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You are here: Home . rules . 2003 . 0510-059
Archived File – for Reference Use.
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Subchapter AA

Consumer Choice health Benefit Plans

28 TAC §§21.3501 ­ 21.3505, 21.3510 ­ 21.3518,

21.3525 ­ 21.3530, 21.3535, and 21.3540 ­ 21.3544

The Commissioner of Insurance adopts new Subchapter AA, §§21.3501 ­ 21.3505, 21.3510 ­ 21.3518, 21.3525 ­ 21.3530, 21.3535, and 21.3540 ­ 21.3544 , concerning consumer choice health benefit plans. Sections 21.3502, 21.3510, 21.3511, 21.3512, 21.3513, 21.3514, 21.3515, 21.3516, 21.3517, 21.3518, 21.3530, and 21.3542 are adopted with changes to the proposed text as published in the January 9, 2004 issue of the Texas Register (29 TexReg 297). Sections 21.3501, 21.3503 ­ 21.3505, 21.3525 ­ 21.3529, 21.3535, 21.3540 ­ 21.3541, and 21.3543 ­ 21.3544 are adopted without changes and will not be republished.

These adopted new sections are the result of the enactment of Senate Bill (SB) 541 during the 78 th Regular Legislative Session. That legislation added, among other provisions, Texas Insurance Code Arts. 3.80 and 20A.09N, which are designed to increase the availability of health insurance coverage by allowing authorized insurers and health maintenance organizations (HMOs) to issue health plans that, in whole or in part, do not offer or provide state-mandated health benefits. In furtherance of this goal of increased availability and to provide more flexibility in the HMO market, SB 541 also changed the definition of "basic health care services" in the HMO Act, Texas Insurance Code Chapter 843. The department has adopted amendments to a rule implementing this change, which is published elsewhere in this issue of the Texas Register .

The purpose of these rules is to implement the provisions and the intent of SB 541 by increasing availability of more affordable health benefit plans; developing a well-defined, efficient process for bringing those plans to market; and instituting appropriate safeguards to ensure consumer understanding of and freedom to choose between health benefit plan options.

The department has changed several of the proposed sections as published; however, none of the changes introduce new subject matter or affect additional persons than those subject to the proposal as originally published. In response to comments, the department has changed the various sections as indicated.

In §21.2502, the department added definitions for "health insurer" and "HMO"because those terms were included in the text of §§21.3525-21.3528 to clarify the applicability of the notice requirements. The department has added language to §§21.3510, 21.3511, 21.3512, 21.3513, 21.3515, 21.3516, 21.3517, and 21.3518 regarding entitlement to care under Article 21.52B and the requirements of Article 21.52D.

In response to a commenter´s request to remove "upon request"from §21.3530(e), the department has added subsection (a)(5) that requires that the written disclosure statement provided to the prospective or current policyholder or contract holder state that the applicant has a right to receive a copy free of charge.

In §21.3542(a), the department added language to clarify that a health carrier must offer consumers the opportunity to apply for a plan with state-mandated benefits when they offer a consumer choice health benefit plan. The offer must be in the same category that most closely approximates the consumer choice health benefit plan offered. In subsection (b)(2), the department removed the words "in writing" from the requirement that health carriers offer consumer alternatives in subsection (a), and replaced it with a requirement that the presentation be identical for both types of plans. In subsection (b)(3), the department revised the rule by taking out the words, "upon request" to clarify that if a health carrier is providing premium cost information on one plan, it must provide that information for the other plan. In subsection (d), the department changed the rule to allow a health carrier to combine on a single form the written affirmation and the acknowledgement of the written disclosure statement required by §21.3530(a)(4). The department has also made minor changes to correct clerical and typographical errors.

Adopted §21.3501 provides for severability of a provision if it´s determined to be invalid. Adopted §21.3502 sets forth the definition of terms used in the subchapter. Adopted §21.3503 contains authority for health carriers to offer consumer choice health benefit plans. Adopted §21.3504 contains a severability clause. Adopted §21.3505 provides that the rule applies only to a health plan delivered, issued for delivery, or renewed on or after the effective date of the subchapter.

Adopted §§21.3510 ­ 21.3518 enumerate the benefits considered "state­mandated health benefits," which a health carrier may exclude, for each type of consumer choice health benefit plan a health carrier may offer.

Adopted §21.3525 sets out the notice that health insurers must include on each application for a consumer choice health benefit plan, and §21.3526 sets out the notice that health insurers must include on the policy itself. Adopted §§21.3527 and 21.3528 set out the notices that an HMO must provide on the application and evidence of coverage. Adopted §21.3529 enumerates duties of agents marketing, soliciting, receiving an application for, or administering a consumer choice health benefit plan. Adopted §21.3530 provides requirements for a disclosure which each health carrier offering or providing a consumer choice health benefit plan must provide each prospective or current policyholder. Adopted §21.3535 addresses requirements for health carrier retention of the signed disclosure statement required by §21.3530 and the written affirmation required by §21.3542. Adopted §21.3540 requires health carriers to include coverage for direct access to the health care services of an obstetrical or gynecological care provider. Adopted §21.3541 requires HMOs offering a consumer choice health benefit plan to provide basic health care services. Adopted §21.3542 requires a health carrier that offers a consumer choice health benefit plan, to offer the purchaser the opportunity to apply for a plan that is in the same category that most closely approximates the consumer choice health benefit plan, and that includes all state-mandated health benefits. The section also requires a health carrier to obtain written affirmation that it offered one of these alternative plans, which may be combined with the written disclosure statement required by §21.3530(a)(4). Adopted §21.3543 details the documents a health carrier must provide when filing a consumer choice health benefit plan with the department. Adopted §21.3544 addresses required annual reporting related to consumer choice health benefit plans which health carriers must make to the department.

SUMMARY OF COMMENTS AND AGENCY´S RESPONSE TO COMMENTS.

General

Comment:A commenter recommends that the department track a number of trends, including the number of companies offering health coverage who did not offer coverage prior to the availability of consumer choice plans, the number of people opting into consumer choice who were previously uninsured, compared to the number switching from state-mandated plans, or those transferring from public health insurance to consumer choice, and the number remaining uninsured; as well as some demographic information about enrollees in state­mandated versus consumer choice plans.

Agency Response:The adopted sections require tracking of the number of companies newly offering health coverage which did not offer coverage prior to the availability of consumer choice plans. The department also collects similar data through the annual group accident and health data call and will review the data call form to determine whether additional health plan enrollment information is necessary to monitor enrollment in consumer choice benefit plans and fully-mandated plans. The department is working to identify additional information that health plans can reasonably collect and report, regarding enrollment and financial experience in consumer choice and fully-mandated plans.

Comment:A commenter would like the department to track the actuarial impact on state-mandated health benefit plans of consumer choice plans, as well as the average premium costs and cost sharing of the different forms of state-mandated health benefit plans compared to consumer choice plans, including disability status, age, and gender.

Agency Response:SB 541 gives health carriers great latitude in designing consumer choice plans. Existing law, to a lesser extent, allows broad flexibility for health carriers to design fully-mandated plans. Both factors complicate the development of "average" premium costs and cost-sharing provisions, as well as cost comparisons between fully-mandated plans and consumer choice benefit plans. Nonetheless, the department is studying ways to track additional relevant actuarial information regarding both consumer choice and fully-mandated plans. Careful consideration of required reporting is essential so as not to contravene one of the purposes of SB 541, which is to provide more affordable health care coverage options.

Comment: A commenter suggests that the department track trends in the number of companies offering health coverage who did not offer health coverage prior to the availability of consumer choice plans, and the percentage of Texans who remain uninsured compared to the percentage during the years preceding the availability of consumer choice plans.

