Mid-year, a Texas HMO decides to reduce a covered benefit. What must the HMO do before the reduction takes effect?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under 28 TAC 11.501 and 11.503, a change in the benefits described in an evidence of coverage is an amendment that must be filed with TDI and approved before it is used. Under TIC 843.207, an HMO must also give enrollees reasonable notice of a material change in its operations that directly and adversely affects them. A benefit reduction therefore cannot take effect retroactively or be deferred to renewal without notice: the enrollee is entitled to the benefits in the approved evidence of coverage until a properly filed and approved amendment becomes effective, and skipping the filing and notice exposes the HMO to TDI enforcement.
Why the other options are wrong
- A) Newspaper publication is not the notice mechanism for amending an evidence of coverage.
- B) A reduction cannot take effect before the amendment is filed and approved and enrollees are notified.
- D) Enrollee signatures are not required; the filed amendment and advance notice are the required steps.
Memory hook
Amend, approve, then announce; never cut benefits first and disclose later.