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You are here: Home . rules . 2004 . 0811AA-059
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Subchapter D. Health Group Cooperatives

28 TAC §§ 26.401-26.413

The Commissioner of Insurance adopts new Subchapter D, §§26.401-26.413, concerning the establishment of, and provision of health insurance coverage to, health group cooperatives. Sections 26.401, 26.402, 26.404, 26.406-26.411 and 26.413 are adopted with changes to the proposed text as published in the May 7, 2004 issue of the Texas Register (29 TexReg 4413). Sections 26.403, 26.405, and 26.412 are adopted without changes and will not be republished.

The new sections are necessary to implement legislation enacted by the 78 th Legislature in Senate Bill (SB) 10. That legislation added provisions to Chapter 26, Texas Insurance Code, allowing the formation of a new type of purchasing cooperative, a health group cooperative, and establishing the standards by which insurance companies and health maintenance organizations (HMOs)--hereinafter collectively referred to as health carriers--provide group health insurance to such 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 health benefit plans that may be written through cooperatives by expressly exempting those plans from the requirement to include benefits that would otherwise be mandated by the Insurance Code if they relate to a particular illness, disease, or treatment, or by 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 health carriers that issue coverage to these entities.

The department made changes to the proposed sections as follows. The department added language to §§26.401 and 26.413 to include the names of the forms that must be used to satisfy the filing and reporting requirements those sections establish. To simplify compliance with these requirements, the additional language also provides information about where health carriers can obtain the forms.

As a result of comments that questioned what would happen if membership in a health group cooperative falls below the required ten employers, the department changed §26.402(b) to explain that the health group cooperative must recruit additional members by the end of its next open enrollment period. If the health group cooperative does not have ten members at that time, the carrier has the option of terminating coverage of the cooperative. Because of a comment, the department added the words "at least" to §26.402(g) to clarify that a member of a health group cooperative can demonstrate the financial hardship addressed in that subsection, in cases where the contracts between health group cooperatives and their members do not otherwise define financial hardship, by showing that the premium cost of the coverage, as a percentage of the employer´s gross receipts, increased by a factor of at least .50. Because of a question raised in a comment regarding the possibility that these rules guarantee issuance of coverage to large employer members of a health group cooperative, the department added language to §26.404(c), which clarifies that guaranteed issuance is not one of the small employer protections that a cooperative can elect to extend to its large employer members, unless a contract between the health group cooperative and its carrier allows large employers to join the health group cooperative. As a result of a comment, the department added the word "small" to §26.406(b)(3) because that condition only applies to small employers.

Comments received indicated that the language of proposed §26.407 was confusing. To address the issues raised in that regard, the adopted rule consolidates subsections (a) and (b) and changes the language to make clear that a health carrier is not required to make a filing pursuant to §26.407 until it decides to enter the health group cooperative market. The adopted rule also clarifies that large employer health carriers can enter the health group cooperative market. Also, because comments indicated a need for health group cooperatives and sponsoring entities of prospective health group cooperatives to know when a carrier has entered the market and whether a carrier is already committed to serving a cooperative in a certain county, §26.407 includes language that requires health carriers to include in their §26.407 filing the policy form describing the health benefit plan that they will offer in the health group cooperative market. The rule also states that health carriers may not offer or issue coverage in the health group cooperative market until the health carrier has made the filing required by §26.407 and the department has approved the health benefit plan that the health carrier will offer in the health group cooperative market.

The department changed the title of §26.408 and added to that section a reference to §26.404 so that changes made to §26.404 in response to comments do not inadvertently result in inconsistent statements in the rules regarding guaranteed issuance of coverage. Because the rules now make clear that large employer carriers can enter the health group cooperative market, the department deleted the words "small employer" from §26.408. As a result of comments, the department removed from the list in §26.409 several of the state-mandated benefits that were proposed for exemption. The department added language to §26.410 to make clear that health carriers can reference, rather than provide copies for approval, previously approved health benefit plans that they now intend to offer in the health group cooperative market. Because of a comment, the department has changed the language of §26.411(d) so that there is no confusion about the requirement that any health group cooperative service area that an HMO serves must also be included in the HMO service area approved pursuant to Insurance Code Chapter 843.

Finally, the department made grammatical changes and renumbering changes to assure consistency and clarity in the rules.

