| (a) The applicable terms defined in §26.4 of this
title (relating to Definitions) are incorporated into this subchapter.
(b) Insurance Code Chapter 1501, concerning the Health
Insurance Portability and Availability Act, and this subchapter regulate
all health benefit plans sold to large employers, whether the plans
are sold directly or through associations or other groupings of large
employers.
(c) Except as otherwise provided, this subchapter applies
to any health benefit plan providing health care benefits covering
51 or more employees of a large employer, whether provided on a group
or individual franchise insurance policy basis, regardless of whether
the policy was issued in this state, if it provides coverage to any
citizen or inhabitant of this state and if the plan meets one of the
following conditions:
(1) A portion of the premium or benefits is paid by
a large employer.
(2) The health benefit plan is treated by the employer
or by a covered individual as part of a plan or program for the purposes
of the United States Internal Revenue Code of 1986 (26 U.S.C. §106,
concerning Contributions by Employer to Accident and Health Plans,
or §162, concerning Trade or Business Expenses).
(3) The health benefit plan is a group policy issued
to a large employer.
(4) The health benefit plan is an employee welfare
benefit plan under 29 C.F.R. §2510.3-1 (concerning Employee Welfare
Benefit Plan).
(d) For an employer that was not in existence the previous
calendar year, the determination is based on the average number of
employees the employer reasonably expects to employ on business days
in the calendar year in which the determination is made.
(e) If a large employer or the employees of a large
employer are issued a health benefit plan under the provisions of
Insurance Code Chapter 1501 and this subchapter, and the large employer
subsequently employs fewer than 51 employees, the provisions of Insurance
Code Chapter 1501 and this subchapter continue to apply to that particular
health plan if the employer elects to renew the large employer health
benefit plan subject to the provisions of §26.308 of this title
(relating to Renewability of Coverage and Cancellation). A health
carrier providing coverage to an employer must, within 60 days of
becoming aware that the employer has fewer than 51 employees, but
not later than the first renewal date occurring after the employer
ceases to be a large employer, notify the employer of the following:
(1) The employer may renew the large employer policy.
(2) If the employer does not renew the large employer
health benefit plan, the employer will be subject to the requirements
of Insurance Code Chapter 1501 that apply to small employers, and
Chapter 26, Subchapter A, of this title (relating to Definitions,
Severability, and Small Employer Health Regulations), including:
(A) guaranteed issue;
(B) rating protections; and
(C) minimum participation, contribution, and minimum
group size requirements.
(3) The employer has the option to purchase a small
employer health benefit plan from the employer's current health carrier
if the carrier is offering small employer coverage or from any small
employer carrier currently offering small employer coverage in this
state.
(4) If the employer fails to comply with the qualifying
minimum participation, contribution, or group size requirements of §26.303
of this title (relating to Coverage Requirements) and Insurance Code §1501.605
(concerning Minimum Contribution or Participation Requirements), the
health carrier may terminate coverage under the plan, provided that
the termination complies with the terms and conditions of the plan
concerning termination for failure to meet the qualifying minimum
participation, contribution, or minimum group size requirement and
in accordance with Insurance Code §§1501.108 - 1501.111
(concerning Renewability of Coverage: Cancellation; Refusal to Renew:
Discontinuation of Coverage; Notice to Covered Persons; and Written
Statement of Denial, Cancellation, or Refusal to Renew Required, respectively)
and §26.308 of this title.
(f) If a health benefit plan is issued to an employer
that is not a large employer, but subsequently the employer becomes
a large employer, the provisions of Insurance Code Chapter 1501 and
this subchapter apply to the health benefit plan on the first renewal
date, unless the employer was a small employer and renews its current
health benefit plan as provided under §26.5(e) of this title
(relating to Applicability and Scope).
(g) An employer group or association that is a bona
fide employer association under this subsection is a single large
employer for purposes of this subchapter and Insurance Code Chapter
1501.
(1) An employer group or association is a bona fide
employer association if:
(A) the employer group or association has a formal
organizational structure with a governing body and has bylaws or other
similar indications of formality;
(B) the functions and activities of the employer group
or association are controlled by its member employers;
(C) the employer group or association has at least
one substantial business purpose unrelated to offering and providing
health coverage or other employee benefits to its member employers
and their employees;
(D) the member employers of the group or association
are in the same trade, industry, line of business, or profession;
(E) the member employers that participate in the group
health plan control the plan in form and in substance;
(F) each member employer participating in the group
health plan is a person acting directly as an employer of at least
one eligible employee who is a participant covered under the plan;
(G) the employer group or association does not make
health coverage through the group health plan available to individuals
other than:
(i) an eligible employee of a current member employer;
(ii) a former employee of a current member employer
who became eligible for coverage under the group health plan when
the former employee was an employee of the employer;
(iii) a current member employer; or
(iv) a dependent of an individual described in clause
(i), (ii), or (iii) of this subparagraph (for example, spouses and
dependent children); and
(H) the employer group or association is not a health
insurance issuer, or owned or controlled by a health insurance issuer
or by a subsidiary or affiliate of a health insurance issuer, other
than if and to the extent such entities participate in an employer
group or association in their capacity as member employers of the
employer group or association. For purposes of this subparagraph,
control is the power to direct, or cause the direction of, the management
and policies of a person, other than power that results from an official
position with or corporate office held by the person. The power may
be possessed directly or indirectly by any means, including through
the ownership of voting securities or by contract, other than a commercial
contract for goods or nonmanagement services.
(2) An issuer wanting to issue coverage to an employer
group or association seeking designation as a bona fide employer association
under this subsection must submit to TDI an association filing and
any supporting documents establishing that the group or association
meets the requirements of this subsection. The filing must be made
as provided in Chapter 3, Subchapter A, of this title (relating to
Submission Requirements for Filings and Departmental Actions). The
department will review the filing and all supporting documents and
will determine whether to approve or disapprove the employer group's
or association's eligibility as a bona fide employer association.
The filing must include either:
(A) an advisory opinion from the U.S. Department of
Labor recognizing the employer group or association as a bona fide
employer association that is no more than three years old; or
(B) an opinion from an attorney attesting to the fact
that the employer group or association qualifies as a bona fide employer
association under paragraph (1) of this subsection. An attorney attestation
must adequately explain how and why the employer group or association
meets all of the criteria, based on the facts and circumstances of
the employer group's or association's governance and operations during
the 12 months immediately preceding submission of the application,
with explicit references to relevant language drawn from the employer
group's or association's bylaws, trust agreement, or other organizational
documents, which must be submitted to the department with the attorney's
attestation.
(3) For purposes of paragraph (1)(C) of this subsection,
the employer group or association will be treated as having a substantial
business interest unrelated to the provision of benefits under the
plan if:
Cont'd... |
