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Subchapter D. Health Group Cooperatives

28 TAC §§ 26.401-26.413

The Texas Department of Insurance proposes new Subchapter D, §§26.401-26.413 concerning the establishment of, and provision of health insurance coverage to, health group cooperatives pursuant to Senate Bill (SB) 10, 78 th Regular Legislative Session. That legislation added special provisions to Chapter 26, Texas Insurance Code, allowing the formation of such cooperatives and establishing the standards by which carriers provide group health insurance coverage to health group cooperatives comprised of small employers or, at the option of the cooperative, both small and large employers. SB 10 is designed to address small employers´ need for access to healthcare by allowing them to join with other employers on a cooperative basis to obtain health coverage for the cooperative as a single entity. To further achieve this purpose, it also allows for greater flexibility in the plans that may be written through cooperatives by making those plans not subject to state mandated benefits relating to a particular illness, disease, or treatment, or to a state law that regulates the differences in rates applicable to services provided within or outside a health benefit plan network. These new sections are necessary to facilitate these purposes by establishing requirements governing the formation and operation of health group cooperatives, and the obligations of insurance companies and health maintenance organizations (HMOs)-hereinafter collectively "carriers"-that issue health insurance coverage for these entities. This proposal replaces a proposal that was published on January 9, 2003. That proposal has been withdrawn. This proposal includes a new §26.407, that clarifies that a carrier must provide evidence to the department of its intent to participate in the health group cooperative market and identify any limitations on its participation. The proposal also includes a new §26.412 concerning a carrier´s refusal to renew coverage to health group cooperatives.

Proposed §26.401 prescribes the requirements for establishing a health group cooperative, including organization as a nonprofit corporation under applicable law and filing certain information with the department. Proposed §26.402 contains cooperative membership requirements, including a minimum membership of 10 participating employers, and a contractual commitment by each employer to purchase coverage for two years, except where the employer can demonstrate financial hardship. The proposal states that the contract between the employer and the cooperative may define financial hardship, but in the absence of a contractual definition, financial hardship occurs when the employer demonstrates that its premium costs, as a percentage of the employer´s gross receipts, have increased by a factor of at least .50.

Proposed §26.403 allows a cooperative, and its sponsoring entity, to engage in certain marketing activities related to membership and to provide information concerning the general availability of health coverage through the cooperative; however, all coverage issued through the cooperative must be issued through a licensed insurance agent. In arranging for coverage, a cooperative or its board of directors, employees or agents are not liable for failure to arrange for coverage of any particular illness, disease, or health condition.

Proposed §26.404 provides that a health group cooperative is considered a single employer for the purposes of benefit elections and other administrative functions, and a cooperative that is composed of only small employers is considered a small employer for all purposes of Insurance Code Chapter 26 and associated rules. A cooperative that is composed of both small and large employers may elect to extend to all of the large employer members the protections of Chapter 26 and its rules, although this election does not entitle the large employer members to guaranteed issuance of coverage through the cooperative.

Proposed §26.405 states that a carrier providing coverage through a health group cooperative is not subject to a premium or retaliatory tax for two years for previously uninsured employees or dependents, and defines "previously uninsured" to include individuals that lacked creditable coverage for 63 days preceding the effective date of the coverage purchased through the cooperative. A carrier must maintain documentation demonstrating an insured´s qualification for the exemption. Proposed §26.406 requires a carrier offering coverage through a cooperative to use a standard presentation form for employer members that includes certain listed information about the cooperative and, if the health plan does not contain all state-mandated benefits, a written statement that lists the benefits not included, describes the nature and benefits of the plan, and provides notice that purchase of the plan may limit future coverage options. Proposed §26.407 requires carriers to make a filing with the commissioner indicating whether they choose to become health group cooperative carriers. Carriers that do choose to enter the health group cooperative market must include in their filings the information identified in §26.407(c).

Proposed §26.408 says that, subject to the provisions of §26.407, a carrier shall provide coverage to a cooperative in the carrier´s geographic service area that requests coverage. However, a carrier may decline to offer coverage to a cooperative if the carrier is actively engaged in assisting an entity with the formation of a cooperative, as evidenced by a signed letter of agreement. Subject to the provisions of §26.407, a cooperative must provide for coverage to all employees that elect to be covered under any benefit plan offered through the cooperative, including all employees of a large employer that is a member of the cooperative. A carrier may not impose any other restrictions relating to this requirement.

