CHAPTER 1506. TEXAS HEALTH INSURANCE POOL

Statutes > Texas Statutes > INSURANCE CODE > TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES > CHAPTER 1506. TEXAS HEALTH INSURANCE POOL

INSURANCE CODE

TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES

SUBTITLE G. HEALTH COVERAGE AVAILABILITY

CHAPTER 1506. TEXAS HEALTH INSURANCE POOL

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1506.001. DEFINITIONS. In this chapter:

(1) "Board" means the board of directors of the pool.

(1-a) "Church plan" has the meaning assigned by Section 3(33),

Employee Retirement Income Security Act of 1974 (29 U.S.C.

Section 1002(33)).

(1-b) "Creditable coverage" means, with respect to an

individual, coverage of the individual provided under any of the

following:

(A) a group health plan;

(B) health insurance coverage;

U.S.C. Section 1395c et seq.);

(D) Title XIX, 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);

(E) 10 U.S.C. Section 1071 et seq.;

(F) a medical care program of the Indian Health Service or a

tribal organization;

(G) a state health benefits risk pool;

(H) a health benefits plan offered under 5 U.S.C. Section 8901

et seq.;

(I) a public health plan as defined in federal regulations;

(J) a health benefit plan under Section 5(e), Peace Corps Act

(22 U.S.C. Section 2504(e)); or

(K) a state child health plan provided under Title XXI, Social

Security Act (42 U.S.C. Section 1397aa et seq.).

(1-c) "Federally defined eligible individual" means an

individual:

(A) for whom, as of the date on which the individual seeks

coverage under this chapter, the aggregate period of creditable

coverage is 18 months or more;

(B) whose most recent prior creditable coverage was under:

(i) a group health plan, governmental plan, or church plan; or

(ii) health insurance coverage offered in connection with a plan

described by Subparagraph (i);

Part A or Part B, Title XVIII, Social Security Act (42 U.S.C.

Section 1395c et seq.), or a state plan under Title XIX, Social

Security Act (42 U.S.C. Section 1396 et seq.), or any successor

program, and who does not have other health benefit plan

coverage;

(D) with respect to whom the most recent coverage within the

aggregate creditable coverage was not terminated based on a

factor relating to nonpayment of premiums or fraud;

(E) who, if offered the option of continuation coverage under a

continuation provision required by Title X, Consolidated Omnibus

Budget Reconciliation Act of 1985 (29 U.S.C. Section 1161 et

seq.) (COBRA), or under a similar state program, elected that

coverage; and

(F) who has exhausted continuation coverage, if elected, under

Paragraph (E).

(1-d) "Governmental plan" has the meaning assigned by Section

3(32), Employee Retirement Income Security Act of 1974 (29 U.S.C.

Section 1002(32)), and includes any United States governmental

plan.

(1-e) "Group health plan" means an employee welfare benefit plan

as defined by Section 3(1), Employee Retirement Income Security

Act of 1974 (29 U.S.C. Section 1002(1)), to the extent that the

plan provides health benefit plan coverage to employees or their

dependents as defined under the terms of the plan, directly or

through insurance, reimbursement, or otherwise.

(2) "Health benefit arrangement" means a plan, program,

contract, or other arrangement through which an employer provides

health care services, other than health care services covered

through a health benefit plan issuer, to the employer's officers,

employees, or other personnel.

(3) "Health benefit plan issuer" means an entity that provides

health benefit plan coverage in this state, including stop-loss

or excess loss insurance. The term includes:

(A) an insurance company;

(B) a group hospital service corporation operating under Chapter

842;

(D) a stipulated premium company operating under Chapter 884;

(E) a health maintenance organization;

(F) an approved nonprofit health corporation that holds a

certificate of authority under Chapter 844;

(G) an eligible surplus lines insurer operating under Chapter

981;

(H) an insurer providing stop-loss or excess loss insurance to

physicians, health care providers, or hospitals or to any benefit

arrangements to the extent permitted by Section 3, Employee

Retirement Income Security Act of 1974 (29 U.S.C. Section 1002);

and

(I) any other entity providing a plan of health insurance or

health benefits subject to state insurance regulation.

(4) "Health maintenance organization" means an entity that holds

a certificate of authority to operate under Chapter 843.

(5) "Hospital" means a hospital for which a license is issued

under Chapter 241, Health and Safety Code, or that is owned or

operated by the federal or state government.

(6) "Physician" means a person licensed to practice medicine in

this state under Subtitle B, Title 3, Occupations Code.

(7) "Pool" means the Texas Health Insurance Pool.

(8) "Significant break in coverage" means a period of 63

consecutive days during all of which the individual does not have

health benefit plan coverage, except that a waiting period or an

affiliation period is not considered in determining a significant

break in coverage.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

808, Sec. 1, eff. January 1, 2008.

Acts 2007, 80th Leg., R.S., Ch.

881, Sec. 1, eff. January 1, 2008.

Acts 2009, 81st Leg., R.S., Ch.

533, Sec. 2, eff. September 1, 2009.

Sec. 1506.002. DEFINITION OF HEALTH BENEFIT PLAN. (a) In this

chapter, "health benefit plan" means an individual or group

health benefit plan and includes:

(1) a hospital or medical expense incurred policy;

(2) coverage of medical or health care services offered by:

(A) a group hospital service corporation operating under Chapter

842;

(B) a fraternal benefit society operating under Chapter 885;

(D) a health maintenance organization;

(E) a multiple employer welfare arrangement subject to Chapter

846; or

(F) an approved nonprofit health corporation that holds a

certificate of authority under Chapter 844; and

(3) any other health care plan or arrangement that pays for or

furnishes medical or health care services by insurance or

otherwise.

