At Selected Benefits, we specialize in both Large and Small Group Health Insurance for Texas employers. Representing a myriad of choices, our Texas insurance carriers include Aetna, BCBS of Texas, Cigna, Humana, United Healthcare, Scott & White and Memorial Hermann Health plans. Our goal is to help you intelligently understand your benefit options with regard to the Affordable Care Act and it’s many implications on your business and it’s employees.
We’ll be happy to help educate small business owners in Texas about how group medical insurance plans can provide your employees and their families the coverage that they really value.
Businesses with less than 50 full time “equivalent” employees are exempt from paying a penalty for not providing ACA compliant health insurance coverage to its’ employees, of course, the employer can still provide health insurance coverage at its discretion. Per the Patient Protection & Affordable Care Act, any “applicable large employer” will be mandated to offer “minimum essential coverage” that is “affordable” to their employees. Those large employers who fail to meet these requirements will be required to pay an IRS “penalty” on their tax return for the year in which they did not meet said requirement. When the ACA was first passed, that penalty was negligible, but has grown over the years and now is quite significant.
A full