28 TAC §§26.401 - 26.405, 26.407 - 26.411
The Commissioner of Insurance adopts amendments to Subchapter
D, §§26.401 - 26.405 and 26.407 - 26.411, concerning the establishment
of, and provision of health benefit plan coverage to, health group cooperatives
pursuant to Insurance Code, Title 8, Chapter 1501. Section 26.409 is adopted
with a change to the proposed text published in the November 18, 2005, issue
of the
Texas Register
(30 TexReg 7686). Sections
26.401 - 26.405, 26.407, 26.408, 26.410 and 26.411 are adopted without changes.
The adopted amendments are necessary to implement SB 805, 79th Legislature,
Regular Session, which revised the standards by which insurance companies
and health maintenance organizations (HMOs) provide group health benefit plan
coverage to health group cooperatives comprised of small or large employers.
SB 805 enacted §1501.0575, making participation by health benefit plan
issuers in health group cooperatives generally voluntary. The bill also amended §1501.0581
to provide that a health group cooperative may be composed of small employers
or large employers, but not both; and that a health group cooperative consisting
only of small employers is not required to allow a small employer to join
the cooperative under certain statutorily specified conditions and so long
as the Commissioner has been timely notified of the cooperative's election.
The bill also amended Insurance Code §1501.063 to provide that a health
group cooperative is considered a single employer under the Insurance Code,
and that a cooperative composed only of small employers that has made the
election specified in Insurance Code §1501.0581(o) to restrict membership
to no more than 50 employees is to be treated as a small employer for purposes
of Chapter 1501, including for purposes of any provision relating to premium
rates and the issuance and renewal of coverage. The adopted amendments also
are necessary to address changes to requirements governing the formation and
operation of health group cooperatives and the obligations of insurance companies
and HMOs (hereinafter referred to collectively as "health carriers") that
issue health benefit plan coverage for these entities.
The department made one change to the published proposed amendment to §26.409(a)
by removing the deletion indicated for §26.409(a)(20), and by changing
the Insurance Code reference in paragraph (20) from Article 21.53F to Chapter
1367, Subchapter E. Under §26.409(a)(20), a health benefit plan issued
by a health carrier through a cooperative is not subject to the state mandate
relating to the offer of coverage for therapies for children with developmental
delays as required by Insurance Code 21.53F. The proposed amendment to §26.409(a)(20)
as published was intended to make only necessary conforming changes to Insurance
Code references based on the enactment of the nonsubstantive code revision
by the 78th Legislature, Regular Session. The proposed deletion of subsection
(a)(20) was inadvertent, and no substantive change was intended by any of
the amendments to §26.409. The repeal of Article 21.53F by HB 2922, 78th
Legislature, Regular Session, did not include §9 of that article. Section
9 was enacted in HB 2292, 78th Legislature, Regular Session, subsequent to
the repeal of Article 21.53F, and for that reason was not part of the nonsubstantive
code revision of the Insurance Code by the 78th Legislature, Regular Session.
However, as part of the conforming codification of the Insurance Code enacted
by the 79th Legislature, Regular Session, in HB 2018, §9 of Article 21.53F
was repealed and enacted as Insurance Code, Chapter 1367, Subchapter E.
The adopted amendments to §26.401 add subsection (e), which requires
that organizational documents otherwise required to be filed under the section
include notification about whether the health group cooperative elects to
restrict membership to 50 eligible employees. The adopted amendments also
make conforming changes to Insurance Code references based on the enactment
of the nonsubstantive code revision by the 78th Legislature, Regular Session.
The adopted amendments to §26.402 change provisions addressing authorized
membership of a health group cooperative and add a new subsection (d) to conform
the section to Insurance Code §1501.0581(a) - (c) and (o) - (p), as amended
by SB 805. The adopted amendment to §26.403 provides that a health group
cooperative may offer other ancillary products and services, in accord with
provisions of Insurance Code §1501.058, relating to powers and duties
of cooperatives.
The adopted amendments to §26.404 provide that a health group cooperative
is considered a large employer for all purposes of Insurance Code, Chapter
1501 and associated rules, unless it has elected to limit participation in
the cooperative to 50 eligible employees, in which case it is considered a
small employer for all purposes of Insurance Code, Chapter 1501 and associated
rules, including guaranteed issuance of coverage.
The adopted amendments to §26.405 make necessary conforming changes
to Insurance Code references based on nonsubstantive additions to and corrections
in enacted codes pursuant to HB 2018, 79th Legislature, Regular Session. The
adopted amendment to §26.407(a) requires a health carrier to make an
informational filing with the Commissioner concerning intended offers of coverage
to a cooperative not later than 30 days before the initial open enrollment
period for the cooperative. The adopted amendment to §26.407(b) revises
the specific updated information concerning the health carrier's offer of
coverage to the cooperative that the health carrier must provide as part of
its §26.407(a) filing with the department.
