CHAPTER 1253. CANCELLATION OF GROUP COVERAGE IN CERTAIN CIRCUMSTANCES

State Codes and Statutes

Statutes > Texas > Insurance-code > Title-8-health-insurance-and-other-health-coverages > Chapter-1253-cancellation-of-group-coverage-in-certain-circumstances

INSURANCE CODE

TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES

SUBTITLE B. GROUP HEALTH COVERAGE

CHAPTER 1253. CANCELLATION OF GROUP COVERAGE IN CERTAIN

CIRCUMSTANCES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1253.001. LIMITATION OF SERVICES AND BENEFITS ON CONTRACT

RENEGOTIATION. (a) In this section, "health benefit contract"

means a contract providing group health care coverage for

employees that is delivered, issued for delivery, or renewed in

this state by:

(1) an insurance company;

(2) a group hospital service corporation operating under Chapter

842; or

(3) a health maintenance organization operating under Chapter

843.

(b) Subject to Subsection (c), if an employer in this state

agrees to renegotiate a health benefit contract, a change in the

renegotiated contract may not operate solely to terminate

eligibility with respect to any member of the group who, before

the contract was renegotiated:

(1) was covered under the contract; and

(2) had a sickness or injury for which a service was being

provided or a benefit was being paid under the contract.

different durational or dollar limit or a different deductible

amount or amount of coinsurance applicable to a sickness or

injury for which a service was being provided or benefit was

being paid before the contract was renegotiated if that same or a

similar limit or amount applies to a service provided or benefit

paid for a similar sickness or a related condition or injury

covered by the contract.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

SUBCHAPTER B. CONTINUATION OF GROUP ACCIDENT AND HEALTH INSURANCE

POLICIES DURING LABOR DISPUTE

Sec. 1253.051. APPLICABILITY OF SUBCHAPTER. This subchapter

applies to a group accident and health insurance policy that is

delivered or issued for delivery in this state and as to which

any part of the premium is paid or is to be paid by an employer

under the terms of a collective bargaining agreement.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1253.052. CONTINUATION OF GROUP ACCIDENT AND HEALTH

INSURANCE DURING LABOR DISPUTE REQUIRED FOR CERTAIN POLICIES. An

insurer may not deliver or issue for delivery a policy subject to

this subchapter unless the policy provides that if the employees

covered by the policy stop work because of a labor dispute,

coverage continues under the policy, on timely payment of the

premium, for each employee who:

(1) is covered under the policy on the date the work stoppage

begins;

(2) continues to pay the employee's individual contribution,

subject to the conditions provided by this subchapter; and

(3) assumes and pays during the work stoppage the contribution

due from the employer, subject to the conditions provided by this

subchapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1253.053. CONTRIBUTIONS IF POLICYHOLDER IS TRUSTEE. (a)

An employee's contribution for purposes of a policy as to which

the policyholder is a trustee or the trustees of a fund

established or maintained wholly or partly by the employer is the

amount the employee and employer would have been required to

contribute to the fund for the employee if:

(1) the work stoppage had not occurred; and

(2) the agreement requiring the employer to make contributions

to the fund were in effect.

(b) The policy may provide that continuation of coverage is

contingent on the collection of individual contributions by the

policyholder or the policyholder's agent.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1253.054. CONTRIBUTIONS IF POLICYHOLDER IS NOT TRUSTEE.

(a) A policy as to which the policyholder is not a trustee or

the trustees of a fund established or maintained in whole or in

part by the employer must provide that the employee's individual

contribution:

(1) is the policy rate applicable:

(A) on the date the work stoppage begins; and

(B) to an individual in the class to which the employee belongs

as provided by the policy; or

(2) if the policy does not provide for a rate applicable to an

individual, is an amount equal to the amount determined by

dividing:

(A) the total monthly premium in effect under the policy on the

date the work stoppage begins; by

(B) the total number of insureds under the policy on that date.

(b) The policy may provide that continuation of coverage under

this subchapter is contingent on the collection of individual

contributions by the union or unions representing the employees.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1253.055. PAYMENT OF CONTRIBUTION AND PREMIUM. A policy

may provide that continuation of coverage for an employee under

the policy is contingent on timely payment of:

(1) contributions by the employee; and

(2) the premium by the entity responsible for collecting the

individual employee contributions.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1253.056. PAST DUE PREMIUM. (a) A policy may provide that

the continuation of coverage is contingent on payment of any

premium that:

(1) is unpaid on the date the work stoppage begins; and

(2) became due before the date the work stoppage begins.

(b) A premium described by Subsection (a) must be paid before

the date the next premium becomes due under the policy.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1253.057. INDIVIDUAL PREMIUM RATE INCREASE. (a) A policy

may provide that, during the period of a work stoppage, each

individual premium rate shall be increased by an amount not to

exceed 20 percent of the amount shown in the policy, or a greater

percentage as approved by the commissioner, to provide sufficient

compensation to the insurer to cover increased:

(1) administrative costs; and

(2) mortality and morbidity.

(b) If a policy provides for a premium rate increase in

accordance with this section, the amount of an employee's

contribution must be increased by the same percentage.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1253.058. PREMIUM RATE CHANGE NOT LIMITED. (a) This

subchapter does not limit any right of the insurer under a policy

to increase or decrease a premium rate before, during, or after a

work stoppage if the insurer would be entitled to increase the

premium rate had a work stoppage not occurred.

(b) A change in a premium rate made in accordance with this

section takes effect on a date that is determined by the insurer

in accordance with the terms of the policy.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1253.059. LIMITATIONS ON CONTINUATION OF COVERAGE. This

subchapter does not require the continuation of coverage under a

policy for any loss of time benefits included in the policy or

the continuation of other coverage for a period:

(1) longer than six months after a work stoppage occurs;

(2) beyond the time that 75 percent of the covered employees

continue the coverage; or

(3) as to an individual covered employee, beyond the time that

the employee takes a full-time job with another employer.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1253.060. OTHER PROVISIONS; COMMISSIONER APPROVAL REQUIRED.

A policy may contain any other provision relating to

continuation of policy coverage during a work stoppage that the

commissioner approves.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

Loading..

Loading, Please Wait!