Part 1.
TEXAS DEPARTMENT OF INSURANCE
Chapter 11.
HEALTH MAINTENANCE ORGANIZATIONS
The Texas Department of Insurance proposes amendments to §§11.2,
11.508 and 11.509, concerning basic health care services and state-mandated
benefits for health maintenance organizations (HMOs). These proposed amendments
are the result of the enactment of Senate Bill (SB) 541 during the 78th Regular
Legislative Session. That legislation, among other things, provides more flexibility
in the health insurance market by authorizing insurers and HMOs to issue health
plans that, in whole or in part, do not include state-mandated benefits. These
consumer choice plans are the subject of proposed rules published elsewhere
in this issue of the
Texas Register
. In addition,
SB 541 amended the definition of "basic health care services" in the HMO Act,
Texas Insurance Code Chapter 843, to allow the commissioner to determine those
services that an enrolled population might reasonably need to be maintained
in good health, and to delete the requirement that such services include,
at a minimum, services designated as basic health care services for federally
qualified HMOs under Section 1302, Title XIII, Public Health Service Act (42
U.S.C. Section 300e-1(1)).
The proposed amendments are necessary to comply with SB 541 by identifying
basic health care services that are not tied to the specific requirements
of federal law. The amendments are also necessary to amend and add definitions
consistent with these changes and with the development and issuance of consumer
choice plans in the HMO market. In developing a list of basic health care
services, the department considered and evaluated the requirements of federal
law contained in the existing rule; many of these requirements were retained,
although the proposed rule, unlike the existing rule, is comprised solely
of basic services that apply to all persons and removes certain services that
are condition-specific. In developing the list, the department also considered
the statutes and rules of neighboring states and some of the larger states
with populations similar to that of Texas. The department also considered
and evaluated those services that were included in evidences of coverage in
use in Texas prior to the statutory directive that the federal requirements
be considered the minimum standard. Based on the department's analysis of
these sources, the department believes the services that are included in the
proposed description of basic health care services are those that an enrolled
population might reasonably need to be maintained in good health. Consistent
with SB 541, the proposed amendments also limit the application of some currently
required additional mandatory benefit standards for certain group agreements
and add coverage requirements for certain services as set forth in §11.508(a)(1)(H)(iv)
(cancer screenings as required in Insurance Code Article 3.70-2(H) relating
to mammography) and (vi) (cancer screenings as required in Insurance Code
Article 21.53S relating to screening for colorectal cancer). The proposed
amendments to §11.2(b) amend the definition of basic health care service
and add definitions for consumer choice plans and state-mandated plans. The
proposed amendments in that section also change some of the references to
certain provisions of the Insurance Code to reflect the Code’s recodification.
The proposed amendments to §11.508 describe basic health care services
for group, individual and conversion agreements, including state-mandated
plans. The proposed amendments to §11.509 clarify that certain additional
mandatory benefit standards must be included in certain group agreements,
rather than in all group plans.
The Department will consider the adoption of the proposed amendments to §§1.2(b),
11.508 and 11.509 in a public hearing under Docket No. 2586 scheduled for
February 6, 2004, at 9:30 a.m. in Room 100 of the William P. Hobby Jr. State
Office Building, 333 Guadalupe Street in Austin, Texas.
Kimberly Stokes, Senior Associate Commissioner for Life, Health and Licensing,
has determined that for each year of the first five years the proposed sections
will be in effect, there will be no fiscal impact to state and local governments
as a result of the enforcement or administration of the rule. There will be
no measurable effect on local employment or the local economy as a result
of the proposal.
Ms Stokes has determined that for each year of the first five years the
proposed amendments are in effect, the public benefits anticipated as a result
of the proposed amendments will be advising HMOs, physicians and providers,
and the public of the services that constitute basic health care services.
Cost implications to persons required to comply with these amendments for
each year of the first five years the proposed amendments will be in effect
are as follows: These amendments remove the requirement that basic health
care services include all of the currently required standards for federally
qualified HMOs, as well as some requirements related to specific health conditions.
Pursuant to the statute, they also limit the application of some additional
mandatory benefit standards for certain group agreements, and add coverage
requirements for certain services enumerated in SB 541. Consequently, any
change in cost is either due to the requirements of the statute and not to
these amendments or, where required by these amendments, may result in some
cost savings to HMOs and ultimately to purchasers of HMO products. To the
extent most of the services in the proposal are the same or similar as those
required under the existing rule, they should pose no additional costs to
affected entities. The precise changes in cost on an aggregate basis, whether
increased or decreased, would depend upon the extent to which any of these
services are utilized by the HMOs' enrollees. Because the costs are not dependent
upon the size of the HMO, small business HMOs will incur the same costs, or
realize the same savings, as the largest HMOs. Enrollees of small HMOs are
entitled to coverage for the same basic health care services as enrollees
of large HMOs. Consequently, the department believes that it is neither legal
nor feasible to establish separate basic health care service requirements
or waive the requirements for carriers that are small or micro businesses
pursuant to Texas Government Code §2006.001.
To be considered, written comments on the proposal must be submitted no
later than 5:00 p.m. on February 9, 2004 to Gene C. Jarmon, General Counsel
and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P. O. Box
149104, Austin, Texas 78714-9104. An additional copy of the comment must be
simultaneously submitted to Kimberly Stokes, Senior Associate Commissioner,
Life, Health and Licensing Program, Mail Code 107-2A, Texas Department of
Insurance, P.O. Box 149104, Austin, Texas 78714-9104.
Subchapter A. GENERAL PROVISIONS
28 TAC §11.2
The amendments are proposed under the Insurance Code Article
20A.9N(j) and §§843.002(2), 843.151 and 36.001. Insurance Code Article
20A.09N(j) requires the commissioner to adopt rules as necessary to implement
the statutes creating consumer choice plans. Section 843.002(2) provides that
basic health care services are those the commissioner determines an enrolled
population might reasonably require in order to be maintained in good health.
Section 843.151 provides that the commissioner may adopt reasonable rules
as necessary and proper to carry out the provisions of Chapters 843 and 20A.
Section 36.001 provides that the commissioner may adopt any rules necessary
and appropriate to implement the powers and duties of the Texas Department
of Insurance under the Insurance Code and other laws of this state.
The following sections are affected by this proposal: Insurance Code Article
20A.9N(j) and §843.002
§11.2.Definitions.
(a)
The definitions found in the Texas Health Maintenance Organization
Act, [
(b)
The following words and terms, when used in this chapter,
shall have the following meanings unless the context clearly indicates otherwise.
(1)
Act--The Texas Health Maintenance Organization Act, [
(2) - (4)
(No change.)
(5)
Agent--As defined in the Insurance Code
Article 21.07-1, §2
[
(6)
(No change.)
(7)
Basic health care service--Health care services which an
enrolled population might reasonably require to maintain good health, [
(8) - (9)
(No change.)
(10)
Control--As defined in the Insurance Code
§§823.005
and 823.151
[
(11) - (16)
(No change.)
(17)
HMO--A health maintenance organization as defined in Insurance
Code
§843.002(14)
[
(18) - (21)
(No change.)
(22)
Limited service HMO--An HMO which has been issued a certificate
of authority to issue a limited [
(23) - (40)
(No change.)
(41)
Single service HMO--An HMO which has been issued a certificate
of authority to issue a single health care service plan as defined in the
Insurance Code
§843.002
[
(42) - (49)
(No change.)
(50)
Voting security--As defined in the Insurance Code
§823.007
[
(51)
(No change.)
(52)
Annual financial statement--The annual statement to be
used by HMOs, as promulgated by the NAIC and as adopted by the commissioner
under Insurance Code
Article
[
(53) - (57)
(No change.)
(58)
Consumer choice plan--A health plan offered
by an HMO, as described in Subchapter AA of Chapter 21 of this title (relating
to Consumer Choice Health Benefit Plans);
(59)
State-mandated plan--A health plan offered
by an HMO, that contains coverage for all state-mandated benefits, including
those as described in §§21.3515 - 21.3518 of this title (relating
to State-mandated Health Benefits in Individual HMO Plans, State-mandated
Health Benefits in Group HMO Plans, State-mandated Health Benefits in Small
Employer HMO Plans, and State-mandated Health Benefits in Large Employer HMO
Plans) and offers basic health care services without limitation as to time
and cost.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on December 29, 2003.
TRD-200308895
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: February 8, 2004
For further information, please call: (512) 463-6327
28 TAC §11.508, §11.509
The amendments are proposed under the Insurance Code Article
20A.9N(j) and §§843.002(2), 843.151 and 36.001. Insurance Code Article
20A.09N(j) requires the commissioner to adopt rules as necessary to implement
the statutes creating consumer choice plans. Section 843.002(2) provides that
basic health care services are those the commissioner determines an enrolled
population might reasonably require in order to be maintained in good health.
Section 843.151 provides that the commissioner may adopt reasonable rules
as necessary and proper to carry out the provisions of Chapters 843 and 20A.
Section 36.001 provides that the commissioner may adopt any rules necessary
and appropriate to implement the powers and duties of the Texas Department
of Insurance under the Insurance Code and other laws of this state.
The following sections are affected by this proposal: Insurance Code Article
20A.9N(j) and §843.002
§11.508.Mandatory Benefit Standards: Group, Individual and Conversion Agreements.
(a)
Each evidence of coverage providing basic health care services
[
(1)
Outpatient services, including the
following:
(A)
primary care and specialist physician
services;
(B)
outpatient services by other providers;
(C)
diagnostic services, including laboratory,
imaging and radiologic services;
(D)
therapeutic radiology services;
(E)
prenatal services;
(F)
outpatient rehabilitation therapies including
physical therapy, speech therapy and occupational therapy;
(G)
home health services;
(H)
preventive services, including:
(i)
periodic health examinations for adults
as required in Insurance Code Article 20A.09B;
(ii)
immunizations for children as required
in Insurance Code Article 21.53F §3;
(iii)
well-child care from birth as required
in Insurance Code Article 20A.09E;
(iv)
cancer screenings as required in Insurance
Code Article 3.70-2(H) relating to mammography;
(v)
cancer screenings as required in Insurance
Code Article 21.53F relating to screening for prostate cancer;
(vi)
cancer screenings as required in Insurance
Code Article 21.53S relating to screening for colorectal cancer; and
(vii)
annual eye and ear examinations for
children through age 17, to determine the need for vision and hearing correction.
(I)
mental health services for short-term
evaluative or crisis stabilization services, which must have the same cost-sharing
and benefit maximum provisions as any physical health services; and
(J)
emergency services as required by Insurance
Code Article 20A.09Y.
(2)
Inpatient hospital services, including
room and board, general nursing care, meals and special diets when medically
necessary, use of operating room and related facilities, use of intensive
care unit and services, x-ray services, laboratory and other diagnostic tests,
drugs, medications, biologicals, anesthesia and oxygen services, special duty
nursing when medically necessary, radiation therapy, inhalation therapy, administration
of whole blood and blood plasma, and short-term rehabilitation therapy services
in the acute hospital setting.
(3)
Inpatient physician care services, including
services performed, prescribed, or supervised by physicians or other health
professionals including diagnostic, therapeutic, medical, surgical, preventive,
referral and consultative health care services.
(4)
Outpatient hospital services, including
treatment services; ambulatory surgery services; diagnostic services, including
laboratory, radiology, and imaging services; rehabilitation therapy; and radiation
therapy.
[
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(b)
In addition to the basic health care
services in subsection (a) of this section, each evidence of coverage shall
include coverage for the following:
(1)
breast reconstruction as required by federal
law if the plan provides coverage for mastectomy. Breast reconstruction is
subject to the same deductible or copayment applicable to mastectomy. Breast
reconstruction may not be denied because the mastectomy occurred prior to
the effective date of coverage;
(2)
inpatient and postdelivery care for an
enrollee and her newborn child as required by federal law, if the plan provides
maternity benefits; and
(3)
diabetes self-management training, equipment
and supplies as required in Insurance Code Article 21.53G.
(c)
[
(d)
A state-mandated plan defined in §11.2(b)
of this title (relating to Definitions) shall provide coverage for the basic
health care services as described in subsection (a) of this section, as well
as all state-mandated benefits as described in §§21.3516 - 21.3518
of this title (relating to State-mandated Health Benefits in Individual HMO
Plans, State-mandated Health Benefits in Small Employer HMO Plans, and State-mandated
Health Benefits in Large Employer HMO Plans), and must provide the services
without limitation as to time and cost.
