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HB2655

Regular Session

Relating to operation by certain nonprofit organizations of certain regional health care programs for employees of small employers.

Low
Low Cost
Effective:2025-09-01
HB2655
Relating to operation by certain nonprofit organizations of certain regional health care programs for employees of small employers.
Low Urgency
Unanimous Passage
House Vote127 - 0
YEA
100% in favor127 voting
Senate Vote31 - 0
YEA
100% in favor31 voting
Cost Impact
Low
Effective
2025-09-01
Enforcing Agencies
TDI
Primary Author: Rep. Tom Oliverson
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025
  • Compliance Deadline: January 1, 2026 (Recommended). While legal authority vests in September, the practical operational window aligns with the standard benefits plan year beginning January 1.
  • Agency Rulemaking: High Probability of Regulatory Guidance. While the statute does not explicitly mandate a rulemaking schedule, the Texas Department of Insurance (TDI) will likely issue guidance to distinguish these "premium assistance" vehicles from Multiple Employer Welfare Arrangements (MEWAs) or unauthorized insurance products.

Immediate Action Plan

  • 1. Bylaw Review (Q1 2025): Determine if your nonprofit’s charter allows for the governance of a health assistance program.
  • 2. Feasibility Study (Q2 2025): Conduct an actuarial analysis to determine if a premium assistance model offers genuine value to your small business members compared to the open market.
  • 3. Legal Structuring (Q3 2025): Retain counsel to draft the Program Participation Agreement and ensure the funds flow does not constitute "the business of insurance."
  • 4. Go-Live (Sept 2025): Formally charter the program committee upon the law's effective date.

Operational Changes Required

Contracts

  • Program Participation Agreements: Nonprofits must draft new agreements with participating small employers. These contracts must explicitly define the arrangement as "premium assistance" (financial subsidy) rather than "health coverage" to avoid triggering insurance code liabilities.
  • Governance Charters: Bylaws for participating nonprofits must be amended to accept the governance role previously held by the county commissioners court.
  • Vendor Agreements: Contracts with Third-Party Administrators (TPAs) must be updated to reflect that the nonprofit, not the county, is the contracting fiduciary.

Hiring/Training

  • Fiduciary Training: Board members of the operating nonprofit must receive training on fiduciary duties regarding the management of designated health funds.
  • Benefits Administration: Staff must be trained to verify "small employer" status (2–50 employees) and ensure funds are applied strictly to premium assistance, not direct medical service payments.

Reporting & Record-Keeping

  • Fund Segregation: You must establish strict accounting protocols to segregate premium assistance funds from the nonprofit’s general operating accounts. Commingling funds will create significant legal exposure.
  • Eligibility Audits: Maintain auditable records proving that all beneficiaries are employees of qualified small employers within the nonprofit’s operational region.

Fees & Costs

  • Insurance Costs: Nonprofits assuming this role must purchase Fiduciary Liability Insurance and potentially specific Errors & Omissions (E&O) coverage, as sovereign immunity protections applicable to county-run programs will not apply.
  • Legal Setup: Budget for outside counsel to structure the program to avoid classification as an unauthorized insurer by TDI.

Strategic Ambiguities & Considerations

  • Definition of "Premium Assistance": The statute distinguishes this from "health care services" but does not define the boundaries of assistance. It is unclear if the nonprofit can aggregate funds to purchase a group policy or if it is restricted to reimbursing individual market premiums. Conservative Position: Assume the latter until TDI clarifies.
  • Geographic Jurisdiction: The law authorizes operation in the "county in which a participating nonprofit organization operates." For statewide associations, it is ambiguous whether this authorizes a statewide program or requires county-by-county implementation.
  • Solvency Oversight: The removal of county oversight leaves a regulatory vacuum regarding financial solvency. Expect TDI to aggressively interpret existing insurance codes to fill this gap if programs fail to pay.

Need Help Understanding Implementation?

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Feb 11, 2025
Passed House
May 16, 2025
Passed Senate
May 28, 2025
Signed
Jun 20, 2025
TopicsBusiness & CommerceBusiness & Commerce--small Business & Minority BusinessCharitable & Nonprofit OrganizationsInsuranceInsurance--health & Accident
03

House Authors

Rep. Tom OliversonRepublican · Primary Author
Coauthors (1)

Senate Sponsor

Sen. Juan HinojosaDemocrat · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

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More from Rep. Tom Oliverson

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Quick Reference

Frequently Asked Questions

Common questions about HB2655

Q

What does Texas HB2655 do?

HB2655 deregulates the governance of regional health care programs for small employers, authorizing nonprofit organizations to operate "premium assistance programs" without obtaining county commissioners court approval. This legislation shifts control from local government to the private nonprofit sector, creating a new vehicle for trade associations and chambers of commerce to subsidize health costs for members effective September 1, 2025. Implementation Timeline Effective Date: September 1, 2025 Compliance Deadline: January 1, 2026 (Recommended).

Q

Who authored HB2655?

HB2655 was authored by Texas Representative Tom Oliverson during the Regular Session.

Q

When was HB2655 signed into law?

HB2655 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce HB2655?

HB2655 is enforced by Texas Department of Insurance (TDI).

Q

How urgent is compliance with HB2655?

The compliance urgency for HB2655 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

Q

What is the cost impact of HB2655?

The cost impact of HB2655 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does HB2655 address?

HB2655 addresses topics including business & commerce, business & commerce--small business & minority business, charitable & nonprofit organizations, insurance and insurance--health & accident.

Legislative data provided by LegiScanLast updated: November 25, 2025

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