Each enrollee residing in this state is entitled to an evidence of coverage under a health care plan. By agreement between the issuer of the evidence of coverage and the enrollee, the evidence of coverage approved under this subchapter and required by this section may be delivered electronically. Each group, individual, and conversion contract and group certificate must contain the following provisions:

1. (1) Name, address, and phone number of the HMO--The toll-free number referred to in Insurance Code §521.102, where applicable, must appear on the face page.

   1. (A) The face page of an agreement is the first page that contains any written material.
   2. (B) If the agreements or certificates are in booklet form the first page inside the cover is considered the face page.
   3. (C) The HMO must provide the information regarding the toll-free number referred to in Insurance Code Chapter 521, Subchapter C, in compliance with §1.601 of this title.

2. (2) Benefits--A schedule of all health care services that are available to enrollees under the basic, limited, or single health care service plan, including any copayments or deductibles and a description of where and how to obtain services. An HMO may use a variable copayment or deductible schedule. The copayment schedule must clearly indicate the benefit to which it applies.

   1. (A) Copayments. An HMO may require copayments to supplement payment for health care services. Each basic service HMO may establish one or more reasonable copayment options. A reasonable copayment option may not exceed 50 percent of the total cost of services provided. A basic service HMO may not impose copayment charges on any enrollee in any calendar year, when the copayments made by the enrollee in that calendar year total 200 percent of the total annual premium cost which is required to be paid by or on behalf of that enrollee. This limitation applies only if the enrollee demonstrates that copayments in that amount have been paid in that year. The HMO must state the copayment in the group, individual or conversion agreement and group certificate.
   2. (B) Deductibles. A deductible must be for a specific dollar amount of the cost of the basic, limited, or single health care service. An HMO may charge a deductible only for services performed out of the HMO's service area or for services performed by a physician or provider who is not in the HMO's delivery network.
   3. (C) Immunizations. An HMO may not charge a copayment or deductible for immunizations as described in Insurance Code Chapter 1367, Subchapter B for a child from birth through the date the child is six years of age, except that a small employer health benefit plan, as defined by Insurance Code §1501.002, that covers such immunizations may charge a copayment or deductible.

3. (3) Cancellation and nonrenewal--A statement specifying the following grounds for cancellation and nonrenewal of coverage and the minimum notice period that will apply.

   1. (A) An HMO may cancel a subscriber in a group and subscriber's enrolled dependents under circumstances described in clauses (i) - (vii) of this subparagraph, so long as the circumstances do not include health status related factors:

      1. (i) For nonpayment of amounts due under the contract, coverage may be canceled after not less than 30 days written notice, except no written notice will be required for failure to pay premium.
      2. (ii) In the case of fraud or intentional misrepresentation of a material fact, except as described in paragraph (13) of this section, coverage may be canceled after not less than 15 days written notice.
      3. (iii) In the case of fraud in the use of services or facilities, coverage may be canceled after not less than 15 days' written notice.
      4. (iv) For failure to meet eligibility requirements other than the requirement that the subscriber reside, live, or work in the service area, coverage may be canceled immediately, subject to continuation of coverage and conversion privilege provisions, if applicable.
      5. (v) In the case of misconduct detrimental to safe plan operations and the delivery of services, coverage may be canceled immediately.
      6. (vi) For failure of the enrollee and a plan physician to establish a satisfactory patient-physician relationship if it is shown that the HMO has, in good faith, provided the enrollee with the opportunity to select an alternative plan physician, the enrollee is notified in writing at least 30 days in advance that the HMO considers the patient-physician relationship to be unsatisfactory and specifies the changes that are necessary in order to avoid termination, and the enrollee has failed to make such changes, coverage may be canceled at the end of the 30 days.
      7. (vii) Where the subscriber neither resides, lives, or works in the service area of the HMO, or area for which the HMO is authorized to do business, but only if the HMO terminates coverage uniformly without regard to any health status-related factor of enrollees, coverage may be canceled after 30 days' written notice. An HMO may not cancel coverage for a child who is the subject of a medical support order because the child does not reside, live, or work in the service area.

