Small Business Health Insurance Basics In Texas

Finding the right group health plan for your business can be downright intimidating: sorting through 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 array 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 added protections to these businesses, including a 15 percent annual cap 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 clout 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 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 obtain 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 least 30 hours per week; are not classified as temporary, 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 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 equally available to all of 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 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 maintain 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 through COBRA or state continuation must pay the full cost of the plan. You are not obligated to contribute toward their premiums, even if you previously paid a share. 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 mean that the coverages provided are “standardized.” 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 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 that’s not a requirement in indemnity plans. In addition, unlike insurance companies, HMO consumer choice plans must include basic health care services, such as inpatient, outpatient, and preventative services. 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 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. Today a single injury or illness –if uninsured– can leave a family in financial ruin. Moreover, 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 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 still help your employees become insured in a good plan and improve their health and well-being and also improve employee retention in the process.

If you’re a small business owner who would like to offer affordable health insurance plans to your employees, but can’t afford group health insurance, you should consider offering your employees the revolutionary, comprehensive individual health insurance solutions created by Precedent specifically for young, healthy individuals.

Precedent offers affordable, individual health plans with catastrophic 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, [ We offer a unique and innovative suite of individual health insurance solutions, including highly competitive HSA-qualified plans, and an unparalleled “real time” application and acceptance experience.

 

Small Business Health Insurance: A Comprehensive Guide

Introduction:

Offering health insurance to employees is a vital consideration for small businesses. Providing access to healthcare coverage not only attracts and retains talented employees but also ensures their well-being. Navigating the complexities of small business health insurance can be challenging, but understanding the basics and available options can help business owners make informed decisions. This article serves as a comprehensive guide to small business health insurance, covering key concepts, options, and considerations.

I. Understanding Small Business Health Insurance:

a. Definition: Small business health insurance refers to medical coverage provided by employers to their employees. It helps employees pay for medical expenses and offers protection against unforeseen healthcare costs.

b. Importance:

• Attracting and retaining employees: Offering health insurance can make your business more attractive to potential employees, helping you attract and retain top talent.
• Employee well-being: Health insurance ensures that employees have access to essential medical services, promoting their well-being and productivity.
• Tax advantages: Certain tax incentives are available to small businesses that provide health insurance coverage to employees.

II. Options for Small Business Health Insurance:

a. Group Health Insurance: Group health insurance plans cover a group of employees and are usually more affordable than individual plans. They typically provide comprehensive coverage and are available through insurance carriers or healthcare exchanges.

b. SHOP Marketplace: The Small Business Health Options Program (SHOP) Marketplace is a government-run exchange that allows small businesses to compare and purchase health insurance plans. It offers tax credits and cost-sharing reductions for eligible businesses.

c. Health Maintenance Organization (HMO): HMO plans require employees to choose a primary care physician (PCP) who coordinates all their healthcare needs. Referrals are typically required to see specialists.

d. Preferred Provider Organization (PPO): PPO plans offer more flexibility by allowing employees to visit any healthcare provider. While they have a network of preferred providers, employees can seek care from out-of-network providers, although at a higher cost.

e. Point of Service (POS): POS plans combine features of HMOs and PPOs. Employees choose a PCP but have the option to see out-of-network providers, usually at a higher cost.

f. High Deductible Health Plans (HDHP) with Health Savings Accounts (HSA): HDHPs have lower premiums but higher deductibles. They are paired with HSAs, which allow employees to save pre-tax dollars for medical expenses.

III. Considerations for Small Business Health Insurance:

a. Budget: Evaluate your budget and determine how much you can allocate to health insurance costs. Consider both the premiums you will pay and the potential deductibles and copayments.

b. Employee Needs: Assess your employees’ healthcare needs to choose a plan that provides suitable coverage. Consider their demographics, medical histories, and preferences.

c. Plan Comparison: Research and compare different health insurance plans, considering factors like coverage, cost-sharing, provider networks, and prescription drug coverage.

d. Compliance: Ensure your health insurance plan complies with applicable federal and state regulations, including the Affordable Care Act (ACA) requirements.

e. Employee Contributions: Decide whether employees will contribute to the premiums and how much they will be responsible for paying. Communication and transparency are key in managing employee expectations.

f. Insurance Broker/Agent: Consider working with an insurance broker or agent who specializes in small business health insurance. They can provide expert guidance and help you navigate the process.

Conclusion:

Small business health insurance is a crucial investment that benefits both employers and employees. By providing access to comprehensive medical coverage, businesses can attract and retain talented individuals while promoting employee well-being.

Understanding the various options available and considering factors like budget, employee needs, and compliance will assist small business owners in making informed decisions. Additionally, consulting with insurance professionals can provide valuable insights and support throughout the process of obtaining and managing health insurance for your small business.