The statements made herein are intended to provide Producers and Employer Groups with a reminder of the 2005 Texas Senate Bill 51 legislation and its resulting impact to the corporate policies and procedures of Blue Cross and Blue Shield of Texas (BCBSTX)This will also serve as notification that BCBSTX has evaluated and adjusted policies and processes to comply with our current understanding of the legislation requirements.

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The 2005 passage of Texas Senate Bill 51, Group Premium Payment after Employee Termination, by the 79th Texas Legislature Regular Session, amended Chapters 843 and 1301 of the Texas Insurance Code (TIC). This legislation applies to all fully insured PPO and HMO benefit plans issued, delivered or renewed, on or after, January 1, 2006. This legislation change does not impact self-funded (ASO) accounts.

Key aspects of 2005 Texas Senate Bill 51 include:

Premium Payment and Coverage After Enrollee's / Insured's Termination

Group policyholders are liable for an enrollee's or individual insured's premium payments from the time the employee ceases to be eligible for coverage until the end of the month in which the group policyholder notifies the HMO or insurer that the employee is no longer part of the group eligible for coverage; and
Group policyholders are required to provide coverage for the enrollee or individual insured, under the policy, until the end of the month in which notification is received by the HMO or insurer.
Example: When an employee terms on 08/20/07 and the employer notifies the carrier on 09/06/07, the employer is responsible for paying premium for the entire contract month of September, 2007.

Dental and Vision Single Service HMO's Verification

2005 Texas Senate Bill 51 requires that appropriate personnel must be available for verification and preauthorization of health care services for dental and vision single service HMOs between 8 a.m. and 5 p.m. (CT) Monday through Friday for each day that is not a holiday;
Dental and Vision single service HMO's must have a telephone system capable of accepting or recording incoming phone calls for verification after 5 p.m. Monday through Friday and all day Saturday, Sunday and legal holidays. Responses are required to calls accepted or recorded, not later than the next business day, after the date the call is received.
Note: Existing confirmation and preauthorization requirements for full service HMOs and insured PPOs were not changed by 2005 Senate Bill 51.

BLUE CROSS AND BLUE SHIELD OF TEXAS CORPORATE POLICIES AS COMMUNICATED IN DECEMBER 2005:

Operational changes are required by BCBSTX in order to administer the requirements of [2005] Texas Senate Bill 51.

Termination Notifications:
The following operational changes will be effective on January 1, 2006 for all fully insured business, and will apply to existing groups as they reach their 2006 AD.

BCBSTX will define monthly as the contract month.
Retro membership terminations and Odd-day terminations for new groups will not be accepted on, or after, January 1, 2006.
Retro membership terminations and Odd-day terminations for existing groups will not be accepted on, or after, the group's anniversary date (AD) beginning 01-01-06 and continuing through all 06 anniversary dates.
Appropriate notification will be required to terminate coverage for an enrollee or insured. Appropriate reporting of an employee's termination from the employer group may consist of any of the following methods:
- Blue Access for Employers (BAE) portal (Preferred Method);
- Completion and submission of the Group Enrollment Application

Change Form by the employee;
- Completion and submission of the BCBSTX Coverage Change  Termination Form; or
- Automated Eligibility Processing (AEP) tape submissions.

Note: The BCBSTX Coverage Change,  Termination Form should be used in place of providing employee termination notations on billing statements or in the event the employee has been terminated from employment. Termination notations should not be provided on, or submitted with, the billing statements.

The preferred method to report a timely termination is by direct entry into the Blue Access for Employers (BAE) portal. Terminations entered into the Blue Access for Employers (BAE) portal are updated immediately for employee and employee dependents.

Blue Access for Employers (BAE) can be accessed at www.lvhealthins.com and are available Monday through Friday from 6:00 a.m. to 11:30 p.m. and on Saturday from 6:00 a.m. to 3:00 p.m. Blue Access for Employers is not available on Sundays. In the case of unscheduled system downtime, the BAE portal will direct employers to alternate sources of documentation and submission of employee terminations.

