1. (a) Cancellation of coverage.

   1. (1) Coverage will continue through the last day of the month in which coverage is canceled. 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unless the dependent is no longer eligible as a dependent as defined in §81.1 of this title, the court order is no longer valid, or comparable coverage has been obtained.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) Sanctions for Insurance Program Violations.

   1. (1) The Employees Retirement System of Texas may rescind any insurance coverage or impose one or more sanctions described by Insurance Code, Article 3.50-2, §13A against any person, including, but not limited to any current or former participant, employee, annuitant, dependent or insurance claimant who commits any of the violations enumerated in the Insurance Code, Article 3.50-2, §13A(a).
   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. Any person who disputes a recission of coverage, a denial of benefits or other sanctions imposed in connection with a determination made under Insurance Code, Article 3.50-2, §13A(b), may appeal the determination in accordance with §81.9 of this title (relating to Grievance Procedure). A timely appeal of a determination made pursuant to Insurance Code, Article 3.50-2, §13A shall automatically stay the imposition of sanctions. However, at the time such a determination is made pursuant to Insurance Code, Article 3.50-2, §13A, no further claims will be paid until the agency decision is final. Upon final agency action, all eligible claims will be processed subject to any offsets for overpayments made by the carrier.
   3. (3) Any hearing provided 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 on Disputed Claims) or the rules of the State Office of Administrative Hearings, when applicable. In the event of any conflict between a provision of Chapter 67 and the rules of the State Office of Administrative Hearings, the provisions of Chapter 67 shall control.
   4. (4) 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 determined by the Employees Retirement System of Texas.
   5. (5) If a person's insurance coverage is rescinded, it may be rescinded to the date of the inception of the coverage or from the date of the prohibited conduct as found in the determination made in accordance with Insurance Code, Article 3.50-2, §13A(b).
   6. (6) The Employees Retirement System of Texas also may deny any claim filed to obtain benefits from the insurance coverage in a manner prohibited under Insurance Code, art. 3.50-2, §13A.

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; amended to be effective September 16, 1999, 24 TexReg 7276; amended to be effective September 13, 2001, 26 TexReg 6962.