Texas Senate Bill 51 Webinar Presented by: Blue Cross and Blue Shield of Texas December, 2005

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1 Texas Senate Bill 51 Webinar Presented by: Blue Cross and Blue Shield of Texas December, A Division of Health Care Service Corporation, a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association.

2 Agenda Key Aspects of Texas Senate Bill 51 Legislation Example of Applied Texas Senate Bill 51 Legislation BCBSTX Operational Impacts / Changes Identified operational changes are based on BCBSTX current understanding of the statute Operational change implementation is subject to the release and review of the final rules for Texas Senate Bill 51 Frequently Asked Questions (FAQ) 2

3 Key Aspects of Texas Senate Bill 51 - Disclaimer Information provided within this presentation is informational in nature and subject to change, pending the release of the Texas Department of Insurance (TDI) Final Rules. Information contained in this presentation is for Group Policyholder use only and is not to be distributed. Target date for release of Texas Senate Bill 51 final rules is in NOTE: This legislation is not a BCBSTX initiative but a Texas Legislative requirement. 3

4 Key Aspects of Texas Senate Bill 51 4 Texas Senate Bill 51 Overview: Passed by the 79 th Texas Legislature regular session Amends Chapters 843 and 1301 of the Texas Insurance Code (TIC) Applies to all fully-insured (inclusive of Minimum Premium, Cost and Prospective Retention) PPO and HMO benefit plans issued, delivered, offered or renewed, on or after January 1, 2006 Applies to all Enrollees/Insureds and Dependents covered under fully insured PPO and HMO benefit plan lines of business Does not impact self-funded (ASO) plans including Point of Service (POS) contracts Requires for the premium payment and coverage after an enrollee s/insured s termination from a group policy Requires Dental and Vision Single Service HMO s to provide verifications and telephone system coverage

5 Key Aspects of Texas Senate Bill 51, continued Under the new Texas Senate Bill 51 legislation, Group Policyholders are: Liable for an enrollee s or insured s premium payments, from the time the enrollee or insured ceases to be eligible for coverage, until the end of the month in which the Group Policyholder notifies the HMO or insurer, that the enrollee or insured is no longer part of the group and eligible for coverage; and Required to provide coverage for the enrollee or insured, under the policy, until the end of the month in which notification is received by the benefit plan, carrier or insurer. 5

6 Key Aspects of Texas Senate Bill 51, continued Under the new Texas Senate Bill 51 legislation, Dental and Single Service HMO s are required to provide verifications and telephone system coverage as follows: Appropriate personnel must be available for verification and preauthorization of health care services for Dental and Vision Single Service HMO s between 8 a.m. and 5 p.m. Central Standard Time (CST) Monday through Friday for each day that is not a holiday; and Single Service HMO s must have a telephone system capable of accepting or recording incoming phone calls for verification after 5 p.m. Monday through Friday and all day on Saturday, Sunday and Legal Holidays. Responses are required to calls accepted or recorded, not later than the next business day, after the date the call is received. NOTE: BCBSTX does not currently offer Single Service HMO s. 6

7 Key Aspects of Texas Senate Bill 51, continued In relation to Texas Senate Bill 51, BCBSTX will define month as the contract period. The contract period is defined as the following as applicable: 1 st of the month Time period from the 1 st day of the calendar month to the last day of the calendar month. 15 th of the month Time period from the 15 th day of the calendar month to the 14 th day of the following calendar month. 7

8 Key Aspects of Texas Senate Bill 51, continued Who is affected by Texas SB 51? 8 Texas Issued Contracts: All fully insured PPO and HMO benefit plans that are issued, delivered, offered or renewed in the state of Texas; All Enrollees written under Texas contracts regardless of the State of residence. Out of State Issued Contracts: Enrollees located within the State of Texas, but covered by contracts issued in another state, will not be subject to SB51 legislation; BCBSTX s interpretation is that coverage documents issued in another State will contain the provisions required by the State of issue.

9 Example of Applied Texas Senate Bill 51 Legislation An enrollee/insured terms employment with the Group Policyholder on August 20, The Group Policyholder notifies the carrier on September 6, Under the new Senate Bill 51 requirements, the Group Policyholder is responsible for premium payment for the entire month of September 2006, in which the Group Policyholder notified the carrier. 9

10 BCBSTX Operational Impacts / Changes Group Policyholder responsibilities under Texas Senate Bill 51 include: Premium payments for enrollees and their dependents from the time the enrollee ceases to be eligible for coverage, until the end of the contract month, in which BCBSTX was notified of loss of coverage Payment of any and all applied past due premiums to the account if BCBSTX was not notified timely of the enrollee s and dependent s termination. NOTE: Failure to pay any past due premiums will result in delinquent account status and/or termination of the account. 10