Agency Response: The adopted data collection form includes a question to determine the number of companies offering health coverage who did not offer health coverage prior to the availability of consumer choice plans. The department monitors the percentage of uninsured Texans through the annual Current Population Survey (CPS) conducted by the U.S. Census Bureau.

Comment:A commenter suggests that the department track the effect the availability of consumer choice plans has on the Texas Health Insurance Risk Pool.

Agency Response:The department closely monitors the Risk Pool as part of its statutory duties. Moreover, the department is specifically studying, as directed by SB 467, possible expansion of pool eligibility. The department will consider how to include the impact on the risk pool as part of its ongoing study of reporting requirements, but declines to make any specific changes at this time.

Comment: A commenter recommends that the department convene a workgroup composed of carriers, employers, consumers, and consumer advocates to discuss insurance approaches that focus on health promotion and disease prevention activities.

Agency Response: While the department meets regularly with interested parties and is always open to the possibility of bringing together such groups to consider any improvement in the coverage of health care, the department declines to adopt this suggestion at this time.

Comment: A commenter suggests that the rule require carriers that issue ID cards for consumer choice plans to clearly indicate on the ID card that the patient´s coverage is through a consumer choice plan.

Agency Response: The department declines to adopt this requirement at this time. The 78 th Texas Legislature enacted certain requirements for ID cards in SB 418. The rule requiring identification of Texas Department of Insurance (TDI) regulated coverage on a managed care plan ID card took effect on January 1, 2004, and the department believes it needs to assess the impact of that rule before considering extending ID card requirements. Moreover, SB 418 also created a verification process which should address concerns regarding the scope of coverage of consumer choice plans.

Comment: A commenter suggests that TDI create educational materials that will clearly delineate what must be provided, at a minimum, in consumer choice health plans.

Agency Response: Consumer choice health plans must provide the same benefits as all other health plans, except for the state-mandated health benefits they may exclude. Various provisions of the Insurance Code and rules, such as Article 26.43 and §843.201, require the plan documents to express in plain language what the plan provides, which should be sufficient for informational and comparison purposes. The department is preparing educational materials concerning consumer choice plans and the various state-mandated health benefits which they may omit.

Comment: A commenter suggests that studies on the costs of mandated benefits are flawed.

Agency Response: The 78 th Texas Legislature enacted SB 541 to create more affordable and flexible health care coverage options. The bill specifically authorizes the issuance of coverage that, in whole or in part, does not offer or provide state-mandated health benefits. The department will use the reporting requirements in the statute and rule to monitor the effect of omitting state-mandated health benefits on the cost of health care coverage.

Comment: A commenter believes the rule as drafted is too confusing and complicated; that it will be too costly to interpret, design, file, and seek approval of consumer choice plans; and that health carriers will choose not to file consumer choice health benefit plans.

Agency Response: A good number of health carriers have already filed and received approval of consumer choice health benefit plans. Department staff has provided guidance on the law as necessary and remains ready to assist all other carriers with consumer choice plan filings. Essentially, the rule outlines a simple structure for creating a consumer choice health benefit plan. If a coverage or benefit is listed as a state-mandated health benefit for a particular plan type, then a carrier need not include that coverage or benefit in a consumer choice health benefit plan. For all other plan requirements, a health carrier must simply follow the law as it would apply to any other health benefit plan. The department also notes that SB 541 requires carriers participating in the small employer market to offer a consumer choice plan.

Division 2. State Mandated Health Benefits:

Comment: A commenter requests clarification in these sections to reference exclusions for limitations or restrictions on deductibles, coinsurance, copayments, or any annual or lifetime maximum benefit amounts. The commenter also asks for a reference to the exclusion of a specific category of licensed healthcare practitioner in compliance with Texas Insurance Code Article 3.80, §3(a) (2) and (3).

Agency Response: The reference to the requested exclusions is found in §21.3501(8), which, along with SB 541, defines "state-mandated health benefits" to include cost-sharing limitations or restrictions as well as entitlement to care from a specific category of licensed healthcare practitioner. The rule accordingly classifies those items as "state-mandated health benefits" in the various sections of Division 2.

Comment: Commenters question why the complications of pregnancy mandate was not exempted from coverage.

Agency Response: The department determined that the provisions of 28 TAC §21.405(1) do not constitute a "state-mandated health benefit" as defined by SB 541. The rule prohibits a plan from treating complications of pregnancy differently than any other illness or sickness under the policy and it does not create coverage for specific health care services or benefits.

Comment: Commenters question why the Alzheimer´s disease mandate was not exempted from coverage.

Agency Response: Article 3.78 does not constitute a "state-mandated health benefit" as defined by SB 541. The statute provides that a clinical diagnosis of Alzheimer's disease by a physician licensed in this state shall satisfy the requirement for demonstrable proof of organic disease or other proof under the coverage. The statute only applies where the policy already provides coverage for Alzheimer's disease, thus it does not create coverage for specific health care services or benefits.

Comment: Commenters seek clarification regarding administrative mandates allowing enrollees to select a specific category of licensed health care practitioner under Insurance Code Articles 21.52B, 21.52D, 21.52L, 21.53, 21.53B, 21.53L, and 21.53N.

Agency Response: The department appreciates the opportunity to clarify the law, and a response to each mandate follows. Article 21.52B entitles an insured/enrollee to receive care from a specific category of health care practitioners, thus making it a "state-mandated health benefit" under SB 541. In response to comments the department has revised various sections in Division 2 of the rule to include this provision as a state mandated health benefit where appropriate.

SB 541 specifically excludes services of practitioners listed in Articles 21.52 and 3.70-3C from the definition of "state-mandated health benefits." Article 21.52D was not specifically excluded from the definition of state-mandated health benefits under SB 541. Therefore, the requirements of Article 21.52D that exceed the requirements of Article 21.52 and Article 3.70-2 do not apply to consumer choice plans. The department has revised various sections in Division 2 of the rule to reflect this.

The Article 21.52L requirement of health benefit plan coverage for prescription contraceptive drugs and devices do not allow enrollees to select a specific category of licensed health care practitioners.

The department did not include Article 21.53 in the rule as a "state-mandated health benefit," because Article 21.52 entitles an insured/enrollee to receive care from a licensed dentist.

The provisions of Article 21.53B regarding use of osteopathic hospitals is neither plan-specific nor required to be provided. Accordingly, it does not constitute a "state-mandated health benefit" under SB 541.

The pharmacy benefit identification card required by Article 21.53L does not allow enrollees to select a specific category of licensed health care practitioners, nor does it meet any of the other standards required to make it a "state-mandated health benefit."

The Article 21.53N requirement of equal pay for reproductive health and oncology services for women does not allow enrollees to select a specific category of licensed health care practitioners, nor does it meet any of the other standards required to make it a "state-mandated health benefit."

Comment: Commenters note that the rule does not provide for an exception to the Article 26.09 point-of-service mandate for HMOs. The commenter believes requiring health plans to offer a point of service option will increase health care costs and should be exempt.

Agency Response: Because SB 541 does not exempt requirements under Article 26.09, carriers must still offer a point-of-service option if a network-based delivery system offered by an HMO is the only plan offered by the employer. Article 26.09 does not apply to small employers.

Comment : A commenter proposes that the department add provisions in the rules so that when mandates are added by the legislature, they can be added into the list in the rules automatically without having to go through the rule amendment process.

Agency Response : The department declines to adopt this suggestion. There is generally sufficient lead time between the passage of legislation and its effective date to allow for rule amendment. In the event the legislature adds additional health mandates, the department would also communicate its interpretation of whether new mandates fit the SB 541 definition of "state-mandated health benefits" at the earliest possible time to facilitate coverage changes prior to rule amendment.

