CHAPTER 1501. HEALTH INSURANCE PORTABILITY AND AVAILABILITY ACT
INSURANCE CODE
TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES
SUBTITLE G. HEALTH COVERAGE AVAILABILITY
CHAPTER 1501. HEALTH INSURANCE PORTABILITY AND AVAILABILITY ACT
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1501.001. SHORT TITLE. This chapter may be cited as the
Health Insurance Portability and Availability Act.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.002. DEFINITIONS. In this chapter:
(1) "Agent" means a person who may act as an agent for the sale
of a health benefit plan under a license issued under Title 13.
(2) "Dependent" means:
(A) a spouse;
(B) a child younger than 25 years of age, including a newborn
child;
(C) a child of any age who is:
(i) medically certified as disabled; and
(ii) dependent on the parent;
(D) an individual who must be covered under:
(i) Section 1251.154; or
(ii) Section 1201.062; and
(E) any other child eligible under an employer's health benefit
plan, including a child described by Section 1503.003.
(3) "Eligible employee" means an employee who works on a
full-time basis and who usually works at least 30 hours a week.
The term includes a sole proprietor, a partner, and an
independent contractor, if the individual is included as an
employee under a health benefit plan of a small or large
employer. The term does not include an employee who:
(A) works on a part-time, temporary, seasonal, or substitute
basis;
(B) is covered under:
(i) another health benefit plan; or
(ii) a self-funded or self-insured employee welfare benefit plan
that provides health benefits and is established in accordance
with the Employee Retirement Income Security Act of 1974 (29
U.S.C. Section 1001 et seq.); or
(C) elects not to be covered under the employer's health benefit
plan and is covered under:
(i) the Medicaid program;
(ii) another federal program, including the CHAMPUS program or
Medicare program; or
(iii) a benefit plan established in another country.
(4) "Employee" means an individual employed by an employer.
(5) "Health benefit plan" means a group, blanket, or franchise
insurance policy, a certificate issued under a group policy, a
group hospital service contract, or a group subscriber contract
or evidence of coverage issued by a health maintenance
organization that provides benefits for health care services. The
term does not include:
(A) accident-only or disability income insurance coverage or a
combination of accident-only and disability income insurance
coverage;
(B) credit-only insurance coverage;
(C) disability insurance coverage;
(D) coverage for a specified disease or illness;
(E) Medicare services under a federal contract;
(F) Medicare supplement and Medicare Select benefit plans
regulated in accordance with federal law;
(G) long-term care coverage or benefits, nursing home care
coverage or benefits, home health care coverage or benefits,
community-based care coverage or benefits, or any combination of
those coverages or benefits;
(H) coverage that provides limited-scope dental or vision
benefits;
(I) coverage provided by a single service health maintenance
organization;
(J) workers' compensation insurance coverage or similar
insurance coverage;
(K) coverage provided through a jointly managed trust authorized
under 29 U.S.C. Section 141 et seq. that contains a plan of
benefits for employees that is negotiated in a collective
bargaining agreement governing wages, hours, and working
conditions of the employees that is authorized under 29 U.S.C.
Section 157;
(L) hospital indemnity or other fixed indemnity insurance
coverage;
(M) reinsurance contracts issued on a stop-loss, quota-share, or
similar basis;
(N) short-term major medical contracts;
(O) liability insurance coverage, including general liability
insurance coverage and automobile liability insurance coverage,
and coverage issued as a supplement to liability insurance
coverage, including automobile medical payment insurance
coverage;
(P) coverage for on-site medical clinics;
(Q) coverage that provides other limited benefits specified by
federal regulations; or
(R) other coverage that:
(i) is similar to the coverage described by this subdivision
under which benefits for medical care are secondary or incidental
to other coverage benefits; and
(ii) is specified by federal regulations.
(6) "Health benefit plan issuer" means an entity authorized
under this code or another insurance law of this state that
provides health insurance or health benefits in this state,
including:
(A) an insurance company;
(B) a group hospital service corporation operating under Chapter
842;
(C) a health maintenance organization operating under Chapter
843; and
(D) a stipulated premium company operating under Chapter 884.
(7) "Health status related factor" means:
(A) health status;
(B) medical condition, including both physical and mental
illness;
(C) claims experience;
(D) receipt of health care;
(E) medical history;
(F) genetic information;
(G) evidence of insurability, including conditions arising out
of acts of family violence; and
(H) disability.
(8) "Large employer" means a person who employed an average of
at least 51 eligible employees on business days during the
preceding calendar year and who employs at least two employees on
the first day of the plan year. The term includes a governmental
entity subject to Article 3.51-1, 3.51-4, or 3.51-5, to
Subchapter C, Chapter 1364, to Chapter 1578, or to Chapter 177,
Local Government Code, that otherwise meets the requirements of
this subdivision. For purposes of this definition, a partnership
is the employer of a partner.
(9) "Large employer health benefit plan" means a health benefit
plan offered to a large employer.
(10) "Large employer health benefit plan issuer" means a health
benefit plan issuer, to the extent that the issuer is offering,
delivering, issuing for delivery, or renewing health benefit
plans subject to Subchapters C and M.
(11) "Person" means an individual, corporation, partnership, or
other legal entity.
(12) "Preexisting condition provision" means a provision that
excludes or limits coverage as to a disease or condition for a
specified period after the effective date of coverage.
(13) "Premium" means all amounts paid by a small or large
employer and eligible employees as a condition of receiving
coverage from a small or large employer health benefit plan
issuer, including any fees or other contributions associated with
a health benefit plan.