BCBSTX will also accept termination notices by United States Mail, email, or tape submission (AEP). BCBSTX will consider the received date of a submitted termination notice to be the date the termination notice is received by the BCBSTX processing office; not the postmarked date of the U.S. mail correspondence. The Automated Eligibility Process (AEP) system will recognize the receipt date as the date the eligibility data file is received by the BCBSTX processing offices.

Terminations submitted in writing or e-mail utilizing appropriate Group Enrollment Application - Change Form or the Coverage Cancellation Form will ensure priority processing of the termination request. Employees should submit the completed and signed Group Enrollment Application - Change Form to indicate changes to an alternate carrier or other changes to coverage. Employer groups should submit terminations or changes to employee's coverage on the Coverage Cancellation Form. The Coverage Cancellation Form should be submitted in the event the employee is unavailable to complete the Group Enrollment Application -- Change Form.

UPDATES TO BLUE CROSS AND BLUE SHIELD OF TEXAS CORPORATE POLICIES, EFFECTIVE SEPTEMBER 1, 2007

BCBSTX has finalized an update to the original Timely Notification internal policy. The update defines membership cancellation processes for fully-insured accounts as described below. The updated policy will be effective September 1, 2007 and will replace all interim compliance processes as of that date.

Termination Notification
If an enrollee is terminated from an eligible employer group during the seven (7) calendar days preceding the end of the month, and the employer group notifies BCBSTX of the termination within the first three (3) business days of the subsequent month, coverage will be cancelled at the end of the month during which the employee was terminated (e. g. an employee terminates employment on 07/28/07 and employer group notifies BCBSTX on 08/01/07, coverage will be cancelled effective 08/01/07).

Submission Methods
Notification to cancel coverage must be submitted in writing through any of the following methods:

Blue Access for Employers (BAE) the receipt date is the cancellation transaction date documented in BAE.
E-mail  the receipt date is the transmission date on the employer groups email
Written Correspondence Received via U. S. Mail the receipt date is the BCBSTX processing office receipt date
Automated Eligibility Processing (AEP) the receipt date is the date of AEP transmission. Important: Employer Group must answer no-match discrepancy inquiries and make any necessary corrections to the file by the date of the next file transmission; otherwise, the cancellation request will be processed on the next service date following receipt of the corrected information.
Fax the receipt date is the employer groups transmission date.
Hand-Delivery the receipt date is the date the delivery receipt is signed by BCBSTX personnel.
Retroactive Cancellations
Retroactive cancellations are allowed only under the following circumstances:

Fraudulent claim determinations
New groups or existing groups adding new enrollees as the result of acquisitions may retroactively cancel enrollees added in error provided they notify BCBSTX within 30 days of the date the first bill was mailed. The affected enrollees will be shown as never effective.
Terminations Due to Death
Terminations due to death will be processed retroactively for Employee-only coverage. If the policyholder carries dependents on his or her policy, coverage will be cancelled at the end of the month during which notification is received (e. g., if an employee dies on 09/27/07 and BCBSTX receives notification 10/10/07, coverage will be cancelled effective 10/01/07, if no dependents are covered. If dependents are covered, cancellation will be processed for 11/01/07).

Successor Coverage Documentation Required
BCBSTX will require documentation of successor and or Medicare coverage, when processing cancellations due to elective terminations related to coverage obtained through successor and or Medicare policies.

Please direct requests for additional information to your BCBSTX Marketing Representative.  http://www.lvhealthins.com
 
 

Your Health Care Coverage
JUNE 2006
Introduction

Even minor illnesses and injuries can cost thousands of dollars to diagnose and treat. Serious illnesses can be financially devastating. Having adequate health care coverage not only helps ensure that you'll get the care you need, but also helps protect you and your family from large financial losses in the event of an illness or injury.
 
Understanding how health coverage works is an important first step in finding a health plan that meets your needs. This publication provides general information about the kinds of health care coverage available in Texas. It can help you evaluate different health plans and know what to do if you have a problem with your coverage.
Health Plan Basics
Health care plans pay for most, and sometimes all, of the treatment costs for illnesses and injuries. They can generally be classified as either fee for service or managed care. Many people obtain health coverage as part of a group such as an employer, professional association, or other organization  that offers health coverage to its employees or members. Others may buy individual health coverage directly from an agent or insurer. The type of plan you have and how you obtained it usually determines the benefits included, how you access and receive medical care, and what you'll have to pay out of pocket.
 
