Texas Statutes
Subchapter B. Formation and Structure of Multiple Employer Welfare Arrangements
Section 846.053. Eligibility Requirements for Initial Certificate of Authority

Sec. 846.053. ELIGIBILITY REQUIREMENTS FOR INITIAL CERTIFICATE OF AUTHORITY. (a) An applicant for an initial certificate of authority as a multiple employer welfare arrangement must meet the requirements of this section.
(b) The employers in the multiple employer welfare arrangement must be members of an association or group of five or more businesses that are in the same trade or industry, including closely related businesses that provide support, services, or supplies primarily to that trade or industry.
(c) If the employers in the multiple employer welfare arrangement are members of an association, the association must:
(1) be engaged in substantial activity for its members other than sponsorship of an employee welfare benefit plan; and
(2) have been in existence for at least two years before engaging in any activities relating to providing employee health benefits to its members.
(d) The employee welfare plan of the association or group in the multiple employer welfare arrangement must be controlled and sponsored directly by participating employers, participating employees, or both.
(e) The association or group of employers in the multiple employer welfare arrangement must be a not-for-profit organization.
(f) The multiple employer welfare arrangement must:
(1) have within its own organization adequate facilities and competent personnel, as determined by the commissioner, to administer the employee benefit plan; or
(2) have contracted with a third-party administrator licensed to engage in business in this state.
(g) The multiple employer welfare arrangement:
(1) must have applications from not fewer than five employers and must provide similar benefits for not fewer than 200 separate participating employees; and
(2) will have annual gross premiums of or contributions to the plan of not less than:
(A) $20,000 for a plan that provides only vision benefits;
(B) $75,000 for a plan that provides only dental benefits; and
(C) $200,000 for all other plans.
(h) The multiple employer welfare arrangement must possess a written commitment, binder, or policy for stop-loss insurance issued by an insurer authorized to do business in this state that provides:
(1) at least 30 days' notice to the commissioner of any cancellation or nonrenewal of coverage; and
(2) both specific and aggregate coverage with an aggregate retention of not more than 125 percent of the amount of expected claims for the next plan year and a specific retention amount annually determined by the actuarial opinion required by Section 846.153(a)(2).
(i) Both the specific and aggregate coverage required by Subsection (h)(2) must require all claims to be submitted within 90 days after the claim is incurred and provide a 12-month claims incurred period and a 15-month paid claims period for each policy year.
(j) The contributions must be established to fund at least 100 percent of the aggregate retention plus all other costs of the multiple employer welfare arrangements.
(k) The multiple employer welfare arrangement must establish a procedure for handling claims for benefits on dissolution of the arrangement.
(l) The multiple employer welfare arrangement must obtain the required bond.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.