Comment: A commenter questions why federal statutes are not addressed in the rules.

Agency Response: The purpose of the rules is to implement SB 541, which allows exclusion only of "state-mandated health benefits." Articles 3.80(3)(b) and 20A.09N(d) specifically provide that the term "state-mandated health benefits" does not include health benefits that are mandated by federal law. Thus, although a health carrier is not required to include a state-mandated benefit in a consumer choice plan, it must continue to include any similar federally-mandated benefit. For example, a health carrier need not include the state-mandated benefit in Article 21.53I (coverage for reconstructive surgery incident to mastectomy) in a consumer choice plan. The health carrier, however, must still include the federally-mandated coverage for reconstructive surgery after mastectomy set forth in the federal Women´s Health and Cancer Rights Act of 1998 (WHCRA).

Comment: A commenter recommends that the proposed regulations list items that are included in policies, instead of items that are excluded. The commenter indicated that listing diabetes care as an excluded item could allow insurers to exclude diabetes equipment, supplies, and self-management programs.

Agency Response: The department declines to revise the rule. Consumer choice policies must include all the same provisions as other policies, except as allowed by SB 541. The rule lists those items that may be excepted. Coverage for diabetes under Article 21.53G is still required for all consumer choice plans.

§21.3512(5) & §21.3518(9)

Comment: Commenters request clarification on the extent of limitations or restrictions on coinsurance, as well as copayments and deductibles that would no longer be imposed. The commenters recommend that the rule allow both deductible and copayment options for HMOs and also delete restrictions on the amount of copayments and deductibles, which the commenter believes will allow HMOs to compete with other entities offering benefits lower than those required of HMOs.

Agency Response: The rule specifically recognizes as "state-mandated health benefits" existing laws regarding cost-sharing provisions in health plans. These include, for example, 28 TAC §3.3704(a)(6), which governs the difference between levels of coverage in a preferred provider benefit plan, and 28 TAC §11.506(2)(A), which governs the copayments and deductibles an HMO may include in an evidence of coverage. Other laws, however, which are not "state-mandated health benefits," may restrict the extent to which a health carrier may require cost-sharing from an enrollee; one such example is Article 3.70-3C, §8, which requires that a health carrier issuing a preferred provider benefit plan make both levels of benefits reasonably available to all insureds within a designated service area. Carriers must also be prepared to demonstrate compliance with other requirements of the Insurance Code affecting the reasonableness of the cost of coverage, including Articles 1.02(b), 3.42(k), 20A.09(b), 20A.09(k), and §843.082(3).

§21.3518

Comment: Commenters question whether this rule extends to prescription drug riders.

Agency Response: Yes, SB 541 allows a health carrier to revise a rider related to a consumer choice health benefit plan in accordance with the new statutory standard.

§§21.3525, 21.3526, 21.3527, 21.3528, 21.3529, 21.3530, 21.3542, and 21.3543

Comment: Some commenters believe the rule's notice, disclosure, reporting, and filing provisions are excessive and will make selling and obtaining these plans difficult for health carriers, employers, and insureds. Other commenters, however, contend that all consumers, including certificate holders, should receive a copy of all notices and disclosures regarding which state-mandated benefits are not included, the comparative premium costs between these plans, and a notice that purchasing one of these plans may limit their future coverage options. In that same vein, some commenters suggested that the department require employers to distribute copies of the signed disclosure document to all covered employees. Other commenters proposed that a notice of what is not covered by a consumer choice health benefit plan must be provided to enrollees, some specifically suggesting amendment of §21.3530(e) and (g) to require carriers to provide the notices to enrollees and certificate holders. Commenters cited concern as to whether a consumer whose employer purchases a consumer choice health benefit plan will receive any of the notices proposed by TDI.

Agency Response: Commenters have expressed various opposing viewpoints on the notice and disclosure provisions. The department drafted the proposal so as to balance the consumers' need for adequate and meaningful disclosure with the carriers' interest in simplifying compliance. The department notes that with regard to notice to all enrollees, a certificate holder must be provided a certificate of coverage as required by statute, which will reveal the extent to which a consumer choice plan provides coverage. The department thus declines at this time to extend notice and disclosure requirements to the extent requested by some commenters. The department also notes that SB 541 does not authorize it to require an employer to make distributions of notices to their employees. The law places group policyholders in a position of responsibility for certificate holders, and the law requires health carriers to provide the group policyholder with all required notices and disclosures.

With regard to the comments regarding the excessiveness of notices, disclosures, filings, and reporting, many of the duties the rule imposes are the result of statutory direction. The new statutory provisions at Articles 3.80, §5 and 20A.09N (f) require the notices addressed by §§21.3525 -- 21.3528. To clarify the applicability of these sections, the department has added language specifying that the notices in §§21.3525 and 21.3526 apply to only health insurers and the notices in §§21.3527 and 21.3528 apply only to HMOs. The duties of agents set out in §21.3529 derive from the direction in the statutory notice to all prospective and current insureds or contract holders to consult with their agent regarding which state-mandated benefits are excluded under the plan, Articles 3.80 §5 and 20A.09N(f), as well as from the duty of health carriers to provide certain disclosures to prospective and current policyholders and contract holders, Articles 3.80, §6 and 20A.09N(g). Article 3.80, §6 and Article 20A.09N(g) prescribe the form of disclosures addressed by §21.3530(a) and (b) and Form CCP 1. Section 21.3530(a)(5) and (e) clarify the carrier's statutory duties both to provide--and retain--the disclosure statement. Section 21.3530(c) and (d) address the timing of the disclosure and not its content. Section 21.3530(f) requires disclosure in a manner which recognizes the similarity between association and individual coverage.

The department based the written affirmation requirement of §21.3542(d) on its experience with marketing of the promulgated basic and catastrophic small employer health benefit plans. In response to comments, the department has revised this subsection to provide that a health carrier may combine this written affirmation on a single form with the acknowledgement of the written disclosure statement required in §21.3530(a)(4). Finally, the plan filing requirements in §21.3543 generally follow existing plan filing requirements of the department, with the exception of calculations essential for providing rate information required by the statute in Article 3.80, §9 and Article 20A.09N(l). For example, §21.3543(2)(B) requires a carrier to include a statement of the reduction in premium resulting from the differences in coverage and design between the consumer choice health benefit plan and an identical plan with all the state-mandated health benefits.

§21.3530(a)(3)

Comment: A commenter recommends deletion, for plans other than individual plans, of the requirement that the written disclosure state that purchase of the plan may limit future coverage options.

Agency Response: The department believes the requirement is essential to ensure adequate disclosure for markets such as small employer, or an individual participating in an association group plan, and can be included as part of the disclosure already required by statute.

§21.3530(e)

Comment: A commenter suggests striking the phrase "upon request," as a consumer should have the opportunity to review the disclosure along with other marketing materials outside the pressure of a sales meeting.

Agency Response: The rule requires a health carrier to furnish a copy of the disclosure to the consumer upon request. The purpose of SB 541, to increase flexibility and decrease the cost of health care coverage, supports providing a copy of the disclosure only when the consumer requests it. The department has changed the proposal by adding §21.3530(a)(5) to require that the disclosure state that the applicant has a right to receive a copy free of charge. The department will monitor carrier practices and consumer comments and will consider amending the rule if additional requirements are necessary to ensure that consumers have a full and fair opportunity to review the disclosure.

§21.3542

Comment: A commenter states that the section appears to require that a health carrier offering one or more consumer choice health benefit plans must also make available a policy that is comparable to each consumer choice health benefit plan. The commenter reads this section to require a health carrier to offer a distinctive policy form as a complement to each consumer choice plan. The commenter asserts that such a provision would exceed the statutory requirement.

