Part I.
Texas Department of Insurance
Chapter 3.
Life, Accident and Health Insurance and Annuities
The Commissioner of Insurance adopts amendments to §§3.3303,
3.3306, 3.3308, 3.3309, and 3.3324 and new §3.3312 under Subchapter T
and amendments to §§3.3603 - 3.3609, and 3.3613 under Subchapter
W, concerning minimum standards for Medicare supplement policies and miscellaneous
rules for group and individual accident and health insurance. With the exception
of new §3.3312 under Subchapter T, these sections are adopted without
changes to the proposed text as published in the February 26, 1999 issue of
the
Texas Register
(24 TexReg 1300) and will
not be republished. In conjunction with these adopted amendments and new section,
the commissioner has adopted the repeal of existing §§3.3610 - 3.3612.
Notice of the adoption of the repeal is published elsewhere in this issue
of the
Texas Register
.
The amended sections are necessary to bring Texas into compliance with
Public Law 105-33, the federal Balanced Budget Act of 1997 (BBA). Failure
to comply with the federal mandates in the BBA will subject Texas to potential
penalties including the loss of authority to regulate Medicare supplement
coverage. The major changes brought about by the BBA specify additional situations
in which Medicare beneficiaries, after other coverage ceases or terminates,
will be guaranteed access to certain types of Medicare supplement policies
on a guaranteed issue basis. The BBA also mandates protections for these persons
against discrimination in the sale and pricing of Medicare supplement policies,
as well as limitation of preexisting condition exclusions, and adds two new
high deductible plans. These adopted amendments increase awareness and accessibility
of Medicare supplement coverage, which will thus increase beneficiary access
to health care services, particularly in areas with limited availability of
Medicare+Choice plans. The adopted amendments also provide the advantage of
encouraging participation in a Medicare+Choice plan. Medicare+Choice offers
a marketplace of options similar to those available to the non-Medicare population.
Under the adopted amendments, Medicare beneficiaries are guaranteed, under
certain circumstances, the right to Medicare supplement coverage if they choose
to enroll in original Medicare coverage after leaving a Medicare+Choice plan.
The department has made one change from the proposed rule to correct a
typographical error. In §3.3312(b)(2)(A) of the proposed rule, the department
has changed the citation to U.S.C. Title 42, Chapter 7, Subchapter XVIII,
Part D to Part C.
Amended §3.3303 adds definitions for bankruptcy, continuous period
of creditable coverage, creditable coverage, employee welfare benefit plan,
health maintenance organization, insolvency, Medicare+Choice organization,
Medicare+Choice plan, Medicare+Choice private fee-for-service plan, Medicare
Select policy, point-of-service, provider-sponsored organization, and Secretary.
Amended §3.3306 sets out requirements for reduction of preexisting condition
exclusions, coinsurance and copayments under Medicare Part B, and the composition
of new high deductible plans "F" and "J," and revise the list of provided
annual preventive services. Amended §3.3308 requires forms to disclose
the reduction of preexisting condition limitations in accordance with the
new regulations. Amended §3.3309 requires application forms to include
questions to elicit information as to whether the applicant is eligible for
guaranteed issuance of certain Medicare supplement plans, or reduction of
any applicable preexisting condition limitation. The new adopted §3.3312
sets out requirements for guaranteed issue of certain Medicare supplement
coverage for certain eligible persons. Amended §3.3324 sets out requirements
for reduction of preexisting condition exclusions for certain eligible persons
based on their period of creditable coverage. Amended §§3.3603 through
3.3609 and §3.3613 relate to the required disclosure statements for policies
that duplicate Medicare benefits. These sections codify notice requirements
for the content and format of 7 disclosure statements which must be provided
to inform prospective buyers of health insurance policies about the extent
to which benefits under such policies duplicate Medicare benefits, pursuant
to requirements approved by the U.S. Secretary of Health and Human Services.
