28 TAC §§21.2302 - 21.2306
The Commissioner of Insurance adopts amendments to §§21.2302
- 21.2306, concerning notice of availability of coverage under the Texas Health
Insurance Risk Pool (Health Pool). Section 21.2304 and §21.2306 are adopted
with nonsubstantive changes to the proposed text published in the May 5, 2006,
issue of the
Texas Register
(31 TexReg 3656).
Sections 21.2302, 21.2303, and 21.2305 are adopted without changes.
The adopted amendments are necessary to implement SB 809, enacted by the
79th Legislature, Regular Session, effective January 1, 2006, which, in part,
amends the Insurance Code, §1506.152 to address eligibility for pool
coverage. The primary purpose of SB 809 is to amend Chapter 1506 to make risk
pool operations more cost-effective, efficient, and equitable. The amendments
to the rules modify the definitions, notice requirements, and form used for
notification of an individual's eligibility for coverage under the Health
Pool.
The Department made one nonsubstantive change to the published proposed
amendment to §21.2304(b) by conforming §21.2304(b)(5) to reflect
that the amendments to §21.2305 as adopted delete subsection (b) and
its reference to Figure 1, since the amended notice will not be filed with
the Secretary of State's Office and is not adopted by reference in the text
of the rule. The change conforms the cross reference in §21.2304(b)(5)
to the Form Health Pool Notice as referenced in §21.2305 and as subsequently
updated. The change does not introduce new subject matter or affect additional
persons other than those subject to the proposal as published.
The Department made one nonsubstantive change to the published proposed
amendment to §21.2306 by eliminating the reference to subparagraph (D)
of §21.2304(b)(3) in the §21.2306 reference to amendments to §21.2304(b)(3).
The change does not introduce new subject matter or affect additional persons
other than those subject to the proposal as published.
The adopted amendments to §21.2302 make necessary conforming changes
to the definitions of "covered individual," "health carrier," and "health
coverage and substantially similar health coverage," by substituting the term
"benefit plan issuer" for the term "carrier." These changes are needed as
a result of the enactment of the nonsubstantive Insurance Code revision by
the 78th Legislature, Regular Session, effective April 1, 2005 (78th Legislature
code revision).
The adopted amendments to §21.2303 remove the requirement that a health
benefit plan issuer provide written notice of Health Pool availability when
the issuer offers substantially similar health coverage to or for an eligible
individual who has applied for health coverage from the issuer, but at rates
higher than the issuer's standard rate. SB 809 deletes this condition as a
qualifier for Health Pool eligibility. The adopted amendments also make necessary
conforming changes to §21.2303 by substituting the term "benefit plan
issuer" for the term "carrier," based on the 78th Legislature code revision.
The adopted amendments to §21.2304 change the Form Health Pool Notice
referenced in §21.2305 from a formal Figure filed with the Secretary
of State's Office and adopted by reference to a form to be provided by the
Department and available on its website. The Department will provide this
form for a health benefit plan issuer to use at its option when providing
either the mandatory or permissive notice. The adopted amendment to §21.2304(b)(3)
removes former subparagraph (D) from the listing of reasons an individual
may be eligible for coverage under the Health Pool, and redesignates remaining
subparagraphs. Former subparagraph (D) had provided that an individual may
be eligible for Health Pool coverage when the issuer offers substantially
similar health coverage with rates that exceed the rates of the Health Pool.
SB 809 deletes that qualifier from among those specified in the Insurance
Code §1506.152(a)(3). The adopted amendments also make necessary conforming
changes to §21.2304 by substituting the term "benefit plan issuer" for
the term "carrier," based on the 78th Legislature code revision.
The adopted amendments to §21.2305 direct that the Form Health Pool
Notice can be obtained from the Department and update the mailing address;
the amendments also indicate that the notice is available at the Department's
website. The adopted amendments also delete subsection (b) and its reference
to Figure 1, since the amended notice will not be filed with the Secretary
of State's Office and is not adopted by reference in the text of the rule.
The adopted amendments to §21.2306 specify the effective date pertaining
to certain sections of this adoption. In accordance with SECTIONS 11 and 13
of SB 809, the adopted amendments to §21.2303(a) and §21.2304(b)(3)
are effective for any application for health coverage received, processed,
or acted upon by a health benefit plan issuer on or after January 1, 2006.
The other adopted amendments will be effective pursuant to the Government
Code, §2001.036, which provides that a rule takes effect 20 days after
the date on which it is filed in the Office of the Secretary of State.
SUMMARY OF COMMENTS. The Department did not receive any comments on the
proposal.