Proposed §26.409 provides that a health benefit plan issued by an insurance carrier or an HMO through a cooperative is not subject to the state-mandated benefits listed in the proposed section. A plan issued by an HMO must include all basic health care services otherwise required by applicable law. Proposed §26.409 also states that a health plan offered by an insurer is not subject to §3.3704(a)(6) which requires that the basic level of coverage in a preferred provider plan may not be more than 30% less than the higher level of coverage. Proposed §26.410 provides for expedited approval of plans offered through health group cooperatives, allowing a carrier to file and use a plan pursuant to Art. 3.42(c) and associated rules, or to submit a filing for approval under Art. 3.42(d); the department shall approve or disapprove the latter filing within 40 days of receipt. An HMO evidence of coverage must be filed pursuant to the requirements of Subchapter F, Chapter 11, of this title and shall be approved or disapproved within 20 days of receipt.

Proposed §26.411 states that a carrier may provide coverage to only one cooperative in any county, unless the carrier is providing coverage in an expanded service area. A carrier may, by notice and certification to the department, provide health group cooperative coverage to an expanded service area that includes the entire state, and may apply for approval of an expanded service area that includes less than the entire state. The department has 60 days to approve or disapprove such filing. The ability to have expanded service areas will allow a carrier to provide service to more than one cooperative in a given county. Proposed §26.412 establishes the requirements that a carrier issuing coverage to a health group cooperative must satisfy prior to refusing to renew coverage to health cooperatives.

Proposed §26.413 requires a carrier that provides coverage to a cooperative to submit to the department, by March 1 of each year, certain information relating to coverage provided by the carrier for the previous calendar year. Such information includes number of plans issued or renewed to cooperatives during the year; number of Texas lives covered under those plans; number of small employer plans cancelled or voluntarily not renewed and the number of Texas lives covered under those plans and gross premiums received for coverage under those plans; the gross premiums received for newly issued and renewed health group cooperative health benefit plans covering Texas lives; number of cooperative plans that provided coverage to previously uninsured individuals and the number of previously uninsured persons that are covered under those plans; and the number of health benefit plans and lives covered under those plans, broken down by the first three digits of the five-digit ZIP Code of the employer´s principal place of business.

Kimberly Stokes, Senior Associate Commissioner of Life, Health, and Licensing, has determined that for each year of the first five years the proposed sections will be in effect there will be no fiscal impact to local governments as a result of the enforcement or administration of the rule. There will be a fiscal impact to state government as the result of the two-year exemption from state retaliatory and premium tax for the premiums attributable to previously uninsured individuals who are covered by a health group cooperative plan; however, the decrease in revenue is dependent upon the number of insureds or enrollees who were previously uninsured, and therefore cannot be estimated. There will be no measurable effect on local employment or the local economy as a result of the proposal.

