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Signed Into Law
Signed June 20, 2025Effective 2025-06-20
HB2221

Regular Session

Relating to certain trade practices related to life insurance, annuity contracts, and accident and health coverage.

Government Affairs & Regulatory Compliance Analysis

HB2221: Government Affairs Overview

HB2221 fundamentally alters Texas anti-rebating laws, permitting life and health insurers to offer value-added services (VAS), meals, and gifts under strict new documentation standards. This legislation affects all carriers, agents, and HMOs, requiring immediate updates to marketing protocols and vendor data privacy agreements before the January 1, 2026, operational rollout.

Rep. Lacey Hull·House Bill·Regular Session

Moderate
Low Cost
Effective:2025-06-20
Business Impact

Who HB2221 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: moderate

Notable regulatory updates (effective 2025-06-20). Consider how these changes may affect your operations.

🏦

Banking & Finance

Affected business types:

  • Banks
  • Credit unions
  • Financial services firms
  • Insurance companies
View all banking & finance legislation
🏥

Healthcare

Affected business types:

  • Hospitals
  • Healthcare systems
  • Medical practices
  • Health insurance providers
View all healthcare legislation

Key Operational Considerations

  • 1Vendor Master Services Agreements (MSAs): You must amend contracts with third-party wellness, telematics, or risk-mitigation vendors. Insert clauses requiring them to:
  • 2Sales Force Training: Agents must be retrained on the distinction between a "promotional item" (capped at $25) and a "value-added service" (requires objective criteria).
  • 3IT/UX Development: Web developers must update digital enrollment flows to include a mandatory "Opt-In" checkbox for any service utilizing data tracking or wearables.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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HB2221
Relating to certain trade practices related to life insurance, annuity contracts, and accident and health coverage.
Moderate Urgency
Unanimous Passage
House Vote132 - 0
YEA
100% in favor132 voting
Senate Vote31 - 0
YEA
100% in favor31 voting
Cost Impact
Low
Effective
2025-06-20
Enforcing Agencies
Texas Department of Insurance
Primary Author: Rep. Lacey Hull
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: June 20, 2025 (Statutory effective date).
  • Compliance Deadline: January 1, 2026. The operational mandates apply specifically to policies delivered, issued for delivery, or renewed on or after this date.
  • Agency Rulemaking: The Texas Department of Insurance (TDI) is required to define the specific monetary cap for "reasonable" meals, gifts, and raffle prizes. Regulatory Gray Zone: Between June 20, 2025, and the publication of TDI rules, you must rely on conservative internal caps to avoid enforcement actions.

Immediate Action Plan

  • 1. Audit Current Offerings: Immediately review all current "free" services or perks to ensure they meet the statutory definition of risk mitigation or health enhancement under Sec. 1702.002(5).
  • 2. Draft "Objective Criteria": Create the required internal documentation for all approved value-added services to satisfy the non-discrimination requirement.
  • 3. Update Digital Flows: Direct IT to build the "Opt-In" consent mechanism for any tracking devices or apps effective for Jan 1, 2026 renewals.
  • 4. Monitor TDI Bulletins: Assign a compliance officer to watch weekly for the Commissioner’s ruling on the monetary cap for gifts and meals.

Operational Changes Required

Contracts

  • Vendor Master Services Agreements (MSAs): You must amend contracts with third-party wellness, telematics, or risk-mitigation vendors. Insert clauses requiring them to:
  • 1. Obtain explicit consumer consent before activating any tracking device or app.
  • 2. Indemnify the insurer for data privacy violations under Chapter 1702.
  • Agent/Agency Agreements: Update guidelines to explicitly state the $25 limit on promotional items and the pending "reasonable" cap on meals to prevent agents from inadvertently triggering rebating violations.

Hiring/Training

  • Sales Force Training: Agents must be retrained on the distinction between a "promotional item" (capped at $25) and a "value-added service" (requires objective criteria).
  • IT/UX Development: Web developers must update digital enrollment flows to include a mandatory "Opt-In" checkbox for any service utilizing data tracking or wearables.

