28 TAC §§26.401 - 26.413
The Texas Department of Insurance proposes new Subchapter
D, §§26.401 - 26.413 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 carriers provide
group health insurance coverage 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.
This proposal replaces a proposal that was published on January 9, 2003. That
proposal has been withdrawn. This proposal includes a new §26.407, that
clarifies that a carrier must provide evidence to the department of its intent
to participate in the health group cooperative market and identify any limitations
on its participation. The proposal also includes a new §26.412 concerning
a carrier’s refusal to renew coverage to health group cooperatives.
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 through the cooperative.
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 requires carriers to make a filing
with the commissioner indicating whether they choose to become health group
cooperative carriers. Carriers that do choose to enter the health group cooperative
market must include in their filings the information identified in §26.407(c).
Proposed §26.408 says that, subject to the provisions of §26.407,
a carrier shall 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. Subject to the provisions of §26.407, 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 other restrictions
relating to this requirement.
Proposed §26.409 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 listed in the proposed section. A plan issued by an HMO must include
all basic health care services otherwise required by applicable law. Proposed §26.409
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 §26.410
provides for expedited approval of plans offered through health group cooperatives,
allowing a 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 §26.411 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 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. The ability to have expanded
service areas will allow a carrier to provide service to more than one cooperative
in a given county. Proposed §26.412 establishes the requirements that
a carrier issuing coverage to a health group cooperative must satisfy prior
to refusing to renew coverage to health cooperatives.
Proposed §26.413 requires a carrier that provides coverage to a cooperative
to submit to the department, by March 1 of each year, certain 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 coverage 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.
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 described
in this cost note, 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. Adding other information is discretionary on the part of the carrier.
The proposed rule requires the reporting of certain information that was not
previously required to be reported. Because the required information for the
standard presentation form and the information to be reported is easily accessible
to, or developed by, the carrier, these requirements can be satisfied by using
a carrier’s existing resources. The department estimates the cost of
a form to be between $.01-.04 per page, exclusive of postage or facsimile
or electronic transmission. There may be variations in cost from carrier to
carrier based on the number of counties or cooperatives they serve. But 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 or enrollees of important consumer
information concerning health insurance provided through health group cooperatives.
The proposed rule also establishes a standard, to be used in the absence of
a standard agreed upon in the contract between the parties, for determining
a circumstance of financial hardship that 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 provision in the proposal that allows parties to agree to
their own standard by contract obviates the cost potential. Whether and to
what extent the rule’s proposed definition of financial hardship 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 could vary from five
to twenty hours 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 June 7, 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. A request for a public hearing should
be submitted separately to the Office of the Chief Clerk.
The new sections are proposed under the Insurance Code Chapter
26, Articles 26.14A, 26.15 and 26.16, and §36.001. Articles 26.14A and
26.15 contain special provisions relating to health group cooperatives, and
allow 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 provisions are affected by this proposal: Chapter 26, Articles
26.14A, 26.15 and 26.16
§26.401.Establishment of Health Group Cooperatives.
(a)
Subject to the requirements of the Insurance Code and 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
comply with Insurance Code Article 26.14(b) by filing notification of the
receipt of the certificate and a copy of the health group cooperative’s
organizational 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 at least 10 participating
employers, to maintain eligibility for coverage 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
and the limitations identified pursuant to §26.407 of this chapter (relating
to Health Carrier Designation As Health Group Cooperative Carrier), 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 without penalty its health benefit plan
coverage with 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 what constitutes a 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 and restricted to membership in the cooperative, including general
availability of health coverage and is not required to maintain an agent’s
license for soliciting membership in 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 health carrier providing coverage through a health group cooperative is
exempt from premium tax and 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 health carrier shall maintain for four years documentation
for each insured that demonstrates that coverage of the insured or enrollee
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 health 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 health 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 health 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)
contains a 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.Health Carrier Designation As Health Group Cooperative Carrier.
(a)
On or before August 1, 2004, each health carrier that has
designated itself as a small employer carrier pursuant to §26.6 of this
title (relating to Status of Health Carriers as Small Employer Carriers and
Geographic Service Area) shall file with the commissioner, in accordance with
subsection (c) of this section, information indicating whether the carrier
is available to offer or issue small employer health benefit plans to health
group cooperatives. The health carrier shall submit this filing to the 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.
(b)
After August, 1, 2004 whenever a health carrier designates
itself as a small employer carrier pursuant to §26.6 of this title, the
health carrier shall file with the commissioner, in accordance with subsection
(c) of this section, information indicating that it is available to offer
or issue small employer health benefit plans to health group cooperatives.
