More Small Business Health Insurance Basics In Texas

Because premiums, deductibles, copayments, and coinsurance levels for small business group health insurance policies in Texas can vary widely from plan to plan, it pays to shop around.

Have a good understanding of your employees’ healthcare needs before you start shopping. Do they require frequent medical care or do they rarely see the doctor? Are they more concerned about preventive checkups or coverage in case of emergency? Are prescription or maternity benefits important to them? This is an essential first step. You want to purchase a plan that offers the medical benefits your employees need, without a bunch of “extras” your employees won’t take advantage of. You’ll pay for these “extras” in the form of higher premiums.

When shopping for coverage, the Texas Department of Insurance recommends keeping these guidelines in mind:

· Be sure you understand the full extent of each plan’s coverage when comparing plans and rates. If you decide to go with a consumer choice health benefit plan over one with all the state-mandated benefits, the carrier or agent is required to explain in writing which coverages you don’t have.

· Plans with higher deductibles, copayments, and employee share of coinsurance generally will have lower premiums. Keep in mind, however, that your employees will also have to pay more out of pocket when they access services or benefits.

· Consider factors other than cost, such as a company’s financial strength and complaint record. These are indicators of the service you can expect. You can learn a company’s financial rating, as determined by an independent rating organization, by calling the Texas Department of Insurance (TDI) Consumer Help Line. You can also learn information about the frequency of consumer complaints filed against specific companies by calling the Consumer Help Line: 1-800-252-3439/463-5515 in Austin.

· Look into purchasing cooperatives. These are groups of small employers with similar health care needs who join together to negotiate discounted rates for shared plans. For a list of registered purchasing cooperatives in Texas, call the Consumer Help Line.

· Buy only from licensed insurance companies. Selling unlicensed coverage is illegal in Texas. If you buy from an unlicensed carrier, your employees’ claims could go unpaid and you could be held liable for the full amount of your employees’ claims and losses. Guaranty associations pay the claims of licensed carriers that become insolvent. You can learn whether a company is licensed by calling the Consumer Help Line.

· Understand that employee health coverage is different from workers’ compensation insurance, which covers only job-related injuries and illnesses. Although workers’ compensation insurance is not required in Texas, it protects you from high damage awards in the case of workplace accidents. Providing regular health coverage to your employees is not a legal alternative to providing workers’ compensation insurance.

Who Pays and How Much?

The law doesn’t require employers to contribute toward health benefit plan premiums. However, many carriers require employers to pay at least 50 percent of the plan’s premiums. Employers may choose to pay a higher percentage than the carrier requires.

The carrier must offer dependent coverage to all eligible employees. Generally, employers are not required to contribute toward the cost of dependent coverage. If the employer doesn’t contribute, employees may have to pay all of these costs themselves.

Premiums may increase at each renewal term, largely due to rising health care costs and possibly as a result of employee claims experience. Texas law caps small-employer rate increases due to health factors at 15 percent per year.

Insurers cannot require businesses to purchase additional lines of insurance, such as life insurance or disability insurance, as a condition of the sale of a health plan.

Employee Signup and Waiting Period

New employees must be given at least 31 days from their start date to enroll in a plan. After this time, they may be required to wait up to one year for the next “open enrollment period” to join. Carriers must offer a 31-day open enrollment period annually.

You can choose to require your employees who enroll in a plan to wait up to 90 days before being eligible for benefits. During this period, the carrier may not charge you or the employee a premium.

Carriers may require participants to wait a certain amount of time before covering pre-existing medical conditions. In general, plans have different rules for pre-existing conditions. Plans using the open-enrollment requirement cannot make new members wait more than one year before covering their pre-existing conditions.

New enrollees who were covered in the year prior to joining a plan also receive credit toward the waiting period on a month-for-month basis. For example, an employee who was covered under creditable coverage for the entire year before joining a new plan would receive 12 months’ credit toward a one-year pre-existing condition wait — and would therefore experience no wait at all. For previous coverage to be considered creditable, there may not have been more than a 63-day break between the end of the previous coverage and the start of the new coverage.

A small business employer carrier cannot refuse to provide health coverage for employees on the grounds of employee illnesses or pre-existing conditions. Nor may carriers use health-related factors — such as employees’ prior claims experience or information on conditions arising from violent family situations — to decide whether to provide coverage.

How Small Employer Plan Premiums are Calculated

The rates for any given small employer plan are not solely determined by the benefits and deductibles of the plan itself. Certain objective “case characteristics,” along with any health status-related factors of employees, may also be components in determining the premium rate for the small employer group. Case characteristics consist of age, gender, group size, industry, and geography. Carriers can use some or all of these five objective criteria:

· Age of employees: Older people can reasonably be expected to have more expensive and more frequent health-related claims. Generally, the older your workforce, the more your plan will cost.

· Gender: Females generally incur higher medical costs than males at younger ages, particularly during childbearing years. The variance diminishes with age until medical costs for males begin to exceed those for females as they near ages 50 and 60. If you have a younger, proportionately more female workforce, or one that is older and proportionately more male, expect to pay higher premiums.