STATUTORY AUTHORITY. The amendments are adopted under the Insurance
Code Chapter 1506 and §36.001. Section 1506.005 provides that the Commissioner
may adopt rules as necessary and proper to implement the chapter. Section
1506.007(b) states that an insurer providing notice pursuant to the section
shall provide such notice as prescribed by the Commissioner. 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.
§21.2304.Notice.
(a)
The health benefit plan issuer may use the Form Health
Pool Notice referenced in §21.2305 of this title (relating to Form) when
issuing the notice required by §21.2303(a) of this title (relating to
Delivery of Notice).
(b)
In lieu of the notice outlined in subsection (a) of this
section, a health benefit plan issuer may opt to provide a notice that contains
substantially similar language to the language contained in the Form Health
Pool Notice referenced in §21.2305 of this title (relating to Form).
The substantially similar language shall be in a readable and understandable
format and shall include a clear, complete, and accurate description of the
items set out in paragraphs (1) - (5) of this subsection in the following
order:
(1)
a heading in bold print and all capital letters indicating
the information in the notice relates to availability of coverage under the
Health Pool;
(2)
a statement in bold print that the notice is being provided
to advise the individual that he/she may be eligible for coverage from the
Health Pool;
(3)
a listing of the reasons an individual may be eligible
for coverage under the Health Pool which are:
(A)
one written refusal or rejection for substantially similar
health coverage from a health benefit plan issuer due to a medical condition;
(B)
a certification from an agent or salaried representative
of a health benefit plan issuer, on a form developed by the Texas Health Pool
Board of Directors (Board) and approved by the commissioner, that states the
agent or salaried representative is unable to obtain substantially similar
health coverage for the individual with a health benefit plan issuer represented
by the agent or salaried representative because, based on the health benefit
plan issuer's underwriting guidelines, the individual will be declined for
coverage as a result of a medical condition;
(C)
the offer of substantially similar health coverage with
a rider that excludes certain health conditions of the individual and an example
of such rider similar to the following: For example, a health benefit plan
issuer will provide coverage to the individual with an exclusion of the individual's
diabetes, heart disease, cancer, etc.;
(D)
the individual has been diagnosed with one of the medical
conditions specified by the Board that qualifies him/her for Health Pool coverage;
or
(E)
evidence that the individual has maintained health coverage
for the previous 18 months with no gap in coverage greater than 63 days, with
the most recent health coverage through an employer-sponsored plan, government
plan, or church plan.
(4)
a statement that the individual should contact the Health
Pool for additional information regarding eligibility, coverages, cost, limitations,
exclusions, and termination provisions;
(5)
in bold print the full name, address, and telephone numbers
of the Health Pool as shown in the Form Health Pool Notice referenced in §21.2305
of this title and as subsequently updated.
(c)
If a health benefit plan issuer provides a notice of Health
Pool availability to its covered individuals pursuant to §21.2303(c)
of this title, the health benefit plan issuer may use the Form Health Pool
Notice referenced in §21.2305 of this title, or a substantially similar
notice as outlined in subsection (b) of this section, provided the health
benefit plan issuer includes the provisions of paragraphs (1) and (2) of this
subsection in either the Form Health Pool Notice or the substantially similar
notice:
(1)
a statement that the premium rates for Health Pool coverage
are:
(A)
based on the standard rates for substantially similar health
coverage; and
(B)
are subject to change based on:
(i)
changes to the standard rates for substantially similar
health coverage; and
(ii)
the Health Pool's claims experience; and
(2)
a statement that health coverage which may qualify a covered
individual for Health Pool coverage does not include accident, dental-only,
vision-only, fixed indemnity, credit insurance or other limited coverage including
specified disease, long-term care or disability income coverage, coverage
issued as a supplement to liability insurance, insurance arising out of a
workers' compensation or similar law, automobile medical-payment insurance,
Medicare supplement or Medicare Select coverage, or coverage by Medicare,
or insurance under which benefits are payable with or without regard to fault
and which is statutorily required to be contained in any liability insurance
policy or equivalent self-insurance.
(d)
The notice shall be in no less than 10 point type.
§21.2306.Compliance and Effective Date.
The amendments to §21.2303(a) of this title (relating to Delivery
of Notice), and §21.2304(b)(3) of this title (relating to Notice) apply
to any application for health coverage received, processed, or acted upon
by a health benefit plan issuer on or after January 1, 2006.
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 July 6, 2006.
TRD-200603619
Brenda Caldwell
Assistant General Counsel
Texas Department of Insurance
Effective date: July 26, 2006
Proposal publication date: May 5, 2006
For further information, please call: (512) 463-6327