(e)
[
§11.509.Additional Mandatory Benefit Standards: Group Agreement Only.
Group agreements must contain the following additional mandatory provisions.
(1) - (2)
(No change.)
(3)
Chemical dependency. A provision to provide benefits for
the necessary care and treatment of chemical dependency that are not less
favorable than for physical illness generally, subject to the same durational
limits, dollar limits, deductibles and coinsurance factors
is required
for state-mandated plans defined in §11.2(b) of this title (relating
to Definitions)
. Dollar or durational limits which are less favorable
than for physical illness generally may be set only if such limits are sufficient
to provide appropriate care and treatment under the guidelines and standards
adopted under the Insurance Code Article 3.51-9, §2A(d), including §§3.8001
- 3.8022 of this title (relating to Standards for Reasonable Cost Control
and Utilization Review for Chemical Dependency Treatment Centers).
(A)
Coverage for chemical dependency may be limited to a lifetime
maximum of three separate series of treatment for each covered individual
as described by the Insurance Code Article 3.51-9, §2A(b).
(B)
Benefits provided shall be determined as if necessary care
and treatment in a chemical dependency treatment center were care and treatment
in a hospital.
(4)
Osteoporosis. A provision that provides coverage to a qualified
individual as defined in the Insurance Code Article 21.53C for medically accepted
bone mass measurement for the detection of low bone mass and to determine
the person's risk of osteoporosis and fractures associated with osteoporosis
is required for state-mandated plans defined in §11.2(b) of this title.
(5)
(No change.)
(6)
Conditions affecting the temporomandibular joint. Group
agreements, except for contracts issued to small employer plans
and consumer
choice plans defined in §11.2(b) of this title
must include a provision
that provides coverage for a condition affecting the temporomandibular joint
as required by the Insurance Code Article 21.53A.
(7)
Inability to undergo dental treatment. Group agreements,
except for contracts issued to small employer plans
and consumer choice
plans defined in §11.2(b) of this title,
may not exclude from coverage
under the plan an enrollee who is unable to undergo dental treatment in an
office setting or under local anesthesia due to a documented physical, mental,
or medical reason as determined by the enrollee's physician or the dentist
providing the dental care. This benefit does not require an HMO to provide
dental services if dental services are not otherwise scheduled or provided
as part of the benefits covered by the agreement.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed
with the Office of the Secretary of State on December 29, 2003.
TRD-200308896
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: February 8, 2004
For further information, please call: (512) 463-6327
Subchapter AA. CONSUMER CHOICE HEALTH BENEFIT PLANS
The Texas Department of Insurance proposes new Subchapter AA, §§21.3501
- 21.3505, 21.3510 - 21.3518, 21.3525 - 21.3530, 21.3535, and 21.3540 - 21.3544,
concerning consumer choice health benefit plans. These proposed new sections
are the result of the enactment of Senate Bill (SB) 541 during the 78th Regular
Legislative Session. That legislation added, among other provisions, Texas
Insurance Code Arts. 3.80 and 20A.09N, which are designed to increase the
availability of health insurance coverage by allowing authorized insurers
and health maintenance organizations (HMOs) to issue health plans that, in
whole or in part, do not offer or provide state-mandated health benefits.
In furtherance of this goal of increased availability and to provide more
flexibility in the HMO market, SB 541 also changed the definition of "basic
health care services" in the HMO Act, Texas Insurance Code Chapter 843. Amendments
relating to this change are the subject of proposed rules published elsewhere
in this issue of the
Texas Register
.
The purpose of these rules is to implement the provisions and the intent
of SB 541 by increasing availability of more affordable health benefit plans;
developing a well-defined, efficient process for bringing those plans to market;
and instituting appropriate safeguards to ensure consumer understanding of
and freedom to choose between health benefit plan options.
Proposed §21.3501 provides the statement of purpose for the subchapter.
Proposed §21.3502 adds definitions for terms used in the subchapter.
Proposed §21.3503 contains authority for health carriers to offer consumer
choice health benefit plans. Proposed §21.3504 contains a severability
clause. Proposed §21.3505 provides that the rule applies only to a health
plan delivered, issued for delivery, or renewed on or after the effective
date for the subchapter. Proposed §§21.3510 - 21.3518 enumerate
the benefits considered "state-mandated health benefits," which a health carrier
may exclude, for each type of consumer choice health benefit plan a health
carrier may offer.
Proposed §21.3525 sets out the notice that health insurers must include
on each application for a consumer choice health benefit plan, and proposed §21.3526
sets out the notice that health insurers must include on the policy itself.
Proposed §§21.3527 and 21.3528 set out the notices that an HMO must
provide on the application and evidence of coverage. Proposed §21.3529
enumerates duties of agents marketing, soliciting, receiving an application
for, or administering a consumer choice health benefit plan. Proposed §21.3530
provides requirements for a disclosure which each health carrier offering
or providing a consumer choice health benefit plan must provide each prospective
or current policyholder. Proposed §21.3535 addresses requirements for
health carrier retention of the signed disclosure statement required by §21.3530
and the written affirmation required by §21.3542. Proposed §21.3540
requires health carriers to include coverage for direct access to the health
care services of an obstetrical or gynecological care provider. Proposed §21.3541
requires HMOs offering a consumer choice health benefit plan to provide basic
health care services. Proposed §21.3542 requires a health carrier that
offers a consumer choice health benefit plan to make available a comparable
plan that includes all state-mandated health benefits. The section also requires
a health carrier to obtain written affirmation that it offered one of these
alternative plans. Proposed §21.3543 details the documents a health carrier
must provide when filing a consumer choice health benefit plan with the department.
Proposed §21.3544 addresses required annual reporting related to consumer
choice health benefit plans which health carriers must make to the department.
The Department will consider the adoption of the proposed new §§21.3501
- 21.3505, 21.3510 - 21.3518, 21.3525 - 21.3530, 21.3535, and 21.3540 - 21.3544
in a public hearing under Docket No. 2587 scheduled for February 6, 2004,
at 9:30 a.m. in Room 100 of the William P. Hobby Jr. State Office Building,
333 Guadalupe Street in Austin, Texas.
Kimberly Stokes, Senior Associate Commissioner for the Life, Health, and
Licensing Program, has determined that for each year of the first five years
the proposed sections will be in effect there will be no fiscal impact to
state and local governments as a result of the enforcement and administration
of the rule. There will be no measurable effect on local employment or the
local economy as a result of the proposal.
Ms. Stokes has determined that for each year of the first five years the
sections are in effect, the public benefits anticipated as a result of the
proposed sections will be availability of more affordable health benefit plans;
a well-defined, efficient process for bringing those plans to market; and
appropriate safeguards to ensure consumer understanding of and freedom to
choose between health benefit plan options. Except as provided below, any
cost to persons required to comply with these sections for each year of the
first five years the proposed sections will be in effect is the result of
the enactment of SB 541 and not the result of the adoption, enforcement, or
administration of the sections.
The additional probable economic costs to persons required to comply with
the sections are as follows:
Section 21.3530(e) requires health carriers, upon request, to provide a
prospective policyholder or contractholder with a copy of the written disclosure
statement. While the statute requires a health carrier to retain the signed
disclosure statement in the carrier’s records, the proposed section
also requires that the carrier furnish the prospective policyholder with a
copy of the statement. The department estimates the cost of producing this
copy to be between one and four cents per copy. Depending on the circumstances
under which the prospective policyholder or contractholder tenders the request,
there may be costs associated with delivery of the document, including postage
or expenses related to facsimile or other electronic transmission. Use of
alternative means of delivery, such as via facsimile or other electronic transmission,
may also reduce the cost of producing and delivering the document. Since the
copy is furnished only upon request of the policyholder, the actual cost to
a carrier will vary depending on the number of requests made to the carrier.
There are two potential costs identifiable with the §21.3542(d) requirement
that a health carrier obtain a written affirmation that the carrier offered
a prospective policyholder or contractholder an alternative plan in compliance
with §21.3542(a). The first cost relates to obtaining the written affirmation.
Since the health carrier must obtain the written affirmation no later than
at the time of application, a carrier may include the written affirmation
along with other portions of the application. Where a carrier adopts this
practice, there should be no additional cost, unless the language of the written
affirmation necessitates the creation of an additional application page. The
cost in that instance would be the same as where a health carrier chooses
to present the written affirmation separately, which the department estimates
at between one and four cents per affirmation. The actual cost to a health
carrier will vary according to the number of affirmations the carrier processes.
The second cost is the §21.3535(a)(2) requirement that a health carrier
provide the written affirmation to the department at the commissioner’s
request. Since the statute requires a health carrier to retain and produce
the signed disclosure statement, a carrier should be able to store the affirmation
as a part of its normal business operations without incurring additional cost.
An additional cost would arise only if a health carrier lacks the capacity
to store the affirmations, as part of its normal business operations. In such
case, the department estimates that a health carrier in Texas can contract
to store a 12" X 15" box of documents for approximately $5.00 annually. The
total cost will vary depending on the number of documents a health carrier
needs to store. Moreover, the rule does not prescribe the method the company
uses to store and produce the documents. A health carrier may achieve savings
by storing the affirmations electronically.
Section 21.3543(2)(B) requires a carrier to include a statement of the
reduction in premium resulting from the differences in coverage and design
between the consumer choice health benefit plan and an identical plan with
all state-mandated health benefits. As a health carrier must determine this
information in the process of developing its cost model, it can provide a
statement of the differential as a component of normal business operations
without additional cost. At most, any additional cost would stem from the
actual expression of the statement, which the department estimates should
take no more than 30 minutes of an actuary's time. The cost of an actuary's
time will vary depending on whether the carrier employs or contracts independently
with the actuary. The department estimates the average cost of an independent
actuary's time to be $300.00 per hour.
The proposed reporting requirements of §21.3544 may result in additional
administrative expenses to carriers. In addition, costs for carriers will
vary based upon the particular carrier’s method for capturing data,
current computer system and types of plans offered by the carrier. Despite
these variances, all carriers will be required to incur initial costs to make
certain changes to computer systems consistent with the intent of SB 541.
According to 2002 data from the U.S. Bureau of Labor Statistics Occupational
Employment Statistics Survey, as reported by the Texas Workforce Commission,
the mean hourly rate for a computer programmer in the insurance business is
$31.27. The amount of time necessary to implement system changes will vary
greatly based on the size of the carrier, the carrier’s current data
collection practices, and the type of plans offered by the carrier. The department
has consulted with representatives of the industry, including small and large
employer carriers, and estimates that the cost of compliance with these requirements
will vary between $1,000 and $5,000 annually. However, as these reporting
requirements are similar to those already required of employer carriers by
Insurance Code Articles 26.71 and 26.91, the actual cost of compliance may
be lower.
Ms. Stokes has determined, pursuant to Texas Government Code §2006.001,
that the costs of compliance for small or micro businesses with those parts
of the proposed sections that are not mandated by SB 541 fall in two categories:
customer interaction and reporting. The rule’s costs regarding customer
interaction include providing upon request a copy of the written disclosure
statement, as well as obtaining and retaining the written affirmation. The
cost of compliance with these provisions should not vary between carriers
that are large, small, or microbusinesses. The department believes it would
be neither legal nor feasible to exempt small or micro businesses from this
part of the proposed rule, or to establish separate compliance standards,
since to do so would create an unfairly disparate standard for customers of
small or micro businesses with regard to critical consumer safeguards.
As noted earlier, health carriers will likely experience some additional
startup costs with regard to capturing data which the rule requires them to
report. The department estimated these costs based on the mean hourly rate
of computer programmers for the insurance business; this rate should be the
same regardless of whether the entity is a small, micro or large business.
Also as noted herein, there will be additional costs to carriers associated
with the proposed rule’s provisions concerning reporting of data. These
costs may vary depending on whether a carrier employs its own actuaries or
contracts with independent actuaries. Regardless, receipt of a full set of
data, representing the experience of all participating carriers, will be critical
to the proper evaluation of the effect of the new consumer choice health benefit
plans, and thus the department declines to waive or to establish separate
reporting requirements for carriers that are small or micro businesses.
