SECTION 26.401. Establishment of Health Group Cooperatives

(a) Under the Insurance Code and this subchapter, a person may form a health group cooperative for the purchase of employer health benefit plans.

(b) A health carrier may not form, or be a member of, a health group cooperative. A health carrier may associate with a sponsoring entity of a health group cooperative, such as a business association, chamber of commerce, or other organization representing employers or serving an analogous function, to assist the sponsoring entity in forming a health group cooperative.

(c) A health group cooperative must be incorporated as a nonprofit organization and be authorized to transact business in Texas, as required by the Business Organizations Code.

(d) A health group cooperative must file with TDI its organizational documents and, if applicable, authorization to transact business in Texas. The organizational documents must demonstrate the health group cooperative's compliance with Insurance Code §§1501.058 (concerning Powers and Duties of Cooperatives), 1501.059 (concerning Self-Insured or Self-funded Plan Prohibited), and 1501.061 (concerning Requirements Applicable to Heath Benefit Plan Issuers with Which Cooperative May Contract).

(e) A health group cooperative consisting only of small employers that elects to restrict its membership to 50 eligible employees in accordance with Insurance Code §1501.0581(o) (concerning Special Provisions Relating to Health Group Cooperatives) must include that election in the organizational documents filed under subsection (d) of this section. A health group cooperative making this election may not admit an eligible single-employee business, as defined in Insurance Code §1501.051 (concerning Definitions).

(f) A health group cooperative may elect to admit eligible single-employee businesses as members of the cooperative and allow single-employee business members to enroll in health benefit plan coverage as specified in Chapter 26, Subchapter D, Division 2 of this title (relating to Single-employee Business Participation in Health Group Cooperatives).

(g) The provisions of this subchapter do not limit or restrict an employer's access to health benefit plans under this chapter or Insurance Code Chapter 1501 (concerning Health Insurance Portability and Availability Act).

Source Note: The provisions of this §26.401 adopted to be effective August 31, 2004, 29 TexReg 8360; amended to be effective January 31, 2006, 31 TexReg 512; amended to be effective May 17, 2017, 42 TexReg 2539