Finding the right group health plan for your business can be downright intimidating: sorting by lists of insurance companies and plans; checking and re-checking the dollars and totals for deductibles and co-pays; making sense of plan limitations and exclusions; deciphering a dictionary’s worth of insurance-speak. It’s enough to make anyone feel like a high-school freshman again.
Texas insurance law allows 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 two to 50 eligible employees. The law provides some additional protections to these businesses, including a 15 percent annual cap on rate increases due to health factors, a state-enforced guarantee that carriers cannot without any order discontinue coverage, and a cooperative purchasing provision that lets small employers pool their purchasing clout to negotiate lower rates.
For employees of small businesses in Dallas, Houston and throughout Texas, the law provides several ways to continue benefits after leaving a job and limits the waiting period before pre-existing conditions are covered.
Beyond these requirements, small-employer carriers may 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 may acquire small-employer coverage from either a traditional insurance company or a health maintenance organization (HMO). Eligible employees are defined as those who usually work at the minimum 30 hours per week; are not classified as permanent, part-time, or seasonal; and are not already covered by another group health plan. A business’ owners count toward the employee total.
The number of eligible employees — not total employees — determines whether a business is considered a small employer under Texas insurance law. For example, if your business has 60 total employees, it could nevertheless qualify if six of the workers are part-time and four have coverage by 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 equally obtainable to all of your eligible employees and their dependents.
Coverage is obtainable under a small employer health assistance plan if at the minimum 75 percent of a small employer’s eligible employees elect to be covered. Carriers must always “round up” when calculating the percentage. For example, a five-person business with only three employees wanting to participate satisfies a 75 percent requirement by rounding up.
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 business must be counted as two separate employees. Neither of the employees is eligible for coverage 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) allow employees to continue benefits for a period of time after separation from the job. It is your legal responsibility to inform employees of their rights to continue coverage. Former employees who choose to continue their coverage by COBRA or state continuation must pay the complete cost of the plan. You are not obligated to contribute toward their premiums, already if you before paid a proportion. Ask your carrier for details about your responsibility toward former employees.
Types of Plans Offered
Health plans are classified as either “state-mandated plans” or “consumer choice plans.” A state-mandated plan provides certain required minimum features and coverages. A consumer choice plan is any plan developed by a carrier that excludes some state-mandated benefits. Generally, consumer choice plans that do not include all the state-mandated coverages will save you money on your monthly premium.
Although consumer choice plans are sometimes called “standard plans,” be careful not to interpret the term to average that the coverages provided are “uniform.” Each carrier’s consumer choice plan may be different, and a carrier may offer several different consumer choice plans.
Some state-mandated benefits continue to be required for consumer choice plans, including coverages for:
* Phenylketonuria treatment, if prescription drugs are covered.
* Complications of pregnancy.
* Minimum hospital stay after childbirth (federally mandated).
* Reconstruction surgery following a mastectomy (federally mandated).
Consumer choice plans may vary depending on the kind of carrier offering the plan. For example, HMO consumer choice plans must pay for 20 outpatient mental health visits per enrollee per year, but that’s not a requirement in indemnity plans. In addition, unlike insurance companies, HMO consumer choice plans must include basic health care sets, such as inpatient, outpatient, and preventative sets. Carriers may offer optional benefits that vary widely from plan to plan.
You don’t have the time for all this research and number crunching. But can you really provide 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. Today a single injury or illness –if uninsured– can leave a family in financial ruin. additionally, health coverage is a meaningful assistance of employment. You may not be able to hire and keep the best employees without offering it.
Another different to group health insurance plans, which can be unaffordable 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 that would be treated as group insurance under Texas state law. But you can nevertheless help your employees become insured in a good plan and enhance their health and well-being and also enhance employee retention in the time of action. If you’re a small business owner who would like to offer affordable health insurance plans to your employees, but can’t provide group health insurance, you should consider offering your employees the revolutionary, comprehensive individual health insurance solutions produced by Precedent specifically for young, healthy individuals.
Precedent offers affordable, individual health plans with extreme coverage, but without a high deductible, and we’ll offer these plans to your employees at a discount. For more information, visit us at our website, [http://www.precedent.com]. We offer a rare and inventive suite of individual health insurance solutions, including highly competitive HSA-qualified plans, and an unparalleled “real time” application and acceptance experience.