Small Business Health Insurance Basics in Texas

Finding the right group health plan for your business can be downright daunting: sorting through lists of insurance companies and plans; checking and rechecking dollars and totals for deductions and co-payments; make sense of plan limitations and exclusions; deciphering the fuse-speech value of a dictionary. Enough to make you feel like a high school freshman again.

Texas insurance law allows for a wide variety of health insurance plans and packages. All group health insurance has its limitations, and finding the right working health plan at the right price can be difficult.

In Texas, the term “small employer” is a specialized insurance designation reserved for businesses with between two and 50 eligible employees. The law provides these businesses with a 15 percent annual rate increase cap based on health factors, a government-enforced guarantee that carriers cannot arbitrarily terminate coverage, and a joint-buying provision that allows small employers to pool their purchasing influence. provides some additional protection. bargain for lower rates.

For employees of small businesses in Dallas, Houston, and Texas, the law provides several ways for them to maintain benefits after leaving work and limits waiting time before pre-existing conditions are met.

Beyond these requirements, small employer carriers can offer a wide variety of plans with just about any combination of features and benefits.

Eligibility for Small Business Scope

Texas businesses with two to 50 eligible employees may receive small employer coverage from a traditional insurance company or a health care organization (HMO). Eligible employees are generally defined as those who work at least 30 hours per week; not classified as temporary, part-time or seasonal; and is not currently covered by any other group health plan. Owners of a business count towards its employee total.

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The number of eligible employees — not the total number of employees — determines whether a business is considered a small employer under Texas insurance law. For example, if your business has a total of 60 employees, six employees are part-time, and four are insured from another source, such as a spouse’s plan, you may still be eligible.

If you decide to offer a group health plan to your employees, you must offer it equally to all your eligible employees and their dependents.

Coverage is available under a small employer health benefit plan if at least 75 percent of a small employer’s eligible employees choose to be covered. Carriers should always “complete” when calculating the percentage. For example, a five-person business with only three employees willing to participate would round up to meet the 75 percent requirement.

However, in the case of a business with only two eligible employees, the law requires 100 percent participation. A husband and wife working in a workplace should be counted as two separate workers. None of the employees can be covered by the insurance as a dependent of the other.

If you provide a health plan, state regulations, and a federal law called COBRA (Consolidated Omnibus Budget Reconciliation Act), it allows employees to maintain benefits for a period of time after they leave the job. It is your legal responsibility to inform employees of their rights to continue coverage. Former employees who choose to continue their coverage through COBRA or government continuation must pay the full cost of the plan. You are not obligated to contribute to their premiums, even if you have previously paid a share. Check with your carrier for details about your liability to former employees.

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Types of Plans Offered

Health plans are classified as “government-mandated plans” or “consumer preference plans”. A government-mandated plan provides certain required minimum features and scopes. A consumer choice plan is any plan developed by a carrier that excludes certain government-mandated benefits. In general, consumer choice plans that do not include all government-mandated coverage will save you money on your monthly premium.

Although consumer choice plans are sometimes referred to as “standard plans”, be careful not to construe this term as “standardized” coverages provided. Each carrier’s consumer preference plan may be different, and a carrier may offer several different consumer preference plans.

Some government-mandated benefits remain required for consumer choice plans, including guarantees for:

* Treatment of phenylketonuria if prescription drugs are met.

*Complications of pregnancy.

* Minimum length of hospital stay after birth (federally mandated).

* Post-mastectomy reconstruction surgery (federally mandatory).

Consumer choice plans can vary depending on the type of carrier that offers the plan. For example, HMO consumer choice plans must pay for 20 outpatient mental health visits per enrollee per year, but this is not a requirement in compensation plans. In addition, insurance companies, HMO consumer choice plans should include primary health care as distinct from inpatient, outpatient and preventive services. Carriers may offer optional benefits that vary widely from plan to plan.

You don’t have time for all this research and number confusion. But can you really afford to leave it on your “maybe someday” list? As the cost of medical care rises, the risks of not having health insurance are more apparent than ever. A single injury or illness today, if uninsured, can devastate a family financially. Also, health insurance is an important benefit of employment. You may not be able to hire and retain the best employees without offering them.

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Another alternative to group health insurance plans that are not suitable for many small businesses is to offer individual health insurance options to your employees. By law, an employer is not allowed to contribute to these plans or this is considered group insurance under Texas state law. But you can still help your employees be insured with a good plan and improve their health and well-being, and you can also improve employee retention in the process. If you’re a small business owner who wants to offer affordable health insurance plans to your employees but can’t afford group health insurance, you should consider offering your employees revolutionary, comprehensive individual health insurance solutions created specifically for youth by Precedent. healthy individuals.

Precedent offers affordable, individual health plans with disaster coverage but no high exemptions, and we will offer these plans to your employees at a discount. For more information visit us on our website, []. We offer a unique and innovative suite of individual health insurance solutions, including highly competitive HSA qualified plans and a unique “real-time” application and admissions experience.

About Lily Hammond

I have been working as an insurance consultant in my own insurance agency since 1998. Because I've been doing this for so long, I know every detail and I'm here to help you. You can find my e-mail address and work phone on the contact page.

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