A Texas insurer issues a group health benefit plan that covers chemical dependency treatment but caps the annual benefit for that treatment at a lower amount than the annual benefit available for other illnesses. Which statement describes this under TIC 1368.005?
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Why A is correct
Under TIC 1368.005, chemical dependency coverage must be provided in the same manner and under the same terms as coverage for other illnesses, so a separate and lower annual or lifetime maximum for chemical dependency treatment is prohibited. The rule is an equality rule, not a first-dollar rule: the plan may still apply the deductible and coinsurance that apply generally to covered illness, but it may not single out chemical dependency for tighter limits. An issuer using such a cap risks a TDI market conduct finding. Note the scope limit: TIC Chapter 1368 applies to group health benefit plans.
Why the other options are wrong
- B) Once the plan covers chemical dependency, the benefit is not discretionary in the sense of being freely limited. TIC 1368.005 governs how it must be provided.
- C) Disclosure does not cure the problem. A disclosed limitation that is more restrictive than the limits applied to other illnesses still violates the same-terms requirement.
- D) The statute requires equal treatment, not cost-free treatment. Ordinary plan cost-sharing that applies to illness generally may still apply to chemical dependency care.
Memory hook
Equal limits for chemical dependency, but cost sharing still applies.