To be considered, written comments on the proposal must be submitted no
later than 5:00 p.m. on February 9, 2004 to Gene C. Jarmon, General Counsel
and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P. O. Box
149104, Austin, Texas 78714-9104. Commenters must simultaneously submit an
additional copy of the comment to Kimberly Stokes, Senior Associate Commissioner,
Life, Health and Licensing Program, Mail Code 107-2A, Texas Department of
Insurance, P.O. Box 149104, Austin, Texas 78714-9104.
1.
GENERAL PROVISIONS
28 TAC §§21.3501 - 21.3505
The department proposes the new sections under the Insurance
Code Articles 3.80, §7, 20A.09N(j), and §36.001. Articles 3.80, §7
and 20A.09N(j) require the commissioner to adopt rules as necessary to implement
the statutes creating consumer choice health benefits plans. Section 36.001
provides that the commissioner may adopt any rules necessary and appropriate
to implement the powers and duties of the Texas Department of Insurance under
the Insurance Code and other laws of this state.
The following sections are affected by this proposal: Insurance Code Articles
21.3510 - 21.3518, 3.80 and 20A.09N 21.3525 - 21.3530, 21.3535, and 21.3540
- 21.3544.
§21.3501.Statement of Purpose.
This subchapter is intended to implement the provisions of the Texas
Consumer Choice of Benefits Health Insurance Plan Act. The general purpose
of the Act and this subchapter is to implement the legislative goal of providing
individuals, employers, and other purchasers of health care coverage in this
state the opportunity to choose health benefit plans that are more affordable
and flexible than plans available in the existing market. To that end, the
legislature has authorized health carriers to issue policies or evidences
of coverage that, in whole or in part, do not offer or provide certain state-mandated
health benefits.
§21.3502.Definitions.
The following words and terms, when used in this subchapter, shall
have the following meanings, unless the context clearly indicates otherwise.
(1)
Basic health care services--Health care services that the
commissioner determines an enrolled population might reasonably need to be
maintained in good health.
(2)
Commissioner--The commissioner of insurance.
(3)
Consumer choice health benefit plan--A group or individual
accident or sickness insurance policy, or evidence of coverage that, in whole
or in part, does not offer or provide state-mandated health benefits, but
that provides creditable coverage as defined by Insurance Code Article 26.035(a)
or Article 3.70-1.
(4)
Consumer choice of benefits health insurance plan--A consumer
choice health benefit plan.
(5)
Department--The Texas Department of Insurance.
(6)
Health carrier--Any entity authorized under the Insurance
Code or another insurance law of this state that provides health benefits
in this state, including an insurance company, a group hospital service corporation
under Insurance Code Chapter 842, a health maintenance organization under
Insurance Code Chapter 843, and a stipulated premium company under Insurance
Code Chapter 884.
(7)
Standard health benefit plan--A consumer choice health
benefit plan.
(8)
State-mandated health benefits--
(A)
Coverage required under the Insurance Code, this code,
or other law of this state to be provided in an individual, blanket, or group
policy for accident and health insurance, a contract for coverage of a health-related
condition, or an evidence of coverage that:
(i)
includes coverage for specific health care services or
benefits;
(ii)
places limitations or restrictions on deductibles, coinsurance,
copayments, or any annual or lifetime maximum benefit amounts, including limitations
provided in Insurance Code Article 20A.09(l) (as added by Section 7, Chapter
1026, Acts of the 75th Legislature, Regular Session, 1997); or
(iii)
includes a specific category of licensed health care
practitioner from whom an insured or enrollee is entitled to receive care.
(B)
Do not include benefits or coverage mandated by federal
law, or standard provisions or rights required under the Insurance Code, this
code, or other law of this state, to be provided in an individual, blanket,
or group policy for accident and health insurance, a contract for coverage
of a health-related condition, or an evidence of coverage unrelated to specific
health illnesses, injuries, or conditions of an insured or enrollee, including
those benefits or coverages enumerated in Insurance Code Articles 3.80, §3(b)
and 20A.09N(d).
§21.3503.Authority to Offer.
A health carrier may offer, and a health carrier that is also a small
employer carrier shall offer, one or more consumer choice health benefit plans
in accordance with this subchapter and other applicable law.
§21.3504.Severability.
A holding that any provision of this subchapter or the application
thereof to any person or circumstances is for any reason invalid shall not
affect the remainder of the subchapter and the application of its provisions
to any persons under other circumstances.
§21.3505.Application Date.
This subchapter applies only to an insurance policy, contract, or evidence
of coverage delivered, issued for delivery, or renewed on or after the effective
date of the subchapter.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on December 29, 2003.
TRD-200308897
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: February 8, 2004
For further information, please call: (512) 463-6327
28 TAC §§21.3510 - 21.3518
The department proposes the new sections under the Insurance
Code Articles 3.80, §7, 20A.09N(j), and §36.001. Articles 3.80, §7
and 20A.09N(j) require the commissioner to adopt rules as necessary to implement
the statutes creating consumer choice health benefits plans. Section 36.001
provides that the commissioner may adopt any rules necessary and appropriate
to implement the powers and duties of the Texas Department of Insurance under
the Insurance Code and other laws of this state.
The following sections are affected by this proposal: Insurance Code Articles
21.3510 - 21.3518, 3.80 and 20A.09N 21.3525 - 21.3530, 21.3535, and 21.3540
- 21.3544.
§21.3510.State-mandated Health Benefits in Individual Indemnity Policies.
The following enumerated items are state-mandated health benefits a
health insurer does not have to include in an individual indemnity consumer
choice health benefit plan:
(1)
coverage of contraceptive drugs and devices as required
by Insurance Code Article 21.52L and §21.404(3) of this title (relating
to Underwriting);
(2)
coverage of a minimum stay for maternity as required by
Insurance Code Article 21.53F;
(3)
coverage of reconstructive surgery incident to mastectomy
as required by Insurance Code Article 21.53I;
(4)
coverage of acquired brain injury treatment/services as
required by Insurance Code Article 21.53Q;
(5)
limitations or restrictions on coinsurance imposed by §3.3704(a)(6)
of this title (relating to Freedom of Choice: Availability of Preferred Providers);
(6)
coverage of a minimum stay for mastectomy treatment/services
as required by Insurance Code Article 21.52G;
(7)
coverage of diabetes care as required by Insurance Code
Article 21.53D;
(8)
coverage of telehealth and telemedicine as required by
Insurance Code Article 21.53F;
(9)
coverage of off-label drugs as required by Insurance Code
Article 21.53M;
(10)
coverage of mental/nervous disorders with demonstrable
organic disease as required by §3.3057(d) of this title (relating to
Standards for Exceptions, Exclusions, and Reductions Provision);
(11)
coverage of transplant donor coverage as required by §3.3040(h)
of this title (relating to Prohibited Policy Provisions); and
(12)
offer of coverage for therapies for children with developmental
delays as required by Insurance Code Article 21.53F.
§21.3511.State-mandated Health Benefits in Group Association Indemnity Policies.
The following enumerated items are state-mandated health benefits that
a health insurer does not have to include in a group association indemnity
consumer choice health benefit plan:
(1)
coverage of contraceptive drugs and devices as required
by Insurance Code Article 21.52L and §21.404(3) of this title (relating
to Underwriting);
(2)
coverage of a minimum stay for maternity as required by
Insurance Code Article 21.53F;
(3)
coverage of reconstructive surgery incident to mastectomy
as required by Insurance Code Article 21.53I;
(4)
coverage of acquired brain injury treatment/services as
required by Insurance Code Article 21.53Q;
(5)
limitations or restrictions on coinsurance imposed by §3.3704(a)(6)
of this title (relating to Freedom of Choice: Availability of Preferred Providers);
(6)
the offer of in vitro fertilization coverage as required
by Insurance Code Article 3.51-6, §3A;
(7)
coverage of HIV, AIDS, or HIV-related illnesses as required
by Insurance Code Article 3.51-6, §3C;
(8)
coverage of chemical dependency and stays in a chemical
dependency treatment facility as required by Insurance Code Article 3.51-9;
(9)
coverage of serious mental illness as required by Insurance
Code Article 3.51-14;
(10)
the offer of mental or emotional illness coverage as required
by Insurance Code Article 3.70-2(F);
(11)
coverage of inpatient mental health and stays in a psychiatric
day treatment facility as required by Insurance Code Article 3.70-2(F);
(12)
the offer of speech and hearing coverage as required by
Insurance Code Article 3.70-2(G);
(13)
the offer of home health care coverage as required by
Insurance Code Article 3.70-3B;
(14)
coverage of stays in a crisis stabilization unit and/or
residential treatment center for children and adolescents as required by Insurance
Code Article 3.72;
(15)
coverage of a minimum stay for mastectomy treatment/services
as required by Insurance Code Article 21.52G;
(16)
continuation of coverage of certain drugs under a drug
formulary as required by Insurance Code Article 21.52J;
(17)
coverage of diagnosis and treatment affecting temporomandibular
joint and treatment for a person unable to undergo dental treatment in an
office setting or under local anesthesia as required by Insurance Code Article
21.53A;
(18)
coverage of bone mass measurement for osteoporosis as
required by Insurance Code Article 21.53C;
(19)
coverage of diabetes care as required by Insurance Code
Article 21.53D;
(20)
coverage of telehealth and telemedicine as required by
Insurance Code Article 21.53F;
(21)
coverage of off-label drugs as required by Insurance Code
Article 21.53M; and
(22)
offer of coverage for therapies for children with developmental
delays as required by Insurance Code Article 21.53F.
§21.3512.State-mandated Health Benefits in Small Employer Indemnity Policies.
The following enumerated items are state-mandated health benefits that
a health insurer does not have to include in a small employer group indemnity
consumer choice health benefit plan:
(1)
coverage of contraceptive drugs and devices as required
by Insurance Code Article 21.52L and §21.404(3) of this title (relating
to Underwriting);
(2)
coverage of a minimum stay for maternity as required by
Insurance Code Article 21.53F;
(3)
coverage of reconstructive surgery incident to mastectomy
as required by Insurance Code Article 21.53I;
(4)
coverage of acquired brain injury treatment/services as
required by Insurance Code Article 21.53Q;
(5)
limitations or restrictions on coinsurance imposed by §3.3704(a)(6)
of this title (relating to Freedom of Choice: Availability of Preferred Providers);
(6)
the offer of in vitro fertilization coverage as required
by Insurance Code Article 3.51-6, §3A;
(7)
coverage of HIV, AIDS, or HIV-related illnesses as required
by Insurance Code Article 3.51-6, §3C;
(8)
coverage of chemical dependency and stays in a chemical
dependency treatment facility as required by Insurance Code Article 3.51-9;
(9)
the offer of serious mental illness coverage as required
by Insurance Code Article 3.51-14;
(10)
the offer of mental or emotional illness coverage as required
by Insurance Code Article 3.70-2(F);
(11)
coverage of inpatient mental health and stays in a psychiatric
day treatment facility as required by Insurance Code Article 3.70-2(F);
(12)
the offer of speech and hearing coverage as required by
Insurance Code Article 3.70-2(G);
(13)
the offer of home health care coverage as required by
Insurance Code Article 3.70-3B;
(14)
coverage of stays in a crisis stabilization unit and/or
residential treatment center for children and adolescents as required by Insurance
Code Article 3.72; and
(15)
coverage of bone mass measurement for osteoporosis as
required by Insurance Code Article 21.53C.
§21.3513.State-mandated Health Benefits in Large Employer Indemnity Policies.
