Timely Notification Requirement

Account Premium Payment After Employee Termination, enacted by passage of Texas Senate Bill 51, amends Chapter 843 and Chapter 1301, of the Texas Insurance Code (TIC) and applies to fully insured HMO and PPO plans issued, delivered or renewed on or after January 1, 2006. The legislation does not affect self-funded accounts.

This notice is provided to give a high-level overview of the requirements and operational impacts to employer groups. The following are key aspects of the Timely Notification Requirements:

Group policyholders are liable for an enrollee's or individual insured's premium payments from the time the person ceases to be eligible for coverage until the end of the month in which the group policyholder notifies the Health Maintenance Organization (HMO) or insurer that the person is no longer part of the group and eligible for coverage.

Group policyholders are required to provide coverage for the enrollee or individual insured, under the policy, until the end of the notification month.

For example, if an employee terminates employment on August 20, and the employer notifies the carrier on September 6, the employer is responsible for paying premium for the entire month of September.

For the most update information on this and other insurance regulations, visit the Texas Department of Insurance (TDI) website that contains information specific to Texas Insurance Regulations as well as Texas Consumer Information.