New §26.401 prescribes the requirements for establishing a health group cooperative, including organizing as a nonprofit corporation under applicable law and filing certain information with the department. New §26.402 contains cooperative membership requirements, including a contractual commitment by each employer to purchase coverage for two years, except where the employer can demonstrate financial hardship. The new section 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.

New §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 arranged through the cooperative must be issued through a licensed insurance agent that is contracted with the health group cooperative. 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.

New §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 small employer 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.

New §26.405 states that a carrier providing coverage through a health group cooperative is not subject to 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. New §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. If the health benefit plan does not contain all state-mandated benefits, the presentation form must include 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. New §26.407 requires all small and large employer carriers to make a filing with the commissioner when they choose to become health group cooperative carriers. Carriers that choose to enter the health group cooperative market must include in their filings the information identified in §26.407(c).

New §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 provide coverage to a cooperative if the carrier is already contracted to provide coverage to a cooperative in that county, or is actively engaged in assisting an entity with the formation of another 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 health 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.

New §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 section. A health benefit plan issued by an HMO must include all basic health care services otherwise required by applicable law and rules. New §26.409 also states that a health benefit 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. New §26.410 provides for expedited approval of plans offered through health group cooperatives, allowing an insurance carrier to file and use a health benefit plan pursuant to Insurance Code Article 3.42(c) and associated rules, or to submit a filing for approval under Article 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.

New §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. New §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.

New §26.413 requires a carrier that provides coverage to a cooperative to submit to the department, by March 1 of each year, certain stated information relating to coverage provided by the carrier for the previous calendar year. Such information includes number of health benefit 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 insurance 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.

SUMMARY O F COMMENTS AND AGENCY RESPONSE TO COMMENTS.

Comment: One commenter expressed support for new Subchapter D.

Agency Response: The department appreciates the comment.

Comment: A commenter asked if the benefits of the Texas Health Reinsurance System (THRS) will be extended to the large groups that participate in health group cooperatives. Specifically, the commenter wants to know how a plan should address reinsurance when some of the cooperative will be in the THRS and the large employer portion of the cooperative will not be in the THRS.

Agency Response: Reinsurance through the THRS will be available to health group cooperatives to cover the risks presented by their small employer group members, but not their large employer group members. Health group cooperatives can obtain reinsurance for the risks presented by their large group members in the private reinsurance market.

§26.402: One commenter asked for guidance regarding how §26.402(c)(1) and (2) address membership of health group cooperatives. The commenter questioned how a health benefit plan could have an open enrollment that allowed any small group and possible large groups to join and then provide accurate rates for one year. The commenter suggested requiring a certain percentage of plans to be small employer/large employer to allow for underwriters to more accurately rate membership. Another commenter believes that the §26.402(b) requirement that a health group cooperative be composed of at least ten employers at all times, is contrary to and inconsistent with the provisions of proposed §26.404(b) and Insurance Code Article 26.16(b). The commenter notes that neither of these provisions imposes any minimum membership requirement for health group cooperatives.

Agency Response : Because SB 10 allows carriers to work with sponsoring entities even before a health group cooperative is created, the department believes that effective negotiation between a sponsoring entity and a carrier can inform a carrier of the risk it will be taking before it actually enters the health group cooperative market. Insurance Code Article 26.14A(a) allows health group cooperatives to include large employer groups in their membership. The department does not have authority to impose the requirement suggested by the commenter. Therefore, the department declines to specify by rule a requirement that a certain percentage of plans be small employer/large employer plans. The requirement in §26.402(b) that a health group cooperative have at least ten participating members in order to arrange for coverage from a carrier is found at Insurance Code Article 26.15(e). The requirement established by Article 26.15(e) is different from, and not in conflict with, the provisions of Article 26.16(b) and §26.404(b).

Comment: One commenter noted that in §26.402(g), the department has attempted to define financial hardship of an employer. The commenter believes the department is defining a maximum requirement of an increased factor of .50, and questioned why the department did not define a minimum requirement. Another commenter asked if there will be any oversight and monitoring concerning the validity of a member´s claim of financial hardship. Another commenter suggested that the last sentence of §26.402(g) be changed to create a rebuttable presumption of financial hardship, and suggested language for that purpose. The commenter believes that even though the ratio of health costs to gross receipts may have increased, other factors may demonstrate that the costs and expenses for an employer may not result in a financial hardship.