Fee for service vs. managed care
Fee-for-service plans, often called indemnity plans, are sold by traditional insurance companies. With a fee-for-service plan, you can go to any doctor or provider you want, and you don't need a referral to see specialists. A fee-for-service plan will generally pay for most, but not all, of the costs to treat medical conditions covered by the policy.
 
Often your provider will bill your insurance company directly for its share of your health care costs. In some cases, however, you may have to pay the bill up front and then file a claim with your insurance company for reimbursement. Texas law requires companies to pay claims promptly, but it could take several weeks for you to receive your reimbursement.
With a fee-for-service plan, you will pay:
Premiums. A premium is a fee to participate in the plan. You'll have to pay premiums for as long as you have coverage. If you have a plan through your work, your premium will likely be deducted from your paycheck. Employers who offer Texas health insurance plans usually contribute toward some or all of your premium costs, but they aren't required to do so.

Deductibles. A deductible is an amount that you must pay out of your own pocket before your plan will begin to pay.. You'll usually have to meet your deductible each year. Many insurance companies offer high-deductible options for plans. In general, the higher your deductible, the lower your premium will be.

Coinsurance. Once you've met your deductible, most fee-for-service plans will pay a percentage of the remaining cost for covered health services and require you to pay the rest. This cost-sharing is called coinsurance. The coinsurance will vary by plan. For instance, some plans may pay 80 percent of the cost, leaving you to pay 20 percent, while others may pay 70 percent, leaving you to pay 30 percent. In Texas, health plans must pay at least 50 percent of the cost of covered services after the deductible has been met. As with deductibles, the higher the amount you pay in coinsurance, the lower your premium will be.
Note: Most fee-for-service plans will pay only up to a maximum amount, such as $1 million, during your lifetime toward your total medical expenses or for certain medical conditions. This is called a lifetime maximum.
Managed care plans use networks of doctors, hospitals, clinics, and other health care providers that have contracted with the plan to provide health services to the plan's members. Some managed care plans require you to use providers within the plan's network for all routine care. Others pay for care from any provider, but offer financial incentives for you to use providers within the network.
 
In general, managed care plans are more affordable than fee-for-service plans that offer comparable levels of coverage. Managed care networks provide a built-in clientele for network providers, allowing them to charge lower rates. In addition, managed care plans control costs by emphasizing preventive care in an attempt to avoid serious medical conditions that would later require more expensive treatment.
 
Managed care plans will only pay for services deemed to be medically necessary.  If the plan covers prescription drugs, it may have a list, called a formulary, which specifies the drugs it will cover.  In general, the trade-off for managed care is reduced choice for increased affordability.
 
 
There are three types of managed care plans, each with a different level of provider choice:
Health maintenance organizations (HMOs) generally require you to receive health care only from providers within the HMO's network. There are exceptions for medical emergencies and when medically necessary services are not available within the network. With an HMO, you'll choose a primary care physicians from a list of doctors in the HMO's network. Your primary care physician oversees all of your medical care and provides referrals to specialists and other providers.
HMOs usually pay primary care physicians a set monthly fee called a capitation fee for each member, regardless of the amount of covered services performed.
HMO's with a point-of-service (POS) option allow members to use providers outside the HMO's network without first having to receive a referral. However, if you use providers outside the network, you'll have to pay more for your health care. A POS plan may exclude the option for out-of-network care for certain medical conditions. POS coverage is usually offered as a rider, or an add-on to the contract, for an additional fee.

Preferred provider organization (PPO) plans allow you to go to any provider you choose. However, you'll pay less if you use providers in the PPO's network.You don't have to select a primary care physician to oversee your care in a PPO plan.
With a managed care plan you will pay
Premiums.
Deductibles
Copayments. Copayments are amounts you pay each time you go to the doctor, fill a prescription, or receive a covered health service. Most managed care plans usually have a maximum out-of-pocket expense that you'll have to pay in copays and deductibles over a certain period, usually a year. When you reach this amount, your plan will pay 100 percent of all further costs.
Coinsurance. This is the percentage of the cost for health care services that you must pay after you've met your deductible. Coinsurance usually only applies to out-of-network care in PPO and POS plans.
 
