1. (a) Cancellation of coverage.

   1. (1) Except as prohibited by §81.7(h)(1) of this title (relating to Enrollment and Participation) and paragraph (2) of this subsection, an employee, retiree, or surviving spouse may cancel any coverage in effect. Coverage will continue through the last day of the month in which the coverage is cancelled. Coverage canceled by a surviving spouse or dependent of a deceased retiree may never be reinstated.
   2. (2) Court ordered health coverage for a dependent cannot be canceled unless the dependent is no longer eligible as a dependent as defined in §81.1 of this title (relating to Definitions), the court order is no longer valid, or comparable coverage has been obtained.
   3. (3) Coverage for a dependent, who marries or attains age 25, shall be canceled as of the last day of the month following the date of marriage or attainment of age 25, as the case may be.
   4. (4) Surviving spouse coverage for a person who becomes a state employee shall be canceled as of the effective date of coverage as an active employee. Surviving spouse coverage may be reinstated when the spouse terminates employment with the state.
   5. (5) Coverage shall be canceled for non-payment of premium if a premium is not paid within 30 days of the date payment is due. Coverage will be canceled effective the last day of the month for which timely payment was made.
2. (b) Termination of employment. Coverages for an employee who terminates employment and his or her dependents shall continue through the last day of the month in which employment is terminated.

3. (c) Expulsion from the Uniform Group Insurance Program.

   1. (1) The board of trustees may expel any person participating in the Uniform Group Insurance Program who submits a fraudulent claim or otherwise defrauds or attempts to defraud any plan of benefits offered under the program, within the terms of the Insurance Code, Article 3.50-2, §13A.
   2. (2) Any person with a grievance regarding eligibility or other matters involving the program may submit a written request to the Executive Director to make a determination on the matter in dispute.
   3. (3) The Executive Director is authorized to call a hearing on behalf of the Board when he has reason to believe that a person may be subject to expulsion under this section and the Insurance Code, Article 3.50-2, §13A.
   4. (4) Any hearing called pursuant to this section shall be a contested case under Government Code, Chapter 2001, and conducted in the manner prescribed by law and by Chapter 67 of this title (relating to Hearings and Disputed Claims) or the rules of the State Office of Administrative Hearings, when applicable. During such hearing, the standard of proof requiring a finding against the participant shall be the preponderance of evidence. At the time a case is assigned to a hearings examiner, no further claims will be paid until a finding has been made. When a finding has been made, all eligible claims will be processed subject to any offsets for overpayments made by the carrier.
   5. (5) Any person expelled from the Uniform Group Insurance Program may not be insured under any health benefits plan offered by the program for a period of five years from the effective date of the expulsion.

4. (d) Coverage rescinded.

   1. (1) The Executive Director may rescind any insurance coverage of a participant in the program, if the Executive Director determines that the coverage was obtained by a fraudulent act or by making a material misrepresentation or by supplying false information on any enrollment form or application for coverage or related documentation or in any communication.
   2. (2) If the participant's coverage is rescinded, it may be rescinded to the date of the inception of the coverage or to the date of the fraudulent act or material misrepresentation.
   3. (3) The Executive Director also may deny any claim filed to obtain benefits from the fraudulently induced coverage.
   4. (4) The Executive Director's decision to rescind insurance coverage or to deny a claim may be appealed to the board in accordance with §81.9 of this title (relating to Grievance Procedure).

Source Note:The provisions of this §81.11 adopted to be effective September 1, 1985, 10 TexReg 2321; amended to be effective May 19, 1992, 17 TexReg 3252; amended to be effective September 2, 1993, 18 TexReg 5594; amended to be effective September 6, 1996, 21 TexReg 8182; amended to be effecitve February 16, 1998, 23 TexReg 1099.