(b) In this chapter, "health benefit plan" does not include one

or more or any combination of the following:

(1) coverage only for accident or disability income insurance or

any combination of those coverages;

(2) credit-only insurance;

(3) coverage issued as a supplement to liability insurance;

(4) liability insurance, including general liability insurance

and automobile liability insurance;

(5) workers' compensation or similar insurance;

(6) coverage for on-site medical clinics;

(7) automobile medical payment insurance;

(8) insurance coverage under which benefits are payable with or

without regard to fault and that is statutorily required to be

contained in a liability insurance policy or equivalent

self-insurance; or

(9) other similar insurance coverage, specified by federal

regulations issued under the Health Insurance Portability and

Accountability Act of 1996 (Pub. L. No. 104-191), under which

benefits for medical care are secondary or incidental to other

insurance benefits.

following benefits if they are provided under a separate policy,

certificate, or contract of insurance, or are otherwise not an

integral part of the coverage:

(1) limited scope dental or vision benefits;

(2) benefits for long-term care, nursing home care, home health

care, community-based care, or any combination of these benefits;

(3) other similar, limited benefits specified by federal

regulations issued under the Health Insurance Portability and

Accountability Act of 1996 (Pub. L. No. 104-191).

(d) In this chapter, "health benefit plan" does not include the

following benefits if the benefits are provided under a separate

policy, certificate, or contract of insurance, there is no

coordination between the provision of the benefits and any

exclusion of benefits under any group health plan maintained by

the same plan sponsor, and the benefits are paid with respect to

an event without regard to whether benefits are provided with

respect to such an event under any group health plan maintained

by the same plan sponsor:

(1) coverage only for a specified disease or illness; or

(2) hospital indemnity or other fixed indemnity insurance.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

824, Sec. 1, eff. January 1, 2006.

Acts 2007, 80th Leg., R.S., Ch.

808, Sec. 2, eff. January 1, 2008.

Acts 2007, 80th Leg., R.S., Ch.

881, Sec. 2, eff. January 1, 2008.

Sec. 1506.003. DEFINITION OF DEPENDENT. In this chapter,

"dependent" means:

(1) a resident spouse or unmarried child younger than 25 years

of age; or

(2) a child who is:

(A) a full-time student younger than 25 years of age who is

financially dependent on the parent;

(B) 18 years of age or older and is an individual for whom a

person may be obligated to pay child support; or

of the child.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.004. AUDIT OF POOL. (a) Annually, the state auditor

may conduct a special audit of the pool under Chapter 321,

Government Code. The special audit may include a financial audit

and an economy and efficiency audit.

(b) The state auditor shall report the cost of each audit

conducted under this section to the board and the comptroller.

The board shall remit that amount to the comptroller.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 11.065(a), eff. September 1, 2005.

Sec. 1506.005. RULES. The commissioner may adopt rules

necessary and proper to implement this chapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.006. COMPLAINT PROCEDURES. (a) An applicant for or

participant in coverage from the pool is entitled to have

complaints against the pool reviewed by a grievance committee

appointed by the board.

(b) The grievance committee shall report to the board after

completion of the review of each complaint.

pool at least until the third anniversary of the date the pool

received the complaint.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.007. PROVISION OF INFORMATION ABOUT POOL. (a) A

health benefit plan issuer may provide to its insureds and

enrollees a notice relating to the existence of the pool that

contains the address from which an insured or enrollee may obtain

information about the coverage offered by the pool, the

eligibility for and cost of the coverage, and other information

that allows an insured or enrollee to compare the issuer's health

benefit plan coverage provided to the insured or enrollee with

the coverage offered by the pool.

(a-1) A health benefit plan issuer, employer, or other person

who is required to provide notice to an individual of the

individual's ability to continue coverage in accordance with

Title X, Consolidated Omnibus Budget Reconciliation Act of 1985

(29 U.S.C. Section 1161 et seq.) (COBRA), shall, at the time that

that notice is required, also provide notice to the individual of

the availability of coverage under the pool.

(a-2) A health benefit plan issuer who is providing coverage to

an individual in accordance with Title X, Consolidated Omnibus

Budget Reconciliation Act of 1985 (29 U.S.C. Section 1161 et

seq.) (COBRA), shall, not later than the 45th day before the date

that coverage expires, notify the individual of the availability

of coverage under the pool.

(b) A health benefit plan issuer providing notice under this

section shall provide the notice as prescribed by the

commissioner.

solely for providing notice under this section.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

997, Sec. 16, eff. September 1, 2007.

Sec. 1506.008. EXEMPTION FROM STATE TAXES AND FEES. The pool is

not subject to any state tax, regulatory fee, or surcharge,

including a premium or maintenance tax or fee.

Added by Acts 2007, 80th Leg., R.S., Ch.

881, Sec. 3, eff. June 30, 2007.

Sec. 1506.010. REDESIGNATION. Effective September 1, 2009, the

Texas Health Insurance Risk Pool is redesignated the Texas Health

Insurance Pool. A reference in any law to the Texas Health

Insurance Risk Pool means the Texas Health Insurance Pool.

Added by Acts 2009, 81st Leg., R.S., Ch.

533, Sec. 3, eff. September 1, 2009.

SUBCHAPTER B. BOARD OF DIRECTORS

Sec. 1506.051. GOVERNANCE OF POOL; BOARD MEMBERSHIP. (a) The

pool is governed by a board of directors.

(b) The board consists of nine members appointed by the

commissioner as follows:

(1) at least two, but not more than four, members must be

individuals who are affiliated with a health benefit plan issuer

authorized to write health benefit plans in this state;

(2) at least two of the members must be individuals or the

parents of individuals who are covered by the pool or are

reasonably expected to qualify for coverage by the pool; and

(3) the other members of the board may be selected from

individuals such as:

(A) a physician licensed to practice in this state by the Texas

State Board of Medical Examiners;

(B) a hospital administrator;

(D) a representative of the public who is not employed by or

affiliated with an insurance company or insurance plan, group

hospital service corporation, or health maintenance organization.

required to register under Chapter 305, Government Code, because

of the individual's activities with respect to health benefit

plan-related matters is affiliated with a health benefit plan

issuer.

