1. (a) Applicability. The provisions of this section are to apply to any employer offering group health insurance benefits to its employees pursuant to a group health insurance contract providing health care coverage for employees delivered, issued for delivery, or renewed in this state prior to January 1, 1994, for an insurance company, including a group hospital service corporation pursuant to the Insurance Code, Chapter 20.
2. (b) Written notice required. Any employer providing to its employees group accident and health insurance coverage which includes a conversion or group continuation privilege upon termination of coverage shall give written notice of such conversion or group continuation privilege under the policy to each employee, member, or eligible dependent with insurance coverage under the group and affected by the termination or discontinuance of coverage under the policy.
3. (c) Time limit for notice. Such notice as is required by the Insurance Code, Article 3.51-6, §3C(a), shall be provided to each employee, member, or eligible dependent with insurance coverage under a group policy and affected by the termination of coverage under such policy not less than 30 days before the date upon which the termination or discontinuance of the policy or coverage is to take effect, except in situations where the employer receives notification of such termination fewer than 30 days prior to its effective date, in which instance the notice required of the employer to the employees and covered dependents shall be immediate notice. This time limit, however, in no way affects or limits the notice requirements specified in the Insurance Code, Article 3.51-6, §3B. In instances where the group policyholder is required to give notice of continuation immediately upon receipt of written notification of an event triggering the election of a continuation option, such time limits as are statutorily provided shall prevail.

4. (d) Elements of notice for continuation. For policies which provide continuation of group coverage for employees or members and their eligible dependents following termination of coverage under the policy, the required notice shall be provided in a format which includes, at a minimum, the following information:

   1. (1) the period of time, following either the termination or the notice of the employee's or eligible dependent's right to elect continuation, during which the employee, member, or eligible dependent may submit written request for continuation, consistent with provisions of the Insurance Code, Article 3.51-6, §1(d)(3)(B)(ii) and (iii);
   2. (2) the amount of premium or contribution which an employee, member, or eligible dependent electing continuation of coverage must pay to the group policyholder or employer on a monthly basis in advance, consistent with the provisions found in the Insurance Code, Article 3.51-6, §1(d)(3)(B)(iv);
   3. (3) the date or dates upon which the employee's, member's, or eligible dependent's written election of continuation, together with the first contribution required to establish contributions on a monthly basis in advance, must be given to the policyholder or employer, consistent with provisions of the Insurance Code, Article 3.51-6, §1(d)(3)(B)(v); and
   4. (4) the length of time for which continuation is to be effective, consistent with the qualifying events for termination of continuation described in the Insurance Code, Article 3.51-6, §1(d)(3)(B)(vi).

5. (e) Elements of notice for conversion. For policies which provide for coverage under an individual or group conversion policy following termination of coverage under the group policy being converted, the required notice shall be provided in a format which includes, at a minimum, the following information:

   1. (1) a definition of the basis for conversion, which incorporates the terms under which the conversion privilege is available;
   2. (2) the time period during which the employee, member, or eligible dependent may apply for, and pay the first premium toward, a converted policy without having to provide evidence of insurability;
   3. (3) direction as to how and to whom payment of the first premium due under the converted policy shall be made; and
   4. (4) the effective date of the converted policy, and provisions with respect to its renewability.
6. (f) Coordination with the Insurance Code, Article 3.51-6A, notification requirements. Such notice as is required by the Insurance Code, Article 3.51-6, §3C(a), may accompany the notification of employees covered under a policy or contract regarding the specific date on which discontinuance is to take effect pursuant to the Insurance Code, Article 3.51-6A, provided that such notification is designed to give actual notice not only to employees covered under the policy or contract, but also to other members covered under the policy and eligible dependents of such employees; and further provided that the time restrictions for such notification are no less favorable to any party receiving the notification than those recited in subsection (c) of this section.

Source Note:The provisions of this §3.3602 adopted to be effective July 10, 1990, 15 TexReg 3697; amended to be effective January 5, 1994, 18 TexReg 9855.