| (a) A small employer carrier that offers coverage to
a small employer and its employees must offer coverage to each eligible
employee and to each dependent of an eligible employee. Except as
provided in subsection (b) of this section, the small employer carrier
must provide the same health benefit plan to each employee or dependent
eligible for coverage.
(b) If elected by the small employer, a small employer
carrier may offer one or more health benefit plans, provided that
each eligible employee may choose any of the plans offered. Except
as provided in Insurance Code Chapter 1501 (concerning Health Insurance
Portability and Availability Act) with respect to an affiliation period
or exclusions for preexisting conditions, the choice among benefit
plans may not be limited, restricted, or conditioned based on the
risk characteristics of each employee or dependent eligible for coverage.
(c) A small employer carrier may require each small
employer that applies for coverage, as part of the application process,
to provide a complete list of employees, eligible employees, and dependents
of eligible employees. The small employer carrier may also require
the small employer to provide reasonable and appropriate supporting
documentation to verify the information required under this subsection,
and to confirm the applicant's status as a small employer. The small
employer carrier must make a determination of eligibility within five
business days of receipt of any requested documentation. A small employer
carrier may not condition the issuance of coverage on an employer's
production of a particular document, where the employer can otherwise
provide the information required by this section. Similarly, if a
particular document an employer produces does not reasonably evidence
the employer's compliance with this subsection, the employer must
produce other documentation to satisfy the requirements. Examples
of the types of reasonable and appropriate supporting documentation
that a small employer carrier may request from an employer as needed
to fulfill the purposes of this subsection are:
(1) a W-2 Summary Wage and Tax Form or other federal
or state tax records;
(2) a loan agreement;
(3) an invoice;
(4) a business check;
(5) a sales tax license;
(6) articles of incorporation or other business entity
filings with the secretary of state;
(7) assumed name filings;
(8) professional licenses; and
(9) reports required by the Texas Workforce Commission.
(d) A small employer carrier may not deny two individuals
who are married the status of eligible employee solely on the basis
that the two individuals are married. The small employer carrier must
provide a reasonable opportunity for the individuals to submit evidence
as provided in subsection (c) of this section to establish each individual's
status as an eligible employee.
(1) A small employer carrier must provide married eligible
employees of the same employer the option to have one spouse be treated
under a small employer health benefit plan as an employee, and the
other spouse treated as an employee or alternatively as the dependent
of the other employee.
(2) A child of either of the two individuals may only
be covered under the same small employer health benefit plan as a
dependent by one of the two individuals.
(3) An election by a spouse to be treated as a dependent
under this subsection does not impact the individual's status as an
eligible employee for any other purpose under Insurance Code Chapter
1501, except that the individual may be treated as a dependent for
purposes of employer premium contributions.
(e) A small employer carrier must secure a waiver with
respect to each eligible employee and each dependent of the eligible
employee who declines an offer of coverage under a health benefit
plan provided to a small employer. If a small employer elects to offer
coverage through more than one small employer carrier, waivers are
only required to be signed if the individual is declining all offered
plans. The small employer carriers may enter into an agreement designating
which small employer carrier will receive and retain the waiver. Waivers
must be maintained by the small employer carrier for a period of six
years. The waiver must be signed by the employee (on behalf of the
employee or dependent) and must certify that the individual who declined
coverage was informed of the availability of coverage under the health
benefit plan. Receipt by the small employer carrier of a facsimile
transmission of the waiver is permissible, provided that the transmission
includes a representation from the small employer that the employer
will maintain the original waiver on file for a period of six years
from the date of the facsimile transmission. The waiver form must:
(1) require that the reason for declining coverage
be stated on the form;
(2) include a written warning of the penalties imposed
on late enrollees; and
(3) include a statement that the employee and dependents
were not induced or pressured by the small employer, agent, or health
carrier into declining coverage, but elected of their own accord to
decline the coverage.
(f) An agent must notify a small employer carrier,
before submitting an application for coverage with the health carrier
on behalf of a small employer or employee of a small employer, of
any circumstances that would indicate that the small employer has
induced or pressured the employee or dependent to decline coverage
due to the individual's risk characteristics.
(g) New entrants in a health benefit plan issued to
a small employer group must be offered an opportunity to enroll in
the health benefit plan currently held by the employer group or be
offered an opportunity to enroll in the health benefit plan if the
plan is provided through an individual franchise insurance policy,
or if more than one plan is available. If a small employer carrier
has offered more than one health benefit plan to eligible employees
of a small employer group under subsection (b) of this section, the
new entrant must be offered the same choice of health benefit plans
as the other employees (members) in the group. A new entrant who does
not exercise the opportunity to enroll in the health benefit plan
within the period provided by the small employer carrier may be treated
as a late enrollee by the health carrier, provided that the period
provided to enroll in the health benefit plan complies with subsection
(h) of this section.
(h) Periods provided for enrollment in and application
for any health benefit plan provided to a small employer group must
comply with the following:
(1) the initial enrollment period must extend at least
31 consecutive days after the date the new entrant begins employment
or, if the waiting period exceeds 31 days, at least 31 consecutive
days after the date the new entrant completes the waiting period for
coverage;
(2) the new entrant must be notified of his or her
opportunity to enroll at least 31 days in advance of the last date
enrollment is permitted;
(3) the new entrant's application for coverage will
be considered timely if the application is submitted within the initial
enrollment period:
(A) in person;
(B) by mail, postmarked by the end of the specified
period; or
(C) in an alternative method normally accepted by the
small employer carrier, including facsimile transmission (fax), email,
or web-based application; and
(4) the small employer carrier must provide an open
enrollment period of at least 31 consecutive days on an annual basis.
(i) A small employer may establish a waiting period
in accordance with Insurance Code §1501.156 (concerning Employee
Enrollment; Waiting Period) that must not exceed 90 days. A small
employer carrier may not apply a waiting period, elimination period,
or other similar limitation of coverage, other than an exclusion for
preexisting medical conditions or affiliation period consistent with
Insurance Code §1501.102 (concerning Preexisting Condition Provision)
and §1501.104 (concerning Affiliation Period), with respect to
a new entrant, that is longer than the waiting period established
by the small employer.
(j) New entrants in a health plan issued to a small
employer group must be accepted for coverage by the small employer
carrier without any restrictions or limitations on coverage related
to the risk characteristics of the employees or their dependents,
except that a health carrier may exclude coverage for preexisting
medical conditions or impose an affiliation period, to the extent
allowed under Insurance Code Chapter 1501.
(k) A small employer carrier may assess a risk load
to the premium rate associated with a new entrant, consistent with
the requirements of Insurance Code Chapter 1501, Subchapter E (concerning
Underwriting and Rating of Small Employer Health Benefit Plans) and
this chapter. The risk load must be the same risk load charged to
the small employer group immediately before acceptance of the new
entrant into the group.
|
| Source Note: The provisions of this §26.7 adopted to be effective December 30, 1993, 18 TexReg 9375; amended 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 December 6, 2010, 35 TexReg 10768; amended to be effective May 17, 2017, 42 TexReg 2539 |