Amended §3.3603 sets out the purpose and scope of the notice and disclosure.
Amended §3.3604 sets out the content and format of the notice for policies
that provide benefits for expenses incurred for an accidental injury only.
Amended §3.3605 sets out the content and format of the notice for policies
that provide benefits for specified limited services. Amended §3.3606
sets out the content and format of the notice for policies that reimburse
expenses incurred for specified disease or other specified impairments (including
cancer policies, specified disease policies and other policies limiting reimbursement
to named medical conditions). Amended §3.3607 sets out the content and
format of the notice for policies that pay fixed dollar amounts for specified
disease or other specified impairments (including cancer, specified disease
policies, and other policies that pay a scheduled benefit or specified payment
based on diagnosis of the conditions named in the policy). Amended §3.3608
sets out the content and format of the notice for indemnity or other policies
(other than long-term care policies) that pay a fixed dollar amount per day.
Amended §3.3609 sets out the content and format of the notice for policies
that provide benefits for both expenses incurred and fixed indemnity. Amended
§3.3613 sets out the content and format of the notice for other health
insurance policies not specifically identified in §§3.3604 through
3.3609.
§3.3306. A commenter recommends that the department expand the pool
of approved payees in two clauses contained in this section to include nurse
practitioners and clinical nurse specialists.
Agency Response: The department appreciates this comment; however, since
the department did not propose amending these clauses, this recommended change
could be considered a substantive change which could require republication.
Therefore, the department declines to make this change at this time. However,
the department is researching the suggested change and has forwarded the commenter's
recommendation to the NAIC for consideration as part of a group of corrections
to the Model Regulation the NAIC plans to publish. The department anticipates
addressing the recommendation of the commenter along with other corrections
when finalized by the NAIC. In the interim, the department notes that the
fact the rule does not specifically list a practitioner does not preclude
a carrier from recognizing a federally approved practitioner as an independent
reimbursement provider.
For, with changes: Coalition For Nurses In Advanced Practice.
Subchapter T. Minimum Standards for Medicare Supplement Policies
28 TAC §§3.3303, 3.3306, 3.3308, 3.3309, 3.3312, 3.3324
The amendments and new section are adopted under the Insurance
Code Articles 3.74, 3.70-3 and 1.03A. Article 3.74, §5(d) provides that
the department may promulgate reasonable rules for captions or notice requirements
determined to be in the public interest and designed to inform prospective
insureds, subscribers, or enrollees that particular coverages are not Medicare
supplement coverages. Article 3.74, §10 provides that the department
shall adopt rules in accordance with federal law necessary for the state to
retain certification under 42 U.S.C. Section 1395ss, as well as any other
reasonable rules necessary and proper to enforce Texas' minimum statutory
standards for Medicare supplement policies. Article 3.70-3 authorizes the
department to adopt rules and regulations for the filing and submission of
health insurance policies as are necessary, proper or advisable. Article 1.03A
authorizes the commissioner to adopt rules and regulations for the conduct
and execution of the duties and functions of the department as authorized
by statute.
§3.3312.Guaranteed Issue for Eligible Persons.
(a)
Guaranteed Issue.
(1)
Eligible persons are those individuals described in subsection
(b) of this section who apply to enroll under the policy not later than 63
days after the date of the termination of enrollment described in subsection
(b), of this section and who submit evidence of the date of termination or
disenrollment with the application for a Medicare supplement policy.
(2)
With respect to eligible persons, an issuer shall
not deny or condition the issuance or effectiveness of a Medicare supplement
policy described in subsection (c) of this section that is offered and is
available for issuance to newly enrolled individuals by the issuer, and shall
not discriminate in the pricing of such a Medicare supplement policy because
of health status, claims experience, receipt of health care, or medical condition,
and shall not impose an exclusion of benefits based on a preexisting condition
under such a Medicare supplement policy.