Ms. Stokes has determined that for each year of the first five years the sections are in effect, the public benefits anticipated as a result of the proposed sections will be facilitating the creation of health group cooperatives and expediting the approval of health plans designed for such cooperatives, so as to make group insurance more advantageous for small employers, as well as for some large employers, than it might otherwise be if the employers were not purchasing the insurance collectively. This will optimally induce employers to continue to provide health insurance for their employees, and may also result in coverage for previously uninsured employees. Except as described in this cost note, any costs to persons required to comply with these sections for each year of the first five years the proposed sections will be in effect is the result of the enactment of SB 10 and not as a result of the adoption, enforcement, or administration of these sections. SB 10 requires the commissioner by rule to prescribe the standard presentation form that must be used by carriers offering coverage through a health group cooperative, and the proposed rule sets forth eight basic elements of information that must be included on the form. Adding other information is discretionary on the part of the carrier. The proposed rule requires the reporting of certain information that was not previously required to be reported. Because the required information for the standard presentation form and the information to be reported is easily accessible to, or developed by, the carrier, these requirements can be satisfied by using a carrier´s existing resources. The department estimates the cost of a form to be between $.01-.04 per page, exclusive of postage or facsimile or electronic transmission. There may be variations in cost from carrier to carrier based on the number of counties or cooperatives they serve. But these costs would not vary between carriers that are large businesses and those that are small or micro-businesses . I t would be neither legal nor feasible to exempt small or micro-businesses from this part of the rule, as to do so would deprive those carriers´ insureds or enrollees of important consumer information concerning health insurance provided through health group cooperatives. The proposed rule also establishes a standard, to be used in the absence of a standard agreed upon in the contract between the parties, for determining a circumstance of financial hardship that would allow an employer to terminate coverage within the initial two-year period. While a particular standard for termination could conceivably have a financial impact on either a cooperative or a carrier, the provision in the proposal that allows parties to agree to their own standard by contract obviates the cost potential. Whether and to what extent the rule´s proposed definition of financial hardship would have a cost impact would depend upon a number of variables, including size of the cooperative and premium costs and gross revenues of individual employers. Because the rule is designed primarily to address the needs of small employers (those with 2-50 employees)-a great number of which may meet the definition of small or micro-businesses under Government Code Chapter 2006-it would be neither legal or feasible to waive or modify the rule´s requirements for the very groups the statute and the rule are designed to assist. Finally, the proposed reporting requirements may result in additional administrative expenses to carriers that write business through health group cooperatives. Costs will vary based upon the particular carrier's current computer system, existing method for capturing data, and types of plans offered. Despite these variances, all carriers will have to incur some initial costs to make certain changes to computer systems consistent with the reporting requirements. According to 2002 data from the U.S. Bureau of Labor Statistics Occupational Employment Statistics Survey, as reported by the Texas Workforce Commission, t he m ean hourly rate for a computer programmer in the insurance industry is $31.27. The amount of time necessary to implement system changes could vary from five to twenty hours based on such things as the size of the plans written by the carrier and the carrier's current data collection processes. However, as these reporting requirements are similar to those already required of employer carriers by Insurance Code Articles 26.71 and 26.91, and related rules at Texas Administrative Code §26.20, the actual cost of compliance may be lower. The same cost considerations would apply regardless of the size of the carriers; however, because of the importance of this legislation and the need for the department to collect data representing the experience of all carriers writing health plans through health group cooperatives, it is not feasible for the department to waive or establish separate reporting requirements for carriers that are small or micro businesses.

To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on June 7, 2004 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 comment must be simultaneously submitted to Kimberly Stokes, Senior Associate Commissioner, Life, Health and Licensing Program, Mail Code 107-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104.A request for a public hearing should be submitted separately to the Office of the Chief Clerk.

The new sections are proposed under the Insurance Code Chapter 26, Articles 26.14A, 26.15 and 26.16, and §36.001. Articles 26.14A and 26.15 contain special provisions relating to health group cooperatives, and allow the commissioner to adopt rules. Chapter 26, among other things, contains provisions regarding health plans for small employers and authorizes the commissioner of insurance to adopt rules as necessary to implement this chapter. Article 26.16 also contains provisions concerning health group cooperatives and requires the department to develop an expedited approval process for health coverage arranged by a cooperative. 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 provisions are affected by this proposal:

Insurance Code Chapter 26, Articles 26.14A, 26.15 and 26.16

§26.401. Establishment of Health Group Cooperatives.

(a) Subject to the requirements of the Insurance Code and this subchapter, a person may form a health group cooperative for the purchase of employer health benefit plans.

(b) A health carrier may not form, or be a member of, a health group cooperative. A health carrier may associate with a sponsoring entity of a health group cooperative, such as a business association, chamber of commerce, or other organization representing employers or serving an analogous function, to assist the sponsoring entity in forming a health group cooperative.

(c) A health group cooperative must be organized as a nonprofit corporation and has the rights and duties provided by the Texas Non-profit Corporation Act, Texas Civil Statutes, Articles 1396-1.01, et seq.

(d) On receipt of a certificate of incorporation or certificate of authority from the secretary of state, the health group cooperative shall comply with Insurance Code Article 26.14(b) by filing notification of the receipt of the certificate and a copy of the health group cooperative´s organizational documents with the Life/Health Division, Mail Code 106-1A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104. The organizational documents shall demonstrate the health group cooperative´s compliance with Insurance Code Article 26.15.

(e) The board of directors shall file annually with the department a statement of all amounts collected and expenses incurred for each of the preceding years. The annual filing shall be made on Form Number 1212 CERT COOP provided at Figure 49 of §26.27(b)(49) of this title (relating to Forms) and shall be filed with the Life/Health Division, Mail Code 106-1A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104.

(f) The provisions of this subchapter shall not be construed to limit or restrict an employer´s access to health benefit plans under this chapter or Insurance Code Chapter 26.

§26.402. Membership of Health Group Cooperatives.