The adopted amendments to §26.408 provide that, subject to the limitations
of §26.411, which regulates health carrier service areas, a health carrier
may elect not to offer or issue coverage to health group cooperatives or may
elect to offer or issue coverage to one or more health group cooperatives
of its choosing. The adopted amendments also clarify that a health carrier
must comply with the specified guaranteed issuance requirements in offering
and issuing coverage to health group cooperatives that have made the election
to limit participation to 50 eligible employees.
The adopted amendments to §26.409 make necessary conforming changes
to Insurance Code references, including elimination of references to repealed
provisions, based on the enactment of the nonsubstantive code revision by
the 78th Legislature, Regular Session.
The adopted amendments to §26.410 make necessary changes to reflect
the adopted revision to the section title for §26.407 and also make conforming
changes to Insurance Code references based on the enactment of the nonsubstantive
code revision by the 78th Legislature, Regular Session.
The adopted amendments to §26.411 make necessary conforming changes
to Insurance Code references based on the enactment of the nonsubstantive
code revision by the 78th Legislature, Regular Session.
The enactment of SB 805 eliminates the need for §26.412, which addressed
the refusal to renew employer health benefit plans delivered or issued to
a health group cooperative. SB 805 directs a health carrier to treat a health
group cooperative either as a large employer or as a small employer under
the refusal-to-renew provisions of Insurance Code §1501.063. For this
reason, the department has adopted the repeal of §26.412, which is also
published in this issue of the
Texas Register
.
Comment: Two commenters objected to the proposed amendments in §26.404(b)
and §26.408(b) that specify certain instances in which a small employer
group plan issuer participating in the health group cooperative market would
be required to issue coverage to certain cooperatives qualifying as small
employers, even if the issuer did not want to select such cooperative for
coverage. According to the commenters, the proposed amendments are contrary
to the clearly stated intent in Insurance Code §1501.0575 as added by
SB 805 that issuer participation in a cooperative or cooperatives is voluntary.
The commenters emphasized that the language of the statute as amended clearly
provides that a small employer group plan issuer may elect to participate
in one or more cooperatives and may select the cooperatives in which it will
participate. The commenters suggested revisions to §26.404(b) and §26.408(b)
regarding voluntary participation in cooperatives by issuers.
Agency Response: The department agrees that the general provision set out
in Insurance Code §1501.0575 as added by SB 805 indicates that issuer
participation in a cooperative or cooperatives is voluntary, and that the
issuer may elect to participate in one or more cooperatives and may select
the cooperatives in which it will participate. However, the specific amendments
to Insurance Code §1501.063 that were also enacted in SB 805 clearly
provide (i) that a health group cooperative is considered a single employer
under the Insurance Code, and (ii) that a cooperative composed only of small
employers and that has made the election specified in Insurance Code §1501.0581(o)
to restrict membership to no more than 50 employees is to be treated as a
small employer for purposes of Chapter 1501, including for purposes of any
provision relating to premium rates and the issuance and renewal of coverage.
For these reasons, the department makes no changes to subsections §26.404(b)
and §26.408(b) as proposed.
Neither for nor against, with recommended changes: Blue Cross Blue Shield
of Texas; Texas Association of Life and Health Insurers.
The amendments are adopted under the Insurance Code §§1501.010,
1501.058, 1501.0581, and 36.001, and SECTION 7 of SB 805 as enacted by the
79th Legislature, Regular Session. Section 1501.010 authorizes the Commissioner
of Insurance to adopt rules as necessary to implement Chapter 1501. Section
1501.058 requires compliance with federal laws applicable to cooperatives
and health benefit plans issued through cooperatives, to the extent required
by state law or rules adopted by the Commissioner. Section 1501.0581 requires
a health carrier to make an informational filing with the Commissioner concerning
intended offers of coverage to a cooperative and requires that the Commissioner
by rule prescribe the form and the time of the filing. SECTION 7 of SB 805
directs the Commissioner, not later than January 1, 2006, to adopt rules under §1501.010
as necessary to implement the change in law made by SB 805. 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.