Agency Response: The adopted rule includes the phrase "at least" to establish that the factor of .50 is a minimum requirement for establishing financial hardship where another standard has not been established by contract between the cooperative and its members. The issue of financial hardship is amenable to definition in the agreements between the cooperative and its members. Any interests the carriers may have in the issue can be addressed in the agreements between cooperatives and carriers in a manner that assures that carriers, the health group cooperative and cooperative members all have the same understanding about what constitutes financial hardship. The department anticipates that any oversight and monitoring needed on the issue will be conducted by the parties in accordance with their respective agreements. The department does not anticipate performing oversight and monitoring of the cooperative´s contract with its members. The department believes that the contract between a cooperative and its members and the contract between a cooperative and carrier can establish this standard as a rebuttable presumption, or otherwise define financial hardship. Because the rule establishes a standard for situations in which the contracts do not address the issue, a change to the language is not needed.

Comment: One commenter asked if a health benefit plan can re-rate the group if a large employer drops out because of the financial hardship provision.

Agency Response: Carriers must treat a health group cooperative the same as a single employer in relation to rating. Accordingly, it would be allowed to re-rate the group if the change in census would give it justification to re-rate the group under existing Chapter 26 provisions relating to small employers.

Comment: A commenter indicated that health benefit plans are concerned with the provision that requires a plan to provide renewal rates 60 days in advance of the effective date of coverage. To comply, a health benefit plan would have to begin an open enrollment period 90 days early in order to get the participant information to enable a health benefit plan to quote rates. The commenter requested guidance on how to make this provision more manageable.

Agency Response: The requirement that a carrier provide 60 days notice of a rate increase is found in Insurance Code Article 3.51-10. The department has no discretion to waive this requirement. While the requirement for open enrollment is for a minimum of 31 days annually, there is no requirement that the open enrollment period be immediately prior to the plan anniversary. The department recognizes that the potential for large census changes within a cooperative makes rating one more difficult than rating a single employer. The department suggests that cooperatives set their open enrollment period earlier than they would with a single employer, and that carriers be prepared to quote contingent rates while also disclosing that changes in the census of the group during the enrollment process may affect premium cost.

Comment: A commenter stated that the statute makes clear that the carrier must allow enrollment in a health benefit plan consistent with an initial enrollment and annual open enrollment and also consistent with a carrier ´s agreement with a cooperative. The commenter believes that the proposed rules do not provide this latter requirement and may limit a carrier´s rights to contract with a cooperative. Another commenter suggested that §26.402(c) be changed to make it clear that the open enrollment period is subject to the contract between a health group cooperative and the carrier. The commenter feels that the contract between the cooperative and the members or the carrier may provide definitions of the timing of the annual or initial enrollment period. The commenter noted that the contract could allow new members of the cooperative to be immediately eligible for coverage.

Agency Response: The department agrees that a contract between a cooperative and a carrier can allow new employers to join the cooperative at any time during the year. The language of the rule simply requires that a health group cooperative, at a minimum, conduct an initial and annual open enrollment. Pursuant to Insurance Code Articles 26.21 and 26.83, the open enrollment period must have a duration of at least 31 days.

§26.404: A commenter noted that some health benefit plans are concerned with the provisions regarding employer status. Section 26.404(c) extends certain small group protections to any large group in the health group cooperative, but it is not certain what protections will actually extend. The commenter believes that the rules state large employers are not guaranteed issuance of coverage through the cooperative, but once a large group is accepted as a plan in the cooperative they are subject to the rate band. The commenter states that this could be a difficult issue for a cooperative because the large group may make up a large portion of the pool, and the loss of a large group during the formation process may result in a cooperative having fewer than ten member groups.

Agency Response: The commenter is correct that a decision by a health group cooperative to extend small employer protections to its large group members does not by itself assure the guaranteed issuance of coverage to large group members of the cooperative. If the health group cooperative wants guaranteed issuance of coverage for its large group members, the cooperative must include such a provision in its contract with the carrier. The department has added language to §26.404 to make this point clear. If a cooperative has elected to extend small employer protections to its large employer members, the rate band protections applicable to small employers will apply to the large employer members. While this may result in rating complexities for carriers, the inclusion of a large employer in a health group cooperative will not have an adverse effect on the cooperative formation process. Loss of any employer member during the formation process will remove the cooperative´s ability to arrange for coverage if the employer membership falls below ten. This is true regardless of the size of employer that is lost.