   2. (B) An HMO may cancel a group under circumstances described in clauses (i) - (vi) of this subparagraph:

      1. (i) For nonpayment of premium, all coverage may be canceled at the end of the grace period as described in paragraph (12) of this section.
      2. (ii) In the case of fraud on the part of the group, coverage may be canceled after 15 days' written notice.
      3. (iii) For employer groups, violation of participation or contribution rules, coverage may be canceled in compliance with §26.8(h) and §26.303(j) of this title (relating to Guaranteed Issue; Contribution and Participation Requirements and Coverage Requirements).

      4. (iv) For employer groups, in compliance with §26.16 and §26.309 of this title (relating to Refusal to Renew and Application to Reenter Small Employer Market and Refusal to Renew and Application to Reenter Large Employer Market), coverage may be canceled upon discontinuance of:

         1. (I) each of its small or large employer coverages; or
         2. (II) a particular type of small or large employer coverage.
      5. (v) Where no enrollee resides, lives, or works in the service area of the HMO, or area for which the HMO is authorized to do business, but only if the coverage is terminated uniformly without regard to any health status-related factor of enrollees, the HMO may cancel the coverage after 30 days written notice.
      6. (vi) If membership of an employer in an association ceases, and if coverage is terminated uniformly without regard to the health status of an enrollee, the HMO may cancel the coverage after 30 days' written notice.
   3. (C) In the case of a material change by the HMO to any provisions required to be disclosed to contract holders or enrollees pursuant to this chapter or other law, a group or individual contract holder may cancel the contract after not less than 30 days written notice to the HMO.

   4. (D) An HMO may cancel an individual contract under circumstances described in clauses (i) - (vi) of this subparagraph.

      1. (i) For nonpayment of premiums in compliance with the terms of the contract, including any timeliness provisions, coverage may be canceled without written notice, subject to paragraph (12) of this section.
      2. (ii) In the case of fraud or intentional material misrepresentation, except as described in paragraph (13) of this section, the HMO may cancel coverage after not less than 15 days' written notice.
      3. (iii) In the case of fraud in the use of services or facilities, the HMO may cancel coverage after not less than 15 days' written notice.
      4. (iv) Where the subscriber neither resides, lives, or works in the service area of the HMO, or area for which the HMO is authorized to do business, but only if coverage is terminated uniformly without regard to any health status-related factor of enrollees, coverage may be canceled after 30 days' written notice. An HMO may not cancel the coverage for a child who is the subject of a medical support order because the child does not reside, live, or work in the service area.
      5. (v) In case of termination by discontinuance of a particular type of individual coverage by the HMO in that service area, but only if coverage is discontinued uniformly without regard to health status-related factors of enrollees and dependents of enrollees who may become eligible for coverage, the HMO may cancel coverage after 90 days' written notice, in which case the HMO must offer to each enrollee on a guaranteed-issue basis any other individual basic health care coverage offered by the HMO in that service area.
      6. (vi) In case of termination by discontinuance of all individual basic health care coverage by the HMO in that service area, but only if coverage is discontinued uniformly without regard to health status-related factors of enrollees and dependents of enrollees who may become eligible for coverage, the HMO may cancel coverage after 180 days' written notice to the commissioner and the enrollees, in which case the HMO may not re-enter the individual market in that service area for five years beginning on the date of discontinuance at the last coverage not renewed.
4. (4) Claim payment procedure--A provision that sets forth the procedure for paying claims, including any time frame for payment of claims that must comply with Insurance Code Chapter 542, Subchapter B and §1271.005 and the applicable rules.
5. (5) Complaint and appeal procedures--A description of the HMO's complaint and appeal process available to complainants.
6. (6) Definitions--A provision defining any words in the evidence of coverage that have other than the usual meaning. Definitions must be in alphabetical order.
7. (7) Effective date--A statement of the effective date requirements of various kinds of enrollees.