Reporting & Record-Keeping

  • Objective Criteria File: You must create and maintain an internal compliance document for every Value-Added Service offered. This document must detail the specific, non-discriminatory criteria used to determine consumer eligibility. It must be produced immediately upon TDI request.
  • Annuity Waiver Notices: If offering to waive surrender charges, you must generate a written notice or web disclosure provided to the consumer at the time of the offer.
  • Consent Logs: You must maintain auditable logs of consumer consent for any data-tracking devices.

Fees & Costs

  • No New State Fees: There are no new filing fees associated with this bill.
  • Operational Costs: Budget for legal review of marketing materials and IT costs associated with updating consent workflows.

Strategic Ambiguities & Considerations

  • The "Reasonable" Cap: The statute permits meals and gifts of a "reasonable amount determined by the commissioner." TDI has not yet set this figure. Risk: Do not launch expensive marketing campaigns involving meals or non-cash gifts until TDI publishes this specific dollar amount or percentage.
  • "Related to" Coverage: The law requires VAS to "relate to" the insurance coverage. The boundary between a legitimate wellness perk (e.g., a gym membership) and an illegal inducement (e.g., a streaming subscription) remains subject to TDI interpretation.

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JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

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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.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed
Jan 29, 2025
Passed House
May 2, 2025
Passed Senate
May 26, 2025
Signed
Jun 20, 2025
Effective
Jun 20, 2025
TopicsBusiness & CommerceBusiness & Commerce--trade PracticesInsuranceInsurance--health & AccidentInsurance--insurers & AgentsInsurance--life & AnnuitiesHealth Maintenance OrganizationsInsurance, Commissioner of
03

House Authors

Rep. Lacey HullRepublican · Primary Author

Senate Sponsor

Sen. Kelly HancockRepublican · Primary Sponsor

Bill Text(with markup)

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View bill text in multiple formats on Texas Legislature website

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Quick Reference

Frequently Asked Questions

Common questions about HB2221

Q

What does Texas HB2221 do?

HB2221 fundamentally alters Texas anti-rebating laws, permitting life and health insurers to offer value-added services (VAS), meals, and gifts under strict new documentation standards. This legislation affects all carriers, agents, and HMOs, requiring immediate updates to marketing protocols and vendor data privacy agreements before the January 1, 2026, operational rollout.

Q

Who authored HB2221?

HB2221 was authored by Texas Representative Lacey Hull during the Regular Session.

Q

When was HB2221 signed into law?

HB2221 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce HB2221?

HB2221 is enforced by Texas Department of Insurance.

Q

How significant are the changes in HB2221?

The regulatory priority for HB2221 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of HB2221?

The cost impact of HB2221 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does HB2221 address?

HB2221 addresses topics including business & commerce, business & commerce--trade practices, insurance, insurance--health & accident and insurance--insurers & agents.

Q

What are the key dates for HB2221?

Key dates for HB2221: Effective date is 2025-06-20. Rulemaking: Determine and publish the specific monetary cap considered 'reasonable' for non-cash gifts, meals, and raffle prizes (Sec. 1702.053). (Prior to January 1, 2026 (Operational Necessity)); Adopt rules necessary to implement Chapter 1702 regarding uniform standards for value-added services. (Discretionary). Consult with legal counsel rega

Q

What are the penalties under HB2221?

HB2221 establishes the following penalties: administrative penalty of Standard Insurance Code sanctions (suspension, revocation, administrative penalties) for Using tracking devices for value-added services without explicit disclosure and consumer consent.; administrative penalty of Standard Insurance Code sanctions for Offering value-added services in an unfairly discriminatory manner or without documented objective criteria.. Consult with legal counsel for specific applicability to your situation.

Q

Which Texas businesses are affected by HB2221?

HB2221 primarily affects Texas businesses and commercial enterprises, insurance companies and financial institutions, healthcare providers and medical facilities. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026