Comment: Another commenter, pointing to the language of §26.404(a) and (b), presents a hypothetical health group cooperative that is composed of 10 employers with five employees each, and asks if that health group cooperative can expect to be treated exactly the same as a single small employer with regard to questions of guaranteed issuance and renewal of policies and rating limitations. The commenter also asks whether a carrier serving a health group cooperative of this composition would be prevented from issuing small employer health benefit plans for five years if it terminated coverage to such a cooperative.

Agency Response: The statutes and rules governing health group cooperatives apply equally to such cooperatives, regardless of size or makeup. It appears, however, that the commenter may be relying on statutory language enacted by the 78 th Legislature as part of House Bill (HB) 897 (2003), related to small employer health coalitions. An HB 897 small employer health coalition, which must at all times otherwise meet the definition of a small employer, is to be treated as a single small employer for all purposes under Chapter 26, including guaranteed issuance of coverage. This also means that a small employer health coalition may not grow beyond the existing size limitations of a single small employer. Health group cooperatives formed pursuant to SB 10, on the other hand, may exceed the size limitations found in the definition of a small employer and therefore operate under a different statutory scheme. A health group cooperative may not make use of the statutory language specifically applicable to small employer health coalitions to require a carrier to issue coverage the health group cooperative. Similarly, a small employer health coalition that was issued coverage pursuant to the language of HB 897 may not take advantage of the absence of size limitations for health group cooperatives. A carrier that terminates coverage provided to a SB 10 health group cooperative must do so in accordance with §26.412. In such a case, the carrier would be prohibited from offering coverage in the health group cooperative market for five years. Additionally, a carrier may discontinue use of a particular health benefit plan in the health group cooperative market by following the provisions of Insurance Code Article 26.24(d).

Comment: A commenter asked whether a health benefit plan would be mandated to renew a large employer that procures coverage through a health cooperative, and if so, would the health benefit plan be allowed to re-rate the large employer at renewal. Another commenter asked if a health benefit plan would be obligated to apply small group rating restrictions when a large employer is covered by a plan procured through a cooperative.

Agency Response: Chapter 26 of the Insurance Code provided for guaranteed renewability to both small and large employers before the enactment of SB 10. For those cooperatives that have elected to extend small employer protections to their large employer members, the carrier is required to re-rate the large employer members consistent with the rating protections afforded small employer members. For those cooperatives that do not elect to extend small employer protections to their large employer members, the carriers can make adjustments pursuant to the requirements of Chapter 26 applicable to large employers.

Comment: A commenter is concerned that a health group cooperative could begin with several health benefit plans offering coverage to the cooperative but could lose members or experience a lengthy period of time during which it does not add many new members, so that a health benefit plan could potentially end up with a very small number of enrolled employees. Thus, the commenter asked whether a health benefit plan could cease providing coverage to the cooperative due to a lack of membership.

Agency Response: The only limitation on the minimum size of a health group cooperative is the requirement that the cooperative have at least ten employer members. Otherwise, a carrier can cease providing coverage to a health group cooperative only for reasons which would allow it to cease providing coverage to a single employer, such as withdrawal from the market in accordance with §26.412.

§26.406: A commenter suggested that §26.406(b)(3) should be limited to small employers, because this provision does not make sense for large employers. As proposed, §26.406(b)(3) appears to mandate guaranteed issuance for large employers.

Agency Response: The department agrees that the language of the proposed rule should more clearly reflect the statutory scheme and has changed the rule accordingly.

Comment: A commenter believes that §26.406(b)(8)(d) does not appear to be clear for mandate-free health benefit plans.

Agency Response: The department believes that the language of §26.406(b)(8)(D) requires a clear disclosure to employer members that purchase of a health benefit plan that does not contain all state-mandated benefits may impact future coverage options.

§26.407 : Some commenters expressed concern that language of subsections (a) and (b) create confusion. Specifically, the commenters believe that subsection (a) allows existing small employer carriers the option of deciding whether to enter the health group cooperative market, but that subsection (b) requires new entrants to the small employer market to also participate in the health group cooperative market. One commenter offered language changes to assure that existing and new small employer carriers would be treated the same.

Agency Response: The intent underlying SB 10 is that carriers would only enter the health group cooperative market voluntarily. The department has changed the language of §26.407 accordingly.