Individual Health Plans
Insurance companies and HMOs sometimes sell coverage directly to individuals. These policies can cover the purchasing individual only or include a spouse and dependents. Individual plans can be a good option if you're self-employed or work for a company that doesn't offer a health plan.
In general, individual plans cost more, and may cover fewer conditions, than employer-sponsored plans or other group plans. Group plans achieve lower rates by spreading the risk of claims over a greater number of people.
The following are common types of coverage you can usually buy as an individual:
HMO plans Managed care plans offered by HMO's that pay for covered health services as long as you use your particular HMO's network of providers or receive preauthorization for obtaining care outside the network.
Major medical policies Policies that cover hospital stays and physician services in and out of the hospital. Major medical policies also may be offered as PPO plans.
Hospital surgical policies  Policies that cover only expenses directly related to hospital and surgical services, such as daily room, surgery, and doctor charges.
Hospital indemnity policies  Policies that pay up to a fixed amount for each day you are in the hospital.
Specified or dread disease policies  Policies that only cover specific illnesses detailed in the policy, such as cancer or AIDS. This coverage also may be offered as a rider to extend the other types of individual coverage.
Short term policies  Policies that only last for a specified length of time, not to exceed 12 months. Short-term policies are most often purchased as a fill-the-gap measure by people who lose coverage for some reason but expect to gain it back.
Carriers have the right to evaluate your medical history and other health factors when deciding to offer individual plans. The carrier may deny your application based on health factors or only offer a plan with an exclusionary rider eliminating benefits for certain conditions.
 
Covering dependents
 
If a plan covers dependents, such as children and grandchildren, they are eligible for dependent health care coverage until the age of 25. State law requires plans to provide comparable coverage for a dependent if the enrolled parent is required to provide medical child support under a court order. The plan may not require the child to live within the service are or to live with the parent.
 
Children with mental or physical disabilities who cannot financially support themselves may be covered indefinitely. The plan may require evidence of disability. Policies that include maternity coverage, and those that allow dependent coverage, must also provide automatic coverage for any newborn child for the first 31 days. You must notify your carrier if you wish to continue coverage for the child beyond this period.  Large-employer plans also must provide coverage for certain dependent students over the age of 25. However, except for emergency care and authorized referrals, an HMO plan can require dependent students to return to the plans service area to receive health care services.  If two spouses are covered by separate health plans, and both plans cover their dependents, the birthday Riley takes effect. This means the plan of the parent who has the earlier birthday in the calendar year pays first. For example, the plan of a parent whose birthday is July 3 would pay for a child's health care before the plan of the other parent born on July 4. However, if the first parents plan reaches its benefits maximum, the second plan can take effect. In the event of a divorce, a court usually determines which parents plan is a dependents primary coverage.
Health Plan Benefits
Benefits vary from one plan to another. Health plans are classified as either state-mandated plans or consumer choice plans. A state-mandated plan provides certain required minimum features and coverages. To make health coverage more affordable, Texas law allows carriers to also offer consumer choice plans that do not include all of the state-mandated benefits. Consumer choice plans are required to provide members with a disclosure statement and a list describing the benefits that are not covered. To be certain of the coverages you have with any plan, you should refer to your policy or explanation of coverage.
 
Although consumer choice plans also may be called standard plans, be careful not to interpret the term to mean that the coverages provided are standardized.  Each carriers consumer choice plan may be different  and, in fact, a carrier may offer several different consumer choice plans.
Limitations of Coverage
Carriers may deny payment for any treatment, or the continuation of any treatment, if they deem that it is not medically necessary. Many health plans perform utilization review before non-emergency medical procedures are approved. The review must be conducted by an appropriate physician, dentist, or other health care provider, and any decision denying treatment must include a medical reason. State law requires the criteria used to approve or deny requested services or treatments to be objective, medically (clinically) valid, compatible with established health care principles, and flexible enough to allow deviation from standard guidelines when justified on a case-by-case basis.  If you have an unresolved complaint about a utilization review for an individual, small-employer, or large-employer plan, you may file a complaint with TDI. If you have a complaint about a self-funded plan, contact the U.S. Department of Labor.  To reduce the chance of a claims problem, read your policy or benefits booklet carefully. Be sure you meet all of the plans requirements, and keep copies of all correspondence with your carrier and health care provider.  Approval of treatment is not the same as approval for payment. You may still need to file a claim after the procedure. Carriers can refuse payment for portions of approved treatment if they are found to be unnecessary expenses.
 