(d) An individual is not disqualified under Subsection (b)(3)(D)

from representing the public if the individual's only affiliation

with an insurance company or insurance plan, group hospital

service corporation, or health maintenance organization is as an

insured or as an individual who has coverage through a plan

provided by the corporation or organization.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 11.066(a), eff. September 1, 2005.

Sec. 1506.052. PRESIDING OFFICER. The commissioner shall

designate one member of the board to serve as presiding officer

at the pleasure of the commissioner.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.053. TERMS; VACANCY. (a) Members of the board serve

staggered six-year terms.

(b) The commissioner shall fill a vacancy on the board by

appointing, for the unexpired term, an individual who has the

appropriate qualifications to fill that position.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.054. PER DIEM; REIMBURSEMENT. A member of the board

is entitled to:

(1) a per diem in the amount provided by the General

Appropriations Act for state officials for each day the member

performs duties as a board member; and

(2) reimbursement of expenses incurred while performing duties

as a board member in the amount provided by the General

Appropriations Act for state officials.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.055. MEMBER'S IMMUNITY. (a) A member of the board is

not liable for an act or omission made in good faith in the

performance of powers and duties under this chapter.

(b) A cause of action does not arise against a member of the

board for an act or omission described by Subsection (a).

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.056. ADJUSTMENTS. (a) The board may adjust

deductibles, the amounts of stop-loss coverage, and the periods

governing preexisting conditions under Section 1506.155 to

preserve the financial integrity of the pool.

(b) Not later than the 30th day after the date the board makes

an adjustment under this section, the board shall submit to the

commissioner a written report containing a description of and the

reasons for the adjustment.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.057. ANNUAL REPORT OF POOL'S ACTIVITIES. (a) Not

later than June 1 of each year, the board shall submit a report

to the governor, the lieutenant governor, the speaker of the

house of representatives, and the commissioner.

(b) The report must summarize the activities of the pool in the

calendar year preceding the year in which the report is submitted

and must include information relating to net written and earned

premiums, plan enrollment, administration expenses, and paid and

incurred losses.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.058. ADDITIONAL POWERS AND DUTIES. The commissioner

by rule may establish powers and duties of the board in addition

to those provided by this chapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

SUBCHAPTER C. POWERS AND DUTIES OF POOL

Sec. 1506.101. PURPOSES OF POOL. (a) The purposes of the pool

are to:

(1) provide for access to quality health care at minimum cost to

the public;

(2) relieve the insurable population of the disruptive cost of

sharing coverage; and

(3) maximize reliance on strategies of managed care proven by

the private sector.

(b) The pool is not intended to diminish the availability of

traditional health care coverage to consumers who are eligible

for that coverage.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.102. EMPLOYEES; COMMITTEES. (a) The pool may employ

and set the compensation of any persons necessary to assist the

pool in carrying out its responsibilities and functions.

(b) The pool may appoint appropriate legal, actuarial, and other

committees necessary to provide technical assistance in operating

the pool and performing any of the functions of the pool.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.103. PROVIDING COVERAGE. (a) The pool may provide

health benefit coverage to an individual who is eligible for that

coverage under this chapter.

(b) The pool may issue health benefit coverage subject to this

chapter and the pool's plan of operation under Section 1506.201.

coverage to provide optional coverages that comply with

applicable provisions of state and federal law, including a

Medicare supplement benefit plan for individuals 65 years of age

or older who are eligible for Medicare.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 11.067(a), eff. September 1, 2005.

Sec. 1506.104. CHARGES, FORMULAS, AND FORMS. (a) The pool may

establish appropriate rates, rate schedules, rate adjustments,

expense allowances, agents' referral fees, and claim reserve

formulas and perform actuarial functions appropriate to the

operation of the pool.

(b) The pool may adopt policy forms, endorsements, and riders

and applications for coverage.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.105. PREMIUM RATES. (a) The pool may not charge

premium rates that are unreasonable in relation to the benefits

provided, the risk experience, and the reasonable expenses of

providing the coverage.

(b) Separate schedules of premium rates based on age, sex, and

geographic location may apply for individual risks.

appropriate risk factors, including age and variation in claim

costs. The pool may consider appropriate risk factors in

accordance with established actuarial and underwriting practices.

(d) The pool shall establish the standard risk rate. In

establishing the rate, the pool shall use reasonable actuarial

techniques and consider the premium rates charged by other health

benefit plan issuers offering health benefit coverage to

individuals. The rate must reflect anticipated experience and

expenses for health benefit coverage.

(e) Premium rates shall be established to provide fully for all

of the expected costs of claims, including recovery of prior

losses, expenses of operation, investment income from claim

reserves, and any other cost factors, subject to the limitations

described in this subsection and Subsection (e-1). In no event

may pool premium rates exceed 200 percent of the standard risk

rate described by Subsection (d).

(e-1) Subject to the availability of funds under Section

1506.260, discounted premiums shall be offered on a sliding

scale, based on financial need, as follows:

(1) for an individual whose household income is below 200

percent of the federal poverty measure, determined under the

United States Department of Health and Human Services poverty

guidelines in effect at the time coverage is provided, premium

rates shall equal the standard risk rate described by Subsection

(d); and

(2) for an individual whose household income is at or below 300

percent, but not less than 200 percent, of the federal poverty

measure, determined under the United States Department of Health

and Human Services poverty guidelines in effect at the time

coverage is provided, premium rates shall equal 140 percent of

the standard risk rate described by Subsection (d).

(f) The pool shall submit each rate and rate schedule to the

commissioner for approval. The pool may not use a rate or rate

schedule before the rate or schedule is approved by the

commissioner. In evaluating a rate or rate schedule of the pool,

the commissioner shall consider the factors provided by this

section.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 11.068(a), eff. September 1, 2005.

Acts 2009, 81st Leg., R.S., Ch.

265, Sec. 3, eff. January 1, 2010.