(a) The membership of a health group cooperative may consist only of small employers or may, at the option of the health group cooperative, consist of both small and large employers.

(b) To be eligible to arrange for coverage pursuant to Insurance Code Article 26.15(a)(1) a health group cooperative must, during the initial open enrollment period, have at least 10 participating employers. Thereafter, if the health group cooperative does not, at any time, have at least 10 participating employers, to maintain eligibility for coverage the health group cooperative must add additional members by the next open enrollment period to maintain at least 10 participating employers.

(c) Subject to the requirements of Insurance Code Article 26.22 and the limitations identified pursuant to §26.407 of this title (relating to Health Carrier Designation As Health Group Cooperative Carrier), a health group cooperative:

(1) shall allow any small employer to join the health group cooperative and, during the initial and annual open enrollment periods, enroll in health benefit plan coverage; and

(2) may allow a large employer to join the health group cooperative and, during the initial enrollment and annual open enrollment periods, enroll in health benefit plan coverage.

(d) A health group cooperative may not use risk characteristics of an employer or employee to restrict or qualify membership in the health group cooperative.

(e) An employer´s participation in a health group cooperative is voluntary, but an employer electing to participate in a health group cooperative must, through a contract with the health group cooperative, commit to purchasing coverage through the health group cooperative for two years, except as provided for in subsection (f) of this section.

(f) A contract between an employer and a health group cooperative must allow an employer to terminate without penalty its health benefit plan coverage with a health group cooperative before the end of the two year minimum contractual period required by subsection (e) of this section if it can demonstrate to the health group cooperative that continuing to purchase coverage through the cooperative would be a financial hardship in accordance with subsection (g) of this section.

(g) The contract between an employer and a health group cooperative may define what constitutes a financial hardship for the purposes of subsection (f) of this section. If the contract does not define the term, an employer may demonstrate financial hardship if it can show that at the end of the immediately preceding fiscal quarter, or upon receipt of notice of a rate increase, the premium cost to the employer, as a percentage of the employer´s gross receipts, increased by a factor of .50.

§26.403. Marketing Activities of Health Group Cooperatives.

(a) A health group cooperative may engage in marketing activities related and restricted to membership in the cooperative, including general availability of health coverage and is not required to maintain an agent´s license for soliciting membership in the cooperative. All health coverage issued through the cooperative must be issued through a licensed agent that is employed by or contracted with the cooperative.

(b) A sponsoring entity of a health group cooperative may inform its members regarding the health group cooperative and the general availability of coverage through the health group cooperative. All coverage issued through the cooperative must be issued through a licensed agent.

(c) A licensed agent that is used and compensated by a health group cooperative is not required to be appointed by a health carrier offering coverage through the health group cooperative. This exemption does not allow an agent to market other products and services not offered through the health group cooperative without an appointment from the health carrier.

(d) A health group cooperative or a member of the board of directors, the executive director, or an employee or agent of a health group cooperative is not liable for failure to arrange for coverage of any particular illness, disease, or health condition in arranging for coverage through the cooperative.

§26.404. Health Group Cooperative´s Status as Employer.

(a) A health group cooperative is considered a single employer for the purposes of benefit elections and other administrative functions.

(b) A health group cooperative that is composed of only small employers is considered a small employer for all purposes of Chapter 26 of the Insurance Code and Chapter 26 of this title.

(c) A health group cooperative that is composed of small and large employers is considered a small employer in relation to the small employer members for all purposes of the Insurance Code and Chapter 26 of this title. A health group cooperative may elect to extend to all of the large employer members of the health group cooperative the protections of Chapter 26 of the Insurance Code and Chapter 26 of this title. However, this election does not entitle the large employer members to guaranteed issuance of coverage as set forth in Article 26.21(a) of the Insurance Code or §26.8 of this title (relating to Guaranteed Issue; Contribution and Participation Requirements).

§26.405. Premium Tax Exemption for Previously Uninsured.

(a) In accordance with Article 26.14A of the Insurance Code, a health carrier providing coverage through a health group cooperative is exempt from premium tax and retaliatory tax for two years for premiums received for a previously uninsured employee or dependent. The two year period for the exemption begins upon the first date of coverage for the previously uninsured employee or dependent.

(b) For the purposes of this section and Article 26.14A of the Insurance Code, a previously uninsured employee or dependent is an employee or the dependent of an employee of an employer member of a health group cooperative and did not have creditable coverage for the 63 days preceding the effective date of coverage purchased through the health group cooperative.