The following enumerated items are state-mandated health benefits that
a health insurer does not have to include in a large employer group indemnity
consumer choice health benefit plan:
(1)
coverage of contraceptive drugs and devices as required
by Insurance Code Article 21.52L and §21.404(3) of this title (relating
to Underwriting);
(2)
coverage of a minimum stay for maternity as required by
Insurance Code Article 21.53F;
(3)
coverage of reconstructive surgery incident to mastectomy
as required by Insurance Code Article 21.53I;
(4)
coverage of acquired brain injury treatment/services as
required by Insurance Code Article 21.53Q;
(5)
limitations or restrictions on coinsurance imposed by §3.3704(a)(6)
of this title (relating to Freedom of Choice: Availability of Preferred Providers);
(6)
the offer of in vitro fertilization coverage as required
by Insurance Code Article 3.51-6, §3A;
(7)
coverage of HIV, AIDS, or HIV-related illnesses as required
by Insurance Code Article 3.51-6, §3C;
(8)
coverage of chemical dependency and stays in a chemical
dependency treatment facility as required by Insurance Code Article 3.51-9;
(9)
the offer of mental or emotional illness coverage as required
by Insurance Code Article 3.70-2(F);
(10)
coverage of inpatient mental health and stays in a psychiatric
day treatment facility as required by Insurance Code Article 3.70-2(F);
(11)
the offer of speech and hearing coverage as required by
Insurance Code Article 3.70-2(G);
(12)
the offer of home health care coverage as required by
Insurance Code Article 3.70-3B;
(13)
coverage of stays in a crisis stabilization unit and/or
residential treatment center for children and adolescents as required by Insurance
Code Article 3.72;
(14)
coverage of a minimum stay for mastectomy treatment/services
as required by Insurance Code Article 21.52G;
(15)
continuation of coverage of certain drugs under a drug
formulary as required by Insurance Code Article 21.52J;
(16)
coverage of diagnosis and treatment affecting temporomandibular
joint and treatment for a person unable to undergo dental treatment in an
office setting or under local anesthesia as required by Insurance Code Article
21.53A;
(17)
coverage of bone mass measurement for osteoporosis as
required by Insurance Code Article 21.53C;
(18)
coverage of diabetes care as required by Insurance Code
Article 21.53D;
(19)
coverage of telehealth and telemedicine as required by
Insurance Code Article 21.53F;
(20)
coverage of off-label drugs as required by Insurance Code
Article 21.53M; and
(21)
offer of coverage for therapies for children with developmental
delays as required by Insurance Code Article 21.53F.
§21.3514.State-mandated Health Benefits in Blanket Indemnity Policies.
The category of group to which the carrier is issuing coverage determines
which benefits are state-mandated health benefits for blanket indemnity insurance
policies.
§21.3515.State-mandated Health Benefits in Individual HMO Plans.
The following enumerated items are state-mandated health benefits that
an HMO does not have to include in an individual HMO consumer choice health
benefit plan:
(1)
coverage of contraceptive drugs and devices as required
by Insurance Code Article 21.52L and §21.404(3) of this title (relating
to Underwriting);
(2)
coverage of childhood immunizations as required by Insurance
Code Article 20A.09F;
(3)
coverage of a minimum stay for maternity as required by
Insurance Code Article 21.53F;
(4)
coverage of reconstructive surgery incident to mastectomy
as required by Insurance Code Article 21.53I;
(5)
coverage of acquired brain injury treatment/services as
required by Insurance Code Article 21.53Q;
(6)
treatment by a non-primary care specialist as a primary
care provider as required by Insurance Code Article 20A.09(3)(a)(D);
(7)
coverage of rehabilitation therapies as required by Insurance
Code Article 20A.09(a)(4);
(8)
limitations or restrictions on copayments imposed by §11.506(2)(A)
of this title (relating to Mandatory Contractual Provisions: Group, Individual
and Conversion Agreement and Group Certificate);
(9)
limitations or restrictions on deductibles imposed by §11.506(2)(B)
of this title;
(10)
coverage of a minimum stay for mastectomy treatment/services
as required by Insurance Code Article 21.52G;
(11)
coverage of diabetes care as required by Insurance Code
Article 21.53D;
(12)
coverage of telehealth and telemedicine as required by
Insurance Code Article 21.53F;
(13)
coverage of off-label drugs as required by Insurance Code
Article 21.53M; and
(14)
offer of coverage for therapies for children with developmental
delays as required by Insurance Code Article 21.53F.
§21.3516.State-mandated Health Benefits in Group HMO Plans.
The following enumerated items are state-mandated health benefits that
an HMO does not have to include in a non-employer group HMO consumer choice
health benefit plan:
(1)
coverage of contraceptive drugs and devices as required
by Insurance Code Article 21.52L and §21.404(3) of this title (relating
to Underwriting);
(2)
coverage of childhood immunizations as required by Insurance
Code Article 20A.09F;
(3)
coverage of a minimum stay for maternity as required by
Insurance Code Article 21.53F;
(4)
coverage of reconstructive surgery incident to mastectomy
as required by Insurance Code Article 21.53I;
(5)
coverage of acquired brain injury treatment/services as
required by Insurance Code Article 21.53Q;
(6)
treatment by a non-primary care specialist as a primary
care provider as required by Insurance Code Article 20A.09(3)(a)(D);
(7)
coverage of rehabilitation therapies as required by Insurance
Code Article 20A.09(a)(4);
(8)
limitations or restrictions on copayments imposed by §11.506(2)(A)
of this title (relating to Mandatory Contractual Provisions: Group, Individual
and Conversion Agreement and Group Certificate);
(9)
limitations or restrictions on deductibles imposed by §11.506(2)(B)
of this title;
(10)
the offer of in vitro fertilization coverage as required
by Insurance Code Article 3.51-6, §3A;
(11)
coverage of HIV, AIDS, or HIV-related illnesses as required
by Insurance Code Article 3.51-6, §3C;
(12)
coverage of chemical dependency and stays in a chemical
dependency treatment facility as required by Insurance Code Article 3.51-9;
(13)
coverage of serious mental illness as required by Insurance
Code Article 3.51-14;
(14)
the offer of mental or emotional illness coverage as required
by Insurance Code Article 3.70-2(F);
(15)
coverage of inpatient mental health and stays in a psychiatric
day treatment facility as required by Insurance Code Article 3.70-2(F);
(16)
the offer of speech and hearing coverage as required by
Insurance Code Article 3.70-2(G);
(17)
coverage of stays in a crisis stabilization unit and/or
residential treatment center for children and adolescents as required by Insurance
Code Article 3.72;
(18)
coverage of a minimum stay for mastectomy treatment/services
as required by Insurance Code Article 21.52G;
(19)
continuation of coverage of certain drugs under a drug
formulary as required by Insurance Code Article 21.52J;
(20)
coverage of diagnosis and treatment affecting temporomandibular
joint and treatment for a person unable to undergo dental treatment in an
office setting or under local anesthesia as required by Insurance Code Article
21.53A;
(21)
coverage of bone mass measurement for osteoporosis as
required by Insurance Code Article 21.53C;
(22)
coverage of diabetes care as required by Insurance Code
Article 21.53D;
(23)
coverage of telehealth and telemedicine as required by
Insurance Code Article 21.53F;
(24)
coverage of off-label drugs as required by Insurance Code
Article 21.53M; and
(25)
offer of coverage for therapies for children with developmental
delays as required by Insurance Code Article 21.53F.
§21.3517.State-mandated Health Benefits in Small Employer HMO Plans.
The following enumerated items are state-mandated health benefits that
an HMO does not have to include in a small employer group HMO consumer choice
health benefit plan:
(1)
coverage of contraceptive drugs and devices as required
by Insurance Code Article 21.52L and §21.404(3) of this title (relating
to Underwriting);
(2)
coverage of childhood immunizations as required by Insurance
Code Article 20A.09F;
(3)
coverage of a minimum stay for maternity as required by
Insurance Code Article 21.53F;
(4)
coverage of reconstructive surgery incident to mastectomy
as required by Insurance Code Article 21.53I;
(5)
coverage of acquired brain injury treatment/services as
required by Insurance Code Article 21.53Q;
(6)
treatment by a non-primary care specialist as a primary
care provider as required by Insurance Code Article 20A.09(3)(a)(D);
(7)
coverage of rehabilitation therapies as required by Insurance
Code Article 20A.09(a)(4);
(8)
limitations or restrictions on copayments imposed by §11.506(2)(A)
of this title (relating to Mandatory Contractual Provisions: Group, Individual
and Conversion Agreement and Group Certificate);
(9)
limitations or restrictions on deductibles imposed by §11.506(2)(B)
of this title;
(10)
the offer of in vitro fertilization coverage as required
by Insurance Code Article 3.51-6, §3A;
(11)
coverage of HIV, AIDS, or HIV-related illnesses as required
by Insurance Code Article 3.51-6, §3C;
(12)
coverage of chemical dependency and stays in a chemical
dependency treatment facility as required by Insurance Code Article 3.51-9;
(13)
the offer of serious mental illness coverage as required
by Insurance Code Article 3.51-14;
(14)
the offer of mental or emotional illness coverage as required
by Insurance Code Article 3.70-2(F);
(15)
coverage of inpatient mental health and stays in a psychiatric
day treatment facility as required by Insurance Code Article 3.70-2(F);
(16)
the offer of speech and hearing coverage as required by
Insurance Code Article 3.70-2(G);
(17)
coverage of stays in a crisis stabilization unit and/or
residential treatment center for children and adolescents as required by Insurance
Code Article 3.72; and
(18)
coverage of bone mass measurement for osteoporosis as
required by Insurance Code Article 21.53C.
§21.3518.State-mandated Health Benefits in Large Employer HMO Plans.
The following enumerated items are state-mandated health benefits that
an HMO does not have to include in a large employer group HMO consumer choice
health benefit plan:
(1)
coverage of contraceptive drugs and devices as required
by Insurance Code Article 21.52L and §21.404(3) of this title (relating
to Underwriting);
(2)
coverage of childhood immunizations as required by Insurance
Code Article 20A.09F;
(3)
coverage of a minimum stay for maternity as required by
Insurance Code Article 21.53F;
(4)
coverage of reconstructive surgery incident to mastectomy
as required by Insurance Code Article 21.53I;
(5)
coverage of acquired brain injury treatment/services as
required by Insurance Code Article 21.53Q;
(6)
treatment by a non-primary care specialist as a primary
care provider as required by Insurance Code Article 20A.09(3)(a)(D);
(7)
coverage of rehabilitation therapies as required by Insurance
Code Article 20A.09(a)(4);
(8)
limitations or restrictions on copayments imposed by §11.506(2)(A)
of this title (relating to Mandatory Contractual Provisions: Group, Individual
and Conversion Agreement and Group Certificate);
(9)
limitations or restrictions on deductibles imposed by §11.506(2)(B)
of this title;
(10)
the offer of in vitro fertilization coverage as required
by Insurance Code Article 3.51-6, §3A;
(11)
coverage of HIV, AIDS, or HIV-related illnesses as required
by Insurance Code Article 3.51-6, §3C;
(12)
coverage of chemical dependency and stays in a chemical
dependency treatment facility as required by Insurance Code Article 3.51-9;
(13)
the offer of mental or emotional illness coverage as required
by Insurance Code Article 3.70-2(F);
(14)
coverage of inpatient mental health and stays in a psychiatric
day treatment facility as required by Insurance Code Article 3.70-2(F);
(15)
the offer of speech and hearing coverage as required by
Insurance Code Article 3.70-2(G);
(16)
coverage of stays in a crisis stabilization unit and/or
residential treatment center for children and adolescents as required by Insurance
Code Article 3.72;
(17)
coverage of a minimum stay for mastectomy treatment/services
as required by Insurance Code Article 21.52G;
(18)
continuation of coverage of certain drugs under a drug
formulary as required by Insurance Code Article 21.52J;
(19)
coverage of diagnosis and treatment affecting temporomandibular
joint and treatment for a person unable to undergo dental treatment in an
office setting or under local anesthesia as required by Insurance Code Article
21.53A;
(20)
coverage of bone mass measurement for osteoporosis as
required by Insurance Code Article 21.53C;
(21)
coverage of diabetes care as required by Insurance Code
Article 21.53D;
(22)
coverage of telehealth and telemedicine as required by
Insurance Code Article 21.53F;
(23)
coverage of off-label drugs as required by Insurance Code
Article 21.53M; and
(24)
offer of coverage for therapies for children with developmental
delays as required by Insurance Code Article 21.53F.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed
with the Office of the Secretary of State on December 29, 2003.
TRD-200308898
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: February 8, 2004
For further information, please call: (512) 463-6327
28 TAC §§21.3525 - 21.3530, 21.3535
The department proposes the new sections under the Insurance
Code Articles 3.80, §7, 20A.09N(j), and §36.001. Articles 3.80, §7
and 20A.09N(j) require the commissioner to adopt rules as necessary to implement
the statutes creating consumer choice health benefits plans. Section 36.001
provides that the commissioner may adopt any rules necessary and appropriate
to implement the powers and duties of the Texas Department of Insurance under
the Insurance Code and other laws of this state.