(b)
Eligible Persons. An eligible person is an individual described
in any of the following paragraphs:
(1)
The individual is enrolled under an employee welfare benefit
plan that provides health benefits that supplement the benefits under Medicare,
and the plan terminates, or the plan ceases to provide all such supplemental
health benefits to the individual; or the individual is enrolled under an
employee welfare benefit plan that is primary to Medicare and the plan terminates
or the plan ceases to provide all health benefits to the individual because
the individual leaves the plan.
(2)
The individual is enrolled with a Medicare+Choice
organization under a Medicare+Choice plan under Part C of Medicare, and any
of the following circumstances apply:
(A)
The organization's or plan's certification (under U.S.C.
Title 42, Chapter 7, Subchapter XVIII, Part C) has been terminated or the
organization has terminated or otherwise discontinued providing the plan in
the area in which the individual resides;
(B)
The individual is no longer eligible to elect the plan
because of a change in the individual's place of residence or other change
in circumstances specified by the Secretary, but not including termination
of the individual's enrollment on the basis described in section 1851(g)(3)(B)
of the federal Social Security Act (where the individual has not paid premiums
on a timely basis or has engaged in disruptive behavior as specified in standards
under section 1856), or the plan is terminated for all individuals within
a residence area;
(C)
The individual demonstrates, in accordance with guidelines
established by the Secretary, that:
(i)
The organization offering the plan substantially violated
a material provision of the organization's contract under U.S.C. Title 42,
Chapter 7, Subchapter XVIII, Part D in relation to the individual, including
the failure to provide an individual on a timely basis medically necessary
care for which benefits are available under the plan or the failure to provide
such covered care in accordance with applicable quality standards; or
(ii)
The organization, or agent or other entity acting on the
organization's behalf, materially misrepresented the plan's provisions in
marketing the plan to the individual; or
(D)
The individual meets such other exceptional conditions
as the Secretary may provide.
(3)
The individual is enrolled with an entity listed
in subparagraphs (A) - (D) of this paragraph and enrollment ceases under the
same circumstances that would permit discontinuance of an individual's election
of coverage under paragraph (2) of this subsection:
(A)
An eligible organization under a contract under Section
1876 (Medicare risk or cost);
(B)
A similar organization operating under demonstration project
authority, effective for periods before April 1,1999;
(C)
An organization under an agreement under Section 1833(a)(1)(A)
(health care prepayment plan); or
(D)
An organization under a Medicare Select policy; and
(4)
The individual is enrolled under a Medicare supplement
policy and the enrollment ceases because:
(A)
Of the insolvency of the issuer or bankruptcy of the nonissuer
organization; or of other involuntary termination of coverage or enrollment
under the policy;
(B)
The issuer of the policy substantially violated a material
provision of the policy; or
(C)
The issuer, or an agent or other entity acting on the issuer's
behalf, materially misrepresented the policy's provisions in marketing the
policy to the individual;
(5)
The individual was enrolled under a Medicare
supplement policy and terminates enrollment and subsequently enrolls, for
the first time, with any Medicare+Choice organization under a Medicare+Choice
plan under part C of Medicare, any eligible organization under a contract
under Section 1876 (Medicare risk or cost), any similar organization operating
under demonstration project authority, an organization under an agreement
under section 1833(a)(1)(A) (health care prepayment plan), or a Medicare Select
policy; and the subsequent enrollment is terminated by the individual during
any period within the first 12 months of such subsequent enrollment (during
which the individual is permitted to terminate such subsequent enrollment
under section 1851(e) of the federal Social Security Act); or
(6)
The individual, upon first becoming enrolled in Medicare
part B for benefits at age 65 or older, enrolls in a Medicare+Choice plan
under part C of Medicare, and disenrolls from the plan no later than 12 months
after the effective date of enrollment.
(c)
Products to Which Eligible Persons are Entitled. The Medicare
supplement policy to which eligible persons are entitled under:
(1)
Subsection (b)(1), (2), (3) and (4) of this section is
a Medicare supplement policy which has a benefit package classified as Plan
A, B, C, or F offered by any issuer.