8. (8) Eligibility--A statement of the eligibility requirements for membership, including:

   1. (A) that the subscriber must reside, live, or work in the service area and the legal residence of any enrolled dependents must be the same as the subscriber, or the subscriber must reside, live, or work in the service area and the residence of any enrolled dependents must be:

      1. (i) in the service area with the person having temporary or permanent conservatorship or guardianship of the dependents, including adoptees or children who have become the subject of a suit for adoption by the enrollee, where the subscriber has legal responsibility for the health care of the dependents;
      2. (ii) in the service area under other circumstances where the subscriber is legally responsible for the health care of the dependents;
      3. (iii) in the service area with the subscriber's spouse; or
      4. (iv) anywhere in the United States for a child whose coverage under a plan is required by a medical support order.
   2. (B) the conditions under which dependent enrollees may be added to those originally covered;
   3. (C) any limiting age for subscriber and dependents;

   4. (D) a clear statement regarding the coverage of newborn children:

      1. (i) No evidence of coverage may contain any provision excluding or limiting coverage for a newborn child of the subscriber or the subscriber's spouse.
      2. (ii) Congenital defects must be treated the same as any other illness or injury for which coverage is provided.
      3. (iii) The HMO may require that the subscriber notify the HMO during the initial 31 days after the birth of the child and pay any premium required to continue coverage for the newborn child.
      4. (iv) An HMO may not require that a newborn child receive health care services only from network physicians or providers after the birth if the newborn child is born outside the HMO service area due to an emergency, or born in a non-network facility to a mother who does not have HMO coverage. The HMO may require that the newborn be transferred to a network facility at the HMO's expense and, if applicable, to a network provider when the transfer is medically appropriate, as determined by the newborn's treating physician.
      5. (v) A newborn child of the subscriber or subscriber's spouse is entitled to coverage during the initial 31 days following birth. The HMO must allow an enrollee 31 days after the birth of the child to notify the HMO, either verbally or in writing, of the addition of the newborn as a covered dependent.
   5. (E) A clear statement regarding the coverage of the enrollee's grandchildren up to the age of 25 under the conditions by which the coverage is required by Insurance Code §1201.062 and §1271.006.

9. (9) Emergency services--A description of how to obtain services in emergency situations including:

   1. (A) what to do in case of an emergency occurring outside or inside the service area;
   2. (B) a statement of any restrictions or limitations on out-of-area services;
   3. (C) a statement that the HMO will provide for any medical screening examination or other evaluation required by state or federal law that is necessary to determine whether an emergency medical condition exists in a hospital emergency facility or comparable facility;
   4. (D) a statement that necessary emergency care services will be provided, including the treatment and stabilization of an emergency medical condition; and
   5. (E) a statement that where stabilization of an emergency condition originated in a hospital emergency facility or comparable facility, as defined in subparagraph (F) of this paragraph, treatment subject to stabilization must be provided to enrollees as approved by the HMO, provided that the HMO must approve or deny coverage of poststabilization care as requested by a treating physician or provider. An HMO must approve or deny the treatment within the time appropriate to the circumstances relating to the delivery of the services and the condition of the patient, but in no case may approval or denial exceed one hour from the time of the request.

   6. (F) For purposes of this paragraph, "comparable facility" includes the following:

      1. (i) any stationary or mobile facility, including, but not limited to, Level V Trauma Facilities and Rural Health Clinics that have licensed or certified personnel and equipment to provide Advanced Cardiac Life Support consistent with American Heart Association and American Trauma Society standards of care;

      2. (ii) for purposes of emergency care related to mental illness, a mental health facility that can provide 24-hour residential and psychiatric services and is:

         1. (I) a facility operated by the Texas Department of State Health Services;
         2. (II) a private mental hospital licensed by the Texas Department of State Health Services;
         3. (III) a community center as defined by Texas Health and Safety Code §534.001;
         4. (IV) a facility operated by a community center or other entity the Texas Department of State Health Services designates to provide mental health services;
         5. (V) an identifiable part of a general hospital in which diagnosis, treatment, and care for persons with mental illness is provided and that is licensed by the Texas Department of State Health Services; or
         6. (VI) a hospital operated by a federal agency.
10. (10) Entire contract, amendments--A provision stating that the form, applications, if any, and any attachments constitute the entire contract between the parties and that, to be valid, any change in the form must be approved by an officer of the HMO and attached to the affected form and that no agent has the authority to change the form or waive any of the provisions.
11. (11) Exclusions and limitations--A provision setting forth any exclusions and limitations on basic, limited, or single health care services.
12. (12) Grace period--A provision for a grace period of at least 30 days for the payment of any premium falling due after the first premium during which the coverage remains in effect. An HMO may add a charge to the premium for late payments received within the grace period. If an HMO does not receive payment within the 30 days, the HMO may cancel coverage after the 30th day and may hold the terminated members liable for the cost of services received during the grace period, if this requirement is disclosed in the agreement.

