Life and Health Insurance · Texas statutes and rules pertinent to accident and health insurance only · 10 min read
Texas health policy rules: dependents, HIV testing and small employer plans
- Identify the required coverage standards for newborn children, dependents, and chemical dependency under Texas law.
- Explain Texas Department of Insurance rules governing HIV testing, underwriting inquiries, and confidentiality.
- Describe small employer health benefit plan regulations under Chapter 1501 of the Texas Insurance Code, including eligibility and participation standards.
Newborn Coverage and Dependent Benefits Under Texas Law
When you sell health coverage in Texas, you must know that state law strictly safeguards coverage for infants right from birth. A health benefit plan providing maternity benefits or accident and health coverage for additional newborn children may not exclude or limit initial coverage of a newborn child before the 61st day after the child's birth (Tex. Ins. Code §1367.003(1)). Such plans may not exclude or limit coverage for congenital defects of a newborn child (Tex. Ins. Code §1367.003(2)). Furthermore, they may not exclude or limit coverage for the administration of required newborn screening tests, including the cost of a test kit in the amount specified by the Department of State Health Services for the date the test was administered (Tex. Ins. Code §1367.003(3)). Under Texas administrative rules, no individual or group accident and sickness policy providing coverage for additional newborn children may exclude or limit initial coverage of a newborn infant for a period of time or limit coverage for congenital defects (28 TAC §3.3403(a)). Similarly, no individual or group accident and sickness policy providing maternity benefits may exclude or limit initial coverage of a newborn infant for a period of time or limit coverage for congenital defects (28 TAC §3.3403(b)).
Accident and sickness coverage provided for newborn children must be at least as comprehensive as the coverage provided under the policy for other children (28 TAC §3.3403(c)). The initial coverage provided to newborn children must continue for a period of at least 31 days (28 TAC §3.3403(e)). An insurer may charge any additional premium required for the initial period of newborn coverage (28 TAC §3.3403(e)). However, an insurer may require the policyholder to notify the insurer of the birth and pay any required additional premium before newborn coverage continues beyond the initial 31-day period (28 TAC §3.3403(e)). Keep in mind that Texas Insurance Code Section 1367.003 does not apply to policies providing benefits only for specified diseases, pure accident policies, disability only policies, or loss of time only policies (28 TAC §3.3403(i)). For example, if Carlos purchases a disability-only policy, that specific policy is exempt from these statutory newborn requirements.
Dependent qualifications also vary depending on the statutory framework in Texas. In the group benefits program, a dependent includes a spouse (Tex. Ins. Code §1551.004(a)(1)). It also includes an unmarried child younger than 26 years of age (Tex. Ins. Code §1551.004(a)(2)). A dependent in the group benefits program also includes a child of any age whom the board of trustees determines lives with the individual or receives care from the individual on a regular basis, if the board determines that the child is mentally or physically incapacitated to the extent of depending on the individual for care or support (Tex. Ins. Code §1551.004(a)(3)). For purposes of health benefit coverage under Chapter 1551, a dependent also includes an unmarried child of any age upon expiration of the child's COBRA continuation coverage; the definition also includes a ward who is 26 years of age or younger (Tex. Ins. Code §1551.004(a)(4), (5)).
In contrast, under Chapter 1501, which governs small and large employer health benefit plans, dependent age limits differ. Under Chapter 1501, a dependent includes a child younger than 25 years of age, including a newborn child (Tex. Ins. Code §1501.002(2)(B)). It also includes a child of any age who is medically certified as disabled and dependent on the parent (Tex. Ins. Code §1501.002(2)(C)). The age of 25 comes from the Texas statute; separately, federal law requires a group health plan or health insurance issuer that offers dependent coverage of children to keep that coverage available until the child turns 26 (42 U.S.C. §300gg-14(a); 45 CFR §147.120(a)).
| Feature | Group Benefits Program (Chapter 1551) | Small and Large Employer Plans (Chapter 1501) |
|---|---|---|
| Standard Child Age Limit | Unmarried child younger than 26 years of age (Tex. Ins. Code §1551.004(a)(2)) | Child younger than 25 years of age (Tex. Ins. Code §1501.002(2)(B)) |
| Incapacitated or Disabled Child | Child of any age determined by board to live with or receive regular care, mentally or physically incapacitated to the extent of dependency (Tex. Ins. Code §1551.004(a)(3)) | Child of any age medically certified as disabled and dependent on the parent (Tex. Ins. Code §1501.002(2)(C)) |
| Ward Provisions | A ward who is 26 years of age or younger (Tex. Ins. Code §1551.004(a)(5)) | Not specifically enumerated under definition (Tex. Ins. Code §1501.002(2)) |
| Post-COBRA Provisions | Unmarried child of any age upon expiration of continuation coverage under COBRA (Tex. Ins. Code §1551.004(a)(4)) | Not specifically enumerated under definition (Tex. Ins. Code §1501.002(2)) |
Common mistakes
- Assuming an insurer can deny coverage based on a single positive ELISA screening test; Texas law requires an initial ELISA, a second ELISA, and a confirming Western Blot test to all be positive.
- Confusing the child dependent age limits between Chapter 1551 (unmarried child younger than 26) and Chapter 1501 (child younger than 25).
- Believing that seeking counseling for AIDS concerns allows an insurer to make an adverse underwriting decision; Texas rules prohibit adverse decisions based on counseling alone, though seeking treatment is not protected.
- Rounding up when calculating employee participation percentages; Texas rules explicitly require non-whole numbers to be rounded down to the nearest whole number.
Key points
- For policies providing the newborn coverage addressed by 28 TAC §3.3403, initial coverage must continue for at least 31 days; a health benefit plan providing maternity benefits or accident and health coverage for additional newborn children may not exclude or limit initial coverage before the 61st day after birth or coverage for congenital defects.
- Under the group benefits program, dependents include unmarried children younger than 26, while under Chapter 1501, dependent children include those younger than 25 (Tex. Ins. Code §1551.004(a)(2); Tex. Ins. Code §1501.002(2)(B)).
- Chemical dependency coverage is generally subject to the same durational limits, dollar limits, deductibles, and coinsurance as physical illness coverage; a group health benefit plan may impose less favorable dollar or durational limits only if they provide appropriate care and treatment under adopted guidelines and standards.
- In a health or life insurance application or related investigation, insurers may not make inquiries directed toward determining a proposed insured's sexual orientation or use factors such as zip code or occupation to establish it; the rule permits specified factual questions about AIDS diagnoses and positive AIDS-related tests (28 TAC §21.704).
- An adverse underwriting decision for HIV requires positive results across an initial ELISA, a second ELISA, and a confirming Western Blot test (28 TAC §21.705(2)).
- A small employer under Chapter 1501 has an average of at least two but not more than 50 employees, with eligible full-time employees working at least 30 hours a week (Tex. Ins. Code §1501.002).
- Small employers with only two eligible employees face a 100 percent participation requirement, and any non-whole numbers calculated for participation must be rounded down (28 TAC §26.8).
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