Certain small employer health benefit plan issuers and agents are barred from steering coverage choices or compensation based on employees’ health status or claims experience.
Sec. 1501.352. HEALTH STATUS AND CLAIMS EXPERIENCE; PROHIBITED ACTS. (a) A small employer health benefit plan issuer or agent may not, because of the health status or claims experience of the eligible employees of a small employer and those employees' dependents, directly or indirectly encourage or direct the employer to: (1) refrain from applying for coverage with the issuer; (2) seek coverage from another issuer; (3) apply for a particular small employer health benefit plan; or (4) become or not become a member of a particular small employer health coalition. (b) A small employer health benefit plan issuer may not directly or indirectly enter into an agreement or arrangement with an agent that provides for or results in compensation paid to the agent for the sale of small employer health benefit plans that varies because of health status or claims experience. (c) Subsection (b) does not apply to an arrangement that provides compensation to an agent based on a percentage of premium, provided that: (1) the percentage may not vary because of health status or claims experience; and (2) the small employer health benefit plan issuer does not: (A) exclude any additional premium charged to the small employer because of health status or claims experience from the premium amount to which the percentage is applied; or (B) apply a smaller percentage to any additional premium charged to the small employer because of health status or claims experience than is applied to other premiums charged to the small employer. (d) A small employer health benefit plan issuer or agent may not encourage a small employer to exclude an eligible employee from health coverage provided in connection with the employee's employment. (e) A small employer health benefit plan issuer may not terminate, fail to renew, or limit its contract or agreement of representation with an agent for a reason related to the health status or claims experience of a small employer group placed by the agent with the issuer. Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005. Amended by: Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.059(a), eff. September 1, 2005.