Pre-existing conditions and waiting periods
 
If you currently have a medical problem, or have had one in the recent past, it may meet a plans definition of a pre-existing condition. Most plans will require you to wait a period of months, or sometimes years, before paying benefits for treatment related to this condition.  You must disclose any pre-existing conditions in your application for any health plan. Failure to do so could jeopardize future claims or invalidate the policy.  Carriers may define a pre-existing condition as any condition for which you've received medical advice, care, diagnosis, or treatment during a specified period of time before the plan takes effect. In addition, individual plans can define a pre-existing condition as one where you've shown the existence of symptoms likely to cause you to seek diagnosis or care during the period before the plan begins. Typically, individual plans consider your medical history for the previous five years to determine whether you have a pre-existing condition. Employer-sponsored plans typically consider the previous six months, while other group plans usually look at the previous 12 months.  An individual carrier may decline to cover you entirely on the grounds of a pre-existing condition, or the carrier may insist on a special policy rider that excludes treatment for the condition. Group carriers may not insist on a pre-existing condition exclusion rider.  The maximum pre-existing waiting period for an individual health plan is two years. The maximum wait for employer-sponsored health plans is one year. You may have to wait up to two years for pre-existing conditions to be covered if you have coverage through a group plan that's not sponsored by an employer.
 
Some plans may require a standard waiting period before new members are eligible to receive any benefits, regardless of whether they have a pre-existing condition or not. If this is the case, your pre-existing condition wait begins with the start of the waiting period. For example, if your plan has a waiting period of three months and a pre-existing condition waiting period of one year, a new member would be eligible to receive benefits for a pre-existing condition nine months after the waiting period ends.  HMOs have an affiliation period that works in much the same way as a waiting period for pre-existing conditions in indemnity plans. However, the affiliation period may not be longer than 90 days.  If you're switching from one health plan to another, or have recently had health coverage, you may have a shorter waiting period before your pre-existing conditions are covered.  The amount of time you spent covered under the previous health plan is creditable toward any new plans waiting period, as long as there is no gap in coverage greater than 63 days. For example, if you've been covered by a health plan for the past six months, and then switch to a new plan with a pre-existing condition waiting period of one year, you get credit for your previous coverage and you only have to wait six months. If you had coverage under the previous plan for a year, you wouldn't have a waiting period with the new plan.  Look below to see the a summery of how most health insurance plans deal with Pre-Existing Conditions:
Pre-Existing Condition Summary
  Group Health Insurance Individual Health Insurance
Pre-existing condition You received diagnosis, care, or treatment within six months prior to joining an employer-sponsored plan, or one year prior to joining a non-employer group plan You had symptoms likely to cause you to seek medical advice, diagnosis, care, or treatment, or a condition for which you received medical advice, diagnosis, care, or treatment, within five years prior to joining
Waiting period 12 months for plans offered by employers; up to 24 months for non-employer plans (from churches, unions, associations, etc). Up to 24 months
If you're moving from a group plan to Individual Health Insurance Your waiting period is reduced on a month-for-month basis. If previous coverage lasted 12 months, there is no wait for an employer group plan Carrier may refuse to accept you because of a pre-existing condition or may include a rider eliminating coverage for the condition; coverage is credited on a month-for-month basis
If you're moving from an Individual plan to Group Health Insurance Your waiting period is reduced on a month-for-month basis; if previous coverage lasted 12 months, there is no wait There is no law requiring credit for a waiting period; the new carrier may refuse to accept you, include a rider eliminating the condition from coverage, and require a full 24-month waiting period

