Small Business Health Insurance Basics in Texas
Finding the right group health plan for your business can be downright intimidating: checking lists of insurance companies and plans; check and recheck dollars and totals for deductibles and copayments; make sense of the plan’s limitations and exclusions; decipher the value of a dictionary in insurance terms. It’s enough to make anyone feel like a high school freshman again.
Texas insurance law allows for a wide range of health care coverage plans and packages. All group health insurance has its limitations, and finding the right employee health plan at the right price can be challenging.
In Texas, the term “small employer” is a special insurance designation reserved for businesses with between two and 50 eligible employees. The law provides some additional protections to these companies, including a 15 percent annual cap on rate increases due to health factors, a state guarantee that insurers cannot arbitrarily interrupt coverage, and a cooperative buying provision that allows small employers pool their purchasing power to negotiate lower rates.
For small business employees in Dallas, Houston, and throughout Texas, the law provides several ways to keep benefits after leaving a job and limits the waiting period before pre-existing conditions are covered.
Beyond these requirements, small employer insurance companies can offer a wide variety of plans, with virtually any combination of features and benefits.
Small Business Coverage Eligibility
Texas businesses with two to 50 eligible employees can get small employer coverage from a traditional insurance company or a health maintenance organization (HMO). Eligible employees are defined as those who normally work at least 30 hours a week; they are not classified as temporary, part-time or seasonal; and are not yet covered by another group health plan. Business owners count toward total employees.
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, you might still qualify if six of the workers are part-time and four have coverage through some other source, such as a spouse’s plan.
If you decide to offer a group health plan to your employees, you must make it available to all of your eligible employees and their dependents alike.
Coverage is available in a small employer health benefit plan if at least 75 percent of eligible small employer employees choose to be covered. Carriers must always “round” when calculating the percentage. For example, a five-person company with only three employees who want to participate satisfies a 75 percent requirement by rounding.
However, in the case of a business with only two eligible employees, the law requires a 100 percent stake. A husband and wife who work in a company must be counted as two separate employees. Neither employee is eligible for coverage as a dependent of the other.
If you provide a health plan, state regulations and a federal law called COBRA (Omnibus Consolidated Budget Reconciliation Act) allow employees to keep benefits for a period of time after separation from work. 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 state continuation must pay the full cost of the plan. You are not required to contribute to your premiums, even if you previously paid part of it. Ask your supplier about his responsibility in employee training.
Types of plans offered
Health plans are classified as “state mandated plans” or “consumer choice plans.” A state-mandated plan provides certain minimum required features and coverages. A consumer choice plan is any plan developed by an insurer that excludes some state-required benefits. Generally, consumer choice plans that don’t include all of the state-required coverages will save you money on your monthly premium.
Although consumer choice plans are sometimes referred to as “standard plans,” be careful not to interpret the term to mean that the coverages provided are “standardized.” Each operator’s consumer choice plan may be different and an operator may offer several different consumer choice plans.
Some state-mandated benefits continue to be required for consumer choice plans, including coverage for:
* Treatment of phenylketonuria, if prescription drugs are covered.
* Complications of pregnancy.
* Minimum stay in hospital after delivery (federally mandated).
* Reconstruction surgery after a mastectomy (federally mandated).
Consumer choice plans may vary depending on the type of carrier offering the plan. For example, HMO consumer choice plans must pay for 20 outpatient mental health visits per member per year, but that is not a requirement in indemnity plans. Also, unlike insurance companies, HMO consumer choice plans must include basic health care services such as inpatient, outpatient, and preventive services. Operators can offer optional benefits that vary widely from plan to plan.
You don’t have time for all this research and number processing. But can you really afford to put it on your “maybe someday” list? As the cost of health care rises, the risks of not having health insurance are more apparent than ever. Today, a single injury or illness, if uninsured, can leave a family in financial ruin. Additionally, health coverage is a key benefit of employment. You may not be able to hire and keep the best employees without offering it.
Another alternative to group health insurance plans, which can be unaffordable for many small businesses, is offering individual health insurance options to your employees. By law, an employer cannot contribute to these plans, or that would be treated as group insurance under Texas state law. But you can still help your employees stay locked into a good plan and improve their health and well-being and also improve employee retention in the process. If you are a small business owner and would like to offer affordable health insurance plans to your employees, but cannot afford group health insurance, you should consider offering your employees the revolutionary and comprehensive individual health insurance solutions created by Precedent specifically for youth. . , healthy individuals.
Precedent offers affordable individual health plans with catastrophic coverage, but without a high deductible, and we will offer these plans to your employees at a discount. For more information, visit us on our website, [http://www.precedent.com]. We offer a unique and innovative suite of individual health insurance solutions, including highly competitive HSA-qualified plans and an unmatched “real-time” application and acceptance experience.