(a) Purpose. This section implements Subtitle C, Title 2, Health and Safety Code, Chapter 75, Subchapter E , which authorizes the Health and Human Services Commission to implement a competitive grant program to support the initial establishment and operation of one or more regional or local health care programs for employees of small employers.
(b) Grant objectives. The grant or grants awarded under this section are intended to assist with the establishment or operation of regional and local health care programs created to:
  (1) Improve the health of employees of small employers and their families by improving the employees' access to health care and by reducing the number of those employees who are uninsured;
  (2) Reduce the likelihood that those employees and their families will require services from publicly-funded programs such as Medicaid and CHIP;
  (3) Contribute to economic development by helping small businesses remain competitive with a healthy workforce and health care benefits that will attract employees; and
  (4) Encourage innovative solutions for providing and funding health care services and benefits.
(c) Definitions. The following definitions are used throughout this section.
  (1) Commission--The Health and Human Services Commission.
  (2) Employee--An individual employed by an employer. The term includes a partner of a partnership and the proprietor of a sole proprietorship.
  (3) Grantee--A recipient of a grant awarded under this section.
  (4) Local health care program--A program operating in one county and established to provide health care services or benefits to employees of participating small employers under Health and Safety Code, Chapter 75, Subchapter B, Regional or Local Health Care Program.
  (5) Regional health care program--A program operating in two or more counties and established to provide health care services or benefits to employees of participating small employers under Health and Safety Code, Chapter 75, Subchapter B, Regional or Local Health Care Program.
  (6) Small Employer--A person who employed an average of at least two employees, but not more than 50 employees, on business days during the preceding calendar year and who employs at least two employees on the first day of the plan year.
(d) General conditions of the grant. The grants awarded under this section, and any extension, continuation, or addition to such grants, are subject to:
  (1) The availability of appropriated state funds. A grant may be cancelled either before or after the Commission awards a grant if funding for the grant is terminated, withdrawn, or if sufficient funds are not appropriated to the Commission;
  (2) A competitive award process established by the Commission;
  (3) The requirements of the contract executed by the Commission with the grantee as required under subsection (j) of this section; and
  (4) The grant award period specified in the requests for proposals or other notice of potential grant awards issued by the Commission.
(e) Eligible applicants. The following entities are eligible to apply for grant funds:
  (1) The Commissioners court or courts of the county or counties participating in a local or regional health care program;
  (2) The healthcare system or hospital district of the county, or counties, participating in a regional or local health care program;
  (3) A nonprofit organization or such other entity as is described in the requests for proposals or other notice of potential grant award issued by the Commission that:
    (A) Plans or operates the program under a contract with the commissioners court or courts, as applicable; or
    (B) Is an entity in which the county or counties, or a program affiliated with the county or counties, participate or that is established or designated by the commissioners court or courts, as applicable, to plan or operate the program.
(f) Eligible expenditures. Grant applications must meet the requirements and specifications set forth in requests for proposals issued by the Commission. Projects eligible for grant funding may include:
  (1) Identifying the target population of small employers for participating in the program;
  (2) Designing the service or benefit structure and delivery mechanisms;
  (3) Designing and implementing wellness and educational programs to improve the general health of the targeted population;
  (4) Conducting actuarial analysis;
  (5) Conducting related surveys or focus groups;
  (6) Developing and maintaining a provider network;
  (7) Provider contracting;
  (8) Marketing to small employers and employees;
  (9) Administrative costs for the initial operation of regional or local health care programs; and
  (10) Other functions determined by the Commission to support the initial establishment or operation of a regional or local health care program that accomplishes the objectives in subsection (b) of this section.
(g) Application and selection process. An applicant must submit its application for a grant directly to the Commission in the time and manner specified by the Commission. An application received after the deadline will not be considered. A panel selected by the Commission will review and evaluate eligible, complete, and timely applications in accordance with the evaluation methodology published in the request for proposal or other notice of potential grant award issued by the Commission.
(h) Selection criteria. In selecting grant recipients, the Commission shall consider:
  (1) The extent to which the regional or local health care program proposed by the applicant accomplishes the purposes established by Chapter 75 of the Health and Safety Code;
  (2) The extent to which the regional or local health care program meets the objectives established by §75.101 Health and Safety Code; and
  (3) Other criteria established by the Commission as described in the specific request for proposal or other notice of potential grant awards issued by the Commission.
(i) Performance objectives. Grantees will be required to meet performance objectives established by the Commission.
(j) Contract execution. Grantees will be required to execute a contract with the Commission on mutually agreeable terms and conditions in the manner and format prescribed by the Commission. Grant funds may not be distributed to a grantee before the execution of a contract with the Commission. The contract will require that the grantee comply with:
  (1) The performance objectives established by the Commission and monitored through progress reports;
  (2) Any financial and reporting requirements established by the Commission;
  (3) All applicable policies and procedures; and
  (4) All applicable federal and state laws and their implementing regulations.
(k) Project review and evaluation report. The Commission will review all grant projects before September 1, 2008. Grantees must participate in this review in the manner prescribed by the Commission, which may include on-site visits and the submission of data, documents, and reports. The Commission will submit a report by December 1, 2008, to the Governor, Lieutenant Governor, and speaker of the House of Representatives that includes:
  (1) An evaluation of the success of regional and local health care programs in accomplishing the purposes of Health and Safety Code, Chapter 75, Subchapter E; and
  (2) The Commission's recommendations for any legislation needed to facilitate or improve regional and local health care programs.
(l) Expiration. This rule expires September 1, 2009.

Source Note: The provisions of this §351.703 adopted to be effective December 25, 2007, 32 TexReg 9594