    INSURANCE CODE
    TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES
    SUBTITLE B. GROUP HEALTH COVERAGE
    CHAPTER 1252. DISCONTINUATION AND REPLACEMENT OF GROUP AND GROUP-TYPE HEALTH BENEFIT PLAN COVERAGE
    SUBCHAPTER A. GENERAL PROVISIONS
    Sec. 1252.001.  DEFINITIONS.  In this chapter:(1)  "Carrier" means:(A)  an insurer;  or(B)  a group hospital service corporation operating under Chapter 842.(2)  "Health benefit plan" means:(A)  any accident and health insurance policy;(B)  a subscriber contract of a group hospital service corporation;  or(C)  an accident and health benefits package of a multiple employer trust that is not exempt from regulation by this state as an employee welfare benefit plan under the Employee Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et seq.), as amended.(3)  "Previous carrier" means a carrier whose health benefit plan coverage has been replaced with health benefit plan coverage provided by a succeeding carrier.(4)  "Succeeding carrier" means a carrier that replaces the health benefit plan coverage provided by another carrier with its own health benefit plan coverage.(5)  "Total disability" or "totally disabled" means:(A)  with respect to an employee or other primary insured covered under a health benefit plan, the complete inability of that individual to perform all of the substantial and material duties and functions of the individual's occupation and any other gainful occupation in which the individual earns substantially the same compensation earned before the disability;  and(B)  with respect to any other individual covered under a health benefit plan, confinement as a bed patient in a hospital.
    Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.

    Sec. 1252.002.  APPLICABILITY OF CHAPTER.  (a)  This chapter applies only to a health benefit plan that:(1)  provides coverage on a group or group-type basis to an individual eligible for that coverage because of the individual's status as:(A)  an employee of an employer;  or(B)  a member of a labor union or a member of an association;  and(2)  is delivered or issued for delivery in this state.(b)  This chapter does not apply to an entity that is not engaged in the business of insurance in this state.
    Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.

    Sec. 1252.003.  COVERAGE ISSUED ON GROUP-TYPE BASIS.  (a)  For purposes of this chapter, health benefit plan coverage is provided on a group-type basis if:(1)  the plan provides coverage under an insurance policy or subscriber contract to a class of employees or a class of members of a labor union or members of an association and the class is determined by conditions relating to their employment or to their membership in the union or association;(2)  coverage under the plan is not available to the general public and can be obtained and maintained only because of the covered individual's employment status or membership in a labor union or an association;(3)  premiums or subscription charges for the plan are paid to the carrier on an aggregate or bulk-payment basis;  and(4)  the plan is sponsored by:(A)  the employer of the class of employees covered by the plan;  or(B)  the labor union or an association to which the class of members covered by the plan belongs.(b)  Health benefit plan coverage is not provided on a group-type basis if it is a salary-budget plan using individual insurance policies or subscriber contracts that do not meet the conditions for group-type coverage specified by Subsection (a).
    Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.

    SUBCHAPTER B. DISCONTINUATION OF COVERAGE
    Sec. 1252.101.  NOTICE OF DISCONTINUATION OF COVERAGE.  A notice of discontinuation of a health benefit plan must include a request to the group policyholder or other entity responsible for making payments or submitting subscription charges to the carrier to notify employees or members covered by the plan of the discontinuation and the date of the discontinuation.
    Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.

    Sec. 1252.102.  EXTENSION OF BENEFITS PROVISION;  EXEMPTION.  (a)  A health benefit plan must contain, subject to this section and Section 1252.103, a reasonable provision providing for an extension of benefits for a total disability that exists on the date of the plan's discontinuation.(b)  A health benefit plan must contain a reasonable extension of benefits provision for coverage for hospital or medical expenses other than dental expenses.  A provision is considered reasonable if it provides to an individual who is covered under the plan and who is totally disabled on the date of the plan's discontinuation an extension of benefits for expenses incurred in treating the condition causing the total disability and the extension is provided for at least the lesser of:(1)  90 days;  or(2)  the duration of the total disability.(c)  An extension of benefits provision required under this section may provide for an exclusion from coverage for an individual whose coverage is being discontinued and replaced with coverage that:(1)  is provided by a succeeding carrier;  and(2)  provides a level of benefits that is at least substantially equal to the level of benefits provided under the replaced health benefit plan.(d)  An applicable extension of benefits provision must be described in the policy or contract and the group insurance certificate.(e)  Benefits payable during an extension period may be subject to the regular benefit limits of the health benefit plan.(f)  This section does not apply to a health benefit plan that was delivered or issued for delivery in this state before January 1, 1982, and whose level of benefits has not been modified after December 31, 1981.
    Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.