Agency Response: The rule does not necessarily require an offer of a unique plan which includes all state-mandated benefits to correspond to each consumer choice plan a health carrier offers. SB 541 seeks to provide consumers additional affordable health coverage options from which to choose. To implement this goal, §21.3542 requires a health carrier to offer plans that include all state-mandated benefits in accordance with the type and number of consumer choice plans it offers. As an example, if a health carrier offers several different consumer choice major medical indemnity plans, then the health carrier could satisfy this requirement by offering one fully-mandated major medical indemnity plan. Alternatively, if a health carrier were offering one consumer choice hospital-surgical indemnity plan and one consumer choice major medical indemnity plan, then the carrier would have to offer one fully-mandated hospital-surgical indemnity plan and one fully-mandated major medical indemnity plan. In response to the comment, the department has revised the term "comparable" to "the same category that most closely approximates." The department has also added language to clarify the limitations on the carrier's duty in this context.

§21.3542(b)(3)

Comment: A commenter suggests that this section requires a carrier to reflect numerous items showing the difference between a consumer choice plan and a fully mandated plan. The commenter believes this requirement does not come from statute and asks for its removal.

Agency Response: SB 541 requires the offer of a policy or evidence of coverage with state-mandated health benefits. Many of the section´s requirements concern essential elements of the acquisition of health care coverage, for example, the requirement to provide a summary of benefits under Article 26.71, an outline of coverage under 28 TAC §§3.3090 and 3.3093, and the disclosure requirements under §843.205. The other provisions simply assure fair marketing of both state-mandated health plans and consumer choice plans. The department has clarified the requirements to simplify administration of and compliance with the rule.

§21.3542(b)(3)

Comment: A commenter suggests striking the phrase "upon request," as consumers pay for the privilege of completing an application and should be entitled to information about premium cost and an explanation of the differences between plans.

Agency Response: The department has revised the rule to clarify a health carrier´s duty under this requirement, which is to present the fully-mandated plan in the same manner as it presents the consumer choice plan. The adopted rule requires presentation of such elements as premium cost, outline of coverage, and marketing materials in the same manner, for both consumer choice plans and fully-mandated plans. Accordingly, If a health carrier is providing premium cost information on one plan, the rule requires that it provide that information in the same format for the other plan as well.

§21.3542(d)

Comment: A commenter suggests that, to avoid confusion, this should be part of the disclosure document signed by the consumer.

Agency Response: The department agrees with this suggestion and has revised the rule to give health carriers the option of combining these documents.

§21.3544

Comment: A commenter suggests that the reporting requirements enumerated under this section are not required by statute, are burdensome and expensive, and asks for their removal.

Agency Response : The department declines to make this change. In SB 541, the Legislature sought to provide Texans with "more affordable and flexible" health coverage options, as well as increase availability of health coverage, by allowing carriers to offer coverage that does not include state-mandated health benefits.

To determine whether SB 541 and the consumer choice plans achieve these intended effects, the department must collect information sufficient to determine whether the advent of such plans expanded health coverage options beyond that currently available under plans with all state-mandated health benefits. As an example, the department must be able to differentiate between changes to coverage for populations with existing coverage and coverage provided for those not previously covered. The public benefits derived from documenting the costs and benefits of consumer choice plans over currently available plans justifies the expense to carriers to document such changes.

Moreover, the rule's required reports complement existing reporting requirements. For example, small employer carriers already report much of this rule's required information in existing Figure 48. The department intends to align existing Figure 48 reporting requirements with new SB 541 requirements to eliminate any duplication. Moreover, Insurance Code §38.252 requires the commissioner to designate by rule the data that health carriers must collect and report to "determine the impact of mandated benefits and mandated offers of coverage." Providing data from SB 541 plans comparable to that obtained in connection with mandated benefits is critical to evaluate the effectiveness of consumer choice plans.

§21.3544(5)

Comment: A commenter suggests that the department collect information for both consumer choice health benefit plans and fully-mandated plans, to obtain adequate information for meaningful analysis of the impact of consumer choice plans on the ranks of the uninsured.

Agency Response: The department already collects this information for small employer health benefit plans, which comprise approximately one third of the fully-insured population in Texas . This practice will provide figures for analysis. Moreover, the consumer choice data collection form and data collected through the annual group accident and health data call will allow for additional comparison of the two types of plans in both the small and large employer markets.

FOR WITH CHANGES: Advocacy, Incorporated; American Diabetes Association; Blue Cross Blue Shield of Texas; Coalition for Texans with Disabilities; Community First Health Plans, Inc.; Consumers Union; National Multiple Sclerosis Society of Texas; NEXT; Office of Public Insurance Counsel; TFE Company; Texas Association of Business; Texas Association of Health Plans; Texas Association of Life and Health Insurers; Texas Medical Association; Texas Physical Therapy Association; and Women's Health And Family Planning Association of Texas.

The new sections are adopted under the Insurance Code Articles 3.80, §7, 20A.09N(j), and §36.001. Articles 3.80, §7 and 20A.09N(j) require the commissioner to adopt rules as necessary to implement the statutes creating consumer choice health benefit plans. Section 36.001 provides that the commissioner 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.

DIVISION 1. GENERAL PROVISIONS

§21.3501. Statement of Purpose. This subchapter is intended to implement the provisions of the Texas Consumer Choice of Benefits Health Insurance Plan Act. The general purpose of the Act and this subchapter is to implement the legislative goal of providing individuals, employers, and other purchasers of health care coverage in this state the opportunity to choose health benefit plans that are more affordable and flexible than plans available in the existing market. To that end, the legislature has authorized health carriers to issue policies or evidences of coverage that, in whole or in part, do not offer or provide certain state-mandated health benefits.

§21.3502. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Basic health care services--Health care services that the commissioner determines an enrolled population might reasonably need to be maintained in good health.

(2) Commissioner--The commissioner of insurance.

(3) Consumer choice health benefit plan--A group or individual accident or sickness insurance policy, or evidence of coverage that, in whole or in part, does not offer or provide state-mandated health benefits, but that provides creditable coverage as defined by Insurance Code Article 26.035(a) or Article 3.70-1.

(4) Consumer choice of benefits health insurance plan--A consumer choice health benefit plan.

(5) Department--The Texas Department of Insurance.

(6) HMO ­ a person defined in Insurance Code §843.002(14).

(7) Health carrier--Any entity authorized under the Insurance Code or another insurance law of this state that provides health benefits in this state, including an insurance company, a group hospital service corporation under Insurance Code Chapter 842, a health maintenance organization under Insurance Code Article 20A and Chapter 843, and a stipulated premium company under Insurance Code Chapter 884.

(8) Health insurer--Any entity authorized under this code or another insurance law of this state that provides health insurance or health benefits in this state, including an insurance company, a group hospital service corporation under Chapter 842 of the Insurance Code, and a stipulated premium company under Chapter 884 of the Insurance Code.

(9) Standard health benefit plan--A consumer choice health benefit plan.

(10) State-mandated health benefits--

(A) Coverage required under the Insurance Code, this code, or other law of this state to be provided in an individual, blanket, or group policy for accident and health insurance, a contract for coverage of a health-related condition, or an evidence of coverage that:

(i) includes coverage for specific health care services or benefits;

(ii) places limitations or restrictions on deductibles, coinsurance, copayments, or any annual or lifetime maximum benefit amounts, including limitations provided in Insurance Code Article 20A.09(l) (as added by Section 7, Chapter 1026, Acts of the 75th Legislature, Regular Session, 1997); or

(iii) includes a specific category of licensed health care practitioner from whom an insured or enrollee is entitled to receive care.

