1. (a) In this section, "affiliation period" means a period that, under a small or large employer health benefit plan offered by a health maintenance organization, must expire before the coverage becomes effective.

2. (b) A health maintenance organization may impose an affiliation period if the period is applied uniformly without regard to any health status related factor. The affiliation period may not exceed:

   1. (1) two months for an enrollee, other than a late enrollee; or
   2. (2) 90 days for a late enrollee.
3. (c) An affiliation period under a small or large employer health benefit plan must run concurrently with any applicable waiting period under the plan. A health maintenance organization must credit an affiliation period against any preexisting condition provision period.

4. (d) During an affiliation period, a health maintenance organization:

   1. (1) is not required to provide health care services or benefits to the participant or beneficiary; and
   2. (2) may not charge a premium to the participant or beneficiary.
5. (e) A health maintenance organization may use an alternative method approved by the commissioner to address adverse selection.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.