Sec. 1506.106. REINSURANCE. The pool may provide for

reinsurance on a facultative or treaty basis or on both

facultative and treaty bases.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.107. CONTRACTS. (a) The pool may enter into a

contract that is necessary to carry out this chapter, including,

with the approval of the commissioner, a contract with:

(1) a similar pool in another state for the joint performance of

common administrative functions; or

(2) another organization for the performance of administrative

functions.

(b) The pool may contract for stop-loss insurance for risks

incurred by the pool.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.108. LEGAL ACTION. (a) The pool may sue or be sued.

(b) The pool may take any legal action necessary to:

(1) avoid payment of improper claims against the pool or the

coverage provided by or through the pool; or

(2) recover or collect amounts due the pool, including:

(A) assessments due the pool;

(B) amounts erroneously or improperly paid by the pool; and

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.109. COST CONTAINMENT. (a) The pool shall provide

for and use cost containment measures and requirements to make

the coverage offered by the pool more cost-effective. To the

extent the board determines it is cost-effective, the cost

containment measures must include individual case management and

disease management. The cost containment measures may include

preadmission screening, the requirement of a second surgical

opinion, and concurrent utilization review subject to Chapter

4201.

(b) The pool may design, use, contract for, or otherwise arrange

for the delivery of cost-effective health care services,

including establishing or contracting with preferred provider

organizations and health maintenance organizations.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

824, Sec. 2, eff. January 1, 2006.

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2G.017, eff. April 1, 2009.

Sec. 1506.110. BORROWING. The pool may borrow money as

necessary to implement the purposes of the pool.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.111. ADDITIONAL AUTHORITY. In addition to the other

powers granted to the pool under this chapter, the pool may

exercise any of the authority that a health benefit plan issuer

authorized to write health benefit plans in this state may

exercise under the law of this state.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

SUBCHAPTER D. POOL COVERAGE AND BENEFITS

Sec. 1506.151. MINIMUM POOL COVERAGE. (a) The pool shall offer

coverage consistent with major medical expense coverage to each

eligible individual.

(b) The board, with the approval of the commissioner, shall

establish:

(1) the coverages to be provided by the pool;

(2) the applicable schedules of benefits; and

(3) any exclusions to coverage and other limitations.

(1) all required or applicable definitions;

(2) a description of covered services required under the pool;

(3) a list of any exclusions or limitations to coverage; and

(4) the deductibles, coinsurance options, and copayment options

that are required or permitted.

(d) Coverage provided by the pool is subject to Chapter 1379.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 11.069(a), eff. September 1, 2005.

Acts 2007, 80th Leg., R.S., Ch.

808, Sec. 3, eff. January 1, 2008.

Acts 2007, 80th Leg., R.S., Ch.

881, Sec. 4, eff. January 1, 2008.

Acts 2009, 81st Leg., R.S., Ch.

719, Sec. 2, eff. September 1, 2009.

Sec. 1506.152. ELIGIBILITY FOR COVERAGE. (a) An individual who

is a legally domiciled resident of this state is eligible for

coverage from the pool if the individual:

(1) provides to the pool evidence that the individual is a

federally defined eligible individual who has not experienced a

significant break in coverage;

(2) is younger than 65 years of age and provides to the pool

evidence that the individual maintained health benefit plan

coverage under another state's qualified Health Insurance

Portability and Accountability Act health program that was

terminated because the individual did not reside in that state

and submits an application for pool coverage not later than the

63rd day after the date the coverage described by this

subdivision was terminated;

(3) is younger than 65 years of age and has been a legally

domiciled resident of this state for the preceding 30 days, is a

citizen of the United States or has been a permanent resident of

the United States for at least three continuous years, and

provides to the pool:

(A) a notice of rejection of, or refusal to issue, substantially

similar individual health benefit plan coverage from a health

benefit plan issuer, other than an insurer that offers only

stop-loss, excess loss, or reinsurance coverage, if the rejection

or refusal was for health reasons;

(B) certification from an agent or salaried representative of a

health benefit plan issuer that states that the agent or salaried

representative cannot obtain substantially similar individual

coverage for the individual from any health benefit plan issuer

that the agent or salaried representative represents because,

under the underwriting guidelines of the health benefit plan

issuer, the individual will be denied coverage as a result of a

medical condition of the individual;

only with conditional riders;

(D) a diagnosis of the individual with one of the medical or

health conditions on the list adopted under Section 1506.154; or

(E) evidence that the individual is covered by substantially

similar individual coverage that excludes one or more conditions

by rider; or

(4) provides to the pool evidence that, on the date of

application to the pool, the individual is certified as eligible

for trade adjustment assistance or for pension benefit guaranty

corporation assistance, as provided by the Trade Adjustment

Assistance Reform Act of 2002 (Pub. L. No. 107-210).

(b) Subject to Subsection (f), each dependent of an individual

who is eligible for coverage from the pool is also eligible for

coverage from the pool.

coverage from the pool under Subsection (a) is a child, each

parent, grandparent, brother, sister, or child of that individual

who resides with that individual is also eligible for coverage

from the pool.

(d) The board shall develop a form to be used for certification

under Subsection (a)(3)(B). Before it may be used, the form must

be approved by the commissioner.

(e) Notwithstanding Sections 1506.153(a)(1)-(6), an individual

who is certified as eligible for trade adjustment assistance or

for pension benefit guaranty corporation assistance, as provided

by the Trade Adjustment Assistance Reform Act of 2002 (Pub. L.

No. 107-210), and who has at least three months of prior health

benefit plan coverage, as described by Section 1506.155(d), is

not required to exhaust any benefits from the continuation of

coverage under Title X, Consolidated Omnibus Budget

Reconciliation Act of 1985 (29 U.S.C. Section 1161 et seq.), as

amended (COBRA), or state continuation benefits to be eligible

for coverage from the pool.

