Under 28 TAC 11.506(3), what must a Texas HMO's group, individual, and conversion agreements and group certificates include regarding the end of coverage?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under 28 TAC 11.506(3), each group, individual, and conversion contract and group certificate must contain a statement specifying the grounds for cancellation and nonrenewal of coverage and the minimum notice period that will apply. The mandatory-provision rule requires both the grounds and the notice period to be spelled out inside the document itself, so an enrollee can read the contract and know exactly what can end the coverage and how much warning will be given. A clause that leaves termination to the HMO's unlimited discretion would not satisfy the rule and would not be approvable as a form.
Why the other options are wrong
- A) The rule requires specified grounds and a stated minimum notice period, so an at-will cancellation clause contradicts the mandatory provision.
- B) The mandatory provision concerns cancellation and nonrenewal terms, not a listing of an enrollee's diagnoses or claim history.
- C) An advance waiver of notice rights is inconsistent with the requirement that the contract state the minimum notice period that will apply.
Memory hook
The contract must say why coverage can end and how much notice comes with it.