Small Businesses

Texas Basics for Small Business Health Insurance

It can be daunting to find the right group plan for your company. This includes sorting through a list of insurance companies and plans, checking and rechecking the dollar amounts for deductibles or co-pays, understanding plan limitations and exclusions, and deciphering insurance-speak like a dictionary. It can make anyone feel like a high school freshman all over again.

Texas insurance law allows for a wide range of packages and plans in terms of health care coverage. Finding the right employee-health plan at the right cost can be difficult with every group insurance policy.

Texas has a special designation for insurance companies that have between two and 50 employees called “small employers”. These businesses are protected by the law, which includes a 15% annual cap on rate rises due to health factors, a guarantee from the state that carriers cannot discontinue coverage at will, and a cooperative buying provision that allows small employers to pool their purchasing power to negotiate lower rates.

Employees of small Texas businesses located in Dallas, Houston, or throughout Texas have several options to keep their benefits after leaving the job. The law also limits the waiting period for pre-existing conditions to be covered.

These requirements aside, small-employer carriers might offer a wide range of plans with almost any combination of benefits and features.

Eligibility of small-business coverage

Texas companies with between 2 and 50 employees can get small-employer coverage from a traditional insurance company (or a HMO). Eligible employees are those who work at least 30 hours per semaine and aren’t classified as part-time, seasonal, or temporary; and aren’t covered under another group health plan. The employee total includes the owners of a business.

Texas insurance law defines a small employer as the number of eligible employees, not their total workforce. A business with 60 employees could still be considered a small employer if six of those workers are part time and four have coverage through an alternative source like a spouse’s policy.

If you offer a group plan for your employees, it must be available to all eligible employees and their dependents.

If at least 75 percent are eligible, coverage is available under a small-employer health benefit plan. Carriers must always use the “rounding up” method to calculate the percentage. If a business has only three employees, it can satisfy the 75 percent requirement.

If a business has only two eligible employees, however, 100 percent participation is required. The law requires that a husband and wife who work in the same business be considered separate employees. The coverage is not available to the dependents of either of the employees.

Employees can continue to receive benefits for a specified period after being fired from their job if they have a health insurance plan. Both state regulations and the federal COBRA law (Consolidated Omnibus Budget Reconciliation Act), allow them to keep these benefits. Your legal responsibility is for informing employees about their rights to maintain coverage. Ex-employers who want to continue their COBRA coverage or state continuation must cover the entire cost of the plan. Even if you have previously contributed a share, you are not required to contribute towards their premiums. For more information about your responsibility towards former employees, ask your carrier.

Different types of plans available

You can choose to have your health plan classified as “state-mandated” or “consumer option plans.” A state-mandated health plan covers certain coverages and features. Any plan that is not in accordance with state-mandated benefits is a consumer choice plan. A consumer choice plan that does not cover all of the state-mandated benefits will usually save you money on your monthly Premium.

Consumer choice plans may sometimes be called “standard plan” but it is important to not take this to mean that the coverages offered are “standardized.” Every carrier’s consumer option plan is different. A carrier might offer multiple consumer options.

Consumer choice plans continue to require some state-mandated benefits, including coverages that cover:

* Phenylketonuria treatment, if prescription drugs are covered.

* Complications of pregnancy.

* Minimum hospital stay after childbirth (federally mandated).

* Reconstruction surgery following a mastectomy (federally mandated).

Depending on which carrier offers the plan, consumer choice plans can vary. HMO consumer choices plans must pay 20 outpatient mental healthcare visits per enrollee each year. This is not required in indemnity programs. HMO consumer option plans must also include basic health care services such as outpatient and inpatient services. This is not the case with insurance companies. Some carriers may offer additional benefits that differ from one plan to the next.

This research and numbers crunching takes too much time. Can you afford to put it off your “maybe one day” list? The risks of not having insurance for health care are becoming more obvious as the cost of medical treatment rises. Uninsured individuals can lead to financial ruin if they are ever hurt or become ill. Employers have the advantage of health coverage. It is possible to not only hire but also keep the best workers.

An alternative to group insurance plans that can be expensive for small businesses is offering individual health insurance to employees. Employers are prohibited from contributing to these plans. This would make it a Texas state-run group insurance. You can help your employees get insured under a quality plan. This will improve their health, well-being, and retention. Small business owners who want to offer affordable, high-quality health insurance to their employees but cannot afford group coverage should look into Precedent’s innovative, individual insurance solutions. These are designed for young, healthy people.

Precedent offers individual health plans that are affordable and include catastrophic coverage. However, there is no high deductible. We’ll also offer these plans at a discounted rate to your employees. Visit our website for more information. [http://www.precedent.com]. We offer an innovative and unique suite of individual insurance solutions including HSA-qualified plans that are highly competitive and an unmatched “real-time” acceptance and application experience.

molw.net

We are a team of professionals with each having two decades of experience in start-ups, sales, marketing, finance, HR, large scale project and profit centre management and running mature cross functional operations. At Molw.net we are big believers that knowledge transfer is critical to our industry’s evolution. We love to share our experiences and learnings through our online resources.

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