The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

1. (1) Actuary--A qualified actuary who is a member in good standing of the American Academy of Actuaries.
2. (2) Affiliation period--A period of time that under the terms of the coverage offered by an HMO, must expire before the coverage becomes effective. During an affiliation period an HMO is not required to provide health care services or benefits to the participant or beneficiary and a premium may not be charged to the participant or beneficiary.
3. (3) Agent--A person who may act as an agent for the sale of a health benefit plan under a license issued under the Insurance Code, Chapter 21.
4. (4) Base premium rate--For each class of business and for a specific rating period, the lowest premium rate that is charged or that could be charged under a rating system for that class of business by the small employer carrier to small employers with similar case characteristics for small employer health benefit plans with the same or similar coverage.
5. (5) Case characteristics--With respect to a small employer, the geographic area in which that employer's employees reside, the age and gender of the individual employees and their dependents, the appropriate industry classification as determined by the small employer carrier, the number of employees and dependents, and other objective criteria as established by the small employer carrier that are considered by the small employer carrier in setting premium rates for that small employer. The term does not include health status related factors, duration of coverage since the date of issuance of a health benefit plan, or whether a covered person is or may become pregnant.
6. (6) Child--An unmarried natural child of the employee, including a newborn child; adopted child, including a child as to whom an insured is a party in a suit seeking the adoption of the child; natural child or adopted child of the employee's spouse.
7. (7) Class of business--All small employers or a separate grouping of small employers established under the Insurance Code, Chapter 26, Subchapters A-G.
8. (8) Commissioner--The commissioner of insurance.
9. (9) Consumer choice health benefit plan--A health benefit plan authorized by Insurance Code Article 3.80 or Article 20A.09N.

10. (10) Creditable coverage--

    1. (A) An individual's coverage is creditable for purposes of this chapter if the coverage is provided under:

       1. (i) a self-funded or self-insured employee welfare benefit plan that provides health benefits and that is established in accordance with the Employee Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et seq.);
       2. (ii) a group health benefit plan provided by a health insurance carrier or an HMO;
       3. (iii) an individual health insurance policy or evidence of coverage;
       4. (iv) Part A or Part B of Title XVIII of the Social Security Act (42 U.S.C. Section 1395c et seq.);
       5. (v) Title XIX of the Social Security Act (42 U.S.C. Section 1396 et seq., Grants to States for Medical Assistance Programs), other than coverage consisting solely of benefits under Section 1928 of that Act (42 U.S.C. Section 1396s, Program for Distribution of Pediatric Vaccines);
       6. (vi) Chapter 55 of Title 10, United States Code (10 U.S.C. Section 1071 et seq.);
       7. (vii) a medical care program of the Indian Health Service or of a tribal organization;
       8. (viii) a state or political subdivision health benefits risk pool;
       9. (ix) a health plan offered under Chapter 89 of Title 5, United States Code (5 U.S.C. Section 8901 et seq.);
       10. (x) a public health plan as defined in this section;
       11. (xi) a health benefit plan under Section 5(e) of the Peace Corps Act (22 U.S.C. Section 2504(e)); and
       12. (xii) short-term limited duration insurance as defined in this section.

    2. (B) Creditable coverage does not include:

