| (a) Except as provided by Insurance Code §1501.109
(concerning Refusal to Renew; Discontinuation of Coverage), a small
employer carrier must renew any small employer health benefit plan
at the option of the small employer, unless:
(1) the premium has not been paid as required by the
terms of the plan;
(2) the small employer has committed fraud or intentional
misrepresentation of a material fact. An intentional misrepresentation
of a material fact does not include any misrepresentation related
to health status;
(3) the small employer has not complied with a material
provision of the health benefit plan relating to premium contribution,
group size, or minimum participation requirements;
(4) the small employer has no enrollee, in connection
with the plan, who resides or works in the service area of the small
employer carrier or in the area where the small employer carrier is
authorized to do business; or
(5) membership of an employer in an association terminates,
but only if coverage is terminated uniformly without regard to a health-status-related
factor of a covered individual.
(b) A small employer carrier may refuse to renew the
coverage of an eligible employee or dependent for fraud or intentional
misrepresentation of a material fact by that individual and with respect
to an eligible employee or dependent who is a subscriber or enrollee
in an HMO, for the reasons specified in §11.506 of this title
(relating to Mandatory Contractual Provisions: Group, Individual and
Conversion Agreement and Group Certificate). The coverage is also
subject to any policy or contractual provisions relating to incontestability
or time limits on certain defenses. An intentional misrepresentation
of a material fact does not include any misrepresentation related
to health status.
(c) A small employer carrier may not cancel a small
employer health benefit plan except for the reasons specified for
refusal to renew under Insurance Code §1501.108 (concerning Renewability
of Coverage; Cancellation), and subsections (a) and (b) of this section.
A small employer carrier may not cancel the coverage of an eligible
employee or dependent except for the reasons specified for refusal
to renew under Insurance Code §1501.108 and subsections (a) and
(b) of this section.
(d) A carrier is not prevented from seeking any legal
remedies against a person who fraudulently misrepresents health status
during the initial application for coverage. Legal remedies available
to a carrier do not include cancellation or nonrenewal.
(e) Other small employer health benefit plans, provided
through individual policies, must be guaranteed renewable for life
or until maximum benefits have been paid, or may be guaranteed renewable
with the only reasons for termination being those set out in Insurance
Code §1501.108 and §1501.109 and this subchapter. All other
health benefit plans issued to small employers must be renewed at
the option of the small employer, but may provide for termination
in accordance with Insurance Code Chapter 1501 (concerning Health
Insurance Portability and Availability Act), and this subchapter.
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| Source Note: The provisions of this §26.15 adopted to be effective April 9, 1996, 21 TexReg 2648; amended to be effective March 5, 1998, 23 TexReg 2297; amended to be effective April 6, 2005, 30 TexReg 1931; amended to be effective May 17, 2017, 42 TexReg 2539 |