(f) A dependent or individual described by Subsection (c) who is

not a federally defined eligible individual and who has not

experienced a significant break in coverage may not obtain

coverage from the pool before the first date on which the

dependent or individual has been:

(1) a legally domiciled resident of this state for at least the

30 days preceding the date of the application for coverage from

the pool; and

(2) a citizen or permanent resident of the United States for at

least three continuous years.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 11.070(a), eff. September 1, 2005.

Acts 2005, 79th Leg., Ch.

824, Sec. 3, eff. January 1, 2006.

Acts 2007, 80th Leg., R.S., Ch.

808, Sec. 4, eff. January 1, 2008.

Acts 2007, 80th Leg., R.S., Ch.

881, Sec. 5, eff. January 1, 2008.

Acts 2009, 81st Leg., R.S., Ch.

87, Sec. 14.013, eff. September 1, 2009.

Acts 2009, 81st Leg., R.S., Ch.

533, Sec. 4, eff. September 1, 2009.

Sec. 1506.153. INELIGIBILITY FOR COVERAGE. (a) Notwithstanding

Section 1506.152, an individual is not eligible for coverage from

the pool if:

(1) on the date pool coverage is to take effect, the individual

has health benefit plan coverage from a health benefit plan

issuer or health benefit arrangement in effect, except as

provided by Section 1506.152(a)(3)(E);

(2) at the time the individual applies to the pool, except as

provided in Subsection (b), the individual is eligible for other

health care benefits, including an offer of benefits from the

continuation of coverage under Title X, Consolidated Omnibus

Budget Reconciliation Act of 1985 (29 U.S.C. Section 1161 et

seq.) (COBRA), other than:

(A) coverage, including COBRA or other continuation coverage or

conversion coverage, maintained for any preexisting condition

waiting period under a pool policy or during any preexisting

condition waiting period or other waiting period of the other

coverage;

(B) employer group coverage conditioned by a limitation of the

kind described by Section 1506.152(a)(3)(A) or (C); or

Section 1506.152(a)(3)(C) or (D);

(3) within 12 months before the date the individual applies to

the pool, the individual terminated coverage in the pool, unless

the individual:

(A) demonstrates a good faith reason for the termination; or

(B) is a federally defined eligible individual;

(4) the individual is confined in a county jail or imprisoned in

a state or federal prison;

(5) any of the individual's premiums are paid for or reimbursed

under a government-sponsored program or by a government agency or

health care provider;

(6) the individual's prior coverage with the pool was

terminated:

(A) during the 12-month period preceding the date of application

for nonpayment of premiums; or

(B) for fraud; or

(7) the individual is eligible for health benefit plan coverage

provided in connection with a policy, plan, or program paid for

or sponsored by an employer, even though the employer coverage is

declined. This subdivision does not apply to an individual who

is a part-time employee or a part-time employee's dependent

eligible to participate in an employer plan that provides health

benefit coverage:

(A) that is more limited or restricted than coverage with the

pool; and

(B) for which there is no employer contribution to the premium,

either directly or indirectly.

(b) An individual eligible for benefits from the continuation of

coverage under Title X, Consolidated Omnibus Budget

Reconciliation Act of 1985 (29 U.S.C. Section 1161 et seq.)

(COBRA), or a comparable federal or state employee coverage

continuation program, who did not elect continuation of coverage

during the election period, or whose elected continuation of

coverage lapsed or was cancelled without reinstatement, is

eligible for pool coverage. Eligibility under this subsection is

subject to a minimum 180-day exclusion of coverage under Section

1506.155(a-1).

coverage under Subchapter F or G, Chapter 1251, or Subchapter G,

Chapter 1271, who did not elect continuation coverage during the

election period, or whose elected continuation coverage lapsed or

was canceled without reinstatement, is eligible for pool

coverage. Eligibility under this subsection is subject to a

180-day exclusion of coverage under Section 1506.155(a-1).

(d) The 180-day exclusion of coverage provided under Subsection

the continuation of coverage under Subchapter F or G, Chapter

1251, or Subchapter G, Chapter 1271, who did not elect

continuation coverage during the election period, or whose

elected continuation coverage lapsed or was canceled without

reinstatement, following a period of continuation coverage under

Title X, Consolidated Omnibus Budget Reconciliation Act of 1985

(29 U.S.C. Section 1161 et seq.) (COBRA).

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 11.071(a), eff. September 1, 2005.

Acts 2005, 79th Leg., Ch.

824, Sec. 4, eff. January 1, 2006.

Acts 2007, 80th Leg., R.S., Ch.

808, Sec. 5, eff. January 1, 2008.

Acts 2007, 80th Leg., R.S., Ch.

881, Sec. 6, eff. January 1, 2008.

Acts 2007, 80th Leg., R.S., Ch.

1070, Sec. 2, eff. June 15, 2007.

Reenacted and amended by Acts 2009, 81st Leg., R.S., Ch.

87, Sec. 14.014, eff. September 1, 2009.

Reenacted and amended by Acts 2009, 81st Leg., R.S., Ch.

533, Sec. 5, eff. September 1, 2009.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

550, Sec. 9, eff. June 19, 2009.

Sec. 1506.154. LIST OF COVERED CONDITIONS. (a) The board shall

adopt a list of medical or health conditions for which an

individual is eligible for pool coverage under Section

1506.152(a)(3)(D) without applying for health benefit plan

coverage.

(b) The board may amend the list as appropriate.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

808, Sec. 6, eff. January 1, 2008.

Acts 2007, 80th Leg., R.S., Ch.

881, Sec. 7, eff. January 1, 2008.

Sec. 1506.155. PREEXISTING CONDITIONS. (a) Except as provided

by this section and Section 1506.056, pool coverage excludes

charges or expenses incurred before the first anniversary of the

effective date of coverage with regard to any condition for

which:

(1) the existence of symptoms would cause an ordinarily prudent

person to seek diagnosis, care, or treatment within the six-month

period preceding the effective date of coverage; or

(2) medical advice, care, or treatment was recommended or

received during the six-month period preceding the effective date

of coverage.