11 BCBSTX Operational Impacts / Changes Impacts / changes to current BCBSTX procedures necessary to administer the requirements of Texas Senate Bill 51 include: Elimination of Retro membership terminations and / or Oddday terminations for: New groups effective January 1, 2006 and after; Existing groups on or after the anniversary date during 2006 (E.g. Groups with Option 35 will no longer have Odd-day terminations upon the 2006 anniversary date). NOTE: Retro membership terminations will be accepted, in certain instances, of the death of an enrollee on an employee only policy. 11

12 BCBSTX Operational Impacts / Changes Notification will be required to terminate coverage of an enrollee or insured. Appropriate forms of notification include: Blue Access for Employers (BAE) portal entry (Preferred Method) Completion and submission of the Coverage Change / Termination Form by the Group Policyholder representative through U.S. Mail or Completion and submission of the Group Enrollment Application / Change Form by the enrollee through U.S. Mail or Submission through the Automated Eligibility Processing (AEP) tape process NOTE: Verbal statements of an enrollee s or insured s termination will no longer be accepted by BCBSTX. 12

13 BCBSTX Operational Impacts / Changes Example of BCBSTX Group Enrollment Application/Change Form. Located on the Employer section of the BCBSTX public Website at

14 BCBSTX Operational Impacts / Changes Example of Coverage Change / Termination Form. Located on the Employer section of the BCBSTX public Website at

15 BCBSTX Operational Impacts / Changes BCBSTX will no longer allow Odd-day terminations within it s billing options. Billing changes for Group accounts include: 1 st of the month: Terminations will occur on the last day of the contract month in which BCBSTX is notified of enrollee/insured termination by the Group; and Premiums must be paid through the last day of the contract month in which BCBSTX is notified. 15 th of the month: Terminations will occur on the 14 th day of the following contract month in which BCBSTX is notified of enrollee/insured termination by the Group; and Premiums must be paid until the 14 th day of the following contract month in which BCBSTX is notified. 15

16 BCBSTX Operational Impacts / Changes BAE on-line entry provides the best and most timely method of ensuring the receipt of an enrollee s and dependent s termination notifications. BAE hours of availability are: Monday through Friday from 6:30 a.m. to 11:30 p.m. CT Saturday from 7:00 a.m. to 3:00 p.m. CT For more information on BAE: Visit the Employer section of BCBSTX public website at and click on the link to Take a Tour. You may also contact your BCBSTX representative for additional information. 16

17 BCBSTX Operational Impacts / Changes 17 In the event BAE is inaccessible, due to an unscheduled system outage, the following termination notification methods should be utilized: U.S. Mail: P.O. Box Dallas, Texas Address: An will be provided on the system outage message for emergency cancellation submissions Facsimile (Fax) Transmission: A facsimile (fax) number will be provided on the system outage message for emergency cancellation submissions Expedited Mail (UPS/FedEx/Courier): Current physical address of your Account Executive

18 BCBSTX Operational Impacts / Changes BCBSTX will interpret the receipt date of submitted termination notifications as follows: Blue Access for Employers (BAE) (Preferred Method) Date of on-line system entry Facsimile (Fax) Date stamp applied by receiving BCBSTX facsimile machine U.S. Postal Service Date correspondence is received by BCBSTX Postmarks will not be used as the dates received Date is received by BCBSTX processing office Tape Submission (AEP) Date the Group Policyholder representative transmits the data file containing the termination data to the BCBSTX processing office 18

19 BCBSTX Operational Impacts / Changes BCBSTX coverage documents targeted for revision include: Amending the Termination of Coverage articles in our PPO group contracts and HMO Certificates of Coverage. Language modifications will include the Texas Senate Bill 51 legislative requirements that coverage ends at the end of the contract month, in which the Group notifies the carrier, of the termination of enrollee. Amending the 2006 BCBSTX Group Renewal Letters for fullyinsured PPO and HMO groups to include high-level disclosures of the Texas Senate Bill 51 requirements. NOTE: BCBSTX does not issue Summary Plan Descriptions. 19

20 BCBSTX COBRA Administration Texas SB51 does not impact the current COBRA administration process for BCBSTX. Important Note: COBRA continuation is not mentioned in the Texas Senate Bill 51 statute, however: Failure of the Group Policyholder to notify the insurer/hmo of a loss of eligibility for the enrollee could impact the effective date of COBRA continuation coverage. 20

21 Frequently Asked Questions (FAQ s) Who can I talk to about the aspects of the Texas Senate Bill 51 legislation? Your State Representative To locate your State Representative you may view the Texas Legislature Online website: and select Who Represents Me? Texas Department of Insurance (TDI) TDI website or by phone at

22 Frequently Asked Questions (FAQ s) Where can I locate a copy of Texas Senate Bill 51 to view? The Senate Bill 51 Legislation can be accessed through the Texas Legislature Online Webpage at: ILLTYPE=B&BILLSUFFIX=00051&VERSION=5&TYPE=B 22

23 Questions? Should you have additional questions that are not addressed during this presentation, please contact your BCBSTX representative. 23