(c) A health carrier shall maintain for four years documentation for each insured that demonstrates that coverage of the insured or enrollee qualifies the carrier for a tax exemption pursuant to subsection (b) of this section. The documentation shall comply with any applicable rules or procedures adopted by the Comptroller of Public Accounts related to the tax exemption.

§26.406. Standard Presentation Form.

(a) A health carrier offering coverage through a health group cooperative shall use a standard presentation form for employer members of the health group cooperative that includes the information listed in subsection (b) of this section. A standard presentation form may include additional information.

(b) A standard presentation form shall include, at a minimum:

(1) an explanation that the coverage is being offered through a health group cooperative;

(2) the name of the health group cooperative;

(3) an explanation of the employer´s eligibility to join the health group cooperative and purchase coverage without regard for membership in any other organization or the health status or claims experience of the employer and employees;

(4) an explanation of any fees or charges associated with membership in the health group cooperative;

(5) a statement that coverage is available to a small employer on a guaranteed issue basis from any health carrier offering coverage in the small employer market with no requirement of joining a health group cooperative;

(6) if multiple plans are offered through the health group cooperative, an explanation that the employer and employees may select any of the plans without limitation due to health status or claims experience;

(7) a description of the plans offered through the health group cooperative by the health carrier;

(8) if the employer or employee is considering or purchasing a health benefit plan that does not contain all state-mandated health benefits, a written disclosure statement that:

(A) explains that the health benefit plan being offered or purchased does not provide some or all state-mandated health benefits;

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

(C) contains a general description of the benefits offered by the health benefit plan;

(D) provides a notice that purchase of the plan may limit future coverage options in the event the policyholder´s or certificate holder´s health changes and needed benefits are not covered under the health benefit plan.

§26.407. Health Carrier Designation As Health Group Cooperative Carrier.

(a) On or before August 1, 2004 , each health carrier that has designated itself as a small employer carrier pursuant to §26.6 of this title (relating to Status of Health Carriers as Small Employer Carriers and Geographic Service Area) shall file with the commissioner, in accordance with subsection (c) of this section, information indicating whether the carrier is available to offer or issue small employer health benefit plans to health group cooperatives. The health carrier shall submit this filing to the Filings Intake Division, Mail Code 106-1E, Texas Department of Insurance, P. O. Box 149104 , Austin , Texas 78714-9104 or 333 Guadalupe, Austin , Texas , 78701 .

(b) After August, 1, 2004 whenever a health carrier designates itself as a small employer carrier pursuant to §26.6 of this title, the health carrier shall file with the commissioner, in accordance with subsection (c) of this section, information indicating that it is available to offer or issue small employer health benefit plans to health group cooperatives. The health carrier shall submit this filing to the Filings Intake Division, Mail Code 106-1E, Texas Department of Insurance, P. O. Box 149104 , Austin , Texas 78714-9104 or 333 Guadalupe, Austin , Texas , 78701 .

(c) The filings required by subsections (a) and (b) of this section shall include:

(1) the name of the health carrier;

(2) a designation of whether or not the health carrier is currently available to offer or issue small employer health benefit plans to health group cooperatives;

(3) a description, by county, of the health group cooperative basic service area, which is the area in which the carrier is offering or issuing small employer health benefit plans to health group cooperatives;

(4) if applicable, the extended service areas in which the health carrier is currently available to offer or issue small employer heath benefit plans to health group cooperatives;

(5) if applicable, information identifying, by county, the health group cooperative(s) that are currently doing business with the health carrier in each geographic service area or expanded service area;

(6) any limitations concerning the number of participating employers or employees in a health group cooperative that the health carrier is capable of administering; and

(7) any other information requested by the department.

(d) A carrier shall update the filings required by subsections (a) and (b) of this section as necessary to include new counties or extended service areas in which the carrier wishes to offer or issue coverage to health group cooperatives. If the carrier has agreed to provide coverage to a particular health group cooperative at the time of updating the certification, the carrier shall identify the health group cooperative consistent with subsection (c) of this section.

§26.408. Guaranteed Issuance of Coverage to Health Group Cooperatives.

(a) Subject to the limitations identified in §26.407(c)(6) of this title (relating to Health Carrier Designation As Health Group Cooperative Carrier), a health carrier that has made a filing with the commissioner indicating that it is offering or issuing small employer health benefit plans to health group cooperatives shall provide coverage to a health group cooperative that requests coverage in the health carrier´s basic geographic service area for health group cooperative business, as filed pursuant to §26.407 of this title.

