State RegulationsTX specificDifficulty 3/5
What is the difference between cancellation and nonrenewal of a Texas HMO evidence of coverage?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under TIC 843.208, cancellation terminates an enrollee's evidence of coverage during the contract term and is allowed only for the grounds the statute recognizes, such as nonpayment of charges or fraud or intentional material misrepresentation. Nonrenewal is the HMO's refusal to continue the coverage at the end of a term, and it is likewise limited to statutory grounds; health status and claims experience are not among them. Both require advance written notice, so the practical difference is timing, mid-term versus end of term, plus the reason that must be stated.
Why the other options are wrong
- A) Neither action requires TDI pre-approval or the enrollee's consent; both require notice and a permitted ground.
- C) Both actions are limited to statutory grounds; neither is at the HMO's unfettered discretion.
- D) Both concepts apply to individual and group HMO coverage alike; the market is not the distinguishing factor.
Memory hook
Cancellation is the eviction; nonrenewal is the lease not being extended.