§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 §§1366.001 and 1366.003;
(2)
coverage of HIV, AIDS, or HIV-related illnesses as required
by Insurance Code §§1364.001 and 1364.003;
(3)
coverage of chemical dependency and stays in a chemical
dependency treatment facility as required by Insurance Code Chapter 1368;
(4)
coverage or offer of coverage of serious mental illness
as required by Insurance Code §§1355.001 - 1355.007;
(5)
the offer of mental or emotional illness coverage as required
by Insurance Code §1355.106;
(6)
coverage of inpatient mental health and stays in a psychiatric
day treatment facility as required by Insurance Code §1355.104;
(7)
the offer of speech and hearing coverage as required by
Insurance Code Chapter 1365;
(8)
coverage of mammography screening for the presence of occult
breast cancer as required by Insurance Code §1356.005;
(9)
standards for proof of Alzheimer's disease as required
by Insurance Code §1354.002;
(10)
coverage of stays in a crisis stabilization unit and/or
residential treatment center for children and adolescents as required by Insurance
Code §§1355.055 and 1355.056;
(11)
continuation of coverage of certain drugs under a drug
formulary as required by Insurance Code §1369.055;
(12)
coverage of off-label drugs as required by Insurance Code §§1369.001
- 1369.005;
(13)
coverage for formulas necessary for the treatment of phenylketonuria
as required by Insurance Code Chapter 1359;
(14)
coverage of contraceptive drugs and devices as required
by Insurance Code §§1369.101 - 1369.109 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 Chapter
1360;
(16)
coverage of bone mass measurement for osteoporosis as
required by Insurance Code §1361.003;
(17)
coverage of diabetes care as required by Insurance Code
Chapter 1358;
(18)
coverage of childhood immunizations as required by Insurance
Code §§1367.051 - 1367.055 and 1367.053;
(19)
coverage for screening tests for hearing loss in children
and related diagnostic follow-up care as required by Insurance Code §§1367.101
- 1367.105;
(20)
offer of coverage for therapies for children with developmental
delays as required by Insurance Code Chapter 1367, Subchapter E;
(21)
coverage of certain tests for detection of prostate cancer
as required by Insurance Code Chapter 1362;
(22)
coverage of acquired brain injury treatment/services as
required by Insurance Code Chapter 1352;
(23)
coverage of certain tests for detection of colorectal
cancer as required by Insurance Code Chapter 1363;
(24)
coverage for reconstructive surgery for craniofacial abnormalities
in a child as required by Insurance Code §§1367.151 - 1367.154;
(25)
coverage of rehabilitation therapies as required by Insurance
Code §1271.156;
(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 Chapter 1353;
(28)
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);
(29)
coverage of a minimum stay for maternity as required by
Insurance Code §§1366.051 - 1366.059;
(30)
coverage of reconstructive surgery incident to mastectomy
as required by Insurance Code §§1357.001 - 1357.007; and
(31)
coverage of a minimum stay for mastectomy treatment/services
as required by Insurance Code §§1357.051 - 1357.057.
(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 (relating
to Freedom of Choice: Availability of Preferred Providers).
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on January 11, 2006.
TRD-200600176
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: January 31, 2006
Proposal publication date: November 18, 2005
For further information, please call: (512) 463-6327
28 TAC §26.412
The Commissioner of Insurance adopts the repeal of §26.412,
concerning the refusal of a health carrier to renew employer health benefit
plans delivered or issued to a health group cooperative. The repeal of this
section is adopted without changes to the proposal published in the November
18, 2005, issue of the
Texas Register
(30
TexReg 7690).
Section 26.412 regulated a health carrier's election to refuse to renew
employer health benefit plans delivered or issued to a health group cooperative.
Repeal of §26.412 is necessary because the enactment of SB 805, 79th
Legislature, Regular Session, obviates the need for the section. Under SB
805, health carriers issuing employer health benefit plans to health group
cooperatives are to treat such cooperatives as either large employers or small
employers pursuant to the refusal-to-renew provisions of Insurance Code §1501.063.
The adoption of the repeal will result in consistency between the Chapter
26 administrative rules regulating health care cooperatives with regard to
refusal-to-renew provisions and the amendments to Insurance Code Chapter 1501
enacted in SB 805.
The department did not receive any comments on the proposed repeal.
The repeal is adopted pursuant to the Insurance Code §§1501.010,
1501.058, 1501.0581, and 36.001, and SECTION 7 of SB 805 as enacted by the
79th Legislature, Regular Session. Section 1501.010 authorizes the Commissioner
of Insurance to adopt rules as necessary to implement Chapter 1501. Section
1501.058 requires compliance with federal laws applicable to cooperatives
and health benefit plans issued through cooperatives, to the extent required
by state law or rules adopted by the Commissioner. Section 1501.0581 requires
a carrier to make an informational filing with the Commissioner concerning
intended offers of coverage to a cooperative and requires that the Commissioner
by rule prescribe the form and the time of the filing. SECTION 7 of SB 805
directs the Commissioner, not later than January 1, 2006, to adopt rules under §1501.010
as necessary to implement the change in law made by SB 805. 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.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on January 11, 2006.
TRD-200600175
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: January 31, 2006
Proposal publication date: November 18, 2005
For further information, please call: (512) 463-6327