CHAPTER 1253. CANCELLATION OF GROUP COVERAGE IN CERTAIN CIRCUMSTANCES
INSURANCE CODE
TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES
SUBTITLE B. GROUP HEALTH COVERAGE
CHAPTER 1253. CANCELLATION OF GROUP COVERAGE IN CERTAIN
CIRCUMSTANCES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1253.001. LIMITATION OF SERVICES AND BENEFITS ON CONTRACT
RENEGOTIATION. (a) In this section, "health benefit contract"
means a contract providing group health care coverage for
employees that is delivered, issued for delivery, or renewed in
this state by:
(1) an insurance company;
(2) a group hospital service corporation operating under Chapter
842; or
(3) a health maintenance organization operating under Chapter
843.
(b) Subject to Subsection (c), if an employer in this state
agrees to renegotiate a health benefit contract, a change in the
renegotiated contract may not operate solely to terminate
eligibility with respect to any member of the group who, before
the contract was renegotiated:
(1) was covered under the contract; and
(2) had a sickness or injury for which a service was being
provided or a benefit was being paid under the contract.
(c) A renegotiated health benefit contract may include a
different durational or dollar limit or a different deductible
amount or amount of coinsurance applicable to a sickness or
injury for which a service was being provided or benefit was
being paid before the contract was renegotiated if that same or a
similar limit or amount applies to a service provided or benefit
paid for a similar sickness or a related condition or injury
covered by the contract.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
SUBCHAPTER B. CONTINUATION OF GROUP ACCIDENT AND HEALTH INSURANCE
POLICIES DURING LABOR DISPUTE
Sec. 1253.051. APPLICABILITY OF SUBCHAPTER. This subchapter
applies to a group accident and health insurance policy that is
delivered or issued for delivery in this state and as to which
any part of the premium is paid or is to be paid by an employer
under the terms of a collective bargaining agreement.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1253.052. CONTINUATION OF GROUP ACCIDENT AND HEALTH
INSURANCE DURING LABOR DISPUTE REQUIRED FOR CERTAIN POLICIES. An
insurer may not deliver or issue for delivery a policy subject to
this subchapter unless the policy provides that if the employees
covered by the policy stop work because of a labor dispute,
coverage continues under the policy, on timely payment of the
premium, for each employee who:
(1) is covered under the policy on the date the work stoppage
begins;
(2) continues to pay the employee's individual contribution,
subject to the conditions provided by this subchapter; and
(3) assumes and pays during the work stoppage the contribution
due from the employer, subject to the conditions provided by this
subchapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1253.053. CONTRIBUTIONS IF POLICYHOLDER IS TRUSTEE. (a)
An employee's contribution for purposes of a policy as to which
the policyholder is a trustee or the trustees of a fund
established or maintained wholly or partly by the employer is the
amount the employee and employer would have been required to
contribute to the fund for the employee if:
(1) the work stoppage had not occurred; and
(2) the agreement requiring the employer to make contributions
to the fund were in effect.
(b) The policy may provide that continuation of coverage is
contingent on the collection of individual contributions by the
policyholder or the policyholder's agent.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1253.054. CONTRIBUTIONS IF POLICYHOLDER IS NOT TRUSTEE.
(a) A policy as to which the policyholder is not a trustee or
the trustees of a fund established or maintained in whole or in
part by the employer must provide that the employee's individual
contribution:
(1) is the policy rate applicable:
(A) on the date the work stoppage begins; and
(B) to an individual in the class to which the employee belongs
as provided by the policy; or
(2) if the policy does not provide for a rate applicable to an
individual, is an amount equal to the amount determined by
dividing:
(A) the total monthly premium in effect under the policy on the
date the work stoppage begins; by
(B) the total number of insureds under the policy on that date.
(b) The policy may provide that continuation of coverage under
this subchapter is contingent on the collection of individual
contributions by the union or unions representing the employees.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1253.055. PAYMENT OF CONTRIBUTION AND PREMIUM. A policy
may provide that continuation of coverage for an employee under
the policy is contingent on timely payment of:
(1) contributions by the employee; and
(2) the premium by the entity responsible for collecting the
individual employee contributions.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1253.056. PAST DUE PREMIUM. (a) A policy may provide that
the continuation of coverage is contingent on payment of any
premium that:
(1) is unpaid on the date the work stoppage begins; and
(2) became due before the date the work stoppage begins.
(b) A premium described by Subsection (a) must be paid before
the date the next premium becomes due under the policy.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1253.057. INDIVIDUAL PREMIUM RATE INCREASE. (a) A policy
may provide that, during the period of a work stoppage, each
individual premium rate shall be increased by an amount not to
exceed 20 percent of the amount shown in the policy, or a greater
percentage as approved by the commissioner, to provide sufficient
compensation to the insurer to cover increased:
(1) administrative costs; and
(2) mortality and morbidity.
(b) If a policy provides for a premium rate increase in
accordance with this section, the amount of an employee's
contribution must be increased by the same percentage.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1253.058. PREMIUM RATE CHANGE NOT LIMITED. (a) This
subchapter does not limit any right of the insurer under a policy
to increase or decrease a premium rate before, during, or after a
work stoppage if the insurer would be entitled to increase the
premium rate had a work stoppage not occurred.
(b) A change in a premium rate made in accordance with this
section takes effect on a date that is determined by the insurer
in accordance with the terms of the policy.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1253.059. LIMITATIONS ON CONTINUATION OF COVERAGE. This
subchapter does not require the continuation of coverage under a
policy for any loss of time benefits included in the policy or
the continuation of other coverage for a period:
(1) longer than six months after a work stoppage occurs;
(2) beyond the time that 75 percent of the covered employees
continue the coverage; or
(3) as to an individual covered employee, beyond the time that
the employee takes a full-time job with another employer.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1253.060. OTHER PROVISIONS; COMMISSIONER APPROVAL REQUIRED.
A policy may contain any other provision relating to
continuation of policy coverage during a work stoppage that the
commissioner approves.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.