       1. (i) accident-only, disability income insurance, or a combination of accident-only and disability income insurance;
       2. (ii) coverage issued as a supplement to liability insurance;
       3. (iii) liability insurance, including general liability insurance and automobile liability insurance;
       4. (iv) workers' compensation or similar insurance;
       5. (v) automobile medical payment insurance;
       6. (vi) credit only insurance;
       7. (vii) coverage for onsite medical clinics;
       8. (viii) other coverage that is similar to the coverage described in this subsection under which benefits for medical care are secondary or incidental to other insurance benefits and specified in federal regulations;
       9. (ix) if offered separately, coverage that provides limited scope dental or vision benefits;
       10. (x) if offered separately, long-term care coverage or benefits, nursing home care coverage or benefits, home health care coverage or benefits, community based care coverage or benefits, or any combination of those coverages or benefits;
       11. (xi) if offered separately, coverage for limited benefits specified by federal regulation;
       12. (xii) if offered as independent, noncoordinated benefits, coverage for specified disease or illness;
       13. (xiii) if offered as independent, noncoordinated benefits, hospital indemnity or other fixed indemnity insurance; or
       14. (xiv) Medicare supplemental health insurance as defined under Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss), coverage supplemental to the coverage provided under Chapter 55 of Title 10, United States Code (10 U.S.C. Section 1071 et seq.), and similar supplemental coverage provided under a group plan, but only if such insurance or coverages are provided under a separate policy, certificate, or contract of insurance.
11. (11) Department--The Texas Department of Insurance.
12. (12) Dependent--A spouse; newborn child; child under the age of 25 years; child of any age who is medically certified as disabled and dependent on the parent; any person who must be covered under Insurance Code Article 3.51-6, §3D or §3E, or the Insurance Code Article 3.70-2(L); and any other child included as an eligible dependent under an employer's benefit plan, including a child who is a full-time student as required by Insurance Code Article 21.24-2 and §11.506(19) of this title (relating to Mandatory Contractual Provisions: Group, Individual and Conversion Agreement and Group Certificate).
13. (13) DNA--Deoxyribonucleic acid.
14. (14) Effective date--The first day of coverage under a health benefit plan, or, if there is a waiting period, the first day of the waiting period.

15. (15) Eligible employee--An employee who works on a full-time basis and who usually works at least 30 hours a week. The term also includes a sole proprietor, a partner, and an independent contractor, if the sole proprietor, partner, or independent contractor is included as an employee under a health benefit plan of a small or large employer, regardless of the number of hours the sole proprietor, partner, or independent contractor works weekly, but only if the plan includes at least two other eligible employees who work on a full-time basis and who usually work at least 30 hours a week. The term does not include:

    1. (A) an employee who works on a part-time, temporary, seasonal or substitute basis; or

    2. (B) an employee who is covered under:

       1. (i) another health benefit plan;
       2. (ii) a self-funded or self-insured employee welfare benefit plan that provides health benefits and that is established in accordance with the Employee Retirement Income Security Act of 1974 (29 United States Code, §§1001, et seq.);
       3. (iii) the Medicaid program if the employee elects not to be covered;
       4. (iv) another federal program, including the TRICARE program or Medicare program, if the employee elects not to be covered; or
       5. (v) a benefit plan established in another country if the employee elects not to be covered.
16. (16) Employee--Any individual employed by an employer.
17. (17) Franchise insurance policy--An individual health benefit plan under which a number of individual policies are offered to a selected group of a small or large employer. The rates for such a policy may differ from the rate applicable to individually solicited policies of the same type and may differ from the rate applicable to individuals of essentially the same class.
18. (18) Genetic information--Information derived from the results of a genetic test or from family history.

19. (19) Genetic test--A laboratory test of an individual's DNA, RNA, proteins, or chromosomes to identify by analysis of the DNA, RNA, proteins, or chromosomes the genetic mutations or alterations in the DNA, RNA, proteins, or chromosomes that are associated with a predisposition for a clinically recognized disease or disorder. The term does not include:

    1. (A) a routine physical examination or a routine test performed as a part of a physical examination;
    2. (B) a chemical, blood or urine analysis;
    3. (C) a test to determine drug use; or
    4. (D) a test for the presence of the human immunodeficiency virus.

20. (20) HMO--Any person governed by the Texas Health Maintenance Organization Act, Insurance Code, Chapters 20A and 843, including:

    1. (A) a person defined as a health maintenance organization under the Texas Health Maintenance Organization Act;
    2. (B) an approved nonprofit health corporation that is certified under §162.001 Texas Occupations Code, and that holds a certificate of authority issued by the commissioner under Insurance Code Article 21.52F;
    3. (C) a statewide rural health care system under Insurance Code, Chapter 845 that holds a certificate of authority issued by the commissioner under Insurance Code, Chapter 843; or
    4. (D) a nonprofit corporation created and operated by a community center under Chapter 534, Subchapter C, Health and Safety Code.