(2)
Subsection (b)(5) of this section is the same Medicare
supplement policy in which the individual was most recently previously enrolled,
if available from the same issuer, or, if not so available, a policy described
in paragraph (1) of this subsection.
(3)
Subsection (b)(6) of this section shall include any
Medicare supplement policy offered by any issuer.
This agency hereby certifies that the adoption has been
reviewed by legal counsel and found to be a valid exercise of the agency's
legal authority.
Filed with the Office of the Secretary of State on April
15, 1999.
TRD-9902216
Lynda H. Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: April 14, 1999
Proposal publication date: February 26, 1999
For further information, please call: (512) 463-6327
28 TAC §§3.3603-3.3609, 3.3613
The amendments are adopted under the Insurance Code Articles
3.74, 3.70-3 and 1.03A. Article 3.74, §5(d) provides that the department
may promulgate reasonable rules for captions or notice requirements determined
to be in the public interest and designed to inform prospective insureds,
subscribers, or enrollees that particular coverages are not Medicare supplement
coverages. Article 3.74, §10 provides that the department shall adopt
rules in accordance with federal law necessary for the state to retain certification
under 42 U.S.C. Section 1395ss, as well as any other reasonable rules necessary
and proper to enforce Texas' minimum statutory standards for Medicare supplement
policies. Article 3.70-3 authorizes the department to adopt rules and regulations
for the filing and submission of health insurance policies as are necessary,
proper or advisable. Article 1.03A authorizes the commissioner to adopt rules
and regulations for the conduct and execution of the duties and functions
of the department as authorized by statute.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on April
15, 1999.
TRD-9902215
Lynda H. Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: April 14, 1999
Proposal publication date: February 26, 1999
For further information, please call: (512) 463-6327
28 TAC §§3.3610-3.3612
The Commissioner of Insurance adopts the repeal of §§3.3610
- 3.3612, concerning notices for Medicare supplement policies. The repeal
is adopted without changes to the proposal as published in the February 26,
1999 issue of the Texas Register (24 TexReg 1300). In conjunction with this
repeal, the commissioner has adopted amendments to (3.3603 - 3.3609 and (3.3613
under Subchapter W. Notice of these adopted amendments is published elsewhere
in this issue of the Texas Register.
Repeal of these sections is necessary to bring Texas into compliance with
the federal Balanced Budget Act of 1997 (BBA).
The purpose and objective of this repeal is to delete disclosure notices
no longer necessary for certain policies. Changes to the BBA clarify that
those certain policies are no longer considered to provide benefits that duplicate
Medicare.
No comments were received.
The repeal is adopted under the Insurance Code Articles 3.70-3,
3.74, and 1.03A. Article 3.70-3 authorizes the department to adopt rules and
regulations for the filing and submission of health insurance policies as
are necessary, proper or advisable. Article 3.74, §5(d) provides that
the department may promulgate reasonable rules for captions or notice requirements
determined to be in the public interest and designed to inform prospective
insureds, subscribers, or enrollees that particular coverages are not Medicare
supplement coverages. Article 3.74, §10 provides that the department
shall adopt rules in accordance with federal law as necessary for the state
to retain certification under 42 U.S.C. Section 1395ss, as well as any other
reasonable rules necessary and proper to enforce Texas' minimum statutory
standards for Medicare supplement policies. Article 1.03A authorizes the commissioner
to adopt rules and regulations for the conduct and execution of the duties
and functions of the department as authorized by statute.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on April
15, 1999.
TRD-9902217
Lynda H. Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: April 14, 1999
Proposal publication date: February 26, 1999
For further information, please call: (512) 463-6327
Subchapter M. Mandatory Notice Requirements
Subchapter W. Miscellaneous Rules for Group and Individual Accident and Health Insurance
Chapter 21.
Trade Practices