13. (13) Incontestability:

    1. (A) All statements made by the subscriber on the enrollment application are considered representations and not warranties. The statements are considered truthful and made to the best of the subscriber's knowledge and belief. A statement may not be used in a contest to void, cancel, or nonrenew an enrollee's coverage or reduce benefits unless:

       1. (i) it is in a written enrollment application signed by the subscriber; and
       2. (ii) a signed copy of the enrollment application is or has been furnished to the subscriber or the subscriber's personal representative.
    2. (B) An individual contract or group certificate may only be contested because of fraud or intentional misrepresentation of material fact made on the enrollment application. For small employer coverage, the misrepresentation must be other than a misrepresentation related to health status.
    3. (C) For a group contract or certificate, the HMO may increase its premium to the appropriate level if the HMO determines that the subscriber made a material misrepresentation of health status on the application. The HMO must provide the contract holder 31 days' prior written notice of any premium rate change.

14. (14) Out-of-network services--Each contract between an HMO and a contract holder must provide that if medically necessary covered services are not available through network physicians or providers, the HMO must, on the request of a network physician or provider, within the time appropriate to the circumstances relating to the delivery of the services and the condition of the patient, but in no event to exceed five business days after receipt of reasonably requested documentation, allow a referral to a non-network physician or provider and must fully reimburse the non-network provider at the usual and customary or an agreed rate.

    1. (A) For purposes of determining whether medically necessary covered services are available through network physicians or providers, the HMO must offer its entire network, rather than limited provider networks within the HMO delivery network.
    2. (B) The HMO may not require the enrollee to change his or her primary care physician or specialist providers to receive medically necessary covered services that are not available within the limited provider network.
    3. (C) Each contract must further provide for a review by a specialist of the same or similar specialty as the type of physician or provider to whom a referral is requested before the HMO may deny a referral.
15. (15) Schedule of charges--A statement that discloses the HMO's right to change the rate charged with 60 days' written notice under Insurance Code Chapter 1254.
16. (16) Service area--A description and a map of the service area, with key and scale, that identifies the county, or counties, or portions of counties, to be served, indicating primary care physicians, hospitals, and emergency care sites. A ZIP code map and a provider list may be used to meet the requirement.
17. (17) Termination due to attaining limiting age--A provision that a child's attainment of a limiting age does not operate to terminate the child's coverage while that child is incapable of self-sustaining employment due to mental retardation or physical disability, and chiefly dependent on the subscriber for support and maintenance. The HMO may require the subscriber to furnish proof of incapacity and dependency within 31 days of the child's attainment of the limiting age and subsequently as required, but not more frequently than annually following the child's attainment of the limiting age.
18. (18) Termination due to student dependent's change in status--Each group agreement and certificate that conditions dependent coverage for a child twenty-five years of age or older on the child's being a full-time student at an educational institution must contain a provision complying with Insurance Code Chapter 1503.
19. (19) Conformity with state law--A provision that if the agreement or certificate contains any provision not in conformity with Insurance Code Chapter 1271 or other applicable laws, it must not be rendered invalid but must be construed and applied as if it were in full compliance with Insurance Code Chapter 1271 and other applicable laws.
20. (20) Conformity with Medicare supplement minimum standards and long-term care minimum standards--Each group, individual, and conversion agreement and group certificate must comply with Chapter 3, Subchapter T of this title, referred to in this paragraph as Medicare supplement rules, and Chapter 3, Subchapter Y of this title, referred to in this paragraph as long-term care rules, where applicable. If there is a conflict between the Medicare supplement or long-term care rules and the HMO rules, the Medicare supplement or long-term care rules will govern to the exclusion of the conflicting provisions of the HMO rules. Where there is no conflict, an HMO must follow the Medicare supplement and long-term care rules and the HMO rules where applicable.
21. (21) Nonprimary care physician specialist as primary care physician--A provision that allows enrollees with chronic, disabling, or life threatening illnesses to apply to the HMO's medical director to use a nonprimary care physician specialist as a primary care physician as set out in Insurance Code §1271.201.

