1. (a) Except as otherwise provided, this subchapter shall apply to any health benefit plan providing health care benefits covering 51 or more eligible employees of a large employer, whether provided on a group or individual franchise basis, regardless of whether the policy was issued in this state if it provides coverage to any citizen or inhabitant of this state and if the plan meets one of the following conditions:

   1. (1) a portion of the premium or benefits is paid by a large employer;
   2. (2) the health plan is treated by the employer or by a covered individual as part of a plan or program for the purposes of 26 United States Code §106 or §162; or
   3. (3) the health plan is a group policy issued to a large employer.
2. (b) For an employer who was not in existence throughout the calendar year preceding the year in which the determination of whether the employer is a large employer is made, the determination is based on the average number of eligible employees the employer reasonably expects to employ on business days in the calendar year in which the determination is made.
3. (c) An insurance policy, evidence of coverage, contract, or other document that is delivered, issued for delivery, or renewed to large employers and their employees on or after July 1, 1997, shall comply with all provisions of the Insurance Code, Chapter 26, Subchapters A and H, as adopted by the 75th Legislature, and with this subchapter.
4. (d) An insurance policy, evidence of coverage, contract or other document establishing coverage under a health benefit plan for large employers and their employees that is delivered, issued for delivery or renewed before July 1, 1997 is governed by the law as it existed before that date, until the first renewal date of that policy, evidence of coverage, contract or other document establishing coverage on or after July 1, 1997.

5. (e) If a large employer or the employees of a large employer are issued a health benefit plan under the provisions of the Insurance Code, Chapter 26, Subchapters A and H, and this subchapter, and the large employer subsequently employs less than 51 eligible employees, the provisions of the Insurance Code, Chapter 26, Subchapters A and H, and this subchapter shall continue to apply to that particular health plan if the employer elects to renew the large employer health benefit plan subject to the provisions of §26.308 of this title (relating to Renewability of Coverage and Cancellation). A health carrier providing coverage to such an employer shall, within 60 days of becoming aware that the employer has less than 51 eligible employees, but not later than the first renewal date occurring after the employer ceases to be a large employer, notify the employer of the following:

   1. (1) The employer may renew the large employer policy.
   2. (2) If the employer does not renew the large employer health benefit plan, the employer will be subject to the requirements of the Insurance Code, Chapter 26, Subchapters A-G concerning small employers, and Subchapter A of this chapter, including guaranteed issue, rating protections, and participation/contribution requirements.
   3. (3) The employer has the option to purchase a small employer health benefit plan from the employer's current health carrier, if the carrier is offering such coverage, or from any small employer carrier currently offering small employer coverage in this state.
   4. (4) If the employer fails to comply with the minimum percentage participation or contribution requirements, the coverage will terminate.
6. (f) If a health benefit plan is issued on or after July 1, 1997, to an employer that is not a large employer as defined in the Insurance Code, Chapter 26, but subsequently the employer becomes a large employer, the provisions of the Insurance Code, Chapter 26, Subchapter H and this subchapter shall apply to the health benefit plan on the first renewal date, unless the employer was a small employer and renews its current health benefit plans as provided under §26.5(i) of this title (relating to Applicability and Scope).
7. (g) A governmental entities' health benefit plan (subject to Insurance Code, Articles 3.51-1, 3.51-2, 3.51-3, 3.51-4, 3.51-5, or 3.51-5A) that is provided through health insurance coverage and that otherwise meets the requirements of being a large employer is subject to the provisions of Chapter 26, Insurance Code, Subchapters A and H and this subchapter. The portion of a non-federal governmental entity's health benefit plan that is self-insured may elect not to comply with §2721 of the Public Health and Services Act as added by the Health Insurance Portability and Availability Act of 1996.

Source Note:The provisions of this §26.301 adopted to be effective March 5, 1998, 23 TexReg 2297.