Comment: A commenter requested that §26.406 be changed to require the carrier to obtain a signed acknowledgment from current and prospective policyholders that they received the disclosure statement required by §26.406. The commenter also suggested that §26.407 include a requirement that carriers provide to prospective certificate holders the same information that is disclosed to policyholders pursuant to §26.406, before or concurrently with the offer of the plan (or renewal). The commenter believes that this would assure that employees covered by the health group cooperative plan understand clearly which mandates, that would otherwise be included pursuant to other sections and articles of the Insurance Code, are not included in the plan that is offered to the health group cooperative. The commenter suggested specific language.

Agency Response: 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 plan provides coverage. The department thus declines at this time to extend notice and disclosure requirements to the extent requested by some commenters.

Comment: A commenter suggested that language in §26.407(a) and (b) that requires health benefit plans to indicate if they are available to offer coverage should instead require that the health benefit plans indicate whether they intend to offer coverage. The commenter offered the same suggestion for §26.407(c)(2) and (4).

Agency Response: The department has changed the language of §26.407 to make clear that a carrier may not offer or issue a plan to a health group cooperative until the carrier has received departmental approval to use the policy forms it wishes to offer in the health group cooperative market. The filing required by §26.407 and receipt by the carrier of department approval for the health benefit plan it will issue to health group cooperatives signals that the carrier has entered the health group cooperative market. This should prevent confusion in the market about whether a particular carrier is available or intends to offer or issue coverage to health group cooperatives.

Comment: A commenter stated that §26.407 is confusing, and observed that the section suggests that only a small group insurer can contract with a cooperative. The commenter believes SB 10 clearly contemplates that large employer carriers who have not elected to be a small employer group carrier could contract with a cooperative, and complains that the flexibility afforded by SB 10 is in question because of the wording in §26.407 and §26.408. The commenter also believes that if a cooperative is composed only of small employers, a carrier that has already elected to be a small employer carrier should be able to contract with a cooperative without having to make an additional filing with the department.

Agency Response: The department agrees that large employer carriers may provide coverage to health group cooperatives established pursuant to SB 10 and has changed the rules so that it is clear that large employer carriers may elect to participate in the health group cooperative market. A small or large employer carrier that chooses to participate in the health group cooperative market must make the filing required by §26.407 so that the department will know which carriers are providing coverage to health group cooperatives, their specific service areas, any other limitations of the carrier´s participation in the market, and the policy or policies that will be offered to health group cooperatives by the carrier. The department has added language to the proposed rule so that there is no confusion about whether carriers must file the health benefit plans to be offered to health group cooperatives for department approval in the same way that they must file for approval health benefit plans for other markets.

§26.408: Two commenters believe that §26.408 requires a carrier that has made a filing to indicate that it is offering or issuing plans to a health group cooperative to provide coverage to any health group cooperative that requests coverage. The commenter does not believe that SB 10 requires carriers that have not yet contracted with a cooperative to guarantee issue to any cooperative that requests coverage. One of the commenters points out that a cooperative could be composed of only one small employer and several large group employers, so that guaranteed issue would not be a right to which the large employer members would be entitled, and urges that there is nothing in SB 10 that requires a carrier to provide guaranteed issue to such a cooperative. Another commenter makes the point that if there is guaranteed issue of coverage to a health group cooperative and no contract yet exists, then the carrier and cooperative will not know what contract will apply under the guarantee issue provision in §26.408(a).

Agency Response: The provisions of §26.408 related to issuance of coverage are subject to the requirements of §26.407. The department has changed §26.407 to include a requirement that the carrier include in its filing a copy of the policy form describing the health benefit plan it will offer to health group cooperatives. The carrier may not issue policies in the health group cooperative market until it receives departmental approval of the form. Therefore, a carrier that is actually participating in the health group cooperative market will have a form approved for use in that market. A carrier that has made the filing required by §26.407 and has received department approval for the form it will use to offer and issue health benefit plans in the health group cooperative market must provide coverage to a health group cooperative that requests coverage unless the carrier is already contracted with a cooperative or is actively engaged in assisting with the formation of a cooperative as described in §26.408(b)(2). Unless there is already a contract between the health group cooperative and the carrier that commits the carrier to providing coverage for large group members of the cooperative, a health group cooperative that is composed of one small employer group and nine large employer groups will not be eligible to purchase coverage from a carrier if the carrier declines to provide coverage for the large group members of the health group cooperative, because the cooperative would not have ten participating members as required by Insurance Code Article 26.15(e).