 
Long-term care
 
Long-term care refers to the type of personal care services you may need if you become unable to care for yourself because of a loss of functional capacity or cognitive impairment.  Long-term care is different from traditional medical care. Traditional medical care treats physical problems directly in an attempt to permanently cure or control them. Long-term care services however, help a person maintain his or her ability to function, perform normal daily activities, or maintain a normal lifestyle.  In general, health plans do not cover long-term care. Some may cover short-term nursing home care, but long-term custodial care in a nursing home or at-home custodial care typically requires a special long-term care policy.
How to Shop for Coverage
Be sure you understand the full extent of the coverage that is included in any health plans you're considering.  If you have more than one option, choose the plan with the highest level of coverage you can afford. The higher a plans deductibles, co-pays, and coinsurance, the more you can usually save on premiums. However, you'll also have to pay more out of pocket for claims.
Consider factors other than cost. A carriers financial rating and history of consumer complaints are other important considerations. Also make sure your carrier is licensed by TDI. Guaranty associations play the claims of licensed carriers that become insolvent. If your company isn't licensed, your claims could go unpaid. You can learn a company's financial rating from an independent rating organization, its complaints history, and its license status by calling TDI'S Consumer Help Line or by viewing company profiles on our website
 
Ask your friends, family, and physician for recommendations. Be sure you learn the answers to these questions about any health plan you're considering:
Does the plan cover your choice of physicians and hospitals?

Are there limits on medicines, referrals to specialists, or the types of treatment or surgery available?

Are there benefit limits per person, family, illness, treatment and/or hospital stay?

What is the procedure for out-of-network emergency care?

Does the plan have yearly or lifetime maximums?
Additional precautions
 
When you apply for coverage, be sure you fill out the application accurately and completely. If you knowingly provide incorrect, incomplete, or misleading information, especially about a pre-existing condition, your coverage could be canceled or your benefits denied.
 
When purchasing an individual plan, never sign a blank policy application, and verify any information filled in by an agent. Make payments by check or money order payable directly to the insurance company or HMO, not the agent, and insist on a signed receipt on the carriers letterhead. Make sure you have the full name, address, and phone number for both your agent and your carrier.
 
Never pay more than two months premiums until you have received a copy of your policy, HMO certificate, or group membership certificate.  State law requires that you have a 10-day Free-look to evaluate any individual coverage policy, during which you can change your mind and receive a refund. If you return a policy, send it by certified mail, return receipt requested.
 
Health Insurance Rates
 
Texas, like most states, has no authority to regulate or approve health plan rates. The only exception is for small-employer plans, where the state has a cap on annual premium rate increases. Insurance companies and HMOs set their own premiums. Small-employer and large-employer plans are required to give 60 days notice before any increase takes effect.  In general, health plan rates are determined by all of the following:
The coverages included. The more conditions your plan covers, the greater the carriers risk. Premium rates increase accordingly.

Amount of the deductibles. Plans with higher deductibles have lower premiums.

Number of covered dependents. Adding a spouse or dependent children to your plan will raise your premiums.

Number of group plan participants. Group plans are usually less expensive than individual plans. As group size increases, administrative costs per plan member decline. Also, smaller groups and individuals tend to buy health coverage based on participants targeted needs, increasing the likelihood of claims. This type of custom tailoring is less likely as claims risk is distributed across a larger population.

Claims experience. You can expect to pay more if you've filed claims in the past.

Age. Older people can reasonably be expected to require more, and more expensive, health care. Your premium will reflect your age, or the ages of the members in your group plan.

Gender. Females generally incur higher medical costs than males at younger ages, particularly during childbearing years. This variance diminishes with age until medical costs for males begin to exceed those for females in the late 50s and early 60s. Younger, proportionately more female plan members, or older, proportionately more male, will increase rates.

Geography. Health costs vary by region due to differences in cost of living, medical practices, and the amount of medical competition in the area.

Industry. If you are in an employer-sponsored plan, your rates may be affected by the nature of your profession. Some industries have higher medical claims costs than others because of working conditions and the prevalence of accidents. High employee turnover in some industries can also result in higher administrative costs for the carrier.
Dealing with Rate Increases
 
Premiums tend to rise quicker for individual plans since there is no employer or other plan sponsor to help bear the cost. If your premiums are increasing beyond your ability to pay, you may be able to save money by asking your carrier to revise an individual plan.
 
