Part 1. TEXAS DEPARTMENT OF INSURANCE
Chapter 26. SMALL EMPLOYER HEALTH INSURANCE REGULATIONS
Subchapter D. HEALTH GROUP COOPERATIVES
The Commissioner of Insurance adopts amendments to §26.402 and §26.404, concerning the establishment of, and provision of health benefit plan coverage to, health group cooperatives pursuant to the Insurance Code Chapter 1501. The amendments are adopted without changes to the proposal published in the December 14, 2007, issue of the Texas Register (32 TexReg 9253).
REASONED JUSTIFICATION. The adopted amendments are necessary to implement SB 1255, 80th Legislature, Regular Session, which revised the standards by which carriers provide group health benefit plan coverage to health group cooperatives comprised of small employers, large employers, or both small and large employers. SB 1255 amended §1501.0581 to provide that a health group cooperative may be composed of small employers, large employers, or both small and large employers. It further amended §1501.0581 by adding subsection (a-1) to provide that health group cooperative membership may be restricted to small and large employers within a single industry grouping as defined by the most recent edition of the United States Census Bureau's North American Industry Classification System. SB 1255 also amended §1501.063 to provide that a health group cooperative composed only of small employers and that has not made the election described by §1501.0581(o)(1) in accordance with subsection (p) of that section, or a health group cooperative that is composed of both small and large employers, may be treated in the same manner as a large employer for purposes of the Insurance Code Chapter 1501.
HOW THE SECTIONS WILL FUNCTION. The adopted amendments to §26.402 make changes to provisions addressing authorized membership of a health group cooperative and amend subsections (a) and (c) to conform the subsections to the Insurance Code §1501.0581(a) - (c) as amended by SB 1255. The adopted amendments to §26.402 add new subsection (e), which provides that a health group cooperative may restrict its membership to small and large employers within a single industry grouping as defined by the most recent edition of the United States Census Bureau's North American Industry Classification System, and re-designates subsequent subsections accordingly.
The adopted amendment to §26.404 provides that a health group cooperative composed only of small employers and that has not made the election to limit participation in the cooperative to 50 eligible employees as described by §1501.0581(o)(1) and in accordance with subsection (p) of that section, or a health group cooperative that is composed of both small and large employers, may be treated in the same manner as a large employer for purposes of the Insurance Code Chapter 1501.
SUMMARY OF COMMENTS. The Department did not receive any comments on the published proposal.
STATUTORY AUTHORITY. The amendments are adopted under the Insurance Code §§1501.010, 1501.058, and 36.001. 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 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 February 15, 2008.
TRD-200800980
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: March 6, 2008
Proposal publication date: December 14, 2007
For further information, please call: (512) 463-6327