Finding the right group health plan for your business can be overwhelming: sifting through lists of insurance companies and plans; checking and rechecking dollars and totals for deductibles and co-pays; understanding the plan’s limits and exclusions; Understanding the value of an insurance-speak dictionary. 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 cost 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 limit on rate increases due to health factors, a state-enforced guarantee that carriers cannot arbitrarily discontinue coverage, and a cooperative purchasing provision that lets small employers pool their purchasing power to negotiate lower rates.
For employees of small businesses in Dallas, Houston and throughout Texas, the law provides several ways to maintain benefits after leaving a job and limits the waiting period before pre-existing conditions are covered.
Beyond these requirements, small-employer carriers 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 obtain small-employer coverage from a traditional insurance company or health maintenance organization (HMO). Eligible employees are defined as those who ordinarily work at least 30 hours per week; is not classified as temporary, part-time or seasonal; and are not already covered by another group health plan. The owner of a business calculates the total number of employees.
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 may still qualify if six employees are part-time and four have coverage through another 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 equally.
Coverage under the Small Employer Health Benefit Plan is available if at least 75 percent of the small employer’s eligible employees elect to be covered. Carriers should always “round up” when calculating percentages. For example, a five-person business in which only three employees want to participate meets the 75 percent requirement by rounding up.
However, in the case of a business with only two qualifying employees, the law requires 100 percent participation. A husband and wife working in a business should be counted as two separate employees. No employee is eligible for coverage as a dependent of another.
If you offer a health plan, state regulations and a federal law called COBRA (Consolidated Omnibus Budget Reconciliation Act) allow employees to retain benefits for a period of time after a job separation. You have a 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 bound to contribute to their premium, even if you have previously paid for a share. Check with your carrier for details on its responsibilities to former employees.
Types of Schemes Proposed
Health plans are classified as either “state-mandated plans” or “consumer choice plans”. A state-mandated plan provides certain minimum required features and coverage. A consumer choice plan is any plan developed by a carrier that does not include certain state-mandated benefits. Generally, consumer choice plans that don’t include all state-mandated coverage will save you money on your monthly premiums.
Although consumer choice plans are sometimes called “standard plans,” be careful not to interpret this term to mean that the coverage provided is “standardized.” Each carrier’s Consumer Choice plan may differ, and a carrier may offer several different Consumer Choice plans.
Some state-mandated benefits remain required for consumer choice plans, including:
* Phenylketonuria treatment, if prescription drugs are covered.
*Complications of pregnancy.
* Minimum hospital stay after childbirth (federally mandated).
* Reconstructive surgery after mastectomy (federally mandated).
The consumer’s choice of 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 enrollee per year, but indemnity plans do not have this requirement. Also, unlike insurance companies, HMO consumer choice plans must cover basic health care services, such as 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 counting. But can you really leave this 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 not insured – can devastate a family financially. In addition, health coverage is a major benefit of employment. You may not be able to hire and keep the best employees without offering them.
Another alternative to group health insurance plans, which may not be affordable 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 it would be treated as group insurance under Texas state law. But you can still help your employees get insured in 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 who would like to offer an affordable health insurance plan to your employees, but cannot afford group health insurance, then you should consider offering your employees the revolutionary, comprehensive individual health insurance solution created by President specifically for young, healthy individuals.
President offers affordable, individual health plans with catastrophic coverage but without high deductibles, and we will offer these plans to your employees at a discount. For more information, visit our website, [http://www.precedent.com], We offer a unique and innovative suite of individual health insurance solutions, including highly competitive HSA-eligible plans and an unparalleled “real-time” application and approval experience.
