: Yeas 104, Nays 39, two

present not voting.

______________________________

Chief Clerk of the House

Approved:

______________________________

Date

______________________________

Governor