Texas Laws Regarding Small Group Health Insurance Plans
Some Laws applicable to Small Group Health Insurance Plans (employers with 2 to 50 eligible employees):

Eligible employees are those who work at least 30 hours per week on a full-time basis and who are not covered by another health benefit plan (group, blanket, or franchise plan including COBRA and Medicare/Medicaid, and some companies allow individual coverage as a reason for waivering). You are required to have 75 % (as established by most health insurance companies) of the eligible employees on your Group Health Insurance Benefit plan (75% participation). Those who work at least 30 hours per week, but choose not to be covered by your group plan, must sign a waiver for coverage.

The insurance company establishes the amount the employer must contribute of the employee's premium. It is usually 50%, though some insurance companies require 75% contribution. The employer is not required to pay any portion of the dependents' premium.

Applications for a new group plan are guaranteed issue but can be rated up to a maximum of an additional 67% above base rates; such rate up is based on medical conditions on the initially submitted employees' applications. The rate up applies to the entire group's premium. This is only done at the time of initial enrollment of the Group Health Insurance Benefit plan. Eligible employees who enroll during their waiting period will be guaranteed issue without additional rate-up, without regard to their medical conditions. (A health benefit plan cannot apply riders or waivers on medical conditions.)

You may choose a waiting period for newly hired eligible employees of 0 to 90 days.

Texas House Bill 1440 allows dependent children to be covered until age 25, without full time student status as a requirement. (Self insured plans do not have to comply with this law.)

Pregnancy cannot be considered a pre-existing condition. If you have maternity coverage on your Group Health Benefit plan (required if you have 15+ employees) and enroll a pregnant employee, the maternity is covered from the first day the employee is covered under your Group Health Benefit plan.

A pre-existing condition for a disease or condition that has caused an employee (or their dependent) to seek advice, diagnosis, care, or treatment; (or the same has been recommended) in the six months prior to the Small Group Health Insurance effective date, will not be covered for 12 months after the effective date
Unless:
The insured employee (or dependent) has had continuous prior coverage in a health benefit plan for the previous 12 months without more than a 60-day gap between plans, not counting any health benefit plan's waiting periods. (Most insurance companies allow month to month credit, if a person has not had a full 12 months prior coverage.)

There is an open enrollment period of the 31 days prior to your annual renewal to allow those employees and/or their dependents not currently on your Group Health Benefit plan to apply guaranteed issue. During the year this open enrollment applies to anyone who has a change in family status (death, birth, adoption, marriage, divorce, or loss of health benefit coverage).

The last date of coverage as an employee for terminated employees is the date that notification is received at the Insurance Company, or a requested date after notification. Retro-active cancellation is not available. Employer will be responsible for immediate notification directly to the Insurance Company to avoid paying past the requested termination date. (Texas Senate Bill # 51, applies to new business effective on or after 1/1/06, and current plan renewals on or after 1/1/06.)

When an employee leaves your Group Health Benefit plan, they and/or their dependents will be eligible to continue coverage for 18 months (COBRA for groups with 20+ employees) or 6 months (Texas Continuation for groups with less than 20 employees). The employee must notify you within 31 days of the date of termination that they want to continue, and pay to you the premiums from the date coverage ended to next 1st of the month. They should pay you prior to the 1st of each month that they are eligible and want to continue coverage. You may charge an additional 2% of their total premium. (There are factors in COBRA that extends coverage for disabled insured.) You do not have to offer coverage under Texas Continuation to employees who have not been covered under your Group Health Insurance plan for at least 3 consecutive months prior to termination. COBRA and Texas Continuation can only be continued as long as the Group Health Benefit plan is in force.

The laws that have been excerpted above: Texas House Bill 2055, 1993
Texas House Bill 369, 1995
COBRA, Consolidated Omnibus Budget Reconciliation Act of 1985
Federal Health Insurance Portability and Accountability Act of 1996

Please note: this guideline includes some of the laws that pertain to Group Health Benefit plans. There may be others that apply to your group. Please call with questions, or further clarification.