1. (a) A small employer carrier shall market each of its small employer health benefit plans to small employers in this state. A small employer carrier may not suspend the marketing or issuance of the small employer benefit plans unless the health carrier has good cause and has received the prior approval of the commissioner or the commissioner's designee. In marketing the standard benefit plans to small employers, a small employer carrier shall use at least the same sources and methods of distribution that it uses to market other small employer health benefit plans to small employers. Any agent authorized by a small employer carrier to market health benefit plans to small employers in this state shall also be authorized to market the small employer health benefit plans.
2. (b) Each small employer that has expressed an interest in purchasing a small employer health benefit plan shall be given a written summary of the standard benefit plans. The summary shall be in a readable and understandable format and shall include a clear, complete and accurate description of these items in the following order: lifetime maximums; deductibles, coinsurance maximums and percentages payable; benefits provided; and limitations and exclusions and riders that must be offered. To assure that small employers are fully aware that the Basic Coverage Benefit Plan does not cover organ transplants, or hospice, small employer carriers, other than HMOs, electing not to utilize Figure 41, shall reference this difference in the summary which is prepared and shall appear in bold print. Small employer carriers other than HMOs may use Form Number 1212 SUMM at Figure 41 of §26.27(b)(41) of this title (relating to Forms) to meet the requirements of this subsection. HMOs shall use the disclosure format required by §11.1600 of this title (relating to Information to Prospective Group Contract Holders and Enrollees) to meet the requirements of this subsection.

3. (c) A small employer carrier shall offer the standard benefit plans to each small employer who inquires about purchasing a small employer health benefit plan and shall, upon request, explain each of the plans to the small employer. A small employer carrier, other than an HMO, shall offer and explain the basic coverage benefit plan and the catastrophic care benefit plan. An HMO shall offer and explain the small employer health benefit plans that the HMO has filed for use in the small employer market. The offer may be provided directly to the small employer or delivered through an agent. The offer shall be in writing and shall include at least the following information:

   1. (1) information describing how the small employer may enroll in the plans; and
   2. (2) information set out in the Insurance Code, Article 26.40, and §26.12 of this title (relating to Disclosure).
4. (d) A small employer carrier shall provide a price quote to a small employer (directly or through an authorized agent) within ten working days of receiving a request for a quote and such information as is necessary to provide the quote. A small employer carrier shall notify a small employer (directly or through an authorized agent) within five working days of receiving a request for a price quote of any additional information needed by the small employer carrier to provide the quote.
5. (e) A small employer carrier, other than an HMO, shall not apply more stringent or detailed requirements related to the application process for the standard benefit plans, including the basic coverage benefit plan and the catastrophic coverage benefit plan than are applied for other health benefit plans offered by the health carrier to small employers. An HMO shall not apply more stringent or detailed requirements related to the application process for the prototype small employer group health benefit plan than are applied for other health benefit plans offered by the HMO to small employers.
6. (f) If a small employer carrier denies coverage under a health benefit plan to a small employer on any basis, the denial shall be in writing and shall state with specificity the reasons for the denial (subject to any restrictions related to confidentiality of medical information).
7. (g) A small employer carrier shall establish and maintain a means to provide information to small employers who request information on the availability of small employer health benefit plans in this state. The information provided to small employers shall at least include information about how to apply for coverage from the health carrier and may include the names and phone numbers of agents located geographically proximate to the caller or such other information that is reasonably designed to assist the caller to locate an authorized agent or to otherwise apply for coverage.
8. (h) The small employer carrier shall not require a small employer to join or contribute to any association or group as a condition of being accepted for coverage by the small employer carrier, except that, if membership in an association or other group is a requirement for accepting a small employer into a particular health benefit plan, a small employer carrier may apply such requirement, subject to the requirements of the Insurance Code, Chapter 26, Subchapters A-G.
9. (i) A small employer carrier may not require, as a condition to the offer or sale of a health benefit plan to a small employer, that the small employer purchase or qualify for any other insurance product or service.

10. (j) Health carriers offering individual and group health benefit plans in this state shall be responsible for determining whether the plans are subject to the requirements of the Insurance Code, Chapter 26, Subchapters A-G, and this subchapter. Health carriers shall elicit the following information from applicants for such plans at the time of application:

    1. (1) whether or not any portion of the premium will be paid by a small employer;
    2. (2) whether or not the prospective policyholder, certificate holder, or any prospective insured individual intends to treat the health benefit plan as part of a plan or program under §162 or §106 of the United States Internal Revenue Code of 1986 (26 United States Code §106 or §162); or
    3. (3) whether or not the applicant is a small employer.
11. (k) If a health carrier fails to comply with subsection (j) of this section, the health carrier shall be deemed to be on notice of any information that could reasonably have been attained if the health carrier had complied with subsection (i) of this section.

Source Note:The provisions of this §26.13 adopted to be effective December 30, 1993, 18 TexReg 9375; amended to be effective April 9, 1996, 21 TexReg 2648; amended to be effective March 5, 1998, 23 TexReg 2297.