Comment: One commenter asserted that the provision in §26.408(b)(2) that allows a carrier to decline to offer or issue coverage to a cooperative for up to 60 days while negotiating with another cooperative does not allow sufficient time for the cooperative and health benefit plan to complete their negotiations, and recommends adding an additional 60 days extension. Another commenter points out that this 60-day limitation is not found in SB 10. Another commenter has suggested additional language for proposed §26.408(b)(2), that would prohibit a carrier from declining to provide coverage on the basis that it is already actively engaged with the formation of a health group cooperative, if the applying health group cooperative meets the requirements of proposed §26.404(b).

Agency Response: The department notes that the 60-day period does not commence until some point in time coincident with or after the carrier has made its filing pursuant to §26.407. The department believes that the combined effect of §§26.407 and 26.408 should allow adequate time for a carrier and health group cooperative to negotiate issues prior to a carrier issuing coverage to a health group cooperative. The department also believes that its change to §26.407 to make clear that a carrier may not issue policies in the health group cooperative market until it has received departmental approval of any health benefit plan it will offer or issue in the health group cooperative market will resolve any potential problems in this area. Insurance Code Article 26.14(f) allows a carrier to assist a sponsoring entity in forming a health group cooperative. The apparent legislative intent is to encourage carriers and sponsoring entities to begin working together prior to the creation of a health group cooperative. The language suggested for §26.408(b)(2) by the commenter that would require a carrier to issue coverage to a health group cooperative other than the one it had been working with, just because the new cooperative fit the description in §26.404(b) would vitiate that intent, and the department declines to make the suggested language change.

§26.409: One commenter asserts that mandate exemptions in paragraphs 5, 6, 9, 10, 13, 22, 26, and 27 of proposed §26.409(a) do not fit the descriptions of the mandates that SB 10 exempts from inclusion in health group cooperative plans because they do not relate to a particular illness, disease or treatment, nor do they regulate the differences in rates applicable to services provided within a health benefit plan network or outside the network.

Agency Response: The department agrees with this comment regarding paragraphs 9, 13 and 22, and has changed the rule accordingly. The department believes that the subject matter of the mandates identified in paragraphs 5, 6, 10, 26 and 27 describe illnesses, diseases or treatments with sufficient particularity that they fall within the legislative intent underlying SB 10. Therefore, the department has retained these paragraphs on the list of state mandates that are exempt from inclusion in SB 10 plans.

Comment: A commenter asserts that the exemptions in paragraphs 29, 30 and 31 of proposed §26.409(a) relate to plan design but do not relate specifically to rates or other SB 10 criteria for exemption. The commenter also contends that the underlying purpose of Insurance Code Article 3.70-3C(8)(a) and 28 TEX. ADMIN. CODE §3.3704(a)(6) is to require plans to have an adequate network and to pay a reasonable portion of "out of network" charges. The commenter believes the department´s interpretations of this statute and rule should stand, lest PPO plans avoid the more stringent regulation of HMOs without providing any additional benefit in return. Another commenter noted that the provisions in §26.409(a)(29) and (31) are repetitive.

Agency Response: SB 10 specifically directs that a health benefit plan issued to a health group cooperative is not subject to state law, including a rule, that regulates the differences in rates applicable to services provided within a plan network or outside the network. This is the effect of these three paragraphs. However, because §26.409(a)(29) and (31) are repetitive of §26.409(c), the department has not included them in the adopted rule.

Comment: The commenter notes that the statutory requirements identified in paragraphs 32, 33 and 34 of proposed §26.409(a) are mandated by federal law, and urges that these mandates be removed from the rule so that federal preemption is not invoked.

Agency Response: The department disagrees. SB 10 plans are not subject to a state law that relates to a particular illness, disease or treatment, and the state laws referenced in this comment are within that category. Federal laws, however, contain requirements similar, but not identical, to the coverages these three statutes mandate. Carriers and cooperatives offering coverage pursuant to SB 10 should remember that neither SB 10 nor this rule provides any exemption from requirements of federal law and should design their health benefit plans accordingly.

§26.411: A commenter asked that the department clarify that in §26.411(b), the service area of an HMO is not affected by the cooperative service area; however, the cooperative must be in the HMO´s service area.

Agency Response: The department agrees and has changed the rule accordingly.

§26.412: A commenter noted that the provisions in §26.412(c) and (d) are repetitive.

Agency Response: A close reading of the two subsections indicates that they are not identical and differences between the subsections are sufficient so that the department declines to make any changes in response to the comment.

5. NAMES OF T HOSE COMMENTING FOR AND AGAINST THE SECTIONS.

For: Texas Association of Business.