(b) A health carrier may decline to offer coverage to a health group cooperative if the carrier is:

(1) already providing coverage to a health group cooperative in the same county; or

(2) actively engaged in assisting an entity with the formation of a health group cooperative. A health carrier is actively engaged in assisting an entity with the formation of a health group cooperative if the health carrier has associated with the entity for the purpose of forming a health group cooperative and the parties have signed a letter of agreement that evidences that the entity intends to form a health group cooperative with the assistance of the carrier and intends to purchase coverage from the health carrier. This exception is available for no more than 60 days from the date of the letter. This exception period cannot be extended, nor can additional letters of agreement between the parties have the effect of extending this exception period.

(c) Subject to the limitations identified in §26.407(c)(6) of this title, a health carrier that is providing coverage to an employer through a health group cooperative must provide coverage to any employee that elects to be covered under a health benefit plan that is offered through the health group cooperative.

§26.409. Health Benefit Plans Offered Through Health Group Cooperatives.

(a) A health benefit plan issued by a health carrier through a health group cooperative is not subject to the following state mandates:

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

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

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

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

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

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

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

(8) coverage of mammography screening for the presence of occult breast cancer as required by Insurance Code Article 3.70-2(H);

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

(10) 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;

(11) standards for proof of Alzheimer´s disease as required by Insurance Code Article 3.78;

(12) coverage for formulas necessary for the treatment of phenylketonuria as required by Insurance Code Article 3.79;

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

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

(15) coverage of diagnosis and treatment affecting temporomandibular joint and treatment for a person unable to undergo dental treatment in an office setting or under local anesthesia as required by Insurance Code Article 21.53A;

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

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

(18) coverage of childhood immunizations as required by Insurance Code Articles 21.53F and 20A.09F;

(19) coverage for screening tests for hearing loss in children and related diagnostic follow-up care as required by Insurance Code Article 21.53F;

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

(21) coverage of certain tests for detection of prostate cancer as required by Insurance Code Article 21.53F;

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

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

(24) coverage of certain tests for detection of colorectal cancer as required by Insurance Code Article 21.53S;

(25) coverage for reconstructive surgery for craniofacial abnormalities in a child as required by Insurance Code Article 21.53W;

(26) limitations on the treatment of complications in pregnancy established by §21.405 of this title (relating to Policy Terms and Conditions);

(27) coverage for services related to immunizations and vaccinations under managed care plans as required by Insurance Code Article 21.53K;

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

(29) limitations on differences between levels of coverage in preferred provider benefit plans as described in §3.3704(a)(6) of this title (relating to Freedom of Choice: Availability of Preferred Providers);

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

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

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

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

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

(b) A health benefit plan issued by an HMO through a health group cooperative must provide for the basic health care services as provided in §11.508 or §11.509 of this title (relating to Mandatory Benefit Standards: Group, Individual and Conversion Agreements and Additional Mandatory Benefit Standards, Group Agreement Only):

(c) A health benefit plan offered by an insurer through a health group cooperative is not subject to §3.3704(a)(6) of this title.

§26.4 10 . Expedited Approval for Plans Offered Through a Health Group Cooperative.

(a) A health carrier must file for approval a health benefit plan that will be offered solely to a health group cooperative and shall indicate in the filing that the health benefit plan is to be offered to a health group cooperative and is subject to review under this section.

(b) A health benefit plan subject to review under this section and filed with the department by an insurer may be filed as a file and use form consistent with Insurance Code Article 3.42(c) and §3.5(a)(2) of this title (relating to Filing Authorities and Categories).

(c) An insurer that does not elect to file for approval under subsection (b) of this section shall file the form for approval consistent with Insurance Code Article 3.42(d) and §3.5(a)(1) of this title. The department shall approve or disapprove the filing within 40 calendar days of receipt of the complete filing.

(d) An HMO must file for approval an HMO evidence of coverage that is to be offered solely to a health group cooperative and shall indicate that review of the evidence of coverage is subject to the expedited process available under this section. The evidence of coverage shall be filed consistent with the requirements of Subchapter F of Chapter 11 of this title (relating to Evidence of Coverage) and shall be approved or disapproved by the department within 20 calendar days of receipt of a complete filing.