(B) Do not include benefits or coverage mandated by federal law, or standard provisions or rights required under the Insurance Code, this code, or other law of this state, to be provided in an individual, blanket, or group policy for accident and health insurance, a contract for coverage of a health-related condition, or an evidence of coverage unrelated to specific health illnesses, injuries, or conditions of an insured or enrollee, including those benefits or coverages enumerated in Insurance Code Articles 3.80, §3(b) and 20A.09N(d).

§21.3503. Authority to Offer. A health carrier may offer, and a health carrier that is also a small employer carrier shall offer, one or more consumer choice health benefit plans in accordance with this subchapter and other applicable law.

§21.3504. Severability. A holding that any provision of this subchapter or the application thereof to any person or circumstances is for any reason invalid shall not affect the remainder of the subchapter and the application of its provisions to any persons under other circumstances.

§21.3505. Application Date. This subchapter applies only to an insurance policy, contract, or evidence of coverage delivered, issued for delivery, or renewed on or after the effective date of the subchapter.

DIVISION 2. State-Mandated Health Benefits

§21.3510. State-mandated Health Benefits in Individual Indemnity Policies. The following enumerated items are state-mandated health benefits a health insurer does not have to include in an individual indemnity consumer choice health benefit plan:

(1) coverage of contraceptive drugs and devices as required by Insurance Code Article 21.52L and §21.404(3) of this title (relating to Underwriting);

(2) coverage of a minimum stay for maternity as required by Insurance Code Article 21.53F;

(3) coverage of reconstructive surgery incident to mastectomy as required by Insurance Code Article 21.53I;

(4) coverage of acquired brain injury treatment/services as required by Insurance Code Article 21.53Q;

(5) limitations or restrictions on coinsurance imposed by §3.3704(a)(6) of this title (relating to Freedom of Choice: Availability of Preferred Providers);

(6) coverage of a minimum stay for mastectomy treatment/services as required by Insurance Code Article 21.52G;

(7) coverage of diabetes care as required by Insurance Code Article 21.53D;

(8) coverage of telehealth and telemedicine as required by Insurance Code Article 21.53F;

(9) coverage of off-label drugs as required by Insurance Code Article 21.53M;

(10) coverage of mental/nervous disorders with demonstrable organic disease as required by §3.3057(d) of this title (relating to Standards for Exceptions, Exclusions, and Reductions Provision);

(11) coverage of transplant donor coverage as required by §3.3040(h) of this title (relating to Prohibited Policy Provisions);

(12) offer of coverage for therapies for children with developmental delays as required by Insurance Code Article 21.53F;

(13) entitlement to care under Article 21.52B relating to pharmaceutical services; and

(14) the requirements of Article 21.52D regarding the use of optometrists and ophthalmologists by managed care plans, that exceed the entitlement to select a practitioner under Article 21.52 and Article 3.70-2.

§21.3511. State-mandated Health Benefits in Group Association Indemnity Policies. The following enumerated items are state-mandated health benefits that a health insurer does not have to include in a group association indemnity consumer choice health benefit plan:

(1) coverage of contraceptive drugs and devices as required by Insurance Code Article 21.52L and §21.404(3) of this title (relating to Underwriting);

(2) coverage of a minimum stay for maternity as required by Insurance Code Article 21.53F;

(3) coverage of reconstructive surgery incident to mastectomy as required by Insurance Code Article 21.53I;

(4) coverage of acquired brain injury treatment/services as required by Insurance Code Article 21.53Q;

(5) limitations or restrictions on coinsurance imposed by §3.3704(a)(6) of this title (relating to Freedom of Choice: Availability of Preferred Providers);

(6) the offer of in vitro fertilization coverage as required by Insurance Code Article 3.51-6, §3A;

(7) coverage of HIV, AIDS, or HIV-related illnesses as required by Insurance Code Article 3.51-6, §3C;

(8) coverage of chemical dependency and stays in a chemical dependency treatment facility as required by Insurance Code Article 3.51-9;

(9) coverage of serious mental illness as required by Insurance Code Article 3.51-14;

(10) the offer of mental or emotional illness coverage as required by Insurance Code Article 3.70-2(F);

(11) coverage of inpatient mental health and stays in a psychiatric day treatment facility as required by Insurance Code Article 3.70-2(F);

(12) the offer of speech and hearing coverage as required by Insurance Code Article 3.70-2(G);

(13) the offer of home health care coverage as required by Insurance Code Article 3.70-3B;

(14) 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;

(15) coverage of a minimum stay for mastectomy treatment/services as required by Insurance Code Article 21.52G;

(16) continuation of coverage of certain drugs under a drug formulary as required by Insurance Code Article 21.52J;

(17) 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;

(18) coverage of bone mass measurement for osteoporosis as required by Insurance Code Article 21.53C;

(19) coverage of diabetes care as required by Insurance Code Article 21.53D;

(20) coverage of telehealth and telemedicine as required by Insurance Code Article 21.53F;

(21) coverage of off-label drugs as required by Insurance Code Article 21.53M;

(22) offer of coverage for therapies for children with developmental delays as required by Insurance Code Article 21.53F;

(23) entitlement to care under Article 21.52B relating to pharmaceutical services; and

(24) the requirements of Article 21.52D regarding the use of optometrists and ophthalmologists by managed care plans, that exceed the entitlement to select a practitioner under Article 21.52 and Article 3.70-2.

§21.3512. State-mandated Health Benefits in Small Employer Indemnity Policies. The following enumerated items are state-mandated health benefits that a health insurer does not have to include in a small employer group indemnity consumer choice health benefit plan:

(1) coverage of contraceptive drugs and devices as required by Insurance Code Article 21.52L and §21.404(3) of this title (relating to Underwriting);

(2) coverage of a minimum stay for maternity as required by Insurance Code Article 21.53F;

(3) coverage of reconstructive surgery incident to mastectomy as required by Insurance Code Article 21.53I;

(4) coverage of acquired brain injury treatment/services as required by Insurance Code Article 21.53Q;

(5) limitations or restrictions on coinsurance imposed by §3.3704(a)(6) of this title (relating to Freedom of Choice: Availability of Preferred Providers);

(6) the offer of in vitro fertilization coverage as required by Insurance Code Article 3.51-6, §3A;

(7) coverage of HIV, AIDS, or HIV-related illnesses as required by Insurance Code Article 3.51-6, §3C;

(8) coverage of chemical dependency and stays in a chemical dependency treatment facility as required by Insurance Code Article 3.51-9;

(9) the offer of serious mental illness coverage as required by Insurance Code Article 3.51-14;

(10) the offer of mental or emotional illness coverage as required by Insurance Code Article 3.70-2(F);

(11) coverage of inpatient mental health and stays in a psychiatric day treatment facility as required by Insurance Code Article 3.70-2(F);

(12) the offer of speech and hearing coverage as required by Insurance Code Article 3.70-2(G);

(13) the offer of home health care coverage as required by Insurance Code Article 3.70-3B;

(14) 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;

(15) coverage of bone mass measurement for osteoporosis as required by Insurance Code Article 21.53C;

(16) entitlement to care under Article 21.52B relating to pharmaceutical services; and

(17) the requirements of Article 21.52D regarding the use of optometrists and ophthalmologists by managed care plans, that exceed the entitlement to select a practitioner under Article 21.52 and Article 3.70-2.