22. (22) Selected obstetrician or gynecologist--Individual, conversion, and group agreements and certificates, except small employer plans as defined by Insurance Code §1501.002, must contain a provision that permits an enrollee to select, in addition to a primary care physician, an obstetrician or gynecologist to provide health care services within the scope of the professional specialty practice of a properly credentialed obstetrician or gynecologist, and subject to the provisions of Insurance Code Chapter 1451, Subchapter F. An HMO must not prevent an enrollee from selecting a family physician, internal medicine physician, or other qualified physician to provide obstetrical or gynecological care.

    1. (A) An HMO must permit an enrollee who selects an obstetrician or gynecologist direct access to the health care services of the selected obstetrician or gynecologist without a referral by the enrollee's primary care physician or prior authorization or precertification from the HMO.

    2. (B) Access to the health care services of an obstetrician or gynecologist includes:

       1. (i) one well-woman examination per year;
       2. (ii) care related to pregnancy;
       3. (iii) care for all active gynecological conditions; and
       4. (iv) diagnosis, treatment, and referral to a specialist within the HMO's network for any disease or condition within the scope of the selected professional practice of a properly credentialed obstetrician or gynecologist, including treatment of medical conditions concerning breasts.
    3. (C) An HMO may require an enrollee who selects an obstetrician or gynecologist to select the obstetrician or gynecologist from within the limited provider network to which the enrollee's primary care physician belongs.
    4. (D) An HMO may require a selected obstetrician or gynecologist to forward information concerning the medical care of the patient to the primary care physician. However, the HMO must not impose any penalty, financial or otherwise, on the obstetrician or gynecologist by the HMO for failure to provide this information if the obstetrician or gynecologist has made a reasonable and good faith effort to provide the information to the primary care physician.
    5. (E) An HMO may limit an enrollee in the plan to self-referral to one participating obstetrician and gynecologist for both gynecological care and obstetrical care. The limitation must not affect the right of the enrollee to select the physician who provides that care.
    6. (F) An HMO must include in its enrollment form a space in which an enrollee may select an obstetrician or gynecologist as set forth in Insurance Code Chapter 1451, Subchapter F. The enrollment form must specify that the enrollee is not required to select an obstetrician or gynecologist, but may instead receive obstetrical or gynecological services from her primary care physician or primary care provider. The enrollee must have the right at all times to select or change a selected obstetrician or gynecologist. An HMO may limit an enrollee's request to change an obstetrician or gynecologist to no more than four changes in any 12-month period.
    7. (G) An enrollee who elects to receive obstetrical or gynecological services from a primary care physician (i.e., a family physician, internal medicine physician, or other qualified physician) must adhere to the HMO's standard referral protocol when accessing other specialty obstetrical or gynecological services.
23. (23) Diagnosis of Alzheimer's disease--An HMO that provides for the treatment of Alzheimer's disease must provide that a clinical diagnosis of Alzheimer's disease under Insurance Code Chapter 1354 by a physician licensed in this state satisfies any requirement for demonstrable proof of organic disease.
24. (24) Drug Formulary--A group agreement and certificate, except small employer plans as defined by Insurance Code §1501.002, that covers prescription drugs and uses one or more formularies must comply with Insurance Code Chapter 1369, Subchapter B and Chapter 21, Subchapter V of this title.
25. (25) Inpatient care by non primary care physician--If an HMO or limited provider network provides for an enrollee's care by a physician other than the enrollee's primary care physician while the enrollee is in an inpatient facility (e.g., hospital or skilled nursing facility), a provision that on admission to the inpatient facility a physician other than the primary care physician may direct and oversee the enrollee's care.

Source Note:The provisions of this §11.506 adopted to be effective January 1, 1980, 4 TexReg 4622; amended to be effective December 6, 1984, 9 TexReg 6011; amended to be effective July 15, 1986, 11 TexReg 3074; amended to be effective December 4, 1987, 12 TexReg 4363; amended to be effective August 17, 1992, 17 TexReg 5356; amended to be effective June 1, 1996, 21 TexReg 2467; amended to be effective November 2, 1998, 23 TexReg 11347; amended to be effective February 8, 1999, 24 TexReg 725; amended to be effective February 24, 2005, 30 TexReg 854; amended to be effective November 15, 2006,31TexReg 9298; amended to be effective November 17, 2014, 39 TexReg 9030.