The health carrier shall submit this filing to the 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)
The filings required by subsections (a) and (b) of this
section shall include:
(1)
the name of the health carrier;
(2)
a designation of whether or not the health carrier is currently
available to offer or issue small employer health benefit plans to health
group cooperatives;
(3)
a description, by county, of the health group cooperative
basic service area, which is the area in which the carrier is offering or
issuing small employer health benefit plans to health group cooperatives;
(4)
if applicable, the extended service areas in which the
health carrier is currently available to offer or issue small employer heath
benefit plans to health group cooperatives;
(5)
if applicable, information identifying, by county, the
health group cooperative(s) that are currently doing business with the health
carrier in each geographic service area or expanded service area;
(6)
any limitations concerning the number of participating
employers or employees in a health group cooperative that the health carrier
is capable of administering; and
(7)
any other information requested by the department.
(d)
A carrier shall update the filings required by subsections
(a) and (b) of this section as necessary to include new counties or extended
service areas in which the carrier wishes to offer or issue coverage to health
group cooperatives. If the carrier has agreed to provide coverage to a particular
health group cooperative at the time of updating the certification, the carrier
shall identify the health group cooperative consistent with subsection (c)
of this section.
§26.408.Guaranteed Issuance of Coverage to Health Group Cooperatives.
(a)
Subject to the limitations identified in §26.407(c)(6)
of this chapter (relating to Health Carrier Designation As Health Group Cooperative
Carrier), a health carrier that has made a filing with the commissioner indicating
that it is offering or issuing small employer health benefit plans to health
group cooperatives shall provide coverage to a health group cooperative that
requests coverage in the health carrier’s basic geographic service area
for health group cooperative business, as filed pursuant to §26.407 of
this title.
(b)
A health carrier may decline to offer coverage to a health
group cooperative if the carrier is:
(1)
already providing coverage to a health group cooperative
in the same county; or
(2)
actively engaged in assisting an entity with the formation
of a health group cooperative. A health carrier is actively engaged in assisting
an entity with the formation of a health group cooperative if the health 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 health carrier. This exception
is available for no more than 60 days from the date of the letter. This exception
period cannot be extended, nor can additional letters of agreement between
the parties have the effect of extending this exception period.
(c)
Subject to the limitations identified in §26.407(c)(6)
of this chapter, a health 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.
§26.409.Health Benefit Plans Offered Through Health Group Cooperatives.
(a)
A health benefit plan issued by a health carrier 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);
(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);
(31)
limitations or restrictions on coinsurance imposed by §3.3704(a)(6)
of this title (relating to Freedom of Choice: Availability of Preferred Providers);
(32)
coverage of a minimum stay for maternity as required by
Insurance Code Article 21.53F;
(33)
coverage of reconstructive surgery incident to mastectomy
as required by Insurance Code Article 21.53I; and
(34)
coverage of a minimum stay for mastectomy treatment/services
as required by Insurance Code Article 21.52G.
(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.
§26.410.Expedited Approval for Plans Offered Through a Health Group Cooperative.
(a)
A health 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 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.
§26.411.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;
and
(4)
any other information requested by the department.
(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.
§26.412.Refusal to Renew and Application to Reenter Health Group Cooperative Market.
(a)
A health carrier may elect to refuse to renew all employer
health benefit plans delivered or issued for delivery by the health carrier
to a health group cooperative in this state or in a health group cooperative
basic or extended service area approved under the Insurance Code, Article
26.14A(l). The health carrier shall notify the commissioner of the election
not later than the 180th day before the date coverage under the first health
group cooperative health benefit plan terminates under the Insurance Code
Article 26.24(a).
(b)
The health carrier must notify each affected covered health
group cooperative not later than the 180th day before the date on which coverage
terminates for the health group cooperative.
(c)
An health carrier that elects under the Insurance Code
Article 26.24(a) to refuse to renew all health group cooperative employer
health benefit plans in this state or in an approved geographic service area
may not write a new health group cooperative employer health benefit plan
in this state or in the geographic service area, as applicable, before the
fifth anniversary of the date of notice to the commissioner under the Insurance
Code Article 26.24(a).
(d)
A health carrier that elects not to renew under the Insurance
Code Article 26.24, and this section may not resume offering health benefit
plans to health group cooperatives in this state or in the geographic area
for which the election was made until it has filed a petition with the commissioner
to be reinstated as a health group cooperative carrier and the petition has
been approved by the commissioner or the commissioner's designee. In reviewing
the petition, the commissioner may ask for such information and assurances
as the commissioner finds reasonable and appropriate.
§26.413.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 March 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 section, 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 April 26, 2004.
TRD-200402757
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: June 6, 2004
For further information, please call: (512) 463-6327