· Number of plan participants: Carriers often base rates on group size for two reasons. As size increases, administrative costs per insured decrease. Also, smaller groups tend to buy health coverage based on the targeted needs of participants, increasing the likelihood of claims for the benefits provided. As group size increases, this “custom-tailoring” becomes more difficult and premiums tend to decrease. However, the highest group size factor may not exceed the lowest group size factor by more than 20 percent.

· Industry: Some industries have higher medical claims costs than others because of working conditions and the prevalence of accidents. High employee turnover in some industries can also result in higher administrative costs for the carrier. However, the highest industry factor a carrier charges may not exceed the lowest factor by more than 15 percent.

· Geographic area: Health care costs vary by region due to differences in cost of living and medical practices, as well as the amount of medical competition in the area. Most plans vary rates by either county or ZIP code, using the employer’s business address to set rates.

The rating process for a small-employer group can be described as a two-step process. First, a carrier determines a premium rate based on case characteristics and plan design, without regard to health status-related factors. This produces the baseline price of the policy. Second, the carrier may adjust the rate to reflect health status-related factors of the group. This adjustment must apply uniformly to all members of the group and may not exceed 67 percent of the baseline price of the policy.

Group health insurance can be unaffordable for many small businesses, not to mention an administrative headache. Another alternative to group health insurance plans 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.

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.

How to Save Money and Get Discount Health Insurance in Missouri

According to U.S. Census figures, more than 12 percent of the people in Missouri have no health insurance coverage at all, and that number is growing as more and more companies begin phasing out group health coverage for their workers.

If you work for a company which offers group health insurance you might do well to join their plan as quickly as possible. Group plans are forced by law to include individuals with pre-existing conditions and to include people who smoke and use tobacco products. If you are fired or laid off you have many rights concerning health insurance that you do not have if you buy your own health insurance.

But today more and more people are forced to look for their own health coverage. If you are in this category you know how expensive health coverage is – but there are things you can do to save money and get discount health insurance right here in Missouri.

First, give up smoking and all tobacco products. You’ve been meaning to for years – now’s the time. Non-smokers pay a lot less for health insurance. If you’re obese you’ve got to bite the bullet and finally lose that extra weight. It’s hard to drop those pounds, but it can be done, and the thought of all that money you’re going to save on your health insurance premiums may help you on your way.

If you are having problems affording health care perhaps it’s time for you to simply look at health insurance from a different perspective. In the past people have looked to health insurance to pay (or help pay) for every doctor’s visit, and every other small health cost. But what if you change your perspective and look at health insurance as a safety net against wiping out your savings and taking your home in the case of a catastrophic illness or accident.

Looked at in this way, purchasing health insurance with a high deductible makes excellent sense financially. It means that you will be responsible for the majority of your run-of-the-mill health problems, but if a truly catastrophic problem arises, then your health insurance will take over, protecting your major assets.

And the higher your deductible the lower your monthly premiums.

Finally, get online and compare various health policies and their prices at a variety of insurance companies. Play around with the form, trying out various deductibles until you find a combination that makes sense for you. Accept the fact that there will be trade-offs when purchasing health insurance, and unless you are wealthy, compromises will undoubtedly have to be made.

Unfortunately, if you really want to save the most money and get truly discount health insurance you will have to run all of your figures over at least 3 different health insurance websites since no one website makes comparisons against every insurance company.

This means you’ll have to block out some time to make your comparisons, but the time you spend doing that today will pay off for years to come through lower health insurance premiums month after month after month.

Health Insurance Options for College Students

By the time graduation caps are tossed into the air, high school students will probably have been accepted to a college, picked a dorm and signed up for their courses. But is their health insurance securely in place?

Most parents’ employee-sponsored group health insurance plans will cover their children up until they’re between 20 to 24 years of age, whether they live at home or away at school. The employer, however, may charge a substantial extra premium to cover the college age student.

If you don’t have any health insurance as a student, college health plans could be a good solution. College-sponsored individual health insurance plans at some schools are subsidized by tuition, so they might even be a good deal. It’s important to note that even when college health plans are subsidized, they are not necessarily subsidized for the student’s spouse or dependents.

Be forewarned, however, that college plans are not free and the benefits vary. Committees from each college meet with health insurance companies and design plans specific to their schools. State laws also play a critical role in the health insurance policies offered to students, as well as other market factors. As a result, there exists a wide range of premiums and benefits that vary from college to college.

College plans sometimes limit preventative and routine care, but students can often visit college health centers for free services. Even when visits to the health center are free, the health center may charge the student for lab work, physical therapy, X-rays, prescriptions, and other procedures.

In most cases, college plans will pay 100 percent for college health center charges associated with covered services with a nominal deductible. For services outside the health center, however, including those provided by out-of-state providers, the college plan may reduce significantly and impose a larger deductible. Furthermore the college plan may have a limited maximum benefit, which will leave the student without coverage if something truly terrible happens.

Pre-existing conditions can create problems as well. College plans may exclude pre-existing conditions from treatment. Before signing up for a college health plan, make sure you know whether the plan will or will not cover treatment for your asthma or any other pre-existing condition.