The following sections are affected by this proposal: Insurance Code Articles
21.3510 - 21.3518, 3.80 and 20A.09N 21.3525 - 21.3530, 21.3535, and 21.3540
- 21.3544.
§21.3525.Insurer Notice on Application.
Each application for participation in a consumer choice health benefit
plan must contain the following language at the beginning of the document
in at least 12 point bold type: "You have the option to choose this Consumer
Choice of Benefits Health Insurance Plan that, either in whole or in part,
does not provide state-mandated health benefits normally required in accident
and sickness insurance policies in Texas. This standard health benefit plan
may provide a more affordable health insurance policy for you although, at
the same time, it may provide you with fewer health benefits than those normally
included as state-mandated health benefits in policies in Texas. If you choose
this standard health benefit plan, please consult with your insurance agent
to discover which state-mandated health benefits are excluded in this policy."
§21.3526.Insurer Notice on Policy.
Each consumer choice health benefit plan must contain the following
language at the beginning of the document in at least 12 point bold type:
"This Consumer Choice of Benefits Health Insurance Plan, either in whole or
in part, does not provide state-mandated health benefits normally required
in accident and sickness insurance policies in Texas. This standard health
benefit plan may provide a more affordable health insurance policy for you
although, at the same time, it may provide you with fewer health benefits
than those normally included as state-mandated health benefits in policies
in Texas. Please consult with your insurance agent to discover which state-mandated
health benefits are excluded in this policy."
§21.3527.HMO Notice on Application.
Each application for enrollment in a standard health benefit plan must
contain the following language at the beginning of the document in at least
12 point bold type: "You have the option to choose this Consumer Choice of
Benefits Health Maintenance Organization health care plan that, either in
whole or in part, does not provide state-mandated health benefits normally
required in evidences of coverage in Texas. This standard health benefit plan
may provide a more affordable health plan for you although, at the same time,
it may provide you with fewer health plan benefits than those normally included
as state-mandated health benefits in Texas. If you choose this standard health
benefit plan, please consult with your insurance agent to discover which state-mandated
health benefits are excluded in this evidence of coverage."
§21.3528.HMO Notice on Evidence of Coverage.
Each consumer choice health benefit plan must contain the following
language at the beginning of the document in at least 12 point bold type:
"This Consumer Choice of Benefits Health Maintenance Organization health care
plan, either in whole or in part, does not provide state-mandated health benefits
normally required in evidences of coverage in Texas. This standard health
benefit plan may provide a more affordable health plan for you although, at
the same time, it may provide you with fewer health plan benefits than those
normally included as state-mandated health benefits in Texas. Please consult
with your insurance agent to discover which state-mandated health benefits
are excluded in this evidence of coverage."
§21.3529.Duty of Agent.
Each agent marketing, soliciting, receiving an application for, or
administering a consumer choice health benefit plan shall:
(1)
provide each prospective and current policyholder or contractholder
with all disclosures and offers required by §21.3530(a) of this subchapter
(relating to Health Carrier Disclosure) and §21.3542(a) of this subchapter
(relating to Offer of State-Mandated Plan); and
(2)
upon request, consult with prospective and current policyholders
and contractholders regarding the state-mandated health benefits not included
in the consumer choice health benefit plan.
§21.3530.Health Carrier Disclosure.
(a)
A health carrier offering or providing a consumer choice
health benefit plan must provide each prospective or current policyholder
or contractholder with a written disclosure statement in the manner prescribed
in Form CCP 1 provided by the department for that purpose. Form CCP 1:
(1)
acknowledges that the consumer choice health benefit plan
being offered or purchased does not provide some or all state-mandated health
benefits;
(2)
lists those state-mandated health benefits not included
under the consumer choice health benefit plan;
(3)
provides a notice that purchase of the plan may limit future
coverage options in the event the policyholder's, contractholder’s,
or certificate holder’s health changes and needed benefits are not covered
under the consumer choice health benefit plan; and
(4)
requires the prospective or current policyholder or contractholder
to sign an acknowledgment that he received the written disclosure statement.
(b)
A health carrier may obtain Form CCP 1 by making a request
to the Life/Health Division, Filings and Operations Division, Mail Code 106-1E,
Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104 or
333 Guadalupe, Austin, Texas 78701, or by accessing the department website
at www.tdi.state.tx.us.
(c)
A health carrier must tender the disclosure described in
subsection (a) of this section:
(1)
to a prospective policyholder or contractholder, not later
than with the offer of a consumer choice health benefit plan; and
(2)
to an existing policyholder or contractholder, along with
any offer to renew the contract or policy.
(d)
Where a health carrier tenders the disclosure statement
referenced in subsection (a) of this section to a prospective policyholder
or contractholder:
(1)
through an agent, the agent may not transmit the application
to the health carrier for consideration until the agent has secured the signed
disclosure statement from the applicant.
(2)
directly to the applicant, the health carrier may not process
the application until the health carrier has secured the signed disclosure
statement from the applicant.
(e)
The health carrier must, upon request, provide the prospective
policyholder or contractholder with a copy of the written disclosure statement.
(f)
Where a health carrier is offering or issuing a consumer
choice health benefit plan to an association, the health carrier must satisfy
the requirements of subsection (c) of this section by tendering the disclosure
to prospective or existing certificateholders.
§21.3535.Retention of Disclosure.
(a)
A health carrier must, for a period of six years:
(1)
retain in the health carrier’s records the signed
disclosure statement required by §21.3530 of this subchapter (relating
to Health Carrier Disclosure) and the written affirmation required by §21.3542
of this subchapter (relating to Offer of State-Mandated Plan); and
(2)
on request from the department, provide a copy of the signed
disclosure statement and/or written affirmation to the department.
(b)
A health carrier may accept receipt of a signed disclosure
or written affirmation by facsimile or electronic transmission, but such carrier
remains responsible for compliance with subsection (a)(2) of this section.
(c)
If subsequent to the issuance of a policy or evidence of
coverage, a policyholder or contractholder does not return the signed disclosure
statement to the health carrier, the health carrier may satisfy the requirements
of subsection (a)(1) of this section by furnishing proof that the health carrier
tendered the disclosure statement, with a request to sign and return it, to
the policyholder or contractholder in accordance with §21.3530(c)(2)
of this subchapter.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed
with the Office of the Secretary of State on December 29, 2003.
TRD-200308899
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: February 8, 2004
For further information, please call: (512) 463-6327
28 TAC §§21.3540 - 21.3544
The department proposes the new sections under the Insurance
Code Articles 3.80, §7, 20A.09N(j), and §36.001. Articles 3.80, §7
and 20A.09N(j) require the commissioner to adopt rules as necessary to implement
the statutes creating consumer choice health benefits plans. Section 36.001
provides that the commissioner may adopt any rules necessary and appropriate
to implement the powers and duties of the Texas Department of Insurance under
the Insurance Code and other laws of this state.
The following sections are affected by this proposal: Insurance Code Articles
21.3510 - 21.3518, 3.80 and 20A.09N 21.3525 - 21.3530, 21.3535, and 21.3540
- 21.3544.
§21.3540.Direct Access to Services.
Any consumer choice health benefit plan must include coverage for direct
access to the health care services of an obstetrical or gynecological care
provider as required by Texas Insurance Code Article 21.53D, as added by Chapter
912, Acts of the 75th Legislature, Regular Session, 1997.
§21.3541.Basic Health Care Services.
An HMO offering a consumer choice health benefit plan must provide
the basic health care services required by §11.508 and §11.509 of
this title (relating to Mandatory Benefit Standards: Group, Individual and
Conversion Agreements, and Additional Mandatory Benefit Standards: Group Agreement
Only).
§21.3542.Offer of State-Mandated Plan.
(a)
A health carrier that offers one or more consumer choice
health benefit plans under this section to a person or entity must also make
available, no later than at the time of application, an accident or sickness
insurance policy or evidence of coverage that is comparable to each consumer
choice health benefit plan, that includes state-mandated health benefits,
and that is otherwise authorized by the Insurance Code.
(b)
With regard to health plans required by subsection (a)
of this section, a health carrier shall:
(1)
use the same sources and methods of distribution to market
both consumer choice health benefit plans and health benefit plans required
by this subsection;
(2)
make the offer of such health plans in writing;
(3)
communicate the offer and, upon request, the premium cost
of such plans, as well as any additional details regarding them, contemporaneously
with the offer and premium cost of, and other details regarding, the consumer
choice health benefit plan policy or evidence of coverage; and
(4)
provide at least the following information:
(A)
a description of how the person or entity may apply for
or enroll in each offered policy or evidence of coverage;
(B)
the benefits and/or services available and the premium
cost under each offered policy or evidence of coverage; and
(C)
upon request, an explanation of each of the policies or
evidences of coverage and the differences between the health plan offered
pursuant to subsection (a) of this section and the consumer choice health
benefit plans.
(c)
A health carrier shall not apply more stringent or detailed
requirements related to the application process for a consumer choice health
benefit plan, or for a policy or evidence of coverage offered in compliance
with subsection (a) of this section, than it applies for other health benefit
plans offered by the health carrier.
(d)
A health carrier offering a consumer choice health benefit
plan must obtain from each prospective policyholder or contractholder, at
or before the time of application, a written affirmation that the health carrier
also offered a policy or evidence of coverage in compliance with subsection
(a) of this section.
§21.3543.Required Plan Filings.
A health carrier shall:
(1)
file the consumer choice health benefit plan with the Filings
and Operations Division in accordance with:
(A)
Insurance Code Article 20A.09 and Chapter 11 of this title
(relating to Health Maintenance Organizations) including the filing fee requirements;
and
(B)
Insurance Code Article 3.42 and Chapter 3, Subchapter A
of this title (relating to Requirements for Filing of Policy Forms, Riders,
Amendments, Endorsements for Life, Accident, and Health Insurance and Annuities)
including the filing fee requirements.
(2)
include with the filing of a consumer choice health benefit
plan:
(A)
the disclosures required by §21.3530 of this subchapter
(relating to Health Carrier Disclosure);
(B)
a statement of the reduction in premium resulting from
the differences in coverage and design between the consumer choice health
benefit plan and an identical plan providing all state-mandated health benefits;
(C)
certification of compliance with §21.3542 of this
subchapter (relating to Offer of State-Mandated Plan); and
(D)
for informational purposes, the rates to be used with a
consumer choice health benefit plan.
§21.3544.Required Annual Reporting.
(a)
Health carriers offering a consumer choice health benefit
plan shall file annually with the department, not later than April 1 of each
year, in the manner prescribed on Form CCP 2 provided by the department, a
certification stating the following:
(1)
the total number of consumer choice health benefit plans
newly issued and renewed covering Texas lives by type of plan;
(2)
the total number of Texas lives (including members/employees,
spouses, and dependents) covered under newly issued and renewed consumer choice
health benefit plans;
(3)
the total number of consumer choice health benefit plans
covering Texas lives that were cancelled or non-renewed during the previous
calendar year (and were not in effect after December 31), as well as the total
number of Texas lives covered under those plans, and gross premiums paid for
coverage of Texas lives under those plans;
(4)
the gross premiums received for newly issued and renewed
consumer choice health benefit plans covering Texas lives;
(5)
the number of consumer choice health benefit plans covering
individuals and groups in Texas that were uninsured for at least two months
prior to issue, and the number of Texas lives covered under those plans; and
(6)
the number of consumer choice health benefit plans in force
in Texas on December 31, and the number of Texas lives covered under those
plans, based on the first three digits of the five-digit ZIP Code of:
(A)
the employer’s principal place of business in Texas,
for any employer-based plan; and
(B)
the individual’s place of residence, for individual
or group non-employer based plans.
(b)
For purposes of this subsection, gross premiums shall be
the total amount of monies collected by the health carrier for health benefit
plans during the applicable calendar year or the applicable calendar quarter.
Gross premiums shall include premiums collected for individual and group consumer
choice health benefit plans. Gross premiums shall also include premiums collected
under group certificates issued or delivered to individuals (in this state),
regardless of where the health carrier issues or delivers the master policy.