21. (21) Health benefit plan--A group, blanket, or franchise insurance policy, a certificate issued under a group policy, a group hospital service contract, or a group subscriber contract or evidence of coverage issued by a health maintenance organization that provides benefits for health care services. The term does not include the following plans of coverage:

    1. (A) accident-only or disability income insurance or a combination of accident-only and disability income insurance;
    2. (B) credit-only insurance;
    3. (C) disability insurance coverage;
    4. (D) coverage for a specified disease or illness;
    5. (E) Medicare services under a federal contract;
    6. (F) Medicare supplement and Medicare Select policies regulated in accordance with federal law;
    7. (G) long-term care coverage or benefits, nursing home care coverage or benefits, home health care coverage or benefits, community-based care coverage or benefits, or any combination of those coverages or benefits;
    8. (H) coverage that provides limited-scope dental or vision benefits;
    9. (I) coverage provided by a single-service health maintenance organization;
    10. (J) coverage issued as a supplement to liability insurance;
    11. (K) insurance coverage arising out of a workers' compensation or similar insurance;
    12. (L) automobile medical payment insurance coverage;
    13. (M) jointly managed trusts authorized under 29 United States Code §§141 et seq. that contain a plan of benefits for employees that is negotiated in a collective bargaining agreement governing wages, hours, and working conditions of the employees that is authorized under 29 United States Code §157;
    14. (N) hospital indemnity or other fixed indemnity insurance;
    15. (O) reinsurance contracts issued on a stop-loss, quota-share, or similar basis;
    16. (P) short-term limited duration insurance as defined in this section;
    17. (Q) liability insurance, including general liability insurance and automobile liability insurance;
    18. (R) coverage for onsite medical clinics; or
    19. (S) coverage that provides other limited benefits specified by federal regulations; or

    20. (T) other coverage that is:

        1. (i) similar to the coverage described in subparagraphs (A) - (S) of this paragraph under which benefits for medical care are secondary or incidental to other insurance benefits; and
        2. (ii) specified in federal regulations.
22. (22) Health carrier--Any entity authorized under the Insurance Code or another insurance law of this state that provides health insurance or health benefits in this state including an insurance company, a group hospital service corporation under Insurance Code, Chapter 842, an HMO, and a stipulated premium company under Insurance Code, Chapter 844.
23. (23) Health insurance coverage--Benefits consisting of medical care (provided directly, through insurance or reimbursement, or otherwise) under any hospital or medical service policy or certificate, hospital or medical service plan contract, or HMO contract.
24. (24) Health status related factor--Health status; medical condition, including both physical and mental illnesses; claims experience; receipt of health care; medical history; genetic information; evidence of insurability, including conditions arising out of acts of domestic violence; and disability.
25. (25) Index rate--For each class of business as to a rating period for small employers with similar case characteristics, the arithmetic average of the applicable base premium rate and corresponding highest premium rate.
26. (26) Large employer--An employer who employed an average of at least 51 eligible employees on business days during the preceding calendar year and who employs at least two employees on the first day of the policy year. For purposes of this definition, a partnership is the employer of a partner.
27. (27) Large employer carrier--A health carrier, to the extent that carrier is offering, delivering, issuing for delivery, or renewing health benefit plans subject to Insurance Code, Chapter 26, Subchapters A and H.
28. (28) Large employer health benefit plan--A health benefit plan offered to a large employer.

29. (29) Late enrollee--Any employee or dependent eligible for enrollment who requests enrollment in a small or large employer's health benefit plan after the expiration of the initial enrollment period established under the terms of the first plan for which that employee or dependent was eligible through the small or large employer or after the expiration of an open enrollment period under Insurance Code Article 26.21(h) or 26.83(f), who does not fall within the exceptions listed below, and who is accepted for enrollment and not excluded until the next open enrollment period. An employee or dependent eligible for and requesting enrollment cannot be excluded until the next open enrollment period and, when enrolled, is not a late enrollee, in the following special circumstances:

    1. (A) the individual:

       1. (i) was covered under another health benefit plan or self-funded employer health benefit plan at the time the individual was eligible to enroll;
       2. (ii) declines in writing, at the time of initial eligibility, stating that coverage under another health benefit plan or self-funded employer health benefit plan was the reason for declining enrollment;
       3. (iii) has lost coverage under another health benefit plan or self-funded employer health benefit plan as a result of the termination of employment, the reduction in the number of hours of employment, the termination of the other plan's coverage, the termination of contributions toward the premium made by the employer; or the death of a spouse, or divorce; and
       4. (iv) requests enrollment not later than the 31st day after the date on which coverage under the other health benefit plan or self-funded employer health benefit plan terminates;
    2. (B) the individual is employed by an employer who offers multiple health benefit plans and the individual elects a different health benefit plan during an open enrollment period;
    3. (C) a court has ordered coverage to be provided for a spouse under a covered employee's plan and the request for enrollment is made not later than the 31st day after the date on which the court order is issued;
    4. (D) a court has ordered coverage to be provided for a child under a covered employee's plan and the request for enrollment is made not later than the 31st day after the date on which the employer receives the court order or notification of the court order;
    5. (E) the individual is a child of a covered employee and has lost coverage under Chapter 62, Health and Safety Code, Child Health Plan for Certain Low-Income Children or Title XIX of the Social Security Act (42 U.S.C. §§1396, et seq., Grants to States for Medical Assistance Programs), other than coverage consisting solely of benefits under Section 1928 of that Act (42 U.S.C. §1396s, Program for Distribution of Pediatric Vaccines);
    6. (F) the individual has a change in family composition due to marriage, birth of a child, adoption of a child, or because an insured becomes a party in a suit for the adoption of a child;
    7. (G) an individual becomes a dependent due to marriage, birth of a newborn child, adoption of a child, or because an insured becomes a party in a suit for the adoption of a child; and
    8. (H) the individual described in subparagraphs (E), (F) and (G) of this paragraph requests enrollment no later than the 31st day after the date of the marriage, birth, adoption of the child, loss of the child's coverage, or within 31 days of the date an insured becomes a party in a suit for the adoption of a child.
30. (30) Limited scope dental or vision benefits--Dental or vision benefits that are sold under a separate policy or rider and that are limited in scope to a narrow range or type of benefits that are generally excluded from hospital, medical, or surgical benefits contracts.

31. (31) Medical care--Amounts paid for:

    1. (A) the diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body;
    2. (B) transportation primarily for and essential to the medical care described in subparagraph (A) of this paragraph; or
    3. (C) insurance covering medical care described in either subparagraph (A) or (B) of this paragraph.
32. (32) Medical condition--Any physical or mental condition including, but not limited to, any condition resulting from illness, injury (whether or not the injury is accidental), pregnancy, or congenital malformation. Genetic information in the absence of a diagnosis of the condition related to such information shall not constitute a medical condition.
33. (33) New business premium rate--For each class of business as to a rating period, the lowest premium rate that is charged or offered or that could be charged or offered by the small employer carrier to small employers with similar case characteristics for newly issued small employer health benefit plans that provide the same or similar coverage.
34. (34) New entrant--An eligible employee, or the dependent of an eligible employee, who becomes part of or eligible for a small or large employer group after the initial period for enrollment in a health benefit plan. After the initial enrollment period, this includes any employee or dependent who becomes eligible for coverage and who is not a late enrollee.
35. (35) Participation criteria--Any criteria or rules established by a large employer to determine the employees who are eligible for enrollment, including continued enrollment, under the terms of a health benefit plan. Such criteria or rules may not be based on health status related factors.
36. (36) Person--An individual, corporation, partnership, or other legal entity.
37. (37) Point-of-service coverage (POS coverage)--Coverage provided under a POS plan as described in §21.2901 of this title (relating to Definitions) and as permitted by Article 26.48, Insurance Code.
38. (38) Plan year--For purposes of the Insurance Code, Chapter 26, and this chapter, a 365-day period that begins on the plan or policy's effective date or a period of one full calendar year, under a health benefit plan providing coverage to small or large employers and their employees, as defined in the plan or policy. Small or large employer carriers must use the same definition of plan year in all small or large employer health benefit plans.
39. (39) Postmark--A date stamp by the US Postal Service or other delivery entity, including any electronic delivery available.
40. (40) Preexisting condition provision--A provision that denies, excludes, or limits coverage as to a disease or condition for a specified period after the effective date of coverage.
41. (41) Premium--All amounts payable by a small or large employer and eligible employees as a condition of receiving coverage from a small or large employer carrier, including any fees or other contributions associated with a health benefit plan.
42. (42) Premium rate quote--A statement of the premium a small or large employer carrier offers and will accept to make coverage effective for a small or large employer.
43. (43) Public health plan--Any plan established or maintained by a State, county, or other political subdivision of a State that provides health insurance coverage to individuals who are enrolled in the plan.
44. (44) Rating period--A calendar period for which premium rates established by a small employer carrier are assumed to be in effect.
45. (45) Reinsured carrier--A small employer carrier participating in the Texas Health Reinsurance System.