(14) "Small employer" means a person who employed an average of
at least two employees but not more than 50 eligible employees on
business days during the preceding calendar year and who employs
at least two employees on the first day of the plan year. The
term includes a governmental entity subject to Article 3.51-1,
3.51-4, or 3.51-5, to Subchapter C, Chapter 1364, to Chapter
1578, or to Chapter 177, Local Government Code, that otherwise
meets the requirements of this subdivision. For purposes of this
definition, a partnership is the employer of a partner.
(15) "Small employer health benefit plan" means a health benefit
plan developed by the commissioner under Subchapter F or any
other health benefit plan offered to a small employer in
accordance with Section 1501.252(c) or 1501.255.
(16) "Small employer health benefit plan issuer" means a health
benefit plan issuer, to the extent that the issuer is offering,
delivering, issuing for delivery, or renewing health benefit
plans subject to Subchapters C-H.
(16-a) "Small employer health coalition" means a private
purchasing cooperative composed solely of small employers that is
formed under Subchapter B.
(17) "Waiting period" means a period established by an employer
that must elapse before an individual who is a potential enrollee
in a health benefit plan is eligible to be covered for benefits.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.046(a), eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 2G.013, eff. April 1, 2009.
Sec. 1501.003. APPLICABILITY: SMALL EMPLOYER HEALTH BENEFIT
PLANS. An individual or group health benefit plan is a small
employer health benefit plan subject to Subchapters C-H if it
provides health care benefits covering two or more eligible
employees of a small employer and:
(1) the employer pays a portion of the premium or benefits;
(2) the employer or a covered individual treats the health
benefit plan as part of a plan or program for purposes of Section
106 or 162, Internal Revenue Code of 1986 (26 U.S.C. Section 106
or 162); or
(3) the health benefit plan is an employee welfare benefit plan
under 29 C.F.R. Section 2510.3-1(j).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.004. APPLICABILITY: LARGE EMPLOYER HEALTH BENEFIT
PLANS. An individual or group health benefit plan is a large
employer health benefit plan subject to Subchapters C and M if
the plan provides health care benefits to eligible employees of a
large employer and:
(1) the employer pays a portion of the premium or benefits;
(2) the employer or a covered individual treats the health
benefit plan as part of a plan or program for purposes of Section
106 or 162, Internal Revenue Code of 1986 (26 U.S.C. Section 106
or 162); or
(3) the health benefit plan is an employee welfare benefit plan
under 29 C.F.R. Section 2510.3-1(j).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.005. EXCEPTION: CERTAIN INDIVIDUALLY UNDERWRITTEN
POLICIES. Except as provided by Section 1501.003 or 1501.004,
this chapter does not apply to an individual health insurance
policy that is subject to individual underwriting, even if the
premium is paid through a payroll deduction method.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.006. CERTIFICATION. (a) In accordance with rules
adopted by the commissioner, each health benefit plan issuer
shall certify that the issuer is offering, delivering, issuing
for delivery, or renewing, or that the issuer intends to offer,
deliver, issue for delivery, or renew:
(1) a health benefit plan to or through a small employer in this
state that is subject to this chapter; or
(2) a health benefit plan to or through a large employer in this
state that is subject to this chapter.
(b) A health benefit plan issuer must submit a revised
certification to the commissioner only if the issuer changes its
status as a small or large employer health benefit plan issuer or
changes its intent to become a small or large employer health
benefit plan issuer to the extent that its previous certification
ceases to be accurate.
(c) The certification must include a statement that the health
benefit plan issuer is complying with this chapter to the extent
it applies to the issuer.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.007. AFFILIATES. (a) In this section, "affiliate"
has the meaning described by Section 823.003.
(b) For purposes of this chapter, health benefit plan issuers
that are affiliates or that are eligible to file a consolidated
tax return are considered to be one issuer, and a restriction
imposed by this chapter applies as if the health benefit plans
delivered or issued for delivery to small employers in this state
by the affiliates were issued by one issuer.
(c) Notwithstanding Subsection (b), a health maintenance
organization that is an affiliate is considered to be a separate
health benefit plan issuer for purposes of this chapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.008. LATE ENROLLEES. (a) For purposes of this
chapter, an employee or dependent eligible for enrollment in a
small or large employer's health benefit plan is a late enrollee
if the individual requests enrollment after the expiration of:
(1) the initial enrollment period established under the terms of
the first plan for which the individual was eligible through the
small or large employer; or
(2) an open enrollment period under Section 1501.156(a) or
1501.606(a).
(b) An employee or dependent eligible for enrollment is not a
late enrollee if the individual:
(1) was covered under another health benefit plan or self-funded
employer health benefit plan at the time the individual was
eligible to enroll;
(2) declined enrollment in writing, at the time of the initial
eligibility for enrollment, stating that coverage under another
health benefit plan or self-funded employer health benefit plan
was the reason for declining enrollment;
(3) has lost coverage under the other health benefit plan or
self-funded employer health benefit plan as a result of:
(A) the termination of employment;
(B) a reduction in the number of hours of employment;
(C) the termination of the other plan's coverage;
(D) the termination of contributions toward the premium made by
the employer; or
(E) the death of a spouse or divorce; and
(4) requests enrollment not later than the 31st day after the
date coverage under the other health benefit plan or self-funded
employer health benefit plan terminates.
(c) An employee or dependent eligible for enrollment is also not
a late enrollee if the individual is:
(1) employed by an employer that offers multiple health benefit
plans and the individual elects a different health benefit plan
during an open enrollment period;
(2) a spouse for whom a court has ordered coverage under a
covered employee's plan and the request for enrollment of the
spouse is made not later than the 31st day after the date the
court order is issued;
(3) a child for whom a court has ordered coverage under a
covered employee's plan and the request for enrollment is made
not later than the 31st day after the date the employer receives
the court order; or
(4) a child of a covered employee who has lost coverage under
Title XIX of the Social Security Act (42 U.S.C. Section 1396 et
seq.), other than coverage consisting solely of benefits under
Section 1928 of that Act (42 U.S.C. Section 1396s), or under
Chapter 62, Health and Safety Code, and the request for
enrollment is made not later than the 31st day after the date on
which the child loses coverage.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.009. SCHOOL DISTRICT ELECTION. (a) An independent
school district may elect to participate as a small employer
without regard to the number of eligible employees in the
district. An independent school district that makes the election
is treated as a small employer under this chapter for all
purposes.
