28 TAC §11.2200, §11.2206
The Texas Department of Insurance adopts amendments to §11.2200
and new §11.2206 concerning dental health maintenance organizations (HMOs).
The sections are adopted with changes to the proposed text as published in
the December 25, 1998, issue of the
Texas Register
(23 TexReg 13012).
These proposed amendments and new section are necessary to implement legislation
enacted by the 75th Legislature in Senate Bill 385 which requires dental HMOs
with more than 10,000 enrollees in Texas to offer a dental point-of-service
plan to an employer, association, or other private group arrangement that
employs or has 25 or more employees or members and that contributes to the
cost of dental benefit plan coverage to its employees only through an HMO
provider panel. The rules set out disclosure requirements about the point-of-service
plan that must be included as part of the group enrollment application, and
if applicable, the group enrollment form, to allow informed, objective decisions
in selecting dental care coverage. After receiving public comments on the
proposed rules, the department has made changes based upon the public comments,
as well as for clarification, punctuation, and consistency. The following
revisions to the referenced sections were made: Section 11.2200(7) was changed
from "point-of-service group enrollment application" to "point-of-service
group disclosure statement;" language in the definition was changed from "[
a
]n application provided by an HMO that provides" to "[
a
]
written statement containing information about" dental benefits; and "which
statement" was added before "the HMO must provide to." The phrase "if the
employer, association or private group arrangement accepts the dental point-of
service plan" was added to §11.2200(7)(B) to clarify that disclosure
must be made to potential enrollees only if an employee accepts a point-of-service
option offered by an HMO. "Group Enrollment Application for Point-of-Service
Plans" was omitted from the caption of §11.2206 and "Certificates" was
changed to "Certification of Compliance." The phrase "and, if the employer
elects to offer the point-of-service option, each enrollment form," was added
after "each point-of-service application" in §11.2206(a). Proposed §11.2206(a)(4)
was deleted.
Section 11.2200 adds definitions for "insurer," "point-of-service group
disclosure statement," "point-of-service plan," and "qualified actuary." New
§11.2206 sets forth the disclosures that must be included in the point-of-service
disclosure statement and the requirement that an HMO that provides a point-of-service
plan retain certification that the indemnity benefits correspond with benefits
arranged or provided by the HMO.
General: A commenter commended the department for drafting rules that increase
consumer awareness of available dental benefit coverage. Additionally, the
commenter requested confirmation that under Insurance Code Article 20A.38
an enrollee should not be required to use either the HMO or indemnity benefits
first nor should either product be subjected to any waiting periods or other
negative incentives.
Agency Response: The department agrees that a goal of Article 20A.38 is
to increase consumer awareness of the differences between the HMO and indemnity
benefits available to the enrollee and to enable the enrollee to make an informed
choice between the two. The department confirms that if an HMO offering a
point-of-service option were to place constraints on access to one type of
benefit in order to encourage an enrollee to select the other benefit, this
would be contrary to the legislative intent behind the statute and the requirements
of the rules.
Comment: A commenter requested clarification about a perceived discrepancy
between requirements of the Insurance Code and statements in the preamble
to the proposed rules. The commenter interprets the preamble to require that
an HMO that offers a point-of-service option to an employer in accordance
with Article 20A.38 must also offer the point-of-service option to every employer
with which it contracts, regardless of the number of employees employed by
those employers.
Agency Response: Neither Article 20A.38 nor the rules require an HMO to
offer a point-of-service option to an employer, association, or other private
group arrangement unless it employs 25 or more employees or has 25 or more
members.
Comment: A commenter believes that the preamble to the proposed rule did
not clearly outline all conditions required regarding applicability of the
statute.
Agency Response: The department wishes to clarify that the statute applies
to all HMOs that meet all of the conditions set forth in Article 20A.38 sections
(a), (b) and (c). The requirements of all three sections must be read in conjunction
with each other to give full meaning to the statute. The statute applies to
each dental HMO or other single service HMO that provides dental benefits
with more than 10,000 enrollees in this state enrolled in dental benefits
plans based on a provider panel. All of these HMOs must offer a point-of-service
plan to any employer, association, or other private group arrangement that
employs or has 25 or more employees or members if the HMO's dental provider
plan is the sole delivery system offered by the employer to the employees.
It is then up to the employer, pursuant to Article 20A.38(d), to decide whether
to make the employee responsible for paying the cost for the premium for the
point-of-service plan to the extent that the premium exceeds the cost for
the plan provided through a provider panel. Article 20A.38 also requires that
the premium for the point-of-service option be based on the actuarial value
of the point-of-service coverage.
Comment: A commenter was troubled by the use of the word "comparable" in
the preamble to the proposed rules, noting that the word "corresponding" is
used in the text of the rules and in Article 20A.38.
Agency Response: The department regrets any confusion the use of the word
"comparable" may have caused. As used in the preamble, "comparable" was intended
to be synonymous with "corresponding." The department agrees that the rules
and the statute require corresponding benefits.
Sections 11.2200(6) and 11.2206(a): A commenter asked for the addition
of language in the definition of "insurer" or the disclosure sections indicating
that an insurer is not required to provide disclosure above and beyond the
disclosure that the HMO is required to provide under the statute and rules.