Text of subsection as amended by Acts 2009, 81st Leg., R.S., Ch.

550, Sec. 10

(a-1) Except as provided by Section 1506.056, pool coverage for

an individual eligible pursuant to Section 1506.153(b) or (c)

excludes charges or expenses incurred before the expiration of

180 days from the effective date of coverage with regard to any

condition for which:

(1) the existence of symptoms would cause an ordinarily prudent

person to seek diagnosis, care, or treatment within the six-month

period preceding the effective date of coverage; or

(2) medical advice, care, or treatment was recommended or

received during the six-month period preceding the effective date

of coverage.

Text of subsection as amended by Acts 2009, 81st Leg., R.S., Ch.

533, Sec. 6

(a-1) Except as provided by Section 1506.056, pool coverage for

an individual eligible pursuant to Section 1506.153(b) excludes

charges or expenses incurred before the first anniversary of the

effective date of coverage with regard to any condition for

which:

(1) the existence of symptoms would cause an ordinarily prudent

person to seek diagnosis, care, or treatment within the six-month

period preceding the effective date of coverage; or

(2) medical advice, care, or treatment was recommended or

received during the six-month period preceding the effective date

of coverage.

(b) The exclusion provided by Subsection (a) does not apply to a

federally defined eligible individual or an individual who:

(1) was continuously covered for a period of at least 12 months,

excluding any waiting period, by creditable coverage that

terminated not earlier than the 63rd day before the effective

date of coverage under the pool; and

(2) applied for pool coverage not later than the 63rd day after

the date the creditable coverage described by Subdivision (1)

terminated.

in effect at any time during the 12-month period preceding the

effective date of the individual's coverage under the pool, the

pool shall subtract from the exclusion period required under

Subsection (a) the period that the individual was covered under

that creditable coverage and any waiting period that applied

before that creditable coverage became effective.

(c-1) If an individual eligible under Section 1506.153(b) was

covered by creditable coverage at any time during the 12-month

period immediately preceding the effective date of the

individual's coverage under the pool, the pool shall subtract

from the exclusion period required under Subsection (a-1) up to

180 days of:

(1) the period during which the individual was covered under the

creditable coverage; and

(2) any waiting period that applied before the creditable

coverage became effective.

(d) A preexisting condition provision may not be applied to an

individual who has been certified as eligible for trade

adjustment assistance or for pension benefit guaranty corporation

assistance, as provided by the Trade Adjustment Assistance Reform

Act of 2002 (Pub. L. No. 107-210), if the individual:

(1) was continuously covered by a health benefit plan for a

period of three months before the individual's separation from

employment; and

(2) applies for coverage from the pool not later than the 63rd

day after the date on which the prior coverage was terminated.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 11.071(b), eff. September 1, 2005.

Acts 2005, 79th Leg., Ch.

824, Sec. 5, eff. January 1, 2006.

Acts 2007, 80th Leg., R.S., Ch.

808, Sec. 7, eff. January 1, 2008.

Acts 2007, 80th Leg., R.S., Ch.

881, Sec. 8, eff. January 1, 2008.

Acts 2007, 80th Leg., R.S., Ch.

1070, Sec. 3, eff. June 15, 2007.

Acts 2009, 81st Leg., R.S., Ch.

533, Sec. 6, eff. September 1, 2009.

Acts 2009, 81st Leg., R.S., Ch.

550, Sec. 10, eff. June 19, 2009.

Sec. 1506.156. BENEFIT REDUCTION; CERTAIN COVERAGES SECONDARY.

(a) The pool shall reduce benefits otherwise payable under pool

coverage by:

(1) the total amount paid or payable through any other health

benefit plan or health benefit arrangement; and

(2) the total amount of hospital or medical expense benefits

paid or payable under:

(A) workers' compensation coverage;

(B) automobile insurance, regardless of whether provided on the

basis of fault or no fault; or

(b) Pool coverage provided under Section 1506.152(a)(3)(E) is

secondary to the individual coverage described by that paragraph

for any period during which that individual coverage is in

effect.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

824, Sec. 6, eff. January 1, 2006.

Sec. 1506.157. RECOVERY OF CERTAIN AMOUNTS. (a) The pool has a

cause of action against an eligible individual for the recovery

of the amount of benefits paid that are not for covered expenses.

(b) Benefits due from the pool may be reduced or refused as an

offset against an amount recoverable under this section.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.158. TERMINATION OF POOL COVERAGE. (a) An

individual's pool coverage ends:

(1) on the date the individual ceases to be a legally domiciled

resident of this state, unless the individual:

(A) is a student younger than 25 years of age and is financially

dependent on a parent covered by the pool;

(B) is a child for whom an individual covered by the pool may be

obligated to pay child support; or

by the pool, regardless of the age of the child;

(2) on the first day of the month following the date the

individual requests coverage to end;

(3) on the date the individual covered by the pool dies;

(4) on the date state law requires cancellation of the coverage;

(5) at the option of the pool, on the 31st day after the date

the pool sends to the individual any inquiry concerning the

individual's eligibility, including an inquiry concerning the

individual's residence, to which the individual does not reply;

(6) on the 31st day after the date a premium payment for pool

coverage becomes due if the payment is not made before that day;

(7) on the date the individual is 65 years of age and eligible

for coverage under Medicare, unless the coverage received from

the pool is Medicare supplement coverage issued by the pool; or

(8) at the time the individual ceases to meet the eligibility

requirements for coverage.

(b) Notwithstanding Subsection (a), the coverage of an

individual who ceases to meet the eligibility requirements for

coverage terminates on the earlier of:

(1) the first premium due date after the date the pool

determines the individual does not meet the eligibility

requirements; or

(2) the first day of the first month after the month in which

the pool determines the individual does not meet the eligibility

requirements.

individual does not meet the eligibility requirements for

coverage.