(b) An independent school district that is participating in the
uniform group coverage program established under Chapter 1579 may
not participate in the small employer market under this section
for health insurance coverage and may not renew a health
insurance contract obtained in accordance with this section after
the date on which the program of coverages provided under Chapter
1579 is implemented. This subsection does not affect a contract
for the provision of optional coverages not included in a health
benefit plan under this chapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 2G.014, eff. April 1, 2009.
Sec. 1501.0095. SCHOOL DISTRICT EMPLOYEE ELECTION. (a)
Notwithstanding any other provision of this chapter, a school
district employee who is eligible for coverage under a large or
small employer health benefit plan providing coverage to the
school district's employees and who is the spouse of another
school district employee covered under the plan may elect whether
to be treated under the plan as:
(1) an employee; or
(2) the dependent of the other employee.
(b) The commissioner shall adopt rules under Section 1501.010
governing the manner in which an election under this section must
be made.
Added by Acts 2005, 79th Leg., Ch.
998, Sec. 1, eff. June 18, 2005.
Sec. 1501.010. GENERAL RULES. The commissioner shall adopt
rules necessary to:
(1) implement this chapter; and
(2) meet the minimum requirements of federal law, including
regulations.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.011. DETERMINATION OF EMPLOYER STATUS FOR CERTAIN
EMPLOYERS. (a) For an employer that did not exist throughout
the calendar year preceding the year in which the determination
of whether the employer is a small employer is made, the
determination is based on the average number of employees and
eligible employees the employer reasonably expects to employ on
business days in the calendar year in which the determination is
made.
(b) For an employer that did not exist throughout the calendar
year preceding the year in which the determination of whether the
employer is a large employer is made, the determination is based
on the average number of eligible employees the employer
reasonably expects to employ on business days in the calendar
year in which the determination is made.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
SUBCHAPTER B. COALITIONS AND COOPERATIVES
Sec. 1501.051. DEFINITIONS. In this subchapter:
(1) "Board of directors" means the board of directors elected by
a private purchasing cooperative or a health group cooperative.
(2) "Board of trustees" means the board of trustees of the Texas
cooperative.
(3) "Cooperative" means a private purchasing cooperative or a
health group cooperative established under this subchapter.
(3-a) "Expanded service area" means any area larger than one
county in which a health group cooperative offers coverage.
(4) "Texas cooperative" means the Texas Health Benefits
Purchasing Cooperative established under Section 1501.052.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.048(a), eff. September 1, 2005.
Sec. 1501.052. TEXAS HEALTH BENEFITS PURCHASING COOPERATIVE;
BOARD OF TRUSTEES. (a) The Texas Health Benefits Purchasing
Cooperative is a nonprofit corporation established to make health
care coverage available to small and large employers and their
eligible employees and the eligible employees' dependents.
(b) The Texas cooperative is administered by a board of trustees
of five members appointed by the governor with the advice and
consent of the senate. Two members must represent employers, two
members must represent employees, and one member must represent
the public.
(c) Members of the board of trustees serve staggered six-year
terms, with the terms of one or two members expiring February 1
of each odd-numbered year.
(d) A member of the board of trustees may not be compensated for
serving on the board but is entitled to reimbursement for actual
expenses incurred in performing functions as a member of the
board as provided by the General Appropriations Act.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.049(a), eff. September 1, 2005.
Sec. 1501.053. TEXAS HEALTH BENEFITS PURCHASING COOPERATIVE:
EXECUTIVE DIRECTOR AND OTHER EMPLOYEES. (a) The board of
trustees shall employ an executive director. The executive
director may hire other employees of the Texas cooperative as
necessary.
(b) Salaries for employees of the Texas cooperative and related
costs may be paid from administrative fees collected from
employers and participating health benefit plan issuers or other
sources of funding arranged by the Texas cooperative.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.054. REGIONAL SUBDIVISIONS OF TEXAS HEALTH BENEFITS
PURCHASING COOPERATIVE. The board of trustees may:
(1) develop regional subdivisions of the Texas cooperative; and
(2) authorize each subdivision to separately exercise the powers
and duties of a cooperative.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.055. APPLICABILITY OF PUBLIC INFORMATION LAW TO TEXAS
HEALTH BENEFITS PURCHASING COOPERATIVE. The Texas cooperative is
subject to the public information law, Chapter 552, Government
Code.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.056. PRIVATE PURCHASING COOPERATIVES AND HEALTH GROUP
COOPERATIVES. (a) Two or more small or large employers may form
a private purchasing cooperative to purchase small or large
employer health benefit plans. Subject to Subsection (d), a
person may form a health group cooperative to purchase employer
health benefit plans. A cooperative must be organized as a
nonprofit corporation and has the rights and duties provided by
the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,
Vernon's Texas Civil Statutes).
(b) On receipt of a certificate of incorporation or certificate
of authority from the secretary of state, the cooperative shall
file written notice of the receipt of the certificate and a copy
of the cooperative's organizational documents with the
commissioner.
(c) Annually, the board of directors shall file with the
commissioner a statement of all amounts collected and expenses
incurred for each of the preceding three years.
(d) A health benefit plan issuer may not form, or be a member
of, a health group cooperative. A health benefit plan issuer may
associate with a sponsoring entity, such as a business
association, chamber of commerce, or other organization
representing employers or serving an analogous function, to
assist the sponsoring entity in forming a health group
cooperative.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.050(a), eff. September 1, 2005.