(c)
Form CCP 2 can be obtained from the Texas Department of
Insurance, Filings and Operations Division, MC 106-1E, P.O. Box 149104, Austin,
Texas 78714-9104. The form can also be obtained from the department’s
internet web site @ www.tdi.state.tx.us.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed
with the Office of the Secretary of State on December 29, 2003.
TRD-200308900
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: February 8, 2004
For further information, please call: (512) 463-6327
Subchapter D. HEALTH GROUP COOPERATIVES
28 TAC §§26.401 - 26.411
The Texas Department of Insurance proposes new Subchapter
D, §§26.401-26.411 concerning the establishment of, and provision
of health insurance coverage to, health group cooperatives pursuant to Senate
Bill (SB) 10, 78th Regular Legislative Session. That legislation added special
provisions to Chapter 26, Texas Insurance Code, allowing the formation of
such cooperatives and establishing the standards by which group health insurance
coverage is provided to health group cooperatives comprised of small employers
or, at the option of the cooperative, both small and large employers. SB 10
is designed to address small employers’ need for access to healthcare
by allowing them to join with other employers on a cooperative basis to obtain
health coverage for the cooperative as a single entity. To further achieve
this purpose, it also allows for greater flexibility in the plans that may
be written through cooperatives by making those plans not subject to state
mandated benefits relating to a particular illness, disease, or treatment,
or to a state law that regulates the differences in rates applicable to services
provided within or outside a health benefit plan network. These new sections
are necessary to facilitate these purposes by establishing requirements governing
the formation and operation of health group cooperatives, and the obligations
of insurance companies and health maintenance organizations (HMOs)-hereinafter
collectively "carriers"-that issue health insurance coverage for these entities.
Proposed §26.401 prescribes the requirements for establishing a health
group cooperative, including organization as a nonprofit corporation under
applicable law and filing certain information with the department. Proposed §26.402
contains cooperative membership requirements, including a minimum membership
of 10 participating employers, and a contractual commitment by each employer
to purchase coverage for two years, except where the employer can demonstrate
financial hardship. The proposal states that the contract between the employer
and the cooperative may define financial hardship, but in the absence of a
contractual definition, financial hardship occurs when the employer demonstrates
that its premium costs, as a percentage of the employer’s gross receipts,
have increased by a factor of at least .50.
Proposed §26.403 allows a cooperative, and its sponsoring entity,
to engage in certain marketing activities related to membership and to provide
information concerning the general availability of health coverage through
the cooperative; however, all coverage issued through the cooperative must
be issued through a licensed insurance agent. In arranging for coverage, a
cooperative or its board of directors, employees or agents are not liable
for failure to arrange for coverage of any particular illness, disease, or
health condition.
Proposed §26.404 provides that a health group cooperative is considered
a single employer for the purposes of benefit elections and other administrative
functions, and a cooperative that is composed of only small employers is considered
a small employer for all purposes of Insurance Code Chapter 26 and associated
rules. A cooperative that is composed of both small and large employers may
elect to extend to all of the large employer members the protections of Chapter
26 and its rules, although this election does not entitle the large employer
members to guaranteed issuance of coverage.
Proposed §26.405 states that a carrier providing coverage through
a health group cooperative is not subject to a premium or retaliatory tax
for two years for previously uninsured employees or dependents, and defines
"previously uninsured" to include individuals that lacked creditable coverage
for 63 days preceding the effective date of the coverage purchased through
the cooperative. A carrier must maintain documentation demonstrating an insured’s
qualification for the exemption. Proposed §26.406 requires a carrier
offering coverage through a cooperative to use a standard presentation form
for employer members that includes certain listed information about the cooperative
and, if the health plan does not contain all state-mandated benefits, a written
statement that lists the benefits not included, describes the nature and benefits
of the plan, and provides notice that purchase of the plan may limit future
coverage options.
Proposed §26.407 says that, subject to the provisions of §§26.404
and 26.410, a carrier must provide coverage to a cooperative in the carrier’s
geographic service area that requests coverage. However, a carrier may decline
to offer coverage to a cooperative if the carrier is actively engaged in assisting
an entity with the formation of a cooperative, as evidenced by a signed letter
of agreement. A cooperative must provide for coverage to all employees that
elect to be covered under any benefit plan offered through the cooperative,
including all employees of a large employer that is a member of the cooperative.
A carrier may not impose any restrictions relating to this requirement.
Proposed §26.408 provides that a health benefit plan issued by an
insurance carrier or an HMO through a cooperative is not subject to the state-mandated
benefits as listed in the proposed section. A plan issued by an HMO must include
all basic health care services as provided in §§11.508 or 11.509.
Proposed amendments to §§11.508 and 11.509, which establish basic
health care services pursuant to the requirements of SB 541, are published
elsewhere in this issue of the Texas Register. Proposed §26.408 also
states that a health plan offered by an insurer is not subject to §3.3704(a)(6)
which requires that the basic level of coverage in a preferred provider plan
may not be more than 30% less than the higher level of coverage. Proposed §26.409
provides for expedited approval of plans offered through health group cooperatives,
allowing an insurance carrier to file and use a plan pursuant to Art. 3.42(c)
and associated rules, or to submit a filing for approval under Art. 3.42(d);
the department shall approve or disapprove the latter filing within 40 days
of receipt. An HMO evidence of coverage must be filed pursuant to the requirements
of Subchapter F, Chapter 11, of this title and shall be approved or disapproved
within 20 days of receipt.
Proposed §26.410 states that a carrier may provide coverage to only
one cooperative in any county, unless the carrier is providing coverage in
an expanded service area. A health carrier may, by notice and certification
to the department, provide health group cooperative coverage to an expanded
service area that includes the entire state, and may apply for approval of
an expanded service area that includes less than the entire state. The department
has 60 days to approve or disapprove such filing.
Proposed §26.411 requires a health carrier that provides coverage
to a cooperative to submit to the department, by April 1 of each year, certain
stated information relating to coverage provided by the carrier for the previous
calendar year. Such information includes number of plans issued or renewed
to cooperatives during the year; number of Texas lives covered under those
plans; number of small employer plans cancelled or voluntarily not renewed
and the number of Texas lives covered under those plans and gross premiums
received for coverage under those plans; the gross premiums received for newly
issued and renewed health group cooperative health benefit plans covering
Texas lives; number of cooperative plans that provided insurance to previously
uninsured individuals and the number of previously uninsured persons that
are covered under those plans; and the number of health benefit plans and
lives covered under those plans, broken down by the first three digits of
the five-digit ZIP Code of the employer’s principal place of business.
The Department will consider the adoption of the proposed new §§26.401-
26.411 in a public hearing under Docket No. 2588 scheduled for February 6,
2004, at 1:30 p.m. in Room 100 of the William P. Hobby Jr. State Office Building,
333 Guadalupe Street in Austin, Texas.
Kimberly Stokes, Senior Associate Commissioner of Life, Health, and Licensing,
has determined that for each year of the first five years the proposed sections
will be in effect there will be no fiscal impact to local governments as a
result of the enforcement or administration of the rule. There will be a fiscal
impact to state government as the result of the two-year exemption from state
retaliatory and premium tax for the premiums attributable to previously uninsured
individuals who are covered by a health group cooperative plan; however, the
decrease in revenue is dependent upon the number of insureds or enrollees
who were previously uninsured, and therefore cannot be estimated. There will
be no measurable effect on local employment or the local economy as a result
of the proposal.
Ms. Stokes has determined that for each year of the first five years the
sections are in effect, the public benefits anticipated as a result of the
proposed sections will be facilitating the creation of health group cooperatives
and expediting the approval of health plans designed for such cooperatives,
so as to make group insurance more advantageous for small employers, as well
as for some large employers, than it might otherwise be if the employers were
not purchasing the insurance collectively. This will optimally induce employers
to continue to provide health insurance for their employees, and may also
result in coverage for previously uninsured employees. Except as provided
below, any costs to persons required to comply with these sections for each
year of the first five years the proposed sections will be in effect is the
result of the enactment of SB 10 and not as a result of the adoption, enforcement,
or administration of these sections. SB 10 requires the commissioner by rule
to prescribe the standard presentation form that must be used by carriers
offering coverage through a health group cooperative, and the proposed rule
sets forth eight basic elements of information that must be included on the
form. Because the required information is easily accessible to, or developed
by, the carrier, the standard language can be developed by using a carrier’s
existing resources. Adding other information is discretionary on the part
of the carrier. The department estimates the cost of a form to be between
$.01-.04 per page, exclusive of postage or facsimile or electronic transmission.
These costs would not vary between carriers that are large businesses and
those that are small or micro-businesses. It would be neither legal nor feasible
to exempt small or micro-businesses from this part of the rule, as to do so
would deprive those carriers’ insureds of important consumer information
concerning health insurance provided through health group cooperatives. The
proposed rule also establishes one standard for determining financial hardship,
which would allow an employer to terminate coverage within the initial two-year
period. While a particular standard for termination could conceivably have
a financial impact on either a cooperative or a carrier, the proposal also
provides that those parties may agree to their own standard by contract. Whether
and to what extent the rule’s proposed definition would have a cost
impact would depend upon a number of variables, including size of the cooperative
and premium costs and gross revenues of individual employers. Because the
rule is designed primarily to address the needs of small employers (those
with 2-50 employees)-a great number of which may meet the definition of small
or micro-businesses under Government Code Chapter 2006-it would be neither
legal or feasible to waive or modify the rule’s requirements for the
very groups the statute and the rule are designed to assist. Finally, the
proposed reporting requirements may result in additional administrative expenses
to carriers that write business through health group cooperatives. Costs will
vary based upon the particular carrier's current computer system, existing
method for capturing data, and types of plans offered. Despite these
variances, all carriers will have to incur some initial costs to make certain
changes to computer systems consistent with the reporting requirements. According
to 2002 data from the U.S. Bureau of Labor Statistics Occupational Employment
Statistics Survey, as reported by the Texas Workforce Commission, the mean
hourly rate for a computer programmer in the insurance industry is $31.27.
The amount of time necessary to implement system changes will vary based on
such things as the size of the plans written by the carrier and the carrier's
current data collection processes. However, as these reporting requirements
are similar to those already required of employer carriers by Insurance Code
Articles 26.71 and 26.91, and related rules at Texas Administrative Code §26.20,
the actual cost of compliance may be lower. The same cost considerations
would apply regardless of the size of the carriers; however, because of the
importance of this legislation and the need for the department to collect
data representing the experience of all carriers writing health plans through
health group cooperatives, it is not feasible for the department to waive
or establish separate reporting requirements for carriers that are small or
micro businesses.
To be considered, written comments on the proposal must be submitted no
later than 5:00 p.m. on February 9, 2004 to Gene C. Jarmon, General Counsel
and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P. O. Box
149104, Austin, Texas 78714-9104. An additional copy of the comment must be
simultaneously submitted to Kimberly Stokes, Senior Associate Commissioner,
Life, Health and Licensing Program, Mail Code 107-2A, Texas Department of
Insurance, P.O. Box 149104, Austin, Texas 78714-9104.
The new sections are proposed under the Insurance Code Chapter
26, Articles 26.14A and 26.16, and §36.001. Article 26.14A contains special
provisions relating to health group cooperatives, and allows the commissioner
to adopt rules. Chapter 26, among other things, contains provisions regarding
health plans for small employers and authorizes the commissioner of insurance
to adopt rules as necessary to implement this chapter. Article 26.16 also
contains provisions concerning health group cooperatives and requires the
department to develop an expedited approval process for health coverage arranged
by a cooperative. Section 36.001 provides that the Commissioner of Insurance
may adopt any rules necessary and appropriate to implement the powers and
duties of the Texas Department of Insurance under the Insurance Code and other
laws of this state.
The following sections are affected by this proposal: Insurance Code Chapter
26, Articles 26.14A and 26.16
§26.401.Establishment of Health Group Cooperatives.
(a)
Subject to the requirements of this subchapter, a person
may form a health group cooperative for the purchase of employer health benefit
plans.
(b)
A health carrier may not form, or be a member of, a health
group cooperative. A health carrier may associate with a sponsoring entity
of a health group cooperative, 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.
(c)
A health group cooperative must be organized as a nonprofit
corporation and has the rights and duties provided by the Texas Non-profit
Corporation Act, Texas Civil Statutes, Articles 1396-1.01, et seq.