(d) An individual may maintain pool coverage for the period the

individual is satisfying a preexisting waiting period under

another health benefit plan or health benefit arrangement

intended to replace the pool coverage.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 11.071(c), eff. September 1, 2005.

Sec. 1506.159. PROHIBITION ON ARRANGEMENT OR ATTEMPTED

ARRANGEMENT OF CERTAIN POOL COVERAGE; PENALTY. (a) A health

benefit plan issuer, agent, third-party administrator, or other

person authorized or licensed under this code may not arrange or

assist in, or attempt to arrange or assist in, the application

for coverage from or placement in the pool of an individual who

is not eligible under Section 1506.153(a)(7) for coverage from

the pool for the purpose of separating the person from health

benefit plan coverage offered or provided in connection with

employment that would be available to the person as an employee

or a dependent of an employee.

(b) A violation of this section is an unfair method of

competition and an unfair or deceptive act or practice under

Chapter 541.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

87, Sec. 14.015, eff. September 1, 2009.

SUBCHAPTER E. OPERATION OF POOL

Sec. 1506.201. PLAN OF OPERATION. (a) Operation and management

of the pool is governed by a plan of operation. The plan of

operation includes the articles, bylaws, and operating rules of

the pool that are adopted by the board.

(b) The plan of operation must ensure the fair, reasonable, and

equitable administration of the pool.

chapter, the plan of operation must include procedures for:

(1) operation of the pool;

(2) selection of an administrator as provided by Section

1506.202;

(3) creation of a fund, under management of the board, for

administrative expenses;

(4) handling, accounting, and auditing of money and other assets

of the pool;

(5) development and implementation of a program to:

(A) publicize the existence of the pool, the eligibility

requirements for coverage under the pool, and enrollment

procedures; and

(B) foster public awareness of the pool;

(6) creation of a grievance committee to review complaints

presented by applicants for coverage from the pool and

individuals who are covered by the pool; and

(7) other matters as may be necessary and proper for the

execution of the board's powers, duties, and obligations under

this chapter.

(d) The board shall amend the plan of operation as necessary to

carry out this chapter. An amendment to the plan of operation

must be approved by the commissioner before it becomes a part of

the plan.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.202. POOL ADMINISTRATOR. (a) The board may, on a

competitive bid basis, contract with one or more health benefit

plan issuers or third-party administrators authorized by the

department to administer the pool.

(b) The board shall establish criteria for evaluating the bids

submitted under this section. The criteria must include:

(1) the bidder's proven ability to handle individual health

benefit plans;

(2) the bidder's efficiency of claims paying procedures;

(3) an estimate of total charges for administering the pool;

(4) the bidder's ability to administer the pool in a

cost-efficient manner; and

(5) the bidder's financial condition and stability.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

808, Sec. 8, eff. January 1, 2008.

Acts 2007, 80th Leg., R.S., Ch.

881, Sec. 9, eff. January 1, 2008.

Sec. 1506.203. ADMINISTRATOR'S CONTRACT. (a) A person selected

as a pool administrator shall serve in that capacity for a period

specified in the contract between the pool and the pool

administrator, subject to removal for cause and subject to any

terms, conditions, and limitations of the contract between the

pool and the pool administrator. The term of the contract must

be at least three years and may be extended, in the board's sole

discretion, for up to a total term of six years.

(b) Not later than one year before the expiration date of a pool

administrator's contract, including any board-authorized

extensions of that contract, the board shall invite all health

benefit plan issuers, including the pool administrator, to submit

bids to serve as a pool administrator for the succeeding

administration period. The selection of the succeeding pool

administrator must be made not later than the sixth calendar

month preceding the month in which the pool administrator's

contract expires.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

808, Sec. 9, eff. January 1, 2008.

Acts 2007, 80th Leg., R.S., Ch.

881, Sec. 10, eff. January 1, 2008.

Sec. 1506.204. ADMINISTRATOR'S FUNCTIONS. (a) A pool

administrator shall perform the functions relating to the pool

that are assigned to the administrator.

(b) The assigned functions may include:

(1) performing eligibility and administrative claims payment

functions for the pool;

(2) establishing a billing procedure for collection of premiums

from individuals covered by the pool;

(3) performing functions necessary to ensure timely payment of

benefits to individuals covered by the pool, including:

(A) providing information relating to the proper manner of

submitting a claim for benefits to the pool and distributing

claim forms; and

(B) evaluating the eligibility of each claim for payment by the

pool;

(4) submitting regular reports to the board relating to the

operation of the pool; and

(5) determining after each calendar year the net written and

earned premiums, expenses of administration, and paid and

incurred losses of the pool for that calendar year and reporting

that information to the board and the commissioner.

submission of the reports required under Subsection (b)(4).

(d) The commissioner shall prescribe the forms to be used to

report the information under Subsection (b)(5).

(e) The board shall determine the times at which a pool

administrator is to perform the billing functions for the pool.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.205. PAYMENTS TO ADMINISTRATOR. (a) The pool shall

pay a pool administrator for the administrator's expenses

incurred in performing duties and functions as provided by the

plan of operation.

(b) Except as provided by Subsection (c), the total amount of

administrative costs and fees paid in a calendar year to all pool

administrators may not exceed 12.5 percent of the gross premium

receipts of the pool for the calendar year.

to exceed 15 percent of the gross premium receipts of the pool

for the calendar year, if the commissioner determines that the

higher amount is necessary to pay the administrative costs and

fees of the pool.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

SUBCHAPTER F. ASSESSMENTS FOR OPERATION OF POOL

Sec. 1506.251. INTERIM ASSESSMENTS. (a) The board may assess

health benefit plan issuers, including making advance interim

assessments, as reasonable and necessary for the pool's

organizational and interim operating expenses.

(b) The board shall credit an interim assessment as an offset

against any regular assessment that is due after the end of the

fiscal year.

under Section 1506.252 and recovered from health benefit plan

issuers under Section 1506.253.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

881, Sec. 11, eff. June 30, 2007.