Acts 2005, 79th Leg., Ch.
728, Sec. 11.050(b), eff. September 1, 2005.
Sec. 1501.057. IMMUNITY. (a) The Texas cooperative or a member
of the board of trustees, the executive director, or an employee
or agent of the Texas cooperative is not liable for:
(1) an act performed in good faith in the execution of duties in
connection with the cooperative; or
(2) an independent action of a small employer health benefit
plan issuer or a person who provides health care services under a
health benefit plan.
(b) A private purchasing cooperative, a health group
cooperative, or a member of the board of directors, the executive
director, or an employee or agent of the private purchasing or
health group cooperative is not liable for:
(1) an act performed in good faith in the execution of duties in
connection with the private purchasing or health group
cooperative; or
(2) an independent action of a small or large employer health
benefit plan issuer or a person who provides health care services
under a health benefit plan.
(c) A health group cooperative or a member of the board of
directors, the executive director, or an employee or agent of the
health group cooperative is not liable for failure to arrange for
coverage of any particular illness, disease, or health condition.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.050(c), eff. September 1, 2005.
Sec. 1501.0575. VOLUNTARY PARTICIPATION BY ISSUER IN
COOPERATIVE. A health benefit plan issuer may elect not to
participate in a health group cooperative. The health benefit
plan issuer may elect to participate in one or more health group
cooperatives and may select the cooperatives in which the issuer
will participate.
Added by Acts 2005, 79th Leg., Ch.
823, Sec. 1, eff. September 1, 2005.
Sec. 1501.058. POWERS AND DUTIES OF COOPERATIVES. (a) A
cooperative shall:
(1) arrange for small or large employer health benefit plan
coverage for small or large employer groups that participate in
the cooperative by contracting with small or large employer
health benefit plan issuers that meet the requirements
established by Section 1501.061;
(2) collect premiums to cover the cost of:
(A) small or large employer health benefit plan coverage
purchased through the cooperative; and
(B) the cooperative's administrative expenses;
(3) establish administrative and accounting procedures for the
operation of the cooperative;
(4) establish procedures under which an applicant for or
participant in coverage issued through the cooperative may have a
grievance reviewed by an impartial person;
(5) contract with small or large employer health benefit plan
issuers to provide services to small or large employers covered
through the cooperative; and
(6) develop and implement a plan to maintain public awareness of
the cooperative and publicize the eligibility requirements for,
and the procedures for enrollment in, coverage through the
cooperative.
(b) A cooperative may:
(1) contract with agents to market coverage issued through the
cooperative;
(2) contract with a small or large employer health benefit plan
issuer or third-party administrator to provide administrative
services to the cooperative;
(3) negotiate the premiums paid by its members; and
(4) offer other ancillary products and services to its members
that are customarily offered in conjunction with health benefit
plans.
(c) A cooperative shall comply with:
(1) federal laws applicable to cooperatives and health benefit
plans issued through cooperatives, to the extent required by
state law or rules adopted by the commissioner; and
(2) state laws applicable to cooperatives and health benefit
plans issued through cooperatives.
(d) To be eligible to exercise the authority granted under
Subsection (a)(1), a health group cooperative must have at least
10 participating employers.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.053(a), eff. September 1, 2005.
Sec. 1501.0581. SPECIAL PROVISIONS RELATING TO HEALTH GROUP
COOPERATIVES. (a) The membership of a health group cooperative
may consist of only small employers, only large employers, or
both small and large employers. To participate as a member of a
health group cooperative, an employer must be a small or large
employer as described by this chapter.
(a-1) Notwithstanding Subsections (b) and (c), membership in a
health group cooperative may be restricted to small and large
employers within a single industry grouping as defined by the
most recent edition of the United States Census Bureau's North
American Industry Classification System.
(b) Subject to the requirements imposed on small employer health
benefit plan issuers under Section 1501.101 and subject to
Subsections (a-1) and (o), a health group cooperative:
(1) shall allow a small employer to join a health group
cooperative consisting of only small employers or both small and
large employers and enroll in health benefit plan coverage; and
(2) may allow a large employer to join the health group
cooperative and enroll in health benefit plan coverage.
(c) Subject to Subsections (a-1) and (o), a health group
cooperative consisting of only small employers or both small and
large employers shall allow any small employer to join the health
group cooperative and enroll in the cooperative's health benefit
plan coverage during the initial enrollment and annual open
enrollment periods.
(d) A sponsoring entity of a health group cooperative may inform
the members of the entity about the cooperative and the health
benefit plans offered by the cooperative. Coverage issued
through the cooperative must be issued through a licensed agent
marketing the coverage in accordance with Section 1501.058(b)(1).
(e) The commissioner shall adopt rules that govern the manner in
which an employer may terminate, because of a financial hardship
affecting the employer, participation in a health group
cooperative.
(f) An employer's participation in a health group cooperative is
voluntary, but an employer electing to participate in a health
group cooperative must commit to purchasing coverage through the
health group cooperative for two years, except as provided by
Subsection (e).
(g) A health benefit plan issuer issuing coverage to a health
group cooperative:
(1) shall use a standard presentation form, prescribed by the
commissioner by rule, to market health benefit plan coverage
through the health group cooperative;
(2) may contract to provide health benefit plan coverage with
only one health group cooperative in any county, except that a
health benefit plan issuer may contract with additional health
group cooperatives if it is providing health benefit plan
coverage in an expanded service area in accordance with
Subsection (l);
(3) shall allow enrollment in health benefit plan coverage in
compliance with Subsection (c) and with the health benefit plan
issuer's agreement with the health group cooperative;
(4) is exempt from the premium tax or tax on revenues imposed by
Chapter 222, and the retaliatory tax under Chapter 281 for two
years, with respect to the premiums or revenues received for
coverage provided to each uninsured employee or dependent as
defined by the commissioner in accordance with Subsection (h);
and
(5) shall maintain documentation to be provided by health group
cooperatives to ensure compliance with the rules adopted by the
commissioner under Subsection (h) with respect to uninsured
employees or dependents.