(d)
On receipt of a certificate of incorporation or certificate
of authority from the secretary of state, the health group cooperative shall
file notification of the receipt of the certificate and a copy of the health
group cooperative’s organizational documents with the department by
filing the required notification and documents with the Life/Health Division,
Mail Code 106-1A, Texas Department of Insurance, P.O. Box 149104, Austin,
Texas 78714-9104. The organizational documents shall demonstrate the health
group cooperative’s compliance with Insurance Code Article 26.15.
(e)
The board of directors shall file annually with the department
a statement of all amounts collected and expenses incurred for each of the
preceding years. The annual filing shall be made on Form Number 1212 CERT
COOP provided at Figure 49 of §26.27(b)(49) of this title (relating to
Forms) and shall be filed with the Life/Health Division, Mail Code 106-1A,
Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104.
(f)
The provisions of this subchapter shall not be construed
to limit or restrict an employer’s access to health benefit plans under
this chapter or Insurance Code Chapter 26.
§26.402.Membership of Health Group Cooperatives.
(a)
The membership of a health group cooperative may consist
only of small employers or may, at the option of the health group cooperative,
consist of both small and large employers.
(b)
To be eligible to arrange for coverage pursuant to Insurance
Code Article 26.15(a)(1) a health group cooperative must, during the initial
open enrollment period, have at least 10 participating employers. Thereafter,
if the health group cooperative does not, at any time, have 10 participating
employers, the health group cooperative must add additional members by the
next open enrollment period to maintain at least 10 participating employers.
(c)
Subject to the requirements of Insurance Code Article 26.22,
a health group cooperative:
(1)
shall allow any small employer to join the health group
cooperative and, during the initial and annual open enrollment periods, enroll
in health benefit plan coverage; and
(2)
may allow a large employer to join the health group cooperative
and, during the initial enrollment and annual open enrollment periods, enroll
in health benefit plan coverage.
(d)
A health group cooperative may not use risk characteristics
of an employer or employee to restrict or qualify membership in the health
group cooperative.
(e)
An employer’s participation in a health group cooperative
is voluntary, but an employer electing to participate in a health group cooperative
must, through a contract with the health group cooperative, commit to purchasing
coverage through the health group cooperative for two years, except as provided
for in subsection (f) of this section.
(f)
A contract between an employer and a health group cooperative
must allow an employer to terminate its participation in a health group cooperative
before the end of the two year minimum contractual period required by subsection
(e) of this section if it can demonstrate to the health group cooperative
that continuing to purchase coverage through the cooperative would be a financial
hardship in accordance with subsection (g) of this section.
(g)
The contract between an employer and a health group cooperative
may define financial hardship for the purposes of subsection (f) of this section.
If the contract does not define the term, an employer may demonstrate financial
hardship if it can show that at the end of the immediately preceding fiscal
quarter, or upon receipt of notice of a rate increase, the premium cost to
the employer, as a percentage of the employer’s gross receipts, increased
by a factor of .50.
§26.403.Marketing Activities of Health Group Cooperatives.
(a)
A health group cooperative may engage in marketing activities
related to membership in the cooperative and is not required to maintain an
agent’s license for soliciting membership in the cooperative. The marketing
activities must be restricted to membership in the cooperative and may include
the general availability of health coverage through the cooperative. All health
coverage issued through the cooperative must be issued through a licensed
agent that is employed by or contracted with the cooperative.
(b)
A sponsoring entity of a health group cooperative may inform
its members regarding the health group cooperative and the general availability
of coverage through the health group cooperative. All coverage issued through
the cooperative must be issued through a licensed agent.
(c)
A licensed agent that is used and compensated by a health
group cooperative is not required to be appointed by a health carrier offering
coverage through the health group cooperative. This exemption does not allow
an agent to market other products and services not offered through the health
group cooperative without an appointment from the health carrier.
(d)
A health group cooperative or a member of the board of
directors, the executive director, or an employee or agent of a health group
cooperative is not liable for failure to arrange for coverage of any particular
illness, disease, or health condition in arranging for coverage through the
cooperative.
§26.404.Health Group Cooperative’s Status as Employer.
(a)
A health group cooperative is considered a single employer
for the purposes of benefit elections and other administrative functions.
(b)
A health group cooperative that is composed of only small
employers is considered a small employer for all purposes of Chapter 26 of
the Insurance Code and Chapter 26 of this title.
(c)
A health group cooperative that is composed of small and
large employers is considered a small employer in relation to the small employer
members for all purposes of the Insurance Code and Chapter 26 of this title.
A health group cooperative may elect to extend to all of the large employer
members of the health group cooperative the protections of Chapter 26 of the
Insurance Code and Chapter 26 of this title. However, this election does not
entitle the large employer members to guaranteed issuance of coverage as set
forth in Article 26.21(a) of the Insurance Code or §26.8 of this title
(relating to Guaranteed Issue; Contribution and Participation Requirements).
§26.405.Premium Tax Exemption for Previously Uninsured.
(a)
In accordance with Article 26.14A of the Insurance Code,
a carrier providing coverage through a health group cooperative is exempt
from premium tax or retaliatory tax for two years for premiums received for
a previously uninsured employee or dependent. The two year period for the
exemption begins upon the first date of coverage for the previously uninsured
employee or dependent.
(b)
For the purposes of this section and Article 26.14A of
the Insurance Code, a previously uninsured employee or dependent is an employee
or the dependent of an employee of an employer member of a health group cooperative
and did not have creditable coverage for the 63 days preceding the effective
date of coverage purchased through the health group cooperative.
(c)
A carrier shall maintain for four years documentation for
each insured that demonstrates that coverage of the insured qualifies the
carrier for a tax exemption pursuant to subsection (b) of this section. The
documentation shall comply with any applicable rules or procedures adopted
by the Comptroller of Public Accounts related to the tax exemption.
§26.406.Standard Presentation Form.
(a)
A carrier offering coverage through a health group cooperative
shall use a standard presentation form for employer members of the health
group cooperative that includes the information listed in subsection (b) of
this section. A standard presentation form may include additional information.
(b)
A standard presentation form shall include, at a minimum:
(1)
an explanation that the coverage is being offered through
a health group cooperative;
(2)
the name of the health group cooperative;
(3)
an explanation of the employer’s eligibility to join
the health group cooperative and purchase coverage without regard for membership
in any other organization or the health status or claims experience of the
employer and employees;
(4)
an explanation of any fees or charges associated with membership
in the health group cooperative;
(5)
a statement that coverage is available to a small employer
on a guaranteed issue basis from any carrier offering coverage in the small
employer market with no requirement of joining a health group cooperative;
(6)
if multiple plans are offered through the health group
cooperative, an explanation that the employer and employees may select any
of the plans without limitation due to health status or claims experience;
(7)
a description of the plans offered through the health group
cooperative by the carrier;
(8)
if the employer or employee is considering or purchasing
a health benefit plan that does not contain all state-mandated health benefits,
a written disclosure statement that:
(A)
explains that the health benefit plan being offered or
purchased does not provide some or all state-mandated health benefits;
(B)
lists those state-mandated health benefits not included
under the health benefit plan;
(C)
general description of the benefits offered by the health
benefit plan;
(D)
provides a notice that purchase of the plan may limit future
coverage options in the event the policyholder’s or certificate holder’s
health changes and needed benefits are not covered under the health benefit
plan.
§26.407.Guaranteed Issuance of Coverage to Health Group Cooperatives.
(a)
Subject to the provisions of §§26.404 and 26.410
of this title (relating to Health Group Cooperative’s Status as Employer
and Service Areas for Carriers Offering Coverage Through a Health Group Cooperative),
a health carrier shall provide coverage to a health group cooperative that
requests coverage in the health carrier’s geographic service area.
(b)
A carrier may decline to offer coverage to a health group
cooperative if the carrier is actively engaged in assisting an entity with
the formation of a health group cooperative. A carrier is actively engaged
in assisting an entity with the formation of a health group cooperative if
the carrier has associated with the entity for the purpose of forming a health
group cooperative and the parties have signed a letter of agreement that evidences
that the entity intends to form a health group cooperative with the assistance
of the carrier and intends to purchase coverage from the carrier. The exception
to guaranteed issuance of coverage under this subsection is available for
no more than 60 days from the date of the letter.
(c)
A carrier that is providing coverage to an employer through
a health group cooperative must provide coverage to any employee that elects
to be covered under a health benefit plan that is offered through the health
group cooperative.
§26.408.Health Benefit Plans Offered Through Health Group Cooperatives.
(a)
A health benefit plan issued by an HMO or an insurer through
a health group cooperative is not subject to the following state mandates:
(1)
the offer of in vitro fertilization coverage as required
by Insurance Code Article 3.51-6, §3A;
(2)
coverage of HIV, AIDS, or HIV-related illnesses as required
by Insurance Code Article 3.51-6, §3C;
(3)
coverage of chemical dependency and stays in a chemical
dependency treatment facility as required by Insurance Code Article 3.51-9;
(4)
coverage or offer of coverage of serious mental illness
as required by Insurance Code Article 3.51-14;
(5)
the offer of mental or emotional illness coverage as required
by Insurance Code Article 3.70-2(F);
(6)
coverage of inpatient mental health and stays in a psychiatric
day treatment facility as required by Insurance Code Article 3.70-2(F);
(7)
the offer of speech and hearing coverage as required by
Insurance Code Article 3.70-2(G);
(8)
coverage of mammography screening for the presence of occult
breast cancer as required by Insurance Code Article 3.70-2(H);
(9)
the offer of home health care coverage as required by Insurance
Code Article 3.70-3B;
(10)
coverage of stays in a crisis stabilization unit and/or
residential treatment center for children and adolescents as required by Insurance
Code Article 3.72;
(11)
standards for proof of Alzheimer’s disease as required
by Insurance Code Article 3.78;
(12)
coverage for formulas necessary for the treatment of phenylketonuria
as required by Insurance Code Article 3.79;
(13)
continuation of coverage of certain drugs under a drug
formulary as required by Insurance Code Article 21.52J;
(14)
coverage of contraceptive drugs and devices as required
by Insurance Code Article 21.52L and §21.404(3) of this title (relating
to Underwriting);
(15)
coverage of diagnosis and treatment affecting temporomandibular
joint and treatment for a person unable to undergo dental treatment in an
office setting or under local anesthesia as required by Insurance Code Article
21.53A;
(16)
coverage of bone mass measurement for osteoporosis as
required by Insurance Code Article 21.53C;
(17)
coverage of diabetes care as required by Insurance Code
Article 21.53D;
(18)
coverage of childhood immunizations as required by Insurance
Code Articles 21.53F and 20A.09F;
(19)
coverage for screening tests for hearing loss in children
and related diagnostic follow-up care as required by Insurance Code Article
21.53F;
(20)
offer of coverage for therapies for children with developmental
delays as required by Insurance Code Article 21.53F;
(21)
coverage of certain tests for detection of prostate cancer
as required by Insurance Code Article 21.53F;
(22)
coverage of off-label drugs as required by Insurance Code
Article 21.53M;
(23)
coverage of acquired brain injury treatment/services as
required by Insurance Code Article 21.53Q;
(24)
coverage of certain tests for detection of colorectal
cancer as required by Insurance Code Article 21.53S;
(25)
coverage for reconstructive surgery for craniofacial abnormalities
in a child as required by Insurance Code Article 21.53W;
(26)
limitations on the treatment of complications in pregnancy
established by §21.405 of this title (relating to Policy Terms and Conditions);
(27)
coverage for services related to immunizations and vaccinations
under managed care plans as required by Insurance Code Article 21.53K;
(28)
coverage of rehabilitation therapies as required by Insurance
Code Article 20A.09(a)(4);
(29)
limitations on differences between levels of coverage
in preferred provider benefit plans as described in §3.3704(a)(6) of
this title (relating to Freedom of Choice: Availability of Preferred Providers);
and
(30)
limitations or restrictions on copayments and deductibles
imposed by §11.506(2)(A) and (B) of this title (relating to Mandatory
Contractual Provisions: Group, Individual and Conversion Agreement and Group
Certificate).