For, with change s: Scott & White Health Benefit Plan, Office of Public Insurance Counsel, Texas Health Care Purchasing Alliance, Inc.

Neither for nor against, with changes: Texas Association of Health Benefit Plans, Texas Association of Life and Health Insurers.

6. STATUTORY AUTHORITY. The new sections are adopted under the Insurance Code Chapter 26, Articles 26.14A, 26.15 and 26.16, and §36.001. Articles 26.14A and 26.15 contain provisions relating to health group cooperatives, and allow the commissioner to adopt rules. Chapter 26, among other things, contains provisions regarding health benefit plans for small employers and authorizes the commissioner 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.

7. TEXT.

§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 Filings Intake Division, Mail Code 106-1E, 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 HGC-1, and 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 . It shall be filed with the Filings Intake Division, Mail Code 106-1E, Texas Department of Insurance, P.O. Box 149104 , Austin , Texas 78714-9104 .

(f) The p rovisions 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, at the end of its initial open enrollment period, have at least ten participating employers. Thereafter, if the health group cooperative does not, at any time, have at least ten participating employers, to maintain eligibility for coverage the health group cooperative must add additional members by the end of the next open enrollment period to maintain at least ten participating employers. If, by the end of the next open enrollment period the health group cooperative does not have at least ten participating employers, the health carrier may elect to immediately cease providing coverage to the health group cooperative.

(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 at least .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 this chapter.

(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 this chapter. 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 this chapter. However, unless a contract between a health group cooperative and a health carrier specifies otherwise, 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 that 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 small employers´ 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) A health carrier that wishes to offer or issue coverage to health group cooperatives shall file with the commissioner, in accordance with subsection (b) of this section, information indicating that it is available to offer or issue 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) A filing required by subsection (a) of this section shall include:

(1) the name of the health carrier;

(2) a designation of whether or not the health carrier intends to offer or issue 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 health carrier is offering or issuing health benefit plans to health group cooperatives;

(4) if applicable, the extended service areas approved pursuant to §26.411 (relating to Service Areas for Carriers Offering Coverage Through a Health Group Cooperative), in which the health carrier is currently available to offer or issue heath health 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;

(7) the health benefit plan filed for use by the health carrier as a product available to health group cooperatives, or when appropriate pursuant to subsection (d) of this section, reference to a previously approved form, including the form number and date of approval; and

(8) any other information requested by the department.

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

(d) The form filing required by subsection (b)(7) of this section shall comply, as appropriate, with all applicable filing requirements under Chapter 3 of this title (relating to Life, Accident and Health Insurance and Annuities) or Chapter 11 of this title (relating to Health Maintenance Organizations).

(e) A health carrier that has not received approval of the health benefit plan identified in subsection (b)(7) of this section may not offer coverage to a health group cooperative.

§26.408. Issuance of Coverage to Health Group Cooperatives.

(a) Subject to the limitations identified in §26.407 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 health 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 health 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 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) standards for proof of Alzheimer´s disease as required by Insurance Code Article 3.78;

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

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

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

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

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

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

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

(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) 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);

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

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

(31) 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 (relating to Freedom of Choice: Availability of Preferred Providers).

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

(a) Unless a health carrier has identified a previously approved health benefit plan in the filing required by §26.407(b)(7) (relating to Health Carrier Designation As Health Group Cooperative), the health carrier must file for approval a health benefit plan that will be offered to a health group cooperative and shall clearly 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 HMO shall file the evidence of coverage consistent with the requirements of Subchapter F of Chapter 11 of this title (relating to Evidence of Coverage) and the department shall approve or disapprove the evidence of coverage within 20 calendar days of receipt of a complete filing.

§26.411. Service Areas for Health 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 certification, signed by an officer of the health carrier, that the health carrier intends to provide health group cooperative coverage to an expanded service area that includes the entire state. The health carrier must send the certification 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) A health carrier may apply for an expanded service area that includes less than the entire state by submitting an application for approval 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 . 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) A filing under this section does not affect any HMO service areas that have been established in accordance with Chapter 843 of the Insurance Code. An HMO may not issue coverage to a health group cooperative service area that is not also contained entirely within the HMO´s service area that has been established pursuant to 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 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) A 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 offer or issue 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 Form HGC-2, 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 the Filings Intake Division, MC 106-1E, P.O. Box 149104 , Austin , TX , 78714-9104 .



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