(h) The commissioner by rule shall determine who constitutes an
uninsured employee or dependent for purposes of Subsection
(g)(4).
(i) Notwithstanding any other law, and except as provided by
Subsection (n), a health benefit plan issued by a health benefit
plan issuer to provide coverage with a health group cooperative
is not subject to a state law, including a rule, that:
(1) relates to a particular illness, disease, or treatment; or
(2) regulates the differences in rates applicable to services
provided within a health benefit plan network or outside the
network.
(j) The commissioner by rule shall implement the exemption
authorized by Subsection (i).
(k) A health group cooperative may offer more than one health
benefit plan, but each plan offered must be made available to all
employees covered by the cooperative.
(l) A health benefit plan issuer may, with notice to the
commissioner, provide health benefit plan coverage to an expanded
service area that includes the entire state. A health benefit
plan issuer may apply for approval of an expanded service area
that comprises less than the entire state by filing with the
commissioner an application, in a form and manner prescribed by
the commissioner, at least 60 days before the date the health
benefit plan issuer issues coverage to the health group
cooperative in the expanded service area. At the expiration of
60 days after the date of receipt by the department of a filed
application, the application is considered approved by the
department unless, before that date, the application was either
affirmatively approved or disapproved by written order of the
commissioner. The commissioner, after notice and opportunity for
hearing, may rescind an approval granted to a health benefit plan
issuer under this subsection if the commissioner finds that the
health benefit plan issuer has failed to market fairly to all
eligible employers in the state or the expanded service area.
(m) The provisions of this section do not limit or restrict a
small or large employer's access to health benefit plans under
this chapter.
(n) A health benefit plan provided through a health group
cooperative must provide coverage for diabetes equipment,
supplies, and services as required by Subchapter B, Chapter 1358.
(o) A health group cooperative consisting only of small
employers is not required to allow a small employer to join the
health group cooperative under Subsection (c) if:
(1) the cooperative has elected to restrict membership in the
cooperative in accordance with this subsection and Subsection
(p); and
(2) after the small employer has joined the cooperative, the
total number of eligible employees employed on business days
during the preceding calendar year by all small employers
participating in the cooperative would exceed 50.
(p) A health group cooperative must make the election described
by Subsection (o) at the time the cooperative is initially
formed. Evidence of the election must be filed in writing with
the commissioner in the form and at the time prescribed by the
commissioner by rule.
Added by Acts 2005, 79th Leg., Ch.
728, Sec. 11.051(a), eff. September 1, 2005.
Amended by:
Acts 2005, 79th Leg., Ch.
823, Sec. 2, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
547, Sec. 1, eff. September 1, 2007.
Sec. 1501.0582. HEALTH GROUP COOPERATIVE: EXPEDITED APPROVAL
PROCESS. The department shall develop an expedited approval
process for health benefit plan coverage arranged by a health
group cooperative.
Added by Acts 2005, 79th Leg., Ch.
728, Sec. 11.052(a), eff. September 1, 2005.
Sec. 1501.059. SELF-INSURED OR SELF-FUNDED PLAN PROHIBITED. A
cooperative may not self-insure or self-fund any health benefit
plan or portion of a plan.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.060. SCOPE OF GROUP COVERAGE. Subchapter B, Chapter
1251, does not limit the type of group that may be covered by a
group health benefit plan issued through a cooperative.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.061. REQUIREMENTS APPLICABLE TO HEALTH BENEFIT PLAN
ISSUERS WITH WHICH COOPERATIVE MAY CONTRACT. A cooperative may
contract only with a small or large employer health benefit plan
issuer that demonstrates that the issuer:
(1) is in good standing with the department;
(2) has the capacity to administer health benefit plans;
(3) is able to monitor and evaluate the quality and
cost-effectiveness of care and applicable procedures;
(4) is able to conduct utilization management and establish
applicable procedures and policies;
(5) is able to ensure that enrollees have adequate access to
health care providers, including adequate numbers and types of
providers;
(6) has a satisfactory grievance procedure and is able to
respond to enrollees' calls, questions, and complaints; and
(7) has financial capacity, either through satisfying financial
solvency standards, as applied by the commissioner, or through
appropriate reinsurance or other risk-sharing mechanisms.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.053(b), eff. September 1, 2005.
Sec. 1501.062. COOPERATIVE NOT INSURER; AGENTS AND
ADMINISTRATORS. (a) A cooperative is not an insurer and the
employees of the cooperative are not required to be licensed
under Title 13. This exemption from licensure includes a health
group cooperative that acts to provide information about and to
solicit membership in the cooperative, subject to Section
1501.0581(d).
(b) An agent or third-party administrator used and compensated
by a cooperative must be licensed as required by Title 13.
(c) An agent used and compensated by a cooperative may market
the products and services sponsored by the cooperative without
being appointed by each small or large employer health benefit
plan issuer participating in the cooperative. The agent may not
market any other product or service of a participating small or
large employer health benefit plan issuer that is not sponsored
by the cooperative unless the agent has been appointed by that
issuer.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.052(b), eff. September 1, 2005.
Sec. 1501.063. STATUS AS EMPLOYER. (a) A small employer health
coalition that otherwise meets the description of a small
employer is considered a single small employer for all purposes
under this chapter.
(b) A health group cooperative that is composed of only small
employers, only large employers, or both small and large
employers is considered a single employer under this code.
