A licensed Texas agent takes an HMO application and the first payment from an El Paso applicant. When does the applicant's coverage begin?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under TIC 1271.051 and 1271.052, the evidence of coverage is the TDI-approved document that states the covered services and the enrollee's obligations, and it is the HMO's filed enrollment rules reflected in that document that determine when coverage takes effect. Taking an application and the first payment does not itself bind the HMO: the HMO must accept the application and apply its filed rules before coverage begins. An agent who tells an applicant that coverage begins the moment the application is signed has overstated the enrollment process, and a misstatement about the terms of coverage can be a misrepresentation under TIC 541.052.
Why the other options are wrong
- B) An applicant cannot unilaterally select an effective date.
- C) The application date is only a step in the process; coverage begins on the HMO-approved effective date.
- D) Payment alone does not bind coverage; the HMO's acceptance and filed rules govern the effective date.
Memory hook
The application starts the process; the HMO sets the date.