Parents in preferred network plans and HMO’s often buy a college’s health insurance plan — even when their student is covered under their employer’s plan — because anything other than emergency care may be considered out of network or because of the problem of obtaining referrals across states.

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Cost, and the problems with network restrictions and referrals, shouldn’t prevent the student from having health insurance, whether it’s their parent’s plan or the school’s plan. A serious illness or injury could have long-lasting negative financial consequences for the student, the parent, or both.

Before you make a choice, put your college health plan to the test:

o Is the plan an HMO, or can you use any provider?

o Does the plan cover emergency room visits without prior approval?

o What needs to be done to ensure coverage if there’s an emergency?

o Is there coverage while you are on vacation?

o Can you get coverage during summer break, even if you’re not taking classes?

o Does the plan make accessible the best treatment facilities within the college’s community?

o Which campus health clinic services are free or offered at low cost?

o Are there pre-existing conditions that are excluded?

In Texas, dependent status is available for full-time students until you are 25 years old (or older in limited cases). Texas state law puts the maximum age for dependants at 19 if you are not enrolled in an educational institution. If you’re between the ages of 20 to 24 and the college health plan at the school you’re attending in Dallas, Houston or anywhere else in Texas doesn’t cover one or more of the above issues, you should consider other individual health insurance options. And when you graduate and are no longer covered under your parent’s health insurance plan what will you do then?

There’s a lot you and your parents should consider regarding proper health care insurance while you’re attending school and after you graduate.

Traditional Health Insurance Versus a Health Savings Account

Consumers frequently inquire about the difference between these plans. Most understand the basics of traditional health insurance, but many do not understand the nuances of a Health Savings Account – or HSA.

What is a Health Savings Account?

The easiest way to explain the difference may be to clarify what health savings accounts are not. They are not health insurance plans. Rather, they operate much like savings accounts setup at a bank. And they are always coupled with a high deductible health insurance plan. That is to say, one could purchase high deductible health insurance coverage with or without a health savings account attached to the plan. A Health Savings Account is exactly that – an account established to save money for future health expenses.

The idea behind HSA’s is fairly straightforward. Owners deposit funds into their accounts to be used later for qualified health expenses. Funds can be used for a variety of expenses – including (but not limited to) visits to the doctor, prescriptions and/or meeting the deductible.

Advantages of HSA Compatible Plans

Generally, Health Savings Accounts will be less expensive than traditional insurance plans. The reason is simply that plan deductibles are higher. Therefore, the insurance company underwriting the plan will not have to immediately cover small, incidental claims. The owner would use funds from the HSA for many of the incidentals – like doctor visits, prescriptions, etc.

In addition, the attached savings account has significant tax advantages versus traditional health plans. Contributions into an HSA are tax deferred and the interest accumulates tax deferred – much like contributions to an IRA. However, when funds are withdrawn for qualified medical expenses, no taxes are due on those withdrawals. In this way, HSA’s provide tax advantages to the consumer twice – once when the money is deposited and again when it is withdrawn.

Who Should Consider a HSA Compatible Plan?

Healthy individuals who infrequently visit the doctor are good candidates. Individuals and families on a tight budget, but in need of affordable coverage could also consider a HSA plan. These consumers can pay smaller, minor health costs out of the HSA, but should they have a significant claim, the health insurance coupled with the plan is available once the deductible has been met.

Many employer sponsored group plans are already switching to HSA’s to lower their health care premium bills. The rising cost of health care is forcing many companies and small business groups to change insurance plans in order to save money. A HSA compatible plan can be a fair compromise for the employee and the employer. Some employer groups will make contributions to the HSA to encourage employees to make the change.

Who Should Consider Traditional Insurance?

Consumers who want lower deductibles and more in immediate benefits tend to purchase traditional plans. In the insurance industry, this concept is called “first dollar benefit”. These are benefits the consumer receives without having to meet a deductible or co-insurance provisions. Examples of first dollar benefits include annual physicals, visits to a specialist or non-specialist, OBGYN visits and prescription coverage. While newer HSA plans are offering more in first dollar benefits, usually traditional health insurance will provide the most in immediate benefits.

Traditional coverage can be more advantageous for families and/or middle aged or older consumers. These groups may be more likely to have several claims against their policies. They may desire more in immediate benefits. Additionally, they may simply have the resources available to afford more expensive policies.

In summary, there are many health insurance plans available to the individual, family and business group. Choosing the right plan will often times involve balancing cost with benefits. HSA compatible plans can be an affordable alternative to a traditional, lower deductible plan. Consumers, when working with an experienced independent agent, can usually find a suitable plan that fits their needs.

A.M. Hyers has been working in the insurance and investment industry for nearly ten years. He owns and operates Ohio Insurance Plan, an independent insurance agency doing business in Ohio, Missouri and Georgia.

His agency offers insurance products to individuals, families and any size employee group. They use the leading national insurance carriers to offer quotes, illustrations and relevant information on life insurance, health insurance and HSA accounts. They also offer disability and long term care insurance as well as annuity policies, Medicare supplement plans and Medicare Part D coverage.