28 TAC §§21.2302 - 21.2306
The Texas Department of Insurance proposes amendments to §§21.2302
- 21.2306, concerning notice of availability of coverage under the Texas Health
Insurance Risk Pool (Health Pool). The Department proposes these amendments
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 proposed 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 proposed 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 proposed 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 proposed 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 proposed amendment to §21.2304(b)(3)
removes existing subparagraph (D) from the listing of reasons an individual
may be eligible for coverage under the Health Pool, and redesignates remaining
subparagraphs. Existing subparagraph (D) provides 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 proposed 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 proposed 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 proposed amendments also delete subsection (b) and its reference
to Figure 1, since the amended notice will be neither filed with the Secretary
of State's Office nor adopted by reference in the text of the rule.
The proposed amendments to §21.2306 specify the effective date pertaining
to certain sections of this proposal. In accordance with SECTIONS 11 and 13
of SB 809, the proposed 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 proposed 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.
Jennifer Ahrens, Associate Commissioner, Life, Health and Licensing Division,
has determined that for each year of the first five years the proposed amendments
are in effect, there will be no measurable fiscal implications on state or
local government, local employment, or local economies as a result of enforcing
or administering this proposal.
Ms. Ahrens also has determined that for each year of the first five years
the proposed amendments are in effect, the public benefit anticipated as a
result of the proposed amendments will be more accurate consumer understanding
of the availability of Health Pool coverage.
Ms. Ahrens has determined that the cost of compliance associated with the
proposal results from legislative amendments to Insurance Code §1506.152.
Accordingly, the proposed amendments will not have an impact on small and
micro businesses. The Department has considered the purposes of the relevant
statute, which is to require health benefit plan issuers to provide written
notice of Health Pool availability to an eligible individual who has applied
for health coverage from the health benefit plan issuer in certain statutorily
specified instances, and has determined that it is neither legal nor feasible
to waive or modify the requirements for small or micro businesses. To minimize
notice provision costs, health benefit plan issuers may obtain the Health
Pool Notice form template from the Texas Department of Insurance or the Department's
web site.
Comments on the proposal must be submitted in writing by 5:00 p.m. on June
5, 2006, 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 comments must be submitted to Bill Bingham, Deputy
Commissioner for Regulatory Matters, Life, Health and Licensing Program, Mail
Code 107-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas
78714-9104. Any request for a public hearing should be submitted separately
to the Office of the Chief Clerk by 5:00 p.m. on May 29, 2006.
The amendments are proposed 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.
The following statute is affected by this proposal: Insurance Code Chapter
1506
§21.2302.Definitions.
The following words and terms, when used in this subchapter, shall
have the following meanings, unless the context clearly indicates otherwise:
(1)
Covered individual--An individual who is a resident of
Texas and currently covered by health coverage issued by a health
benefit
plan issuer
[
carrier
].
(2)
(No change.)
(3)
Health
benefit plan issuer
[
carrier
]--Any
entity authorized under the Texas Insurance Code or another insurance law
of this state, which provides health coverage in this state, including an
insurance company, a group hospital service corporation under Chapter 20,
a health maintenance organization under the Texas Health Maintenance Organization
Act (Chapter 20A), an approved nonprofit health corporation, a fraternal benefit
society under Chapter 10, and a stipulated premium company under Chapter 22.
(4)
Health coverage and substantially similar health coverage--Individual
health coverage issued by a health
benefit plan issuer
[
carrier
] that provides coverage for hospital, medical, or surgical expenses.
The term 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.
(5)
(No change.)
§21.2303.Delivery of Notice.
(a)
A health
benefit plan issuer
[
carrier
]
shall provide written notice of Health Pool availability to an eligible individual
who has applied for health coverage from the health
benefit plan issuer
[
carrier
], if the health
benefit plan issuer
[
carrier
]:
(1)
refuses to issue substantially similar health coverage
to or for the eligible individual;
or
(2)
offers substantially similar health coverage to or for
the eligible individual with riders excluding an individual or a medical condition
or illness of an individual from coverage by that policy
.
[
; or
]
[
(3)
offers substantially similar
health coverage to or for the eligible individual at rates higher than the
health carrier's standard rate.]
(b)
The notice shall be sent with the written notification
of the action taken or proposed to be taken by the health
benefit plan
issuer
[
carrier
] on the eligible individual's application
for coverage from the health
benefit plan issuer
[
carrier
].
(c)
A health
benefit plan issuer
[
carrier
]
may also provide written notice of Health Pool availability to a covered individual
for the purpose of allowing the covered individual to compare his or her current
health coverage issued by the health
benefit plan issuer
[
carrier
] with the coverage offered by the Health Pool.
§21.2304.Notice.
(a)
The health
benefit plan issuer
[
carrier
] may use the Form Health Pool Notice
referenced
[
provided
at Figure 1
] 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
[
carrier
] may
opt to provide a notice that contains substantially similar language to the
language contained in
the Form Health Pool Notice referenced
[
Figure 1
] 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) - (2)
(No change.)
(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
[
carrier
] due to a medical condition;
(B)
a certification from an agent or salaried representative
of a health
benefit plan issuer
[
carrier
], 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
[
carrier
] represented by
the agent or salaried representative because, based on the health
benefit
plan issuer's
[
carrier'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
[
carrier
] will provide coverage to the individual
with an exclusion of the individual's diabetes, heart disease, cancer, etc.;
[
(D)
the offer of substantially
similar health coverage with rates that exceed the rates of the Health Pool;]
(D)
[
(E)
] 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)
[
(F)
] 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) - (5)
(No change.)
(c)
If a health
benefit plan issuer
[
carrier
] provides a notice of Health Pool availability to its covered individuals
pursuant to §21.2303(c) of this title, the health
benefit plan issuer
[
carrier
] may use the Form Health Pool Notice
referenced
[
provided at Figure 1
] 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
[
carrier
] includes
the provisions of paragraphs (1) and (2) of this subsection in either
the Form Health Pool Notice
[
Figure 1
] or the substantially
similar notice:
(1) - (2)
(No change.)
(d)
(No change.)
§21.2305.Form.
[
(a)
]
The
Form Health Pool Notice [
is included in subsection (b) of this section in its entirety and has been
filed with the Office of the Secretary of State. The address and phone numbers
are variable to encompass any future changes. The form
] can be obtained
from the Texas Department of Insurance,
Life/Health & HMO Intake
Section,
Life/Health Division,
MC 106-1E
[
MC 106-1A
], P.O. Box 149104, Austin, Texas 78714-9104
, or at the department's
website, www.tdi.state.tx.us
.
[
(b)
Form Health Pool Notice, Figure
1:]
[Figure: 28 TAC §21.2305(b)]
§21.2306.Compliance and Effective Date [ Dates ].
The amendments to [
§21.2302(4) of this title (relating to
Definitions),
] §21.2303(a) of this title (relating to Delivery
of Notice),
and
§21.2304[
(a) and
] (b)(3)
(D)
of this title (relating to Notice)[
, and §21.2305(b) of this
title (relating to Form)
] apply to any application for health coverage
received, processed, or acted upon by a health
benefit plan issuer
[
carrier
] on or after
January 1, 2006
[
September 1, 1999,
and the provisions of §21.2302(5) of this title, §21.2303(c) of
this title, and §21.2304(c) of this title apply to any notice by a health
carrier on or after January 1, 2000
].
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 18, 2006.
TRD-200602216
Gene Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: June 4, 2006
For further information, please call: (512) 463-6327