HB 709

relating to the requirement and study of insurance coverage for
serious emotional disturbance of a child.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 1355.001, Insurance Code, is amended by
adding Subdivision (5) to read as follows:
(5)  "Serious emotional disturbance of a child" means a
diagnosable mental, behavioral, or emotional disorder of
sufficient duration to meet diagnostic criteria specified in the
Diagnostic and Statistical Manual of Mental Disorders that results
in functional impairment that substantially interferes with or
limits a child's role or functioning in family, school, or
(A)  has been diagnosed or identified, as
applicable, in a person who is at least three years of age and
younger than 18 years of age by:
(i)  a physician licensed to practice
medicine in this state and practicing within the scope of the
(ii)  a psychologist, licensed professional
counselor, licensed marriage and family therapist, or licensed
clinical social worker licensed to practice in this state and
practicing within the scope of the applicable license; and
(B)  meets at least one of the following criteria:
(i)  the disorder substantially impairs the
person's ability in at least two of the following activities or
(b)  engaging in family relationships;
(d)  functioning in the community;
(ii)  the disorder creates a risk that the
person will be removed from the person's home and placed in a more
restrictive environment, including in a facility or program
operated by the Department of Family and Protective Services or an
agency that is part of the juvenile justice system;
(iii)  the disorder causes the person to:
(a)  display psychotic features or
(b)  pose a danger to the person's self
(iv)  the disorder results in the person
meeting state special education eligibility requirements for
SECTION 2.  Subchapter A, Chapter 1355, Insurance Code, is
amended by adding Section 1355.0041 to read as follows:
Sec. 1355.0041.  REQUIRED COVERAGE FOR SERIOUS EMOTIONAL
DISTURBANCE OF A CHILD.  (a)  A group health benefit plan:
(1)  must provide coverage for serious emotional
disturbance of a child, based on medical necessity, for not less
than the following treatments in each calendar year:
(A)  45 days of inpatient treatment; and
(B)  60 visits for outpatient treatment,
including group and individual outpatient treatment;
(2)  may not include a lifetime limitation on the
number of days of inpatient treatment or the number of visits for
outpatient treatment covered under the plan; and
(3)  must include the same amount limitations,
deductibles, copayments, and coinsurance factors for serious
emotional disturbance of a child as the plan includes for physical
(b)  A group health benefit plan issuer:
(1)  may not count an outpatient visit for medication
management against the number of outpatient visits required to be
covered under Subsection (a)(1)(B); and
(2)  must provide coverage for an outpatient visit
described by Subsection (a)(1)(B) under the same terms as the
coverage the issuer provides for an outpatient visit for the
(c)  The department shall conduct a study to determine and
evaluate the extent to which enrollees are making claims under
coverage for serious emotional disturbance of a child and the
impact, if any, the coverage for serious emotional disturbance of a
child and the claims have on the cost of the coverage for group
(d)  Not later than December 1, 2026, the department shall
submit to the governor, the lieutenant governor, the speaker of the
house of representatives, and the appropriate standing committees
of the legislature a report regarding the results of the study
required by Subsection (c), together with any recommendations for
(e)  This subsection and Subsections (c) and (d) expire
SECTION 3.  Sections 1355.005 and 1355.007, Insurance Code,
are amended to read as follows:
Sec. 1355.005.  MANAGED CARE PLAN AUTHORIZED.  A group
health benefit plan issuer may provide or offer coverage required
by Section 1355.004 or 1355.0041 through a managed care plan.
Sec. 1355.007.  SMALL EMPLOYER COVERAGE.  An issuer of a
group health benefit plan to a small employer must offer the
coverage described by Section 1355.004 or 1355.0041 to the employer
but is not required to provide the coverage if the employer rejects
SECTION 4.  Section 1355.054(a), Insurance Code, is amended
(a)  Benefits of coverage provided under this subchapter may
be used only in a situation in which:
(1)  the covered individual has a serious mental
illness or serious emotional disturbance of a child as defined by
Section 1355.001 that requires confinement of the individual in a
hospital unless treatment is available through a residential
treatment center for children and adolescents or a crisis
(2)  the covered individual's mental illness or
(A)  substantially impairs the individual's
thought, perception of reality, emotional process, or judgment; or
(B)  as manifested by the individual's recent
disturbed behavior, grossly impairs the individual's behavior.
SECTION 5.  The change in law made by this Act applies only
to a group health benefit plan that is delivered, issued for
delivery, or renewed on or after January 1, 2026. A group health
benefit plan that is delivered, issued for delivery, or renewed
before January 1, 2026, is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 6.  This Act takes effect September 1, 2025.