Sec. 1506.252. DETERMINATION OF NET LOSS. (a) After the end of

each fiscal year, the board shall determine for the preceding

calendar year any net loss of the pool, including administrative

expenses and incurred losses, and report the net loss to the

commissioner.

(b) In determining the net loss, the board shall take into

account investment income and other appropriate gains and losses.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1506.2521. ANNUAL REPORT TO BOARD. Each health benefit

plan issuer shall report to the board the information requested

by the board, as of December 31 of the preceding year.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.072(a), eff. September 1, 2005.

Sec. 1506.2522. ANNUAL REPORT TO BOARD: ENROLLED INDIVIDUALS.

(a) Each health benefit plan issuer shall report to the board

the number of residents of this state enrolled, as of December 31

of the previous year, in the issuer's health benefit plans

providing coverage for residents in this state, as:

(1) an employee under a group health benefit plan; or

(2) an individual policyholder or subscriber.

(b) In determining the number of individuals to report under

Subsection (a)(1), the health benefit plan issuer shall include

each employee for whom a premium is paid and coverage is provided

under an excess loss, stop-loss, or reinsurance policy issued by

the issuer to an employer or group health benefit plan providing

coverage for employees in this state. A health benefit plan

issuer providing excess loss insurance, stop-loss insurance, or

reinsurance, as described by this subsection, for a primary

health benefit plan issuer may not report individuals reported by

the primary health benefit plan issuer.

of excess loss insurance, stop-loss insurance, or reinsurance

count as one employee for purposes of determining that health

plan issuer's assessment.

(d) In determining the number of individuals to report under

this section, the health benefit plan issuer shall exclude:

(1) the dependents of the employee or an individual policyholder

or subscriber; and

(2) individuals who are covered by the health benefit plan

issuer under a Medicare supplement benefit plan subject to

Chapter 1652.

(e) In determining the number of enrolled individuals to report

under this section, the health benefit plan issuer shall exclude

individuals who are retired employees who are 65 years of age or

older.

Added by Acts 2005, 79th Leg., Ch.

824, Sec. 7, eff. January 1, 2006.

Sec. 1506.2523. ANNUAL REPORT TO BOARD: GROSS PREMIUMS. (a)

Each health benefit plan issuer shall report to the board the

gross premiums collected for the preceding calendar year for

health benefit plans.

(b) For purposes of this section, gross health benefit plan

premiums do not include premiums collected for:

(1) coverage under a Medicare supplement benefit plan subject to

Chapter 1652;

(2) coverage under a small employer health benefit plan subject

to Subchapters A-H, Chapter 1501; or

(3) coverage or insurance listed in Section 1506.002(b), (c), or

(d).

Added by Acts 2007, 80th Leg., R.S., Ch.

881, Sec. 12, eff. June 30, 2007.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

533, Sec. 7, eff. September 1, 2009.

Sec. 1506.253. ASSESSMENTS TO COVER NET LOSSES. (a) The board

shall recover any net loss of the pool by assessing each health

benefit plan issuer an amount determined annually by the board

based on information in annual statements, the health benefit

plan issuer's annual report to the board under Sections 1506.2521

and 1506.2522, and any other reports required by and filed with

the board.

(b) The board shall use the total number of enrolled individuals

reported by all health benefit plan issuers under Section

1506.2522 as of the preceding December 31 to compute the amount

of a health benefit plan issuer's assessment, if any, in

accordance with this subsection. The board shall allocate the

total amount to be assessed based on the total number of enrolled

individuals covered by excess loss, stop-loss, or reinsurance

policies and on the total number of other enrolled individuals as

determined under Section 1506.2522. To compute the amount of a

health benefit plan issuer's assessment:

(1) for the issuer's enrolled individuals covered by an excess

loss, stop-loss, or reinsurance policy, the board shall:

(A) divide the allocated amount to be assessed by the total

number of enrolled individuals covered by excess loss, stop-loss,

or reinsurance policies, as determined under Section 1506.2522,

to determine the per capita amount; and

(B) multiply the number of a health benefit plan issuer's

enrolled individuals covered by an excess loss, stop-loss, or

reinsurance policy, as determined under Section 1506.2522, by the

per capita amount to determine the amount assessed to that health

benefit plan issuer; and

(2) for the issuer's enrolled individuals not covered by excess

loss, stop-loss, or reinsurance policies, the board, using the

gross health benefit plan premiums reported for the preceding

calendar year by health benefit plan issuers under Section

1506.2523, shall:

(A) divide the gross premium collected by a health benefit plan

issuer by the gross premium collected by all health benefit plan

issuers; and

(B) multiply the allocated amount to be assessed by the fraction

computed under Paragraph (A) to determine the amount assessed to

that health benefit plan issuer.

A-H, Chapter 1501, is not subject to an assessment under this

subchapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

824, Sec. 8, eff. January 1, 2006.

Acts 2007, 80th Leg., R.S., Ch.

881, Sec. 13, eff. June 30, 2007.

Sec. 1506.254. ASSESSMENT DUE DATE; INTEREST. (a) An

assessment is due on the date specified by the board that is not

earlier than the 30th day after the date written notice of the

assessment is transmitted to the health benefit plan issuer.

(b) Interest accrues on the unpaid amount of an assessment at a

rate equal to the prime lending rate, as published in the most

recent issue of the Wall Street Journal and determined as of the

first day of each month during which the assessment is

delinquent, plus three percent.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

808, Sec. 10, eff. January 1, 2008.

Acts 2007, 80th Leg., R.S., Ch.

881, Sec. 14, eff. January 1, 2008.

Sec. 1506.255. ABATEMENT OR DEFERMENT OF ASSESSMENT. (a) A

health benefit plan issuer may petition the commissioner for an

abatement or deferment of all or part of an assessment

Find Legal Information

Texas Codes and Statutes

CHAPTER 1506. TEXAS HEALTH INSURANCE POOL