Section 26.303 - Coverage Requirements(a) The large employer carrier must accept or reject the entire group of individuals who meet the participation criteria established by the employer and who choose coverage, and may exclude only those eligible employees or dependents who have declined coverage. The carrier may charge premiums in accordance with Insurance Code § 1501.107 (concerning Discounts, Rebates, and Reductions) and §1501.610 (concerning Premium Rates: Adjustments) to the group of employees or dependents who meet the participation criteria established by the employer and who do not decline coverage.(b) A large employer carrier must secure a written waiver for each eligible employee who meets the participation criteria and each dependent, if dependent coverage is offered to enrollees under a large employer health benefit plan, who declines an offer of coverage under a health benefit plan provided to a large employer. If a large employer elects to offer coverage through more than one large employer carrier, waivers are only required to be signed if the individual is declining all offered plans. The large employer carriers may enter into an agreement designating which large employer carrier will receive and retain the waiver. Waivers must be maintained by the large employer carrier for a period of six years. The waiver must ensure that the employee was not induced or pressured into declining coverage because of the employee's health-status-related factors. The waiver must be signed by the employee (on behalf of the employee or the dependent, if applicable) and must certify that the individual who declined coverage was informed of the availability of coverage under the health benefit plan. Receipt by the large employer carrier of a facsimile transmission of the waiver is permissible, provided the transmission includes a representation from the large employer that the employer will maintain the original waiver on file for a period of six years from the date of the facsimile transmission. The waiver form must: (1) require that the reason for declining coverage be stated on the form;(2) include a written warning of the penalties imposed on late enrollees; and(3) include a statement that the following individuals were not induced or pressured by the large employer, agent, or health carrier into declining coverage, but elected to decline coverage:(A) an eligible employee who meets the large employer's participation criteria; and(B) the employee's dependents, if dependent coverage is offered to enrollees under a large employer health benefit plan.(c) An agent must notify a large employer carrier, before submitting an application for coverage with the health carrier on behalf of a large employer or its employees, of any circumstances that would indicate that the large employer has induced or pressured an eligible employee who meets the large employer's participation criteria or a dependent to decline coverage due to the individual's health-status-related factors.(d) Health carriers may require large employers to answer questions designed to determine the level of premium contribution by the large employer and the percentage of participation of eligible employees.(e) In this section, an "eligible employee" does not include employees who are within their waiting or affiliation period for percentage of participation requirement purposes. In determining whether an employer has the required percentage of participation of eligible employees who meet the large employer's participation criteria, if the percentage of eligible employees is not a whole number, the result of applying the percentage to the number of eligible employees must be rounded down to the nearest whole number. For example: if a large employer health carrier uses a minimum participation requirement of 75 percent of the eligible employees meeting the large employer's participation criteria, 75 percent of 55 employees is 41.25. Round 41.25 down to 41; so, 75 percent participation by a 55-employee group would be achieved if 41 of the eligible employees who meet the large employer's participation criteria participate.(f) If a large employer fails to meet the qualifying minimum participation requirement for six consecutive months, the large employer health carrier may terminate coverage under the plan on the first renewal date following that period. The termination must comply with the terms and conditions of the plan concerning termination for failure to meet the qualifying minimum participation percentage and in accordance with Insurance Code §§ 1501.108 - 1501.111 (concerning Renewability of Coverage: Cancellation; Refusal to Renew; Discontinuation of Coverage; Notice to Covered Persons; and Written Statement of Denial, Cancellation, or Refusal to Renew Required, respectively) and § 26.308 of this title (relating to Renewability of Coverage and Cancellation). A large employer health carrier must treat all similarly situated large employer groups in a consistent and uniform manner when terminating health benefit plans due to a participation level of less than the qualifying participation level.(g) A large employer must continue to meet the qualifying minimum group size requirement of § 26.301(c) of this title (relating to Applicability, Definitions, and Scope) to be entitled to elect to renew coverage under § 26.301(e) of this title. If a large employer fails to meet, for six consecutive months, the minimum group size requirement of § 26.301(c) of this title, the health carrier may terminate coverage under the plan on the first renewal date following that period. The termination must comply with the terms and conditions of the plan concerning termination for failure to meet the minimum group size requirements in § 26.301(c) of this title, and in accordance with Insurance Code §§ 1501.108- 1501.111 and § 26.308 of this title.28 Tex. Admin. Code § 26.303
The provisions of this §26.303 adopted to be effective March 5, 1998, 23 TexReg 2297; amended to be effective April 6, 2005, 30 TexReg 1931; Amended by Texas Register, Volume 42, Number 19, May 12, 2017, TexReg 2557, eff. 5/17/2017