§21.3513. State-mandated Health Benefits in Large Employer Indemnity Policies. The following enumerated items are state-mandated health benefits that a health insurer does not have to include in a large employer group indemnity consumer choice health benefit plan:

(1) coverage of contraceptive drugs and devices as required by Insurance Code Article 21.52L and §21.404(3) of this title (relating to Underwriting);

(2) coverage of a minimum stay for maternity as required by Insurance Code Article 21.53F;

(3) coverage of reconstructive surgery incident to mastectomy as required by Insurance Code Article 21.53I;

(4) coverage of acquired brain injury treatment/services as required by Insurance Code Article 21.53Q;

(5) limitations or restrictions on coinsurance imposed by §3.3704(a)(6) of this title (relating to Freedom of Choice: Availability of Preferred Providers);

(6) the offer of in vitro fertilization coverage as required by Insurance Code Article 3.51-6, §3A;

(7) coverage of HIV, AIDS, or HIV-related illnesses as required by Insurance Code Article 3.51-6, §3C;

(8) coverage of chemical dependency and stays in a chemical dependency treatment facility as required by Insurance Code Article 3.51-9;

(9) the offer of mental or emotional illness coverage as required by Insurance Code Article 3.70-2(F);

(10) coverage of inpatient mental health and stays in a psychiatric day treatment facility as required by Insurance Code Article 3.70-2(F);

(11) the offer of speech and hearing coverage as required by Insurance Code Article 3.70-2(G);

(12) the offer of home health care coverage as required by Insurance Code Article 3.70-3B;

(13) 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;

(14) coverage of a minimum stay for mastectomy treatment/services as required by Insurance Code Article 21.52G;

(15) continuation of coverage of certain drugs under a drug formulary as required by Insurance Code Article 21.52J;

(16) 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;

(17) coverage of bone mass measurement for osteoporosis as required by Insurance Code Article 21.53C;

(18) coverage of diabetes care as required by Insurance Code Article 21.53D;

(19) coverage of telehealth and telemedicine as required by Insurance Code Article 21.53F;

(20) coverage of off-label drugs as required by Insurance Code Article 21.53M;

(21) offer of coverage for therapies for children with developmental delays as required by Insurance Code Article 21.53F;

(22) entitlement to care under Article 21.52B relating to pharmaceutical services; and

(23) the requirements of Article 21.52D regarding the use of optometrists and ophthalmologists by managed care plans, that exceed the entitlement to select a practitioner under Article 21.52 and Article 3.70-2.

§21.3514. State-mandated Health Benefits in Blanket Indemnity Policies. The category of group to which the health carrier is issuing coverage determines which benefits are state-mandated health benefits for blanket indemnity insurance policies.

§21.3515. State-mandated Health Benefits in Individual HMO Plans. The following enumerated items are state-mandated health benefits that an HMO does not have to include in an individual HMO consumer choice health benefit plan:

(1) coverage of contraceptive drugs and devices as required by Insurance Code Article 21.52L and §21.404(3) of this title (relating to Underwriting);

(2) coverage of childhood immunizations as required by Insurance Code Article 20A.09F;

(3) coverage of a minimum stay for maternity as required by Insurance Code Article 21.53F;

(4) coverage of reconstructive surgery incident to mastectomy as required by Insurance Code Article 21.53I;

(5) coverage of acquired brain injury treatment/services as required by Insurance Code Article 21.53Q;

(6) treatment by a non-primary care specialist as a primary care provider as required by Insurance Code Article 20A.09(a)(3)(D);

(7) coverage of rehabilitation therapies as required by Insurance Code Article 20A.09(a)(4);

(8) limitations or restrictions on copayments imposed by §11.506(2)(A) of this title (relating to Mandatory Contractual Provisions: Group, Individual and Conversion Agreement and Group Certificate);

(9) limitations or restrictions on deductibles imposed by §11.506(2)(B) of this title;

(10) coverage of a minimum stay for mastectomy treatment/services as required by Insurance Code Article 21.52G;

(11) coverage of diabetes care as required by Insurance Code Article 21.53D;

(12) coverage of telehealth and telemedicine as required by Insurance Code Article 21.53F;

(13) coverage of off-label drugs as required by Insurance Code Article 21.53M;

(14) offer of coverage for therapies for children with developmental delays as required by Insurance Code Article 21.53F;

(15) entitlement to care under Article 21.52B relating to pharmaceutical services; and

(16) the requirements of Article 21.52D regarding the use of optometrists and ophthalmologists by managed care plans, that exceed the entitlement to select a practitioner under Article 21.52 and Article 3.70-2.

§21.3516. State-mandated Health Benefits in Group HMO Plans. The following enumerated items are state-mandated health benefits that an HMO does not have to include in a non-employer group HMO consumer choice health benefit plan:

(1) coverage of contraceptive drugs and devices as required by Insurance Code Article 21.52L and §21.404(3) of this title (relating to Underwriting);

(2) coverage of childhood immunizations as required by Insurance Code Article 20A.09F;

(3) coverage of a minimum stay for maternity as required by Insurance Code Article 21.53F;

(4) coverage of reconstructive surgery incident to mastectomy as required by Insurance Code Article 21.53I;

(5) coverage of acquired brain injury treatment/services as required by Insurance Code Article 21.53Q;

(6) treatment by a non-primary care specialist as a primary care provider as required by Insurance Code Article 20A.09(a)(3)(D);

(7) coverage of rehabilitation therapies as required by Insurance Code Article 20A.09(a)(4);

(8) limitations or restrictions on copayments imposed by §11.506(2)(A) of this title (relating to Mandatory Contractual Provisions: Group, Individual and Conversion Agreement and Group Certificate);

(9) limitations or restrictions on deductibles imposed by §11.506(2)(B) of this title;

(10) the offer of in vitro fertilization coverage as required by Insurance Code Article 3.51-6, §3A;

(11) coverage of HIV, AIDS, or HIV-related illnesses as required by Insurance Code Article 3.51-6, §3C;

(12) coverage of chemical dependency and stays in a chemical dependency treatment facility as required by Insurance Code Article 3.51-9;

(13) coverage of serious mental illness as required by Insurance Code Article 3.51-14;

(14) the offer of mental or emotional illness coverage as required by Insurance Code Article 3.70-2(F);

(15) coverage of inpatient mental health and stays in a psychiatric day treatment facility as required by Insurance Code Article 3.70-2(F);

(16) the offer of speech and hearing coverage as required by Insurance Code Article 3.70-2(G);

(17) 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;

(18) coverage of a minimum stay for mastectomy treatment/services as required by Insurance Code Article 21.52G;

(19) continuation of coverage of certain drugs under a drug formulary as required by Insurance Code Article 21.52J;

(20) 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;

(21) coverage of bone mass measurement for osteoporosis as required by Insurance Code Article 21.53C;

(22) coverage of diabetes care as required by Insurance Code Article 21.53D;

(23) coverage of telehealth and telemedicine as required by Insurance Code Article 21.53F;

(24) coverage of off-label drugs as required by Insurance Code Article 21.53M;

(25) offer of coverage for therapies for children with developmental delays as required by Insurance Code Article 21.53F;

(26) entitlement to care under Article 21.52B relating to pharmaceutical services; and

(27) the requirements of Article 21.52D regarding the use of optometrists and ophthalmologists by managed care plans, that exceed the entitlement to select a practitioner under Article 21.52 and Article 3.70-2.