(b-1) A health group cooperative that is composed only of small
employers and that has made the election described by Section
1501.0581(o)(1) in accordance with Subsection (p) of that section
shall be treated in the same manner as a small employer for the
purposes of this chapter, including for the purposes of any
provision relating to premium rates and issuance and renewal of
coverage.
(b-2) A health group cooperative that is composed only of small
employers and that has not made the election described by Section
1501.0581(o)(1) in accordance with Subsection (p) of that
section, or a health group cooperative that is composed of both
small and large employers, may be treated in the same manner as a
large employer for the purposes of this chapter, including for
the purposes of any provision relating to premium rates and
issuance and renewal of coverage.
(b-3) A health group cooperative shall have sole authority to
make benefit elections and perform other administrative functions
under this code for the cooperative's participating employers.
(c) Any other cooperative formed under this subchapter is
considered an employer solely for the purposes of benefit
elections under this code.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.052(c), eff. September 1, 2005.
Acts 2005, 79th Leg., Ch.
823, Sec. 3, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
547, Sec. 2, eff. September 1, 2007.
Sec. 1501.064. CERTAIN USE OF APPROPRIATED MONEY PROHIBITED.
The Texas cooperative may not use money appropriated by the state
to pay or otherwise subsidize any portion of the premium for a
small employer covered through the cooperative.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.065. CERTAIN ACTIONS BASED ON RISK CHARACTERISTICS OR
HEALTH STATUS PROHIBITED. A cooperative may not limit, restrict,
or condition an employer's or employee's membership in a
cooperative or choice among benefit plans based on:
(1) risk characteristics of a group or of any member of a group;
or
(2) health status related factors, duration of coverage, or any
similar characteristic related to the health status or experience
of a group or of any member of a group.
Added by Acts 2005, 79th Leg., Ch.
728, Sec. 11.053(c), eff. September 1, 2005.
SUBCHAPTER C. PROVISION OF COVERAGE
Sec. 1501.101. GEOGRAPHIC SERVICE AREAS. (a) A small or large
employer health benefit plan issuer must file each of the
issuer's geographic service areas with the commissioner. The
commissioner may disapprove the use of a geographic service area
by a small or large employer health benefit plan issuer.
(b) A small employer health benefit plan issuer that refuses to
issue a small employer health benefit plan in a geographic
service area may not offer a health benefit plan to a small
employer in the applicable service area before the fifth
anniversary of the date of the refusal.
(c) A small or large employer health benefit plan issuer is not
required to offer or issue a small or large employer health
benefit plan to:
(1) a small or large employer that is not located within a
geographic service area of the issuer;
(2) an employee of a small or large employer who neither resides
nor works in the geographic service area of the issuer; or
(3) a small or large employer located within a geographic
service area of the issuer with respect to which area the issuer
demonstrates to the commissioner's satisfaction that the issuer:
(A) reasonably anticipates that it will not have the capacity to
deliver services adequately because of obligations to existing
covered individuals; and
(B) is acting uniformly without regard to the claims experience
of the employer or any health status related factor of employees,
employees' dependents, or new employees or dependents who may
become eligible for the coverage.
(d) A small or large employer health benefit plan issuer that is
unable to offer coverage in a geographic service area in
accordance with a determination made by the commissioner under
Subsection (c)(3) may not offer a small or large employer benefit
plan, as applicable, in that service area before the 180th day
after the later of:
(1) the date the issuer refuses to offer coverage; or
(2) the date the issuer demonstrates to the satisfaction of the
commissioner that it has regained the capacity to deliver
services to small or large employers in the geographic service
area.
(e) If the commissioner determines that requiring the acceptance
of small or large employers under this chapter would place a
small or large employer health benefit plan issuer in a
financially impaired condition and that the issuer is acting
uniformly without regard to the claims experience of the small or
large employer or any health status related factors of eligible
employees, eligible employees' dependents, or new employees or
dependents who may become eligible for the coverage, the issuer
may not offer coverage to small or large employers until the
later of:
(1) the 180th day after the date the commissioner makes the
determination; or
(2) the date the commissioner determines that accepting small or
large employers would not place the issuer in a financially
impaired condition.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.102. PREEXISTING CONDITION PROVISION. (a) In this
section, "creditable coverage" has the meaning assigned by
Section 1205.004 and includes coverage provided under:
(1) a political subdivision health benefits risk pool; and
(2) a short-term limited duration coverage plan.
(b) A preexisting condition provision in a small or large
employer health benefit plan may apply only to coverage for a
disease or condition for which medical advice, diagnosis, care,
or treatment was recommended or received during the six months
before the earlier of:
(1) the effective date of coverage; or
(2) the first day of the waiting period.
(c) A preexisting condition provision in a small or large
employer health benefit plan may not apply to expenses incurred
on or after the first anniversary of the initial effective date
of coverage of the enrollee, including a late enrollee.
(d) A preexisting condition provision in a small or large
employer health benefit plan may not apply to an individual who
was continuously covered for an aggregate period of 12 months
under creditable coverage that was in effect until a date not
more than 63 days before the effective date of coverage under the
plan, excluding any waiting period.
(e) In determining whether a preexisting condition provision
applies to an individual covered by a small or large employer
health benefit plan, the plan issuer shall credit the time the
individual was covered under previous creditable coverage if the
previous coverage was in effect at any time during the 12 months
preceding the effective date of coverage under the plan. If the
previous coverage was issued under a health benefit plan, any
waiting period that applied before that coverage became effective
must also be credited against the preexisting condition provision
period.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.103. TREATMENT OF CERTAIN CONDITIONS AS PREEXISTING
PROHIBITED. (a) A small or large employer health benefit plan
issuer may not treat genetic information as a preexisting
condition described by Section 1501.102(b) in the absence of a
diagnosis of the condition related to the information.