(b)
A health benefit plan issued by an HMO through a health
group cooperative must provide for the basic health care services as provided
in §11.508 or §11.509 of this title (relating to Mandatory Benefit
Standards: Group, Individual and Conversion Agreements and Additional Mandatory
Benefit Standards, Group Agreement Only):
(c)
A health benefit plan offered by an insurer through a health
group cooperative is not subject to §3.3704(a)(6) of this title.
§26.409.Expedited Approval for Plans Offered Through a Health Group Cooperative.
(a)
A carrier must file for approval a health benefit plan
that will be offered solely to a health group cooperative and shall indicate
in the filing that the health benefit plan is to be offered to a health group
cooperative and is subject to review under this section.
(b)
A health benefit plan subject to review under this section
and filed with the department by an insurer may be filed as a file and use
form consistent with Insurance Code Article 3.42(c) and §3.5(a)(2) of
this title (relating to Filing Authorities and Categories).
(c)
An insurer that does not elect to file for a approval under
subsection (b) of this section shall file the form for approval consistent
with Insurance Code Article 3.42(d) and §3.5(a)(1) of this title. The
department shall approve or disapprove the filing within 40 calendar days
of receipt of the complete filing.
(d)
An HMO must file for approval an HMO evidence of coverage
that is to be offered solely to a health group cooperative and shall indicate
that review of the evidence of coverage is subject to the expedited process
available under this section. The evidence of coverage shall be filed consistent
with the requirements of Subchapter F of Chapter 11 of this title (relating
to Evidence of Coverage) and shall be approved or disapproved by the department
within 20 calendar days of receipt of a complete filing.
§26.410.Service Areas for Carriers Offering Coverage Through a Health Group Cooperative.
(a)
A health carrier may provide coverage to only one health
group cooperative in any county, except that a health carrier may provide
coverage to additional health group cooperatives if it is providing coverage
in an expanded service area.
(b)
A health carrier may provide health group cooperative coverage
to an expanded service area that includes the entire state upon providing
notice to the department. A health carrier properly provides notice to the
department by sending a certification that the health carrier intends to provide
health group cooperative coverage to an expanded service area that includes
the entire state. The certification should be signed by an officer of the
health carrier and sent to Filings Intake Division, Mail Code 106-1E, Texas
Department of Insurance, P. O. Box 149104, Austin, Texas 78714-9104 or 333
Guadalupe, Austin, Texas, 78701.
(c)
A health carrier may apply for an expanded service area
that includes less than the entire state by submitting an application for
approval to Filings Intake Division, Mail Code 106-1E, Texas Department of
Insurance, P. O. Box 149104, Austin, Texas 78714-9104 or 333 Guadalupe, Austin,
Texas, 78701. The health carrier may begin using the expanded service area
upon approval or 60 days after the day the application is received by the
department unless the application is disapproved by the department within
that time. The application must include:
(1)
the geographic service areas, defined in terms of counties
or zip codes, to the extent possible;
(2)
if the service area cannot be defined by counties or zip
code, a map which clearly shows the geographic service areas must be submitted
in conjunction with the application;
(3)
service areas by zip code shall be defined in a non-discriminatory
manner and in compliance with the Insurance Code, Articles 21.21-6 and 21.21-8.
(d)
HMO service areas are not affected by a filing under this
section and shall be established in accordance with Chapter 843 of the Insurance
Code.
§26.411.Health Carrier Reporting Requirements.
(a)
Health carriers offering a health benefit plan through
a health group cooperative shall file information with the department, not
later than April 1 of each year, in the manner prescribed and on the form
provided by the department for that purpose. The form can be obtained from
the Texas Department of Insurance, Filings Intake Division, MC 106-1E, P.O.
Box 149104, Austin, Texas 78714-9104. The form can also be obtained from the
department's internet web site at www.tdi.state.tx.us. The information shall
include data for the previous calendar year and shall include the following:
(1)
the total number of health benefit plans newly issued and
renewed to health group cooperatives and covering Texas lives, by type of
plan;
(2)
the total number of Texas lives (including members/employees,
spouses, and dependents) covered under newly issued and renewed health benefit
plans issued through a health group cooperative;
(3)
the total number of health group cooperative health benefit
plans covering Texas lives that were cancelled or non-renewed during the previous
calendar year, including the reasons for cancellation or non-renewal (and
that were not in effect after December 31), as well as the total number of
Texas lives covered under those plans, and gross premiums paid for coverage
of Texas lives under those plans;
(4)
the gross premiums received for newly issued and renewed
health group cooperative health benefit plans covering Texas lives;
(5)
the number of health group cooperative health benefit plans
covering individuals in Texas that were previously uninsured in accordance
with §26.406(b) of this title (relating to Standard Presentation Form),
and the number of Texas lives covered under those plans; and
(6)
the number of health group cooperative health benefit plans
in force in Texas on December 31, and the number of Texas lives covered under
those plans, based on the first three digits of the five-digit ZIP Code of
the employer’s principal place of business in Texas.
(b)
For purposes of this subsection, gross premiums shall be
the total amount of monies collected by the health carrier for health benefit
plans during the applicable calendar year.
(c)
The information required to be filed by this section shall
be filed with Filings Intake Division, MC 106-1E, P.O. Box 149104, Austin,
TX, 78714-9104
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the
Office of the Secretary of State on December 29, 2003.
TRD-200308904
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: February 8, 2004
For further information, please call: (512) 463-6327
Chapter 114.
SELF-INSURANCE
§2, as amended, codified in
] Texas Insurance Code
§843.002
[
Article 20A.02
], are hereby incorporated into
this chapter.
Senate Bill 180, enacted by Acts 1975, 64th Legislature, Chapter 214, pages
514-530, first effective December 1, 1975, as amended
], codified as
the Texas Insurance Code Chapters [
Chapter
] 20A
and 843
.
Articles 20A.15 and 20A.15A
], unless the context of the
rule clearly indicates applicability to any agents licensed under one specific
article.
including, without limitations as to time and cost, those benefits
]
as prescribed in §§11.508 and 11.509 of this title (relating to
Mandatory Benefit Standards: Group, Individual and Conversion Agreements,
and Additional Mandatory Benefit Standards
:
[
-
] Group
Agreement Only)[
, other than those limitations specifically prescribed
in this title
].
Article 21.49-1
].
Article 20A.02(n)
].
service
] health care
service
plan as defined in the Insurance Code
§843.002
[
Article 20A.02(l)
].
Article 20A.02(y)
].
Article 21.49-1
], including any security convertible
into or evidencing a right to acquire such security.
Articles
] 1.11 and
§§802.001, 802.003 and 843.155
[
20A.10
].
Subchapter F. EVIDENCE OF COVERAGE
shall contain the basic health care services defined in §11.2(b)(7)
of this title (relating to Definitions), and
] shall provide
the
following basic health care
[
such
] services
when they
are provided by network physicians or providers, or by non-network physicians
and providers as set forth in §11.506(10) or (15) of this title (relating
to Mandatory Contractual Provisions: Group, Individual and Conversion Agreement
and Group Certificate)
[
as needed and without limitation as to
time and cost, unless such limitation is permitted in this section, including
the following
]:
(1)
Diabetes. A provision for the treatment
of diabetes and conditions associated with diabetes pursuant to the Insurance
Code Article 21.53G.
]
(2)
Diagnostic services. A provision
for diagnostic laboratory and diagnostic and therapeutic radiological services
in support of basic health services including professional fees.]
(3)
Home health services. A provision
for home health services provided at an enrollee's home by health care personnel,
as prescribed or directed by the responsible physician or other authority
designated by the HMO.]
(4)
Inpatient and outpatient services.
A provision for inpatient and outpatient services, including the following:]
(A)
outpatient services, which must include diagnostic
services, treatment services and x-ray services, for patients who are ambulatory
and may be provided in a non-hospital based health care facility or at a hospital;]
(B)
inpatient hospital services, which must include
but not be limited to, room and board, general nursing care, meals and special
diets when medically necessary, use of operating room and related facilities,
use of intensive care unit and services, x-ray services, laboratory, and other
diagnostic tests, drugs, medications, biologicals, anesthesia and oxygen services,
special duty nursing when medically necessary, radiation therapy, inhalation
therapy, and administration of whole blood and blood plasma;]
(C)
outpatient services and inpatient hospital
services must include rehabilitative services and physical speech and occupational
therapy; if in the opinion of a physician, the provision of those services
and therapies are medically necessary, those services and therapies may not
be denied, limited, or terminated if they meet or exceed treatment goals for
the enrollee. For a person that is physically disabled, treatment goals may
include maintenance of functioning or prevention of or slowing of further
deterioration.]
(5)
Breast cancer and related
procedures. A provision for coverage for breast cancer including the following:]
(A)
coverage for mastectomy must provide coverage
for breast reconstruction. Breast reconstruction is subject to the same deductible
or copayment applicable to mastectomy. Breast reconstruction may not be denied
because the mastectomy occurred prior to the effective date of coverage.]
(B)
coverage for the inpatient care for an enrollee
in accordance with the Insurance Code Article 21.52G.]
(6)
Mental health services. A
provision that provides 20 outpatient visits per enrollee per year, as may
be necessary and appropriate for short-term evaluative or crisis intervention
mental health services, or both.]
(7)
Mother and newborn child.
A provision for maternity benefits must provide care for an enrollee and her
newborn child as described in the Insurance Code Article 21.53F.]
(8)
Physician services. A provision
that physician services (including consultant and referral services by a physician)
must be provided by a licensed physician, or if a service of a physician may
also be provided under applicable state law by other health providers, an
HMO may provide the service through these other health providers.]
(9)
Preventive health services.
A provision for preventive health services, which must be made available to
enrollees and must include at least the following:]
(A)
a broad range of voluntary family planning
services;]
(B)
infertility medical services for artificial
insemination, including donor-related services, without limitation as to who
may be a donor. Such infertility medical services include medical treatment
to diagnose and/or treat the medical causes for the infertility of the male
or female enrollee. The infertility medical services appearing in §11.512(13)
of this title (relating to Optional Benefits) are not considered to be basic
health care services;]
(C)
well-child care from birth;]
(D)
periodic health evaluations for adults, including
health risk assessments not less than once every three years for adults and
annual well woman examinations;]
(E)
a medically recognized diagnostic examination
for the detection of prostate cancer in accordance with the Insurance Code
Article 21.53F;]
(F)
annual eye and ear examinations for children
through age 17, to determine the need for vision and hearing correction; and]
(G)
pediatric and adult immunizations, in accord
with accepted medical practice, including immunizations for each covered child
from birth through the date the child is six years of age, as described in
the Insurance Code Article 21.53F and §11.506(2) of this title (relating
to Mandatory Contractual Provisions: Group, Individual and Conversion Agreement
and Group Certificate). An HMO shall not limit benefits to enrollees for immunizations
or vaccinations to circumstances in which an immunization or vaccination is
administered by a pharmacist under a physician's written protocol.]
(10)
Transplants. A provision
for benefits for kidney transplants; corneal transplants; liver transplants
for children with biliary atresia and other rare congenital abnormalities;
and bone marrow transplants for aplastic anemia, leukemia, severe combined
immunodeficiency disease, and Wiskott-Aldrich syndrome, when medically necessary,
including a provision for the payment of the donor's expenses. An HMO may
not require an enrollee to travel out-of-state to receive transplant services
unless the HMO obtains the informed consent of the enrollee, which explains
the benefits and detriments of in-state and out-of-state options.]
(b)
] The benefits described in
subsection
(a)(1)(F) and (1)(I)(ii) and (vi)
[
(a)(1), (5)
and (9)(E) and (G)
] of this section do not apply to small employer plans
as defined by the Insurance Code Chapter 26.
(c)
] Nothing in this title shall
require an HMO, physician, or provider to recommend, offer advice concerning,
pay for, provide, assist in, perform, arrange, or participate in providing
or performing any health care service that violates its religious convictions.
An HMO that limits or denies health care services under this subsection shall
set forth such limitations in its evidence of coverage.
Chapter 21.
TRADE PRACTICES
2.
STATE-MANDATED HEALTH BENEFITS
3.
REQUIRED NOTICES
4.
ADDITIONAL REQUIREMENTS
Chapter 26.
SMALL EMPLOYER HEALTH INSURANCE REGULATIONS
Part 2.
TEXAS WORKERS' COMPENSATION COMMISSION