SECTION 13.511. Regulated PEOs; Approval Required

(a) PEOs subject to this subchapter. This subchapter applies to a PEO sponsoring a self-funded employee health benefit plan if:

(1) its primary business location is in this state; or

(2) a majority of the eligible employees of at least one of its clients are employed in this state; or

(3) the primary business location of at least one of its clients is in this state, where no other state contains a majority of that employer's eligible employees.

(b) PEOs not subject to this subchapter. This subchapter does not apply to a PEO sponsoring an employee health benefit plan that consists only of benefits provided through a group insurance policy or evidence of coverage that guarantees the payment of claims for all eligible benefits issued by a carrier authorized to do business in this state.

(c) License and certificate of approval required. A PEO to which this subchapter applies may not offer a self-funded employee health benefit plan unless the PEO is:

(1) licensed and in good standing with TDLR; and

(2) has a certificate of approval from TDI issued under this subchapter.

(d) Insurance Code Chapter 846. Insurance Code Chapter 846, concerning Multiple Employer Welfare Arrangements, does not apply to a plan sponsored by a PEO unless:

(1) a PEO that does not have a certificate of approval to sponsor a PEO plan under this subchapter performs activities that require a certificate of authority under Chapter 846; or

(2) an approved PEO files a withdrawal plan that is approved by the commissioner, and relinquishes its certificate of approval as a PEO plan sponsor under this subchapter.

Source Note: The provisions of this §13.511 adopted to be effective May 17, 2016, 41 TexReg 3479