    Sec. 1252.103.  INDEMNITY OR BENEFITS PAYABLE FOR DISABILITY.  A discontinuation of health benefit plan coverage occurring during a period of disability does not affect:(1)  any benefits payable under the plan for loss of time from work because of the disability;  or(2)  any specific indemnity required to be provided under the plan during a period of hospital confinement.
    Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.

    Sec. 1252.104.  LIABILITY FOR LOSS UNDER AUTOMATICALLY DISCONTINUED COVERAGE.  (a)  If a health benefit plan provides for automatic discontinuation of coverage when a premium or subscription charge due under the plan is not paid before the expiration of a grace period specified in the plan for that payment, the carrier or other entity responsible for making premium payments or for submitting premiums or subscription charges to the carrier is liable, on the submission of a valid claim, for a loss that is:(1)  covered by the plan;  and(2)  incurred before the expiration of the grace period.(b)  The commissioner may adopt reasonable rules necessary to implement this section.
    Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.

    SUBCHAPTER C. REPLACEMENT OF COVERAGE
    Sec. 1252.201.  TOTAL DISABILITY STATUS.  In this subchapter, a reference to the total disability status of an individual means the individual's disability status immediately preceding the date on which the succeeding carrier's coverage takes effect.
    Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.

    Sec. 1252.202.  EFFECTIVE DATE OF COVERAGE UNDER REPLACEMENT PLAN.  (a)  An individual who was covered by a previous carrier's health benefit plan on the date on which that plan was discontinued shall be provided coverage under the succeeding carrier's health benefit plan as of the replacement plan's effective date if the individual:(1)  is eligible for coverage because the individual is a member of a class eligible for coverage under the replacement plan and satisfies the replacement plan's actively at work and nonconfinement requirements;  and(2)  elects to be covered under the replacement plan.(b)  An individual who would be covered by the succeeding carrier under Subsection (a) but who does not satisfy the replacement plan's actively at work and nonconfinement requirements shall be covered under the replacement plan when the individual satisfies those requirements.
    Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.

    Sec. 1252.203.  EXTENSION OF BENEFITS FOR TOTAL DISABILITY.  (a)  With respect to providing a type of coverage for which Section 1252.102 requires an extension of benefits for an individual with a total disability, a succeeding carrier replacing a previous carrier's plan that is not subject to that section must provide, subject to Subsection (b), the lesser of:(1)  extended benefit coverage that the previous carrier would have been required to provide under Section 1252.102 if the previous carrier had been subject to that section;  or(2)  extended benefit coverage that the succeeding carrier is required to provide under Section 1252.102.(b)  The extended benefit coverage may be reduced by any benefits actually payable under the previous carrier's health benefit plan.
    Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.

    Sec. 1252.204.  COVERAGE FOR PREEXISTING CONDITIONS.  (a)  A succeeding carrier's health benefit plan that limits coverage in accordance with a preexisting conditions provision, other than a waiting period, must provide, during the period the limitation on coverage is in effect, the level of benefits prescribed by this section to an individual covered by the succeeding carrier who:(1)  has a preexisting condition;  and(2)  was covered by the previous carrier's plan on the date on which that plan was discontinued.(b)  The health benefit plan must provide a level of benefits equal to the lesser of:(1)  the level of benefits available under the succeeding carrier's plan as determined without applying the preexisting conditions provision;  or(2)  the level of benefits that would have been available under the previous carrier's plan.
    Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.

    Sec. 1252.205.  WAITING PERIOD.  If the benefits that were available under a previous carrier's health benefit plan are similar to the benefits available under a succeeding carrier's health benefit plan, the succeeding carrier shall give credit for the satisfaction or partial satisfaction of any waiting period or similar provision that has been satisfied under the previous carrier's plan.
    Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.

    Sec. 1252.206.  DETERMINATION OF BENEFITS AVAILABLE UNDER REPLACED PLAN.  (a)  If a succeeding carrier requires a determination of the benefits available under the previous carrier's health benefit plan, the previous carrier shall provide at the request of the succeeding carrier:(1)  a statement of the benefits available under the previous carrier's plan;  or(2)  pertinent information sufficient either to allow verification of those benefits or to allow the succeeding carrier to make a determination of those benefits.(b)  A determination of benefits under this section must be made using the definitions of, and in accordance with all of the conditions and covered expense provisions of, the previous carrier's plan as if that plan had not been replaced.
    Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.

    Sec. 1252.207.  LIABILITY OF PREVIOUS CARRIER.  A carrier of a health benefit plan that is being discontinued is liable only for any accrued liabilities regarding the plan and for any extension of benefits provided under the plan, regardless of whether the group policyholder or any other entity responsible for making payments or for submitting subscription charges to the carrier:(1)  replaces the coverage provided under the discontinued plan with health benefit plan coverage provided by another carrier;(2)  self-insures a health benefit plan;  or(3)  does not provide health benefit plan coverage.
    Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.