Texas small employer group health insurance coalitions, private purchasing cooperatives, as defined by HB 897 

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NEWS RELEASE                                 FOR IMMEDIATE RELEASE

For More Information, Contact:                                                     September 29, 2004

Cynthia Bateman

Texas Coalitions, Inc.

A Texas not for profit Corporation

512-447-9853   512-428-9894 (fax)

cynthia@texascoalitions.com

Business owners join together to reduce health insurance cost

AUSTIN, TX -- September 29, 2004 -- Over 5 million Texans live without health insurance¹.  About 26 percent of Texans are uninsured. 66 percent of uninsured adults work, but either work for a firm that doesn't offer insurance or they can't afford the employee contribution².  While the problem is being debated on national campaign platforms, Texas Legislators have taken action!

Business owners can now utilize a new Texas law that enables them to provide insurance for their employees at lower rates.  House Bill 897 allows small employers to form ‘coalitions’ and apply for health insurance as a larger group. This September, seven small employers formed a coalition and obtained an employee health benefit plan from a major national insurance carrier. The combined premiums for the employers in the coalition were 31% lower than if each had purchased their own group health insurance plan.

Michael Lee, an Insurance Agent in Austin, working with First Texas Health Coalition, Inc stated, “ Rate comparisons from major insurance carriers illustrate that most employers can obtain lower premiums by joining a coalition instead of purchasing their own company plan. The greatest savings seems to be for the employer with 2-9 employees. A large percentage of the uninsured are employed by firms with 2-24 employees and employers this size generally benefit the most from HB 897.”

“We began providing information to small employers about this new legislation at the first of the year, and the response has been tremendous. With group health insurance rates increasing at the highest levels since the 80’s, it seems everyone is searching for solutions. In the past few months we have been contacted by everyone from the neighborhood CPA with 2 employees to business organizations with hundreds of small employer members.”

Information for employers or business groups is available at the Texas Coalitions, Inc. website: www.texascoalitions.com   Email: txpr@texascoalitions.com  Phone 512-447-9853

1. U.S. Census Bureau: March 2003 Current Population Survey for Texas . Analysis by Texas Health and Human Services Commission, October 2003
2. Texas Department of Insurance, Straight Talk About Insurance. http://www.tdi.state.tx.us/commish/talkhealth.html#uninsure

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PRESS RELEASE                                            FOR IMMEDIATE RELEASE

For More Information, Contact                                                            April 1, 2004

Hannah Brandon

First Texas Health Coalition, Inc.

512-428-9827

512-428-9894 (fax)

Hannah@firsttexashealthcoalition.org

NEW LEGISLATION ENABLES EMPLOYERS TO REDUCE HEALTH INSURANCE EXPENSE

Austin, Texas – April 1, 2004 -- First Texas Health Coalition, Inc., a Texas not-for-profit corporation, began assisting Small Employers in Texas to form “small employer coalition” for the purpose of acquiring Health Insurance Benefits at lower rates than are normally available. This was made possible by the passing of HB 897 in the 78^th Regular Session of the Texas Legislature which clarified previous legislation.  HB 897, authored by Rep. Beverly Woolley(R) of Houston, stipulates that a “coalition” of small employers must be considered the same as “a single small employer”.  This allows several employers to join together and obtain the similar rates and benefits that larger employers receive.  HB 897 provides welcomed relief as Health Insurance rate increases have reached record levels.

Under HB 897, a coalition is considered a private purchasing cooperative, comprised of Small employers of 2-50 insured employees each, and is therefore subject to Small Group Reform regulations.  As a Small Employer group, acceptance is guaranteed from any insurance carrier offering Group Health Benefit Plans in Texas.  Small groups of 10 or less employees are usually accessed a premium surcharge of 10-20% due to their size.  By joining with other employers in a coalition, several smaller employers can form a coalition of up to 50 insured employees and eliminate most surcharges.  Normal underwriting procedures allow carriers to adjust rates for health conditions in a group based on risk vs. premium received.  Small groups of 2-5 employees are typically assessed higher rates due to what most people would consider normal health conditions of the employees.  This increased rate is usually less for groups of 40-50 insured due to the increased amount of premium collected.