Agency Response: The department agrees that there is no requirement in
Article 20A.38 or the rules that an insurer with which an HMO has contracted
for the provision of indemnity services must implement the disclosures required
by this statute. These rules do not require an insurer to provide any disclosures
or notice. However, the rules do provide that the HMO and insurer can contractually
agree that the insurer will prepare the certification that relates to the
indemnity coverage provided by the insurer on behalf of the HMO. However,
the HMO retains responsibility for ensuring that the certification prepared
by the insurer complies with the statute and rules.
Section 11.2206(a)(4): A commenter requested deletion of language requiring
disclosure of premiums to prospective enrollees because it would increase
costs and enrollees may be mislead about the cost for such coverage.
Agency Response: The department agrees that this requirement is problematic
in that Article 20A.38(d) permits an employer to require an enrollee who selects
coverage under the point-of-service plan to pay the premium costs that exceed
the amount of premium paid by the employer for the HMO coverage. Therefore,
the HMO would not be in a position to know or provide an enrollee with the
actual costs of the coverage that the enrollee will be required to pay. Accordingly,
this paragraph was deleted from the adopted rules. It should be noted, however,
that these rules do not relieve an HMO of its responsibility to comply with
other rules that require disclosure of premium costs by an HMO.
Section 11.2200(7)(B): A commenter requested that the phrase "if the employer,
association or private group arrangement accepts the dental point-of service
plan" be added after "any prospective enrollees in a dental point-of-services
plan."
Agency Response: The department agrees with the commenter and has added
this language to clarify that the disclosures required by the statute and
rules must be made to potential enrollees only if the employer accepts the
point-of-service option offered by the HMO.
For with changes: Texas Dental Association, DeltaCare, and National Association
of Dental Plans.
The amendments and new section are adopted under the Insurance
Code Articles 20A.38, 20A.22, and 1.03A. Article 20A.38 requires an HMO with
more than 10,000 enrollees in Texas that offers dental benefits to offer a
dental point-of-service plan to an employer, association, or other private
group arrangement that employs or has 25 or more employees or members if its
dental provider panel is the sole delivery system of dental benefits to its
employees. Insurance Code Article 20A.38(c)(3) requires an HMO to provide
disclosure statements as required by rules adopted under the Insurance Code
for each dental plan offered. Insurance Code Article 20A.22(a) authorizes
the Commissioner of Insurance to promulgate rules and regulations to carry
out the provision of the Act. Insurance Code Article 1.03A provides that the
Commissioner of Insurance may adopt rules and regulations to execute the duties
and functions of the Texas Department of Insurance as authorized by statute.
§11.2200. Definitions.
The following words and terms, when used in this subchapter, shall
have the following meanings, unless the context clearly indicates otherwise.
(1)-(5)
(No change.)
(6)
Insurer - An insurance company, a group hospital
service corporation operating under Chapter 20 of the Texas Insurance Code,
a fraternal benefit society operating under Chapter 10 of the Code, or a stipulated
premium insurance company operating under Chapter 22 of the Code.
(7)
Point-of-service group disclosure statement - A written
statement containing information about dental benefits which statement the
HMO must provide to:
(A)
an employer, an association or other private group arrangement
to whom the HMO must offer a dental point-of-service plan; and
(B)
any prospective enrollees in a dental point-of service
plan, if the employer, association or private group arrangement accepts the
dental point-of service plan.
(8)
Point-of-service plan - A plan provided through
a contractual arrangement under which indemnity benefits for the cost of dental
care services other than emergency care or emergency dental care are provided
by an insurer in conjunction with corresponding benefits arranged or provided
by an HMO that provides dental benefits and under which an enrollee may choose
to obtain benefits or services under either the indemnity plan or the HMO
plan in accordance with specific provisions of Insurance Code, Article 20A.38.
(9)
Qualified actuary - An actuary who is either:
(A)
a Fellow of the Society of Actuaries, or
(B)
a Member of the American Academy of Actuaries.
§11.2206. Mandatory Disclosure Statements, Certification of Compliance.
(a)
Each point-of-service group enrollment application and,
if the employer, association or private group arrangement elects to offer
the point-of-service option, each enrollment form, shall include a disclosure
statement written in readable and understandable format that includes the
following information:
(1)
a statement that the dental indemnity benefits are provided
through an insurer and that the dental care services are offered or arranged
by the HMO;
(2)
the name of the insurer and the name of the HMO offering
the benefits; and
(3)
an explanation that, in order to receive benefits:
(A)
from the HMO, an enrollee must utilize only network providers,
except for emergency dental care, and pay the copayments specified in the
evidence of coverage;
(B)
under the indemnity plan, the enrollee may utilize any
provider but prior to receiving reimbursement, the enrollee must meet the
required deductible and is responsible for the coinsurance amount specified
in the policy or certificate.
(b)
Each HMO offering a point-of-service plan shall retain
on file a certification by an HMO officer that the point-of-service plan includes
dental indemnity benefits that correspond to the benefits contained in the
HMO evidence of coverage. The HMO may enter into agreement with the insurer
or a qualified actuary to prepare the certification, provided that the HMO
retains responsibility for obtaining the certification and shall keep the
certification in its possession.
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
13, 1999.
TRD-9902403
Lynda H. Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: May 13, 1999
Proposal publication date: December 25, 1998
For further information, please call: (512) 463-6327