1. (a) In connection with offering a small employer health benefit plan for sale, each small employer health benefit plan issuer and agent shall make a reasonable disclosure, as part of its solicitation and sales materials, of:

   1. (1) the extent to which premium rates for a specific small employer are established or adjusted based on the actual or expected variation in:

      1. (A) claim costs; or
      2. (B) health status of the employer's employees and their dependents;
   2. (2) provisions concerning the issuer's right to change premium rates and factors other than claims experience that affect changes in premium rates;
   3. (3) provisions relating to renewability of policies and contracts; and
   4. (4) any preexisting condition provisions.
2. (b) On request by a small employer, each small employer health benefit plan issuer shall disclose the benefits and premiums available under all small employer coverage for which the employer is qualified.
3. (c) A small employer health benefit plan issuer is not required to disclose information to a small employer that is proprietary or trade secret information under applicable law.

4. (d) Information provided under this section to a small employer must be provided in a manner that is:

   1. (1) understandable by the average small employer; and
   2. (2) sufficient to reasonably inform a small employer of its rights and obligations under a small employer health benefit plan.

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