 | Frequently Asked Questions |
| What is a Coalition under HB 897? |
| In simple terms: A 'coalition' is a group of small
employer groups that join together to obtain group health
insurance benefit plans for their employees as a 'single small
employer group'. The benefit to
the small employers is saving money on insurance premiums by
becoming a 'larger' group. A 'coalition' of small employer
groups as defined by HB 897, is considered a 'single small
employer' for all purposes under the Insurance Code. The
size of a group matters when rates are calculated and several
small employers joined together as a 'small employer coalition' can
benefit from lower rates as a 'larger group'. |
| What Insurance carriers
are available to a coalition? |
| Exactly the same carriers available to any small group in
Texas such as the one you may have now. The only
exception are those select few carriers that only offer
self-funded plans as they are not permitted for coalitions. |
| Do all the Employers in a coalition
have to be similar? |
| No, different types of businesses, from different areas
of Texas, can join together as long as they meet the
requirements below. |
| What are the requirements to join a
coalition group? |
| A. Each employer must meet the guidelines of the Texas
Dept of Insurance Code, Chapter
26, as a small employer of 2-50 employees.
Eligible employees for coverage are defined as: "Eligible
employee" means an employee who works on a full-time
basis and who usually works at least 30 hours a week. The term
also includes a sole proprietor, a partner, and an independent
contractor, if the sole proprietor, partner, or independent
contractor is included as an employee under a health benefit
plan of a small or large employer.
The term does not include:
(A) an employee who works on a
part-time, temporary, seasonal, or substitute basis; or |
|
Are there
other requirements to join? |
| A. The rules to participate
in a coalition are the same as purchasing any Small Group Health
Plan from any carrier for your firm. Click
here for additional information |
| What are
the requirements to form a coalition? |
| The 'Coalition', being one
type of a private purchasing cooperative, is required to
comply with Texas Insurance Code Art.
26.14. Private Purchasing Cooperatives and Health Group
Cooperatives. |
|
I am a Self
Employed person. Can I join? |
| A. No, one person is not a
'group' as defined by Chapter 26 rules of the TX Dept of
Insurance and is not eligible. However, spouses, that are
joint owners or partners of a DBA might be eligible if
they meet the requirements outlined by the State Insurance
Code. Click
here for Commissioners Bulletin 0035-01 which covers this
issue. (Hint: scroll almost all of the way down on the page as
several issues are included in this bulletin) |
| How many members can join a coalition? |
| A. Each coalition group is limited to 50 insured
employees which could be comprised of as many as 25
small employers of 2 person groups. Usually there is a
mix of 2-25 employees per company. Firms having
<30+
employees may not expect savings as large as those with only
2-10 employees. |
| Do I have to sign a contract to
participate. Do I have to agree to a long term
commitment? |
| No. No. Participation is the same as obtaining a
Health Insurance Plan from any carrier in Texas. Participation
is always subject to Texas
Insurance Code Chapter 26 and Title
28 Texas Administration Code Chapter 26 |
| Who decides what plans are offered? |
| You do. Each coalition group chooses the plan and
the carrier they jointly agree to. Rates will be determined by the group census
including Age, Sex, Location (cost of medical services in your
area), dependants, and Medical Conditions. Each census
can be submitted to several carriers, recommendations could be
made, but the decision as to which plan that coalition group
provides is determined by a joint decision of the employer
members. |
| Some of my employees have health
conditions, can they be covered? |
| Yes, Small Group reform laws apply to coalitions and
plans are guaranteed issue. Pre-existing health and
HIPPA regulations apply the same as they would normally for
any small employer of 2-50 employees. |
| I have a few employees located in other
states, can I still join? |
| A. Yes, if your company headquarters in Texas, and
its employees meet the requirements of the Insurance Code and
the rules set out by the chosen carrier.. Each carrier
has its own guidelines as to how many employees can be located
out of the service area. Participation rules are not
changed under a coalition. |
| If I belong to a coalition, will I be
subject to Cobra? |
| The function of a coalition is to obtain favorable rates
for small employers. All regulations regarding Cobra and
Texas Continuation are unaffected and remain subject to
current laws for each employer. Which Law applies to whom is
based on the number of employees for that individual
firm. |
| I have more questions, who do I
contact? |
| Your Agent, but please note, as this is new insurance
regulation, many agents and carriers are unaware, uninformed
or may have received misinformation, or confusing information
regarding HB 897. It is not uncommon to confuse HB 897 with SB 10. You may prefer to: |
| Send us a email
or call Cynthia @ 512-447-9853. Information is freely
shared with anyone. |