Options to reduce your individual plans premiums may include raising your deductibles or co-pays, increasing your maximum out-of-pocket payment, or changing your coverage.  Be sure that you don't drop an essential coverage, however. Before making any changes to your plan, find out if your carrier will allow you to add back any dropped benefits later.  If you're unable to reach a good deal on your current plan, you may want to switch to a new plan or carrier entirely. Remember, if you have, or recently had, a medical condition, you may encounter problems finding new coverage. If you have a serious health condition and cannot find coverage, you may have to join the Texas Health Insurance Risk Pool or seek coverage through government programs.
 
Important!
 
Always try to keep your current coverage until new coverage takes effect. Most companies do not begin coverage until they approve your application and deliver your policy. Gaps in coverage leave you vulnerable in the case of emergency sickness or injury and can result in longer waiting periods before pre-existing conditions are covered by a new plan.
 
Late payment of premiums on an individual policy could cause you to lose your coverage and benefits. Some carriers may accept late payments. However, many carriers will require that you reapply for the coverage before you can be reinstated. If you must re-apply, the carrier may again consider your health history before deciding to accept you.
 
Reinstated coverage will only cover health expenses due to an accident if the accident occurs after reinstatement. It will only cover expenses due to illness if the illness begins more than 10 days after reinstatement. When a carrier reinstates a policy, it may also attach riders excluding certain coverage. The exclusions may be permanent or for a specified period of time.  Under an individual policy, death of an insured spouse does not necessarily terminate coverage. The surviving spouse becomes the insured. If you lose coverage due to a change in marital status, you are entitled to your own individual policy. You don't have to prove you're in good health to receive the new policy.
 
C.O.B.R.A. Coverage
 
 
If you lose your group coverage for employment-related reasons, you may be able to keep your coverage for a limited time, although your employer will no longer continue any contribution toward your premium.
 
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that gives employees, and in some cases retired employees, the right to continue group health coverage for a specified period. You may extend coverage for yourself for up to18 months, and for your spouse or any dependent children for up to 36 months. COBRA generally only applies to employees who lose their coverage because of reduced work hours or lose their job for reasons other than Gross misconduct.
 
COBRA applies to all employer health benefit plans with 20 or more employees, except plans sponsored by the federal government and certain church-related organizations.
 
COBRA also enables a spouse and dependent children to continue coverage when an employee is entitled to Medicare, divorces, or dies. An employees children qualify for continued coverage under COBRA if they lose dependent child status under the rules of the health benefit plan. An employee, spouse, or dependent child has 60 days after qualifying for COBRA coverage to decide whether to take it. If accepted, the cost to the employee, spouse, or dependent child is the full premium, plus a 2 percent administrative fee. Depending on the situation, coverage may continue for 18 to 36 months, but may be slightly longer in some situations.
 
If you continue HMO coverage through COBRA and move out of the service area, you will be covered only for emergency services. For more information, call the Dallas office of the U.S. Department of Labor's Employee Benefits Security Administration.  If you meet certain criteria, Texas law requires your group plan to allow you to continue coverage for six months. The six-month continuation period begins after any federal COBRA extension period ends, or begins immediately if COBRA coverage does not apply. Therefore, if you are eligible and opt for COBRA coverage, you may have a total of 24 months to find new health care coverage.
 
Before the Texas continuation period ends, your group plan is also required to provide you with information on how to enroll in the Texas Health Insurance Risk Pool.
 
State Supported Group Coverage
 
Health carriers are required to provide a group continuation privilege for certain members whose coverage under the group contract has been terminated for any reason except involuntary termination for cause. To be eligible, the member must have been continuously covered under the group contract and under any group contract providing similar services and benefits which it replaces for at least three consecutive months immediately prior to termination. State continuation of group coverage may not terminate until the earliest of the six months after the date the election is made, the date on which the failure to make timely premium payments would terminate coverage, the date the covered person is covered by another similar health care coverage, or the date the group coverage terminates in its entirety.
 
Last updated: 10/26/2006

The Texas Department of Insurance
333 Guadalupe, Austin 78701  P.O. Box 149104, Austin 78714-9104
 
 

Contact Insurance Advisors Regarding Your Houston Health Insurance, Dallas Health Insurance or LasVegas Health Insurance Plan.  We also Serve all territories or Texas and Nevada

Insurance Advisors

409-283-3393 Office  866-572-6137 Fax