January 15, 1987 

Mr. Lyndon L. Olson, Jr. 

Chairman 

State Board of Insurance 

1110 San Jacinto Boulevard 

Austin. Texas 78701 

Dear Mr. Olson: 

Opinion No. m-621 

Re: Claims for loss or impairment 

of speech or hearing under article 

3.70-2(G) of the Insurance Code 

You have asked numerous questions about the construction of 

article 3.70-2(G) of the Insurance Code, which provides: 

Insurers, nonprofit hospital and medical 

service plan corporations subject to Chapter 20 of, 

this code, and health maintenance organizations 

transacting health insurance or providing other 

health coverage in this state shall offer and make 

available, under group policies, contracts, and 

plans providing ~hospital and medical coverage on 

an expense incurred. service or prepaid basis, 

benefits for the necessary care and treatment of 

loss or impairment of speech or hearing that are 

not less favorable than for physical illness 

generally, subject to the same durational limits, 

dollar limits, deductibles, and coinsurance 

factors. Such offer of benefits shall be subject 

to the right of the group policy or contract 

holder to reject the coverage or to select any 

alternative level of benefits if such right is 

offered by or negotiated with such insurer, 

service plan corporation, or health maintenance 

organization. (Emphasis added.) 

Initially, we note that the language of this provision is 

exceedingly difficult to construe in a manner that makes sense. We 

believe that the legislature should address itself to amending it in 

its next regular session. The phrase “to select any alternative level 

of benefits if such right is offered by or negotiated with such 

insurer” has given rise to difficult questions of interpretation. You 

inform us that some insurers have construed that phrase to give the 

insurer the option of providing coverage of certain speech and hearing 

disabilities and not others. Specifically, some insurers have refused 

p. 2799 
Mr. Lyndon L. Olson, Jr. - Page 2 (JM-621) 

to cover treatment for loss or impairment of speech or hearing if th,e 

loss or impairment is a birth defect or developmental problem rather 

than a condition secondary to another illness or injury. You have 

asked us to determine what is meant by the phrase "alternate level of 

benefits" in article ,3.70-2(G). 

Article 3.70-2(G) requires insurers that provide health coverage 

in Texas to offer plans providing "benefits for the necessary care and 

treatment of loss or impairment of speech or hearing that are not less 

favorable than for physical illness generally." That phrase requires 

an offer of coverage for loss or impairment of speech or hearing; it 

does not authorize an initial offer limiting coverage to certain types 

of speech or hearing problems. Therefore, the initial offer must 

include benefits for treatment of speech and hearing problems, regardless of the cause of such problems, and those benefits must be as 

favorable as benefits for physical illness generally. See Attorney 

General Opinion JM-5 (1983). Article 3.70-2(G) also allowsthe insured 

to reject coverage for speech and hearing problems altogether. What 

the statute does not make clear is whether, once the initial offer is 

rejected, the insurer may offer coverage for loss or impairment of 

speech or hearing from certain causes and not others. Although the 

meaning of the phrase is obscure, we think that because the legislature chose the phrase "alternate level of benefits" .rather than 

"alternate coverage," an insurer may not offer or issue a plan that 

covers only certain types of speech and hearing problems and not 

others. In other words, the insured and insurer may negotiate about 

dollar limits, deductibles, and other benefits, but they may not cover 

some hearing problems and exclude fr& coverage speech and hearing 

problems that stem from certain causes. 

SUMMARY 

Under article 3.70-2(G), an insurer may not 

offer or issue a plan that covers only certain 

types of speech and hearing problems and not 

others. 

JIM MATTOX 

Attorney General of Texas 

JACK HIGHTOWER 

First Assistant Attorney General 

MARY KELLER 

Executive Assistant Attorney General 

p. 2800 
Mr. Lyndon L. Olson, Jr. - Paw 3 (JM-621) 

RICK GILPIN 

Chairman. Opinion Committee 

Prepared by Tony Guillory and 

Sarah Woelk 

Assistant Attorneys General 

p. 2801