Texas Administrative Code
Title 28 - INSURANCE
Part 1 - TEXAS DEPARTMENT OF INSURANCE
Chapter 21 - TRADE PRACTICES
Subchapter FF - OBLIGATION TO CONTINUE PREMIUM PAYMENT AND COVERAGE AFTER NOTICE OF LOST GROUP ELIGIBILITY
Section 21.4003 - Group Policyholder, Group Contract Holder, and Carrier Premium Payment and Coverage Obligations
Universal Citation: 28 TX Admin Code § 21.4003
Current through Reg. 50, No. 13; March 28, 2025
(a) Liability for Premiums for Individuals Who Are No Longer Part of the Covered Group.
(1) A contract between a health carrier and a
group policyholder or group contract holder under a health benefit plan
contract must provide that:
(A) the group
policyholder or group contract holder, as described in the Insurance Code
Chapter 1251, is liable for an individual insured's or enrollee's premiums from
the time the individual is no longer part of the group eligible for coverage
under the plan until the end of the month in which the group policyholder or
group contract holder notifies the health carrier that the individual is no
longer part of the group eligible for coverage under the plan; and
(B) the individual remains covered under the
plan until the end of the period specified in subparagraph (A) of this
paragraph.
(2) If a
health carrier agrees that a group policyholder or group contract holder may
tender the notice referenced in paragraph (1)(A) of this subsection by mail,
the date the group policyholder or group contract holder tenders the notice to
the postal service is the date the group policyholder or group contract holder
notifies the health carrier. Evidence of written notifications may be
maintained in a mail log in order to provide proof of submission and establish
date of receipt.
(3) If an
individual or an enrollee ceases to be a part of the group eligible for
coverage within seven calendar days prior to the end of the month, the group
policyholder or group contract holder will be deemed to have notified the
health carrier in the month in which the individual or enrollee ceases to be
part of the group if the health carrier receives notification within the first
three days of the subsequent month, not including Saturdays, Sundays, and legal
holidays. If the notification is sent during this additional three-day
notification period, the policyholder or contract holder must transmit the
notification of an individual's loss of eligibility during the previous month
by a method:
(A) agreed upon by the group
policyholder or group contract holder and the carrier, and
(B) that provides immediate written
notification, such as an internet portal, electronic mail, or telefacsimile.
Immediate written notification sent via electronic means will be presumed
received on the date it is submitted; hand-delivered notification will be
presumed received on the date the delivery receipt is signed.
(4) A group policyholder or group
contract holder is not liable for an individual insured's or an enrollee's
premiums, and a health carrier is not obligated to continue coverage, under
subsection (a) of this section if a group policyholder or group contract holder
notifies a health carrier that an individual will no longer be part of the
group eligible for coverage at least 30 days prior to the date the individual
will no longer be part of the group eligible for coverage.
(5) A group policyholder or group contract
holder is not liable for an individual insured's or an enrollee's premiums, and
a health carrier is not obligated to continue coverage, under subsection (a) of
this section if the individual elects to terminate coverage under the plan and
obtains coverage under a successor health benefit plan that takes effect at any
time after termination of group eligibility and before the end of the coverage
and premium payment period required by the Insurance Code §
843.210 and §
1301.0061 and
subsection (a) of this section. A health carrier may require a group
policyholder or group contract holder seeking to avoid payment of additional
premium for an individual no longer part of the group eligible for coverage to
verify the successor coverage and to agree to be responsible for payment of
premium if the individual's successor health benefit plan does not cover the
individual from the termination of the health carrier's coverage until the end
of the month in which the group policyholder or group contract holder notifies
the health carrier that the individual is no longer part of the group eligible
for coverage. In addition, the group policyholder or group contract holder and
the health carrier remain responsible for compliance with the Insurance Code
§
843.210 and §
1301.0061 if the
individual's successor health benefit plan does not cover the individual from
the termination of the health carrier's coverage until the end of the month in
which the group policyholder or group contract holder notifies the health
carrier that the individual is no longer part of the group eligible for
coverage.
(6) A group policyholder
or group contract holder is not liable for an individual insured's or an
enrollee's premiums, and a health carrier is not obligated to continue
coverage, under subsection (a) of this section under coverage a health carrier
extends to an individual in compliance with
29
U.S.C. §1161 et seq. (COBRA), the
Insurance Code Chapter 1251 Subchapter F, or any other federal or state
continuation of coverage requirement that allows an individual insured or
enrollee, upon termination of eligibility from a group, to pay premium and
extend the period of group health benefit plan coverage after the individual
has left employment or otherwise no longer qualifies as a member of the
group.
(7) A group policyholder or
group contract holder is not liable for an individual insured's or an
enrollee's premiums, and a health carrier is not obligated to continue
coverage, under subsection (a) of this section if a group policyholder or group
contract holder does not contribute to the payment of any individual insured's
or enrollee's premium.
(8) A group
policyholder or group contract holder is not liable for an individual insured's
or an enrollee's premiums, and a health carrier is not obligated to continue
coverage, under subsection (a) of this section in the event of the individual
insured's or enrollee's death after the later of the date of the individual
insured's or enrollee's:
(A) death;
or
(B) receipt of the last covered
service under the plan.
(b) Notice of Liability for Premiums for Individuals Who Are No Longer Part of the Covered Group.
(1) A health carrier that enters into or
renews a health benefit plan contract with a group policyholder or group
contract holder shall provide written notice to the group policyholder or group
contract holder that the group policyholder or group contract holder is liable
for premiums for an individual who is no longer part of the group until the
health carrier receives notification of termination of the individual's
eligibility for coverage as follows:
(A) as
required by the Insurance Code §
843.210(c)
and §
1301.0061(c),
if the health carrier charges the group policyholder or group contract holder
on a monthly basis for premiums, the health carrier shall provide the notice in
each monthly statement sent to the group policyholder or group contract
holder;
(B) if the health carrier
charges the group policyholder or group contract holder on other than a monthly
basis for premiums, the health carrier shall provide the written notice at
inception or renewal of the policy or contract, as applicable, and, thereafter,
at the time of each billing, and
(C) as required by the Insurance Code §
843.210(d)
and §
1301.0061(d),
the notice required under subparagraphs (A) and (B) of this paragraph must
include a description of methods preferred by the health carrier for
notification by a group policyholder or group contract holder of an
individual's termination from coverage eligibility.
(2) Notwithstanding the requirements of
paragraph (1) of this subsection, a health carrier is not required to send
notice of group policyholder or contract holder liability for premiums more
often than monthly.
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