Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 26 - EMPLOYER-RELATED HEALTH BENEFIT PLAN REGULATIONS › Subchapter C - LARGE EMPLOYER HEALTH INSURANCE REGULATIONS › Section 26.306 - Exclusions, Limitations, Waiting Periods, Affiliation Periods, Preexisting Conditions, and Restrictive Riders

Current through Reg. 49, No. 28; July 12, 2024
(a) A
				  large employer carrier may not exclude any eligible employee who meets the
				  participation criteria or an eligible dependent, if dependent coverage is
				  offered to enrollees under a large employer health benefit plan (including a
				  late enrollee, who would otherwise be covered under a large employer's health
				  benefit plan), except to the extent permitted under Insurance Code §§
										1501.102
				  -
				  1501.106
				  (concerning Preexisting Condition Provision; Treatment of Certain Conditions as
				  Preexisting Prohibited; Affiliation Period; Waiting Period Permitted; and
				  Certain Limitations or Exclusions of Coverage Prohibited) and 1501.601 -
				  1501.609 (concerning Participation Criteria; Coverage Requirements; Exclusion
				  of Eligible Employee or Dependent Prohibited; Declining Coverage; Minimum
				  Contribution or Participation Requirements; Employee Enrollment; Waiting
				  Period; Coverage for Newborn Children; Coverage for Adopted Children; and
				  Coverage for Unmarried Children).
(b) A preexisting condition provision in a
				  large employer health benefit plan may not apply to expenses incurred on or
				  after the expiration of the 12 months following the effective date of coverage
				  of the enrollee or late enrollee, except as authorized by subsection (h)(2) of
				  this section.
(c) A preexisting
				  condition provision in a large employer health benefit plan may not apply to
				  coverage for a disease or condition other than a disease or condition for which
				  medical advice, diagnosis, care, or treatment was recommended or received from
				  an individual licensed to provide those services under state law and operating
				  within the scope of practice authorized by state law during the six months
				  before the effective date of coverage.
(d) A large employer carrier may not treat
				  genetic information as a preexisting condition described by Insurance Code
				  §
										1501.102
				  in the absence of a diagnosis of the condition related to the
				  information.
(e) A large employer
				  carrier may not treat a pregnancy as a preexisting condition described by
				  Insurance Code §
										1501.102.
(f) A preexisting condition provision in a
				  large employer health benefit plan may not apply to an individual who was
				  continuously covered for an aggregate period of 12 months under creditable
				  coverage that was in effect up to a date not more than 63 days before the
				  effective date of coverage under the large employer health benefit plan,
				  excluding any waiting or affiliation period. For example, Individual A has
				  coverage under an individual policy for six months beginning on May 1, 2014,
				  through October 31, 2014, followed by a gap in coverage of 61 days until
				  December 31, 2014. Individual A is covered under an individual health plan
				  beginning on January 1, 2015, for six months through June 30, 2015, followed by
				  a gap in coverage of 62 days until August 31, 2015. The effective date of
				  Individual A's coverage under a large employer health benefit plan is September
				  1, 2015. Individual A has 12 months of creditable coverage and would not be
				  subject to a preexisting condition exclusion under the large employer health
				  benefit plan.
(g) In determining
				  whether a preexisting condition provision applies to an individual covered by a
				  large employer benefit plan, the large employer carrier must credit the time
				  the individual was covered under previous creditable coverage if the previous
				  coverage was in effect at any time during the 12 months preceding the effective
				  date of coverage under a large employer health benefit plan. If the previous
				  coverage was issued under a health benefit plan, any waiting or affiliation
				  period that applied before that coverage became effective also must be credited
				  against the preexisting condition provision period. For instance, Individual B
				  is covered under an individual health insurance policy for 18 months beginning
				  May 1, 2014, through November 30, 2015, followed by a four-month gap in
				  coverage from December 1, 2015, to March 31, 2016. On April 1, 2016, Individual
				  B is covered under a group health plan for three months through June 30, 2016,
				  followed by a two-month gap in coverage until August 31, 2016. The effective
				  date of Individual B's coverage under a large employer health insurance policy
				  is September 1, 2016. Under this example, since there was a significant break
				  in coverage, to determine the length of creditable coverage, the large employer
				  carrier counts the creditable coverage the individual had for the 12-month
				  period preceding the effective date of the individual's coverage under the
				  large employer plan. Individual B has creditable coverage of six months and the
				  issuer of the large employer health benefit plan may impose a preexisting
				  condition limitation for six months on Individual B.
(h) A large employer carrier must choose one
				  of the methods set forth in paragraph (1) or (2) of this subsection for
				  handling requests for enrollment from a late applicant in any health benefit
				  plan subject to this subchapter. The large employer carrier must use the same
				  method in regard to all health benefit plans.
(1) The employee or dependent may be excluded
				  from coverage and any application for coverage rejected until the next annual
				  open enrollment period and, on enrollment, may be subject to a 12-month
				  preexisting condition provision or, in the case of an HMO, may be subject to a
				  60-day affiliation provision, as described by Insurance Code §§
											1501.102
				  -
				  1501.104.
(2) The employee or dependent's application
				  may be accepted immediately and the employee or dependent enrolled as a late
				  enrollee during the plan year, in which case the preexisting condition
				  provision imposed for a late enrollee may not exceed 18 months or, in the case
				  of an HMO, the affiliation period may not exceed 90 days, from the date of the
				  late enrollee's application for coverage.
(3) The provisions of paragraphs (1) and (2)
				  of this subsection do not apply to employees or dependents under the special
				  circumstances listed as exceptions under the definition of late enrollee in
				  §
											26.4 of
				  this title (relating to Definitions).
(4) Examples for applying subparagraphs (A)
				  and (B) of this paragraph, in the case of both insurers and HMOs: Individual A
				  requests coverage on October 1, 2014, after the enrollment period of July 1,
				  2014, through July 31, 2014, has ended. The next annual open enrollment period
				  is July 1, 2015, through July 31, 2015. The effective date of coverage for
				  persons enrolling during an open enrollment period is the beginning of the plan
				  year, which is September 1 of each year.
(A)
				  If the carrier is an insurer and has elected to exclude all applicants
				  requesting late enrollment under health benefit plans subject to this
				  subchapter until the next open enrollment period, Individual A must reapply for
				  coverage in July 2015, and the carrier may apply up to a 12-month preexisting
				  condition period from the effective date of coverage and, as with any other
				  enrollee, the preexisting condition period would begin on September 1, 2015,
				  and expire on September 1, 2016.
(B) If the carrier is an insurer and has
				  elected to immediately accept applications for late enrollment under health
				  benefit plans subject to this subchapter and enroll the applicant during the
				  plan year, the carrier may apply up to an 18-month preexisting condition period
				  from the date of application. If Individual A applied for coverage on October
				  1, 2014, the preexisting condition period would begin on that date and would
				  expire on April 1, 2016.
(C) If the
				  carrier is an HMO and has elected to exclude all applicants requesting late
				  enrollment under health benefit plans subject to this subchapter until the next
				  open enrollment period, Individual A must reapply for coverage in July 2015,
				  and the carrier may apply up to a 60-day affiliation period, as with any other
				  enrollee.
(D) If the carrier is an
				  HMO and has elected to immediately accept applications for late enrollment
				  under health benefit plans subject to this subchapter and enroll the applicant
				  during the plan year, the carrier may apply up to a 90-day affiliation period
				  from the day Individual A applied for coverage.