09/21/2006

Affordable group health insurance is now available
By: Kay Hohman, South Montgomery County Woodlands Chamber of Commerce

Do you have group health insurance for you and your employees? If the answer is no, you need to learn more about a new health insurance program in Montgomery County.

The Montgomery County Council of Chambers is coordinating this outstanding health insurance project. The South Montgomery County Woodlands Chamber of Commerce is participating along with the Community Chamber of East Montgomery County, the Greater Conroe/Lake Conroe Area Chamber, the Magnolia Area Chamber, the Magnolia Parkway Chamber, and the Montgomery County Hispanic Chamber.

"The program has been in effect in Montgomery County for only three weeks, and we have had more than 60 inquiries. We expect that number to increase as businesses become aware of the program. This shows there is a great need in our county and in our business community for low-cost health care plans. We hope this action will help reduce costs for our employers and allow more people to join the rolls of the insured," Karen Hoylman, president and CEO of the South Montgomery County Woodlands Chamber of Commerce, said.

A 2002 study by the State Comptroller's office revealed that small employer groups, especially those under 10 employees, are generally charged extra - up to 20 percent by law - to offset the additional administrative costs incurred by the insurance companies. It was determined that if two or more small employer groups are combined into a coalition and treated as a single small employer, the additional administrative charges were reduced or eliminated.

Based on these findings, the Texas Legislature's 78th Session changed the insurance code in 2003 to allow for the creation of small employer health coalitions. The legislative change, HB 897, enables two or more small employers to join together to create a small employer health coalition with up to 50 insured employees. They can then obtain rates from any small group insurance carrier that offers coverage in Texas.

Joining a coalition means that risk and costs are spread among more people in the group. Most employers can then obtain lower premiums instead of purchasing their own company plan. Rates will be determined by the group census on age, sex, location, dependents, and medical conditions. The greatest savings potential exists for businesses with two to nine employees.

Small employer health coalitions are treated as a single small employer under the new legislation. This means they have:

• Guaranteed issuance of health insurance coverage from any insurance carrier licensed to do business in Texas that insures small employer groups.
• Access to the same health insurance plans available to any small group.

• The average age for the coalition is lower than it would have been for the employer's group by itself.
• Rates for pre-existing health conditions, when present, are lower or nonexistent in a coalition that could have been present for a stand-alone group.

Texas Coalitions, Inc. of Austin, Texas, has created a first-of-its-kind health insurance coalitions program for small businesses. To date, the company has saved small businesses an average of $10,000 per business and $2,600 per insured employee.

Over five million Texans live without health insurance. Many of the uninsured are owners and employees of small businesses and their dependents. As health insurance rates escalate beyond affordability, the number of uninsured in small businesses continues to increase.

For more information regarding small employers health insurance coalitions, go to TexasCoalitions.com.