§21.3517. State-mandated Health Benefits in Small Employer HMO Plans. The following enumerated items are state-mandated health benefits that an HMO does not have to include in a small employer group HMO consumer choice health benefit plan:

(1) coverage of contraceptive drugs and devices as required by Insurance Code Article 21.52L and §21.404(3) of this title (relating to Underwriting);

(2) coverage of childhood immunizations as required by Insurance Code Article 20A.09F;

(3) coverage of a minimum stay for maternity as required by Insurance Code Article 21.53F;

(4) coverage of reconstructive surgery incident to mastectomy as required by Insurance Code Article 21.53I;

(5) coverage of acquired brain injury treatment/services as required by Insurance Code Article 21.53Q;

(6) treatment by a non-primary care specialist as a primary care provider as required by Insurance Code Article 20A.09(a)(3)(D);

(7) coverage of rehabilitation therapies as required by Insurance Code Article 20A.09(a)(4);

(8) limitations or restrictions on copayments imposed by §11.506(2)(A) of this title (relating to Mandatory Contractual Provisions: Group, Individual and Conversion Agreement and Group Certificate);

(9) limitations or restrictions on deductibles imposed by §11.506(2)(B) of this title;

(10) the offer of in vitro fertilization coverage as required by Insurance Code Article 3.51-6, §3A;

(11) coverage of HIV, AIDS, or HIV-related illnesses as required by Insurance Code Article 3.51-6, §3C;

(12) coverage of chemical dependency and stays in a chemical dependency treatment facility as required by Insurance Code Article 3.51-9;

(13) the offer of serious mental illness coverage as required by Insurance Code Article 3.51-14;

(14) the offer of mental or emotional illness coverage as required by Insurance Code Article 3.70-2(F);

(15) coverage of inpatient mental health and stays in a psychiatric day treatment facility as required by Insurance Code Article 3.70-2(F);

(16) the offer of speech and hearing coverage as required by Insurance Code Article 3.70-2(G);

(17) 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;

(18) coverage of bone mass measurement for osteoporosis as required by Insurance Code Article 21.53C;

(19) entitlement to care under Article 21.52B relating to pharmaceutical services; and

(20) the requirements of Article 21.52D regarding the use of optometrists and ophthalmologists by managed care plans, that exceed the entitlement to select a practitioner under Article 21.52 and Article 3.70-2.

§21.3518. State-mandated Health Benefits in Large Employer HMO Plans. The following enumerated items are state-mandated health benefits that an HMO does not have to include in a large employer group HMO consumer choice health benefit plan:

(1) coverage of contraceptive drugs and devices as required by Insurance Code Article 21.52L and §21.404(3) of this title (relating to Underwriting);

(2) coverage of childhood immunizations as required by Insurance Code Article 20A.09F;

(3) coverage of a minimum stay for maternity as required by Insurance Code Article 21.53F;

(4) coverage of reconstructive surgery incident to mastectomy as required by Insurance Code Article 21.53I;

(5) coverage of acquired brain injury treatment/services as required by Insurance Code Article 21.53Q;

(6) treatment by a non-primary care specialist as a primary care provider as required by Insurance Code Article 20A.09(a)(3)(D);

(7) coverage of rehabilitation therapies as required by Insurance Code Article 20A.09(a)(4);

(8) limitations or restrictions on copayments imposed by §11.506(2)(A) of this title (relating to Mandatory Contractual Provisions: Group, Individual and Conversion Agreement and Group Certificate);

(9) limitations or restrictions on deductibles imposed by §11.506(2)(B) of this title;

(10) the offer of in vitro fertilization coverage as required by Insurance Code Article 3.51-6, §3A;

(11) coverage of HIV, AIDS, or HIV-related illnesses as required by Insurance Code Article 3.51-6, §3C;

(12) coverage of chemical dependency and stays in a chemical dependency treatment facility as required by Insurance Code Article 3.51-9;

(13) the offer of mental or emotional illness coverage as required by Insurance Code Article 3.70-2(F);

(14) coverage of inpatient mental health and stays in a psychiatric day treatment facility as required by Insurance Code Article 3.70-2(F);

(15) the offer of speech and hearing coverage as required by Insurance Code Article 3.70-2(G);

(16) 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;

(17) coverage of a minimum stay for mastectomy treatment/services as required by Insurance Code Article 21.52G;

(18) continuation of coverage of certain drugs under a drug formulary as required by Insurance Code Article 21.52J;

(19) 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;

(20) coverage of bone mass measurement for osteoporosis as required by Insurance Code Article 21.53C;

(21) coverage of diabetes care as required by Insurance Code Article 21.53D;

(22) coverage of telehealth and telemedicine as required by Insurance Code Article 21.53F;

(23) coverage of off-label drugs as required by Insurance Code Article 21.53M;

(24) offer of coverage for therapies for children with developmental delays as required by Insurance Code Article 21.53F;

(25) entitlement to care under Article 21.52B relating to pharmaceutical services; and

(26) the requirements of Article 21.52D regarding the use of optometrists and ophthalmologists by managed care plans, that exceed the entitlement to select a practitioner under Article 21.52 and Article 3.70-2.

DIVISION 3: Required Notices

§21.3525. Insurer Notice on Application. Each application for participation in a consumer choice health benefit plan offered by a health insurer must contain the following language at the beginning of the document in at least 12 point bold type:

"You have the option to choose this Consumer Choice of Benefits Health Insurance Plan that, either in whole or in part, does not provide state-mandated health benefits normally required in accident and sickness insurance policies in Texas. This standard health benefit plan may provide a more affordable health insurance policy for you although, at the same time, it may provide you with fewer health benefits than those normally included as state-mandated health benefits in policies in Texas. If you choose this standard health benefit plan, please consult with your insurance agent to discover which state-mandated health benefits are excluded in this policy."

§21.3526. Insurer Notice on Policy. Each consumer choice health benefit plan offered by a health insurer must contain the following language at the beginning of the document in at least 12 point bold type:

"This Consumer Choice of Benefits Health Insurance Plan, either in whole or in part, does not provide state-mandated health benefits normally required in accident and sickness insurance policies in Texas. This standard health benefit plan may provide a more affordable health insurance policy for you although, at the same time, it may provide you with fewer health benefits than those normally included as state-mandated health benefits in policies in Texas. Please consult with your insurance agent to discover which state-mandated health benefits are excluded in this policy."

§21.3527. HMO Notice on Application. Each application for enrollment in a consumer choice health benefit plan offered by an HMO must contain the following language at the beginning of the document in at least 12 point bold type:

"You have the option to choose this Consumer Choice of Benefits Health Maintenance Organization health care plan that, either in whole or in part, does not provide state-mandated health benefits normally required in evidences of coverage in Texas. This standard health benefit plan may provide a more affordable health plan for you although, at the same time, it may provide you with fewer health plan benefits than those normally included as state-mandated health benefits in Texas. If you choose this standard health benefit plan, please consult with your insurance agent to discover which state-mandated health benefits are excluded in this evidence of coverage."

§21.3528. HMO Notice on Evidence of Coverage. Each consumer choice health benefit plan offered by an HMO must contain the following language at the beginning of the document in at least 12 point bold type:

"This Consumer Choice of Benefits Health Maintenance Organization health care plan, either in whole or in part, does not provide state-mandated health benefits normally required in evidences of coverage in Texas. This standard health benefit plan may provide a more affordable health plan for you although, at the same time, it may provide you with fewer health plan benefits than those normally included as state-mandated health benefits in Texas. Please consult with your insurance agent to discover which state-mandated health benefits are excluded in this evidence of coverage."

§21.3529. Duty of Agent. Each agent marketing, soliciting, receiving an application for, or administering a consumer choice health benefit plan shall:

(1) provide each prospective and current policyholder or contract holder with all disclosures and offers required by §21.3530(a) of this subchapter (relating to Health Carrier Disclosure) and §21.3542(a) of this subchapter (relating to Offer of State-Mandated Plan); and

(2) upon request, consult with prospective and current policyholders and contract holders regarding the state-mandated health benefits not included in the consumer choice health benefit plan.

§21.3530. Health Carrier Disclosure.

