(a) Except as provided by subsection (d) of this section, a health carrier shall renew a health benefit plan issued to an association, or a bona fide association, at the option of the association or bona fide association, unless:
  (1) the association or bona fide association has failed to pay premiums or contributions in accordance with the terms of the health benefit plan, including any timeliness requirements;
  (2) the association or bona fide association has performed an act or practice that constitutes fraud, or has made an intentional misrepresentation of material fact, relating in any way to the health benefit plan, including claims for benefits under the health benefit plan;
  (3) in regards only to a health benefit plan offered by an HMO or a group hospital service plan issued under the Insurance Code Chapter 20, the association or bona fide association ceases to have any covered members who reside, live, or work in the service area of the HMO or group hospital service plan, but only if coverage is terminated uniformly without regard to any health status-related factor of covered members or dependents of covered members, if dependent coverage is offered; or
  (4) the health carrier is ceasing to offer health benefit plan coverage in the association market in accordance with subsection (d) of this section.
(b) A health carrier may refuse to renew the coverage of a covered member or dependent if:
  (1) the member fails to pay premiums or contributions in accordance with the terms of the health benefit plan, including any timeliness requirements;
  (2) the covered member or dependent has performed an act or practice that constitutes fraud, or has made an intentional misrepresentation of material fact, relating in any way to the health benefit plan, including claims for benefits under the health benefit plan;
  (3) in regards only to coverage offered by an HMO or a group hospital service plan issued under the Insurance Code Chapter 20, the covered member no longer resides, lives, or works in the service area of the HMO or group hospital service plan, but only if coverage is terminated uniformly without regard to any health status-related factor of the covered member or dependent;
  (4) the health carrier is ceasing to offer health benefit plan coverage in the association market in accordance with subsection (d) of this section; or
  (5) the covered member or dependent ceases to be a member of the association or bona fide association to which the coverage is offered, but only if such coverage is terminated under this paragraph uniformly without regard to any health status-related factor of the covered member or dependent.
(c) Medicare eligibility or entitlement is not a basis for non-renewal or termination of a health benefit plan issued to an association or bona fide association or members of an association or bona fide association. However, health benefit plan coverage sold to association and bona fide association members before the members attain Medicare eligibility may contain coordination of benefit provisions that comply with Chapter 3, Subchapter V of this title (relating to Group Coordination of Benefits) and §11.511 of this title (relating to Optional Provisions).
(d) A health carrier may discontinue a particular health benefit plan pursuant to paragraph (1) of this subsection. A health carrier may discontinue all health benefit plans pursuant to paragraph (2) of this subsection.
  (1) A health carrier may discontinue offering a particular type of health benefit plan offered to associations or bona fide associations only if, at least 90 days before the date coverage will be discontinued, the health carrier:
    (A) provides notice in writing to each association or bona fide association and each member covered under the health benefit plan being discontinued;
    (B) offers to the association or bona fide association the option to purchase any other health benefit plan currently being offered by the carrier to associations or bona fide associations; and
    (C) acts uniformly without regard to any health status-related factor of covered members or dependents, or new members or dependents who may become eligible for the coverage.
  (2) A health carrier may discontinue offering all health benefit plans offered to associations or bona fide associations only if, at least 180 days before the date coverage will expire, the health carrier:
    (A) provides notice in writing to the commissioner of insurance, each association or bona fide association, and each covered member;
    (B) discontinues and does not renew all health benefit plans issued in this state or an approved geographic service area of an HMO or group hospital service corporation to associations or bona fide associations; and
    (C) acts uniformly without regard to any health status-related factor of covered members or dependents of covered members, if dependent coverage is offered, or new members or dependents who may become eligible for coverage.
(e) A health carrier that elects not to renew all health benefit plans to associations or bona fide associations in accordance with subsection (d)(2) of this section may not issue any association or bona fide association coverage in this state, or in an approved geographic service area of an HMO or group hospital service corporation, during the five year period beginning on the date of discontinuation of the last such coverage not renewed.
(f) Nothing in this section prohibits or restricts a health carrier's ability to make changes in premium rates by classes in accordance with applicable laws and regulations.
(g) Nothing in this section shall be interpreted as prohibiting a health carrier from making modifications to a health benefit plan mandated by state or federal law.

Source Note: The provisions of this §21.2704 adopted to be effective July 5, 1999, 24 TexReg 5014