46. (46) Renewal date--For each small or large employer's health benefit plan, the earlier of the date (if any) specified in such plan (contract) for renewal; the policy anniversary date; or the date on which the small or large employer's plan is changed. To determine the renewal date for employer association or multiple employer trust group health benefit plans, small or large employer carriers may use the date specified for renewal, or the policy anniversary date, of either the master contract or the contract or certificate of coverage of each small or large employer in the association or trust. Small or large employer carriers must use the same method of determining renewal dates for all small or large employer health benefit plans. A change in the premium rate is not considered a renewal if the change is due solely:

    1. (A) to the addition or deletion of an employee or dependent if the deletion is due to a request by the employee, death or retirement of the employee or dependent, termination of employment of the employee, or because a dependent is no longer eligible; or
    2. (B) to fraud or intentional misrepresentation of a material fact by a small employer or an eligible employee or dependent.
47. (47) Risk-assuming carrier--A small employer carrier that elects not to participate in the Texas Health Reinsurance System, as approved by the department.
48. (48) Risk characteristic--The health status related factors, duration of coverage, or any similar characteristic, except genetic information, related to the health status or experience of a small employer group or of any member of a small employer group.
49. (49) Risk load--The percentage above the applicable base premium rate that is charged by a small employer carrier to a small employer to reflect the risk characteristics of the small employer group. A small employer carrier may not use genetic information to alter or otherwise affect risk load.
50. (50) Risk pool--The Texas Health Insurance Risk Pool established under Insurance Code Article 3.77, or other similar arrangements in other states.
51. (51) RNA--Ribonucleic acid.
52. (52) Short-term limited duration insurance--Health insurance coverage provided under a contract with an issuer that has an expiration date specified in the contract (taking into account any extensions that may be elected by the policyholder without the issuer's consent) that is within 12 months of the date the contract becomes effective.
53. (53) Significant break in coverage--A period of 63 consecutive days during all of which the individual does not have any creditable coverage. Neither a waiting period nor an affiliation period is counted in determining a significant break in coverage.
54. (54) Small employer--An employer that employed an average of at least two employees but not more than 50 eligible employees on business days during the preceding calendar year and who employs at least two employees on the first day of the policy year. For purposes of this definition, a partnership is the employer of a partner. A small employer includes an independent school district that elects to participate in the small employer market as provided under Insurance Code Article 26.036.
55. (55) Small employer carrier--A health carrier, to the extent that health carrier is offering, delivering, issuing for delivery, or renewing, under Insurance Code Article 26.06(a), health benefit plans subject to Subchapters A - G of the Insurance Code, Chapter 26.
56. (56) Small employer health benefit plan--A health benefit plan offered to a small employer under the Insurance Code, Chapter 26, Subchapter E.
57. (57) State-mandated health benefits--As defined in §21.3502 of this title (relating to Definitions).
58. (58) Waiting period--A period of time established by an employer that must pass before an individual who is a potential enrollee in a health benefit plan is eligible to be covered for benefits. If an employee or dependent enrolls as a late enrollee, under special circumstances that except the employee or dependent from the definition of late enrollee, or during an open enrollment period, any period of eligibility before the effective date of such enrollment is not a waiting period.

Source Note:The provisions of this §26.4 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; amended to be effective July 10, 2001, 26 TexReg 5016; amended to be effective April 6, 2005, 30 TexReg 1931.