(a) A health carrier offering or providing a consumer choice health benefit plan must provide each prospective or current policyholder or contract holder with a written disclosure statement in the manner prescribed in Form CCP 1 provided by the department for that purpose. Form CCP 1:

(1) acknowledges that the consumer choice health benefit plan being offered or purchased does not provide some or all state-mandated health benefits;

(2) lists those state-mandated health benefits not included under the consumer choice health benefit plan;

(3) provides a notice that purchase of the plan may limit future coverage options in the event the policyholder's, contract holder´s, or certificate holder´s health changes and needed benefits are not covered under the consumer choice health benefit plan;

(4) requires the prospective or current policyholder or contract holder to sign an acknowledgment that he received the written disclosure statement, and

(5) informs the prospective or current policyholder or contract holder that he has the right to a copy of the written disclosure statement free of charge.

(b) A health carrier may obtain Form CCP 1 by making a request to the Life and Health/Filings and Operations Division, Mail Code 106-1E, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104 or 333 Guadalupe, Austin, Texas 78701, or by accessing the department website at www.tdi.state.tx.us .

(c) A health carrier must tender the disclosure described in subsection (a) of this section:

(1) to a prospective policyholder or contract holder, not later than with the offer of a consumer choice health benefit plan; and

(2) to an existing policyholder or contract holder, along with any offer to renew the contract or policy.

(d) Where a health carrier tenders the disclosure statement referenced in subsection (a) of this section to a prospective policyholder or contract holder:

(1) through an agent, the agent may not transmit the application to the health carrier for consideration until the agent has secured the signed disclosure statement from the applicant.

(2) directly to the applicant, the health carrier may not process the application until the health carrier has secured the signed disclosure statement from the applicant.

(e) The health carrier must, upon request, provide the prospective policyholder or contract holder with a copy of the written disclosure statement.

(f) Where a health carrier is offering or issuing a consumer choice health benefit plan to an association, the health carrier must satisfy the requirements of subsection (c) of this section by tendering the disclosure to prospective or existing certificate holders.

§21.3535. Retention of Disclosure.

(a) A health carrier must, for a period of six years:

(1) retain in the health carrier´s records the signed disclosure statement required by §21.3530 of this subchapter (relating to Health Carrier Disclosure) and the written affirmation required by §21.3542 of this subchapter (relating to Offer of State-Mandated Plan); and

(2) on request from the department, provide a copy of the signed disclosure statement and/or written affirmation to the department.

(b) A health carrier may accept receipt of a signed disclosure or written affirmation by facsimile or electronic transmission, but such carrier remains responsible for compliance with subsection (a)(2) of this section.

(c) If subsequent to the issuance of a policy or evidence of coverage, a policyholder or contract holder does not return the signed disclosure statement to the health carrier, the health carrier may satisfy the requirements of subsection (a)(1) of this section by furnishing proof that the health carrier tendered the disclosure statement, with a request to sign and return it, to the policyholder or contract holder in accordance with §21.3530(c)(2) of this subchapter.

DIVISION 4. Additional requirements

§21.3540. Direct Access to Services. Any consumer choice health benefit plan must include coverage for direct access to the health care services of an obstetrical or gynecological care provider as required by Texas Insurance Code Article 21.53D, as added by Chapter 912, Acts of the 75th Legislature, Regular Session, 1997.

§21.3541. Basic Health Care Services. An HMO offering a consumer choice health benefit plan must provide the basic health care services required by §11.508 and §11.509 of this title (relating to Mandatory Benefit Standards: Group, Individual and Conversion Agreements, and Additional Mandatory Benefit Standards: Group Agreement Only).

§21.3542. Offer of State-Mandated Plan.

(a) A health carrier that offers the opportunity to apply for one or more consumer choice health benefit plans under this section to a person or entity must also, no later than at the time of application, offer the opportunity to apply for an accident and sickness insurance policy or evidence of coverage in the same category that most closely approximates the consumer choice health benefit plan offered, that includes state-mandated health benefits, and that is otherwise authorized by the Insurance Code.

(b) With regard to health plans required by subsection (a) of this section, a health carrier shall:

(1) use the same sources and methods of distribution to market both consumer choice health benefit plans and health benefit plans required by this subsection;

(2) make the offer of such health plans, the premium cost of such plans, as well as any additional details regarding them, contemporaneously with and in the same manner as the offer and premium cost of, and other details regarding, the consumer choice health benefit plan policy or evidence of coverage; and

(3) provide at least the following information:

(A) a description of how the person or entity may apply for or enroll in each offered policy or evidence of coverage;

(B) the benefits and/or services available and the premium cost under each offered policy or evidence of coverage; and

(C) upon request, an explanation of each of the policies or evidences of coverage and the differences between the health plan offered pursuant to subsection (a) of this section and the consumer choice health benefit plans.

(c) A health carrier shall not apply more stringent or detailed requirements related to the application process for a consumer choice health benefit plan, or for a policy or evidence of coverage offered in compliance with subsection (a) of this section, than it applies for other health benefit plans offered by the health carrier.

(d) A health c arrier offering a consumer choice health benefit plan must obtain from each prospective policyholder or contract holder, at or before the time of application, a written affirmation that the health carrier also offered a policy or evidence of coverage in compliance with subsection (a) of this section. A health carrier may combine on a single form this written affirmation and the acknowledgement of the written disclosure statement required by § 21.3530(a)(4) of this subchapter (relating to Health Carrier Disclosure).

§21.3543. Required Plan Filings. A health carrier shall:

(1) file the consumer choice health benefit plan with the Filings and Operations Division in accordance with:

(A) Insurance Code Article 20A.09 and Chapter 11 of this title (relating to Health Maintenance Organizations) including the filing fee requirements; and

(B) Insurance Code Article 3.42 and Chapter 3, Subchapter A of this title (relating to Requirements for Filing of Policy Forms, Riders, Amendments, Endorsements for Life, Accident, and Health Insurance and Annuities) including the filing fee requirements.

(2) include with the filing of a consumer choice health benefit plan:

(A) the disclosures required by §21.3530 of this subchapter (relating to Health Carrier Disclosure);

(B) a statement of the reduction in premium resulting from the differences in coverage and design between the consumer choice health benefit plan and an identical plan providing all state-mandated health benefits;

(C) certification of compliance with §21.3542 of this subchapter (relating to Offer of State-Mandated Plan); and

(D) for informational purposes, the rates to be used with a consumer choice health benefit plan.

§21.3544. Required Annual Reporting.

(a) Health carriers offering a consumer choice health benefit plan shall file annually with the department, not later than April 1 of each year, in the manner prescribed on Form CCP 2 provided by the department, a certification stating the following:

(1) the total number of consumer choice health benefit plans newly issued and renewed 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 consumer choice health benefit plans;

(3) the total number of consumer choice health benefit plans covering Texas lives that were cancelled or non-renewed during the previous calendar year (and 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 consumer choice health benefit plans covering Texas lives;

(5) the number of consumer choice health benefit plans covering individuals and groups in Texas that were uninsured for at least two months prior to issue, and the number of Texas lives covered under those plans; and

(6) the number of consumer choice 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:

(A) the employer´s principal place of business in Texas, for any employer-based plan; and

(B) the individual´s place of residence, for individual or group non-employer based plans.

(b) For purposes of this subsection, gross premiums shall be the total amount of monies collected by the health carrier for health benefit plans during the applicable calendar year or the applicable calendar quarter. Gross premiums shall include premiums collected for individual and group consumer choice health benefit plans. Gross premiums shall also include premiums collected under group certificates issued or delivered to individuals (in this state), regardless of where the health carrier issues or delivers the master policy.

(c) Form CCP 2 can be obtained from the Texas Department of Insurance, Filings and Operations 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 @ www.tdi.state.tx.us .



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