§26.411. Service Areas for Carriers Offering Coverage Through a Health Group Cooperative.

(a) A health carrier may provide coverage to only one health group cooperative in any county, except that a health carrier may provide coverage to additional health group cooperatives if it is providing coverage in an expanded service area.

(b) A health carrier may provide health group cooperative coverage to an expanded service area that includes the entire state upon providing notice to the department. A health carrier properly provides notice to the department by sending a certification that the health carrier intends to provide health group cooperative coverage to an expanded service area that includes the entire state. The certification should be signed by an officer of the health carrier and sent to Filings Intake Division, Mail Code 106-1E, Texas Department of Insurance, P. O. Box 149104 , Austin , Texas 78714-9104 or 333 Guadalupe, Austin , Texas , 78701 .

(c) A health carrier may apply for an expanded service area that includes less than the entire state by submitting an application for approval to Filings Intake Division, Mail Code 106-1E, Texas Department of Insurance, P. O. Box 149104 , Austin , Texas 78714-9104 or 333 Guadalupe, Austin , Texas , 78701 . The health carrier may begin using the expanded service area upon approval or 60 days after the day the application is received by the department unless the application is disapproved by the department within that time. The application must include:

(1) the geographic service areas, defined in terms of counties or zip codes, to the extent possible;

(2) if the service area cannot be defined by counties or zip code, a map which clearly shows the geographic service areas must be submitted in conjunction with the application;

(3) service areas by zip code shall be defined in a non-discriminatory manner and in compliance with the Insurance Code Articles 21.21-6 and 21.21-8; and

(4) any other information requested by the department .

(d) HMO service areas are not affected by a filing under this section and shall be established in accordance with Chapter 843 of the Insurance Code.

§26.412. Refusal to Renew and Application to Reenter Health Group Cooperative Market.

(a) A health carrier may elect to refuse to renew all employer health benefit plans delivered or issued for delivery by the health carrier to a health group cooperative in this state or in a health group cooperative basic or extended service area approved under the Insurance Code, Article 26.14A(l). The health carrier shall notify the commissioner of the election not later than the 180th day before the date coverage under the first health group cooperative health benefit plan terminates under the Insurance Code Article 26.24(a).

(b) The health carrier must notify each affected covered health group cooperative not later than the 180th day before the date on which coverage terminates for the health group cooperative.

(c) An health carrier that elects under the Insurance Code Article 26.24(a) to refuse to renew all health group cooperative employer health benefit plans in this state or in an approved geographic service area may not write a new health group cooperative employer health benefit plan in this state or in the geographic service area, as applicable, before the fifth anniversary of the date of notice to the commissioner under the Insurance Code Article 26.24(a).

(d) A health carrier that elects not to renew under the Insurance Code Article 26.24, and this section may not resume offering health benefit plans to health group cooperatives in this state or in the geographic area for which the election was made until it has filed a petition with the commissioner to be reinstated as a health group cooperative carrier and the petition has been approved by the commissioner or the commissioner's designee. In reviewing the petition, the commissioner may ask for such information and assurances as the commissioner finds reasonable and appropriate.

§26.413. Health Carrier Reporting Requirements.

(a) Health carriers offering a health benefit plan through a health group cooperative shall file information with the department, not later than March 1 of each year, in the manner prescribed and on the form provided by the department for that purpose. The form can be obtained from the Texas Department of Insurance, Filings Intake 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 at www.tdi.state.tx.us . The information shall include data for the previous calendar year and shall include the following:

(1) the total number of health benefit plans newly issued and renewed to health group cooperatives and 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 health benefit plans issued through a health group cooperative;

(3) the total number of health group cooperative health benefit plans covering Texas lives that were cancelled or non-renewed during the previous calendar year, including the reasons for cancellation or non-renewal (and that 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 health group cooperative health benefit plans covering Texas lives;

(5) the number of health group cooperative health benefit plans covering individuals in Texas that were previously uninsured in accordance with §26.406(b) of this title (relating to Standard Presentation Form), and the number of Texas lives covered under those plans; and

(6) the number of health group cooperative 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 the employer´s principal place of business in Texas.

(b) For purposes of this section, gross premiums shall be the total amount of monies collected by the health carrier for health benefit plans during the applicable calendar year.

(c) The information required to be filed by this section shall be filed with Filings Intake Division, MC 106-1E, P.O. Box 149104 , Austin , TX , 78714-9104



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