(b) A small or large employer health benefit plan issuer may not
treat pregnancy as a preexisting condition described by Section
1501.102(b).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.104. AFFILIATION PERIOD. (a) In this section,
"affiliation period" means a period that, under a small or large
employer health benefit plan offered by a health maintenance
organization, must expire before the coverage becomes effective.
(b) A health maintenance organization may impose an affiliation
period if the period is applied uniformly without regard to any
health status related factor. The affiliation period may not
exceed:
(1) two months for an enrollee, other than a late enrollee; or
(2) 90 days for a late enrollee.
(c) An affiliation period under a small or large employer health
benefit plan must run concurrently with any applicable waiting
period under the plan. A health maintenance organization must
credit an affiliation period against any preexisting condition
provision period.
(d) During an affiliation period, a health maintenance
organization:
(1) is not required to provide health care services or benefits
to the participant or beneficiary; and
(2) may not charge a premium to the participant or beneficiary.
(e) A health maintenance organization may use an alternative
method approved by the commissioner to address adverse selection.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.105. WAITING PERIOD PERMITTED. Sections
1501.102-1501.104 do not preclude application of a waiting period
that applies to all new enrollees under a small or large employer
health benefit plan.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.106. CERTAIN LIMITATIONS OR EXCLUSIONS OF COVERAGE
PROHIBITED. (a) A small or large employer health benefit plan
may not limit or exclude, by use of a rider or amendment
applicable to a specific individual, coverage by type of illness,
treatment, medical condition, or accident.
(b) This section does not preclude a small or large employer
health benefit plan from limiting or excluding coverage for a
preexisting condition in accordance with Section 1501.102.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.107. DISCOUNTS, REBATES, AND REDUCTIONS. (a) A small
or large employer health benefit plan issuer may establish
premium discounts, rebates, or a reduction in otherwise
applicable copayments, coinsurance, or deductibles, or any
combination of these incentives, in return for participation in
programs promoting disease prevention, wellness, and health.
(b) A discount, rebate, or reduction established under this
section does not violate Section 541.056(a).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
112, Sec. 3, eff. May 17, 2007.
Sec. 1501.108. RENEWABILITY OF COVERAGE; CANCELLATION. (a)
Except as provided by this section and Section 1501.109, a small
or large employer health benefit plan issuer shall renew the
small or large employer health benefit plan for any covered small
or large employer, as applicable, at the employer's option,
unless:
(1) a premium has not been paid as required by the terms of the
plan;
(2) the employer has committed fraud or has intentionally
misrepresented a material fact;
(3) the employer has not complied with the terms of the plan;
(4) no enrollee in the plan resides or works in the geographic
service area of the small or large employer health benefit plan
issuer or in the area for which the issuer is authorized to do
business; or
(5) membership of the employer in an association terminates, but
only if coverage is terminated uniformly without regard to a
health status related factor of a covered individual.
(b) A small or large employer health benefit plan issuer may
refuse to renew the coverage of a covered employee or dependent
for fraud or intentional misrepresentation of a material fact by
that individual.
(c) A small or large employer health benefit plan issuer may not
cancel a small or large employer health benefit plan except for a
reason specified for refusal to renew under Subsection (a). A
small or large employer health benefit plan issuer may not cancel
the coverage of a covered employee or dependent except for a
reason specified for refusal to renew under Subsection (b).
(d) Notwithstanding Subsection (a), a small or large employer
health benefit plan issuer may modify a small or large employer
health benefit plan if:
(1) the modification occurs at the time of coverage renewal;
(2) the modification is effective uniformly among all small or
large employers covered by that health benefit plan; and
(3) the issuer notifies the commissioner and each affected
covered small or large employer of the modification not later
than the 60th day before the date the modification is effective.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
891, Sec. 1, eff. September 1, 2007.
Sec. 1501.109. REFUSAL TO RENEW; DISCONTINUATION OF COVERAGE.
(a) A small or large employer health benefit plan issuer may
elect to refuse to renew all small or large employer health
benefit plans delivered or issued for delivery by the issuer in
this state or in a geographic service area approved under Section
1501.101. The issuer shall notify:
(1) the commissioner of the election not later than the 180th
day before the date coverage under the first plan terminates
under this subsection; and
(2) each affected covered small or large employer not later than
the 180th day before the date coverage terminates for that
employer.
(b) A small employer health benefit plan issuer that elects
under this section to refuse to renew all small employer health
benefit plans in this state or in an approved geographic service
area may not write a new small employer health benefit plan in
this state or in the geographic service area, as applicable,
before the fifth anniversary of the date notice is provided to
the commissioner under Subsection (a).
(c) A large employer health benefit plan issuer that elects
under this section to refuse to renew all large employer health
benefit plans in this state or in an approved geographic service
area may not write a new large employer health benefit plan in
this state or in the geographic service area, as applicable,
before the fifth anniversary of the date notice is provided to
the commissioner under Subsection (a).
(d) A small or large employer health benefit plan issuer may
elect to discontinue a particular type of small or large employer
coverage only if the issuer:
(1) before the 90th day preceding the date of the
discontinuation of the coverage:
(A) provides notice of the discontinuation to the employer and
the commissioner; and
(B) offers to each employer the option to purchase other small
or large employer coverage offered by the issuer at the time of
the discontinuation; and
(2) acts uniformly without regard to the claims experience of
the employer or any health status related factors of eligible
employees, eligible employees' dependents, or new employees or
dependents who may become eligible for the coverage.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.110. NOTICE TO COVERED PERSONS. (a) A small or large
employer health benefit plan issuer that cancels or refuses to
renew coverage under a small or large employer health benefit
plan under Section 1501.108 or 1501.109 shall, not later than the
30th day before the date termination of coverage is effective,
notify the small or large employer of the cancellation of or
refusal to renew coverage. The employer is responsible for
notifying enrollees in the plan of the cancellation of or refusal
to renew coverage.
(b) The notice provided to a small or large employer by a small
or large employer health benefit plan issuer under this section
is in addition to any other notice required by Section 1501.109.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.111. WRITTEN STATEMENT OF DENIAL, CANCELLATION, OR
REFUSAL TO RENEW REQUIRED. Denial by a small or large employer
health benefit plan issuer of an application from a small or
large employer for coverage from the issuer or cancellation of or
refusal to renew coverage by a small or large employer health
benefit plan issuer must:
(1) be in writing; and
(2) state the reason or reasons for the denial, cancellation, or
refusal to renew.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
SUBCHAPTER D. GUARANTEED ISSUE OF SMALL EMPLOYER HEALTH BENEFIT
PLANS; CONTINUATION OF COVERAGE
Sec. 1501.151. GUARANTEED ISSUE. (a) A small employer health
benefit plan issuer shall issue the small employer health benefit
plan chosen by the small employer to each small employer that
elects to be covered under the plan and agrees to satisfy the
other requirements of the plan.
(b) A small employer health benefit plan issuer shall provide
small employer health benefit plans without regard to health
status related factors.
(c) This chapter does not require a small employer to purchase
health coverage for the employer's employees.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.152. EXCLUSION OF ELIGIBLE EMPLOYEE OR DEPENDENT
PROHIBITED. A small employer health benefit plan issuer may not
exclude an eligible employee or dependent, including a late
enrollee, who would otherwise be covered under a small employer
group.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.153. EMPLOYER CONTRIBUTION. (a) This chapter does
not require a small employer to make an employer contribution to
the premium paid to a small employer health benefit plan issuer,
but the issuer may require an employer contribution in accordance
with the issuer's usual and customary practices applicable to the
issuer's employer group health benefit plans in this state. The
issuer shall apply the employer contribution level uniformly to
each small employer offered or issued coverage by the issuer in
this state.
(a-1) Notwithstanding Subsection (a), a small employer health
benefit plan issuer may offer a small employer the option of a
small employer health benefit plan for which the employer is
required to contribute 100 percent of the premium paid. A plan
offered under this subsection may be offered in addition to a
plan offered by the issuer in accordance with Subsection (a) that
requires a lower percentage of the premium paid to be contributed
by the employer. A plan issued under this subsection must
require the employer to contribute 100 percent of the premium
paid for each eligible participating employee.
(b) If two or more small employer health benefit plan issuers
participate in a purchasing cooperative established under Section
1501.056, each participating issuer may use the employer
contribution requirement established by the cooperative for
policies marketed by the cooperative.
(c) A small employer that elects to make an employer
contribution to the premium paid to a small employer health
benefit plan issuer is not required to pay any amount with
respect to an employee who elects not to be covered.
(d) A small employer may elect to pay the premium for additional
coverage.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
462, Sec. 1, eff. September 1, 2009.
Sec. 1501.154. MINIMUM PARTICIPATION REQUIREMENT. (a) Except
as provided by Section 1501.155, coverage is available under a
small employer health benefit plan if at least 75 percent of a
small employer's eligible employees elect to participate in the
plan.
(b) If a small employer offers multiple health benefit plans,
the collective participation in those plans must be at least:
(1) 75 percent of the employer's eligible employees; or
(2) if applicable, the lower participation level offered by the
small employer health benefit plan issuer under Section 1501.155.
(c) A small employer health benefit plan issuer may elect not to
offer a health benefit plan to a small employer that offers
multiple health benefit plans if:
(1) the plans are provided by more than one issuer; and
(2) the issuer would have less than 75 percent of the employer's
eligible employees enrolled in the issuer's plan.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.054(a), eff. September 1, 2005.
Sec. 1501.155. EXCEPTION TO MINIMUM PARTICIPATION REQUIREMENT.
(a) A small employer health benefit plan issuer may offer a
small employer health benefit plan to a small employer with a
participation level of less than 75 percent of the employer's
eligible employees if the issuer permits the same qualifying
participation level for each small employer health benefit plan
offered by the issuer in this state.
(b) A small employer health benefit plan issuer may offer a
small employer health benefit plan to a small employer even if
the employer's participation level is less than the issuer's
qualifying participation level established in accordance with
Subsection (a) if:
(1) the employer obtains a written waiver from each eligible
employee who declines coverage under a health benefit plan
offered to the employer stating that the employee was not induced
or pressured to decline coverage because of the employee's risk
characteristics; and
(2) the issuer accepts or rejects the entire group of eligible
employees who choose to participate and excludes only those
employees who have declined coverage.
(c) A small employer health benefit plan issuer may underwrite
the group of eligible employees who do not decline coverage under
Subsection (b).
(d) A small employer health benefit plan issuer may not provide
coverage to a small employer or the employer's employees under
Subsection (b) if the issuer or an agent for the issuer knows
that the employer has induced or pressured an eligible employee
or a dependent of the employee to decline coverage because of the
individual's risk characteristics.
(e) A small employer health benefit plan issuer, a small
employer, or an agent may not use the exception provided by
Subsection (b) to circumvent the requirements of this chapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1501.156. EMPLOYEE ENROLLMENT; WAITING PERIOD. (a) The
initial enrollment period under a small employer health benefit
plan for employees and dependents must be at least 31 days, with
a 31-day open enrollment period provided annually.
(b) A small employer may establish a waiting period not to
exceed 90 days from the first day of employment.
(c) A small employer health benefit plan issuer may not deny
coverage to a new employee of a covered small employer or the
employee's dependents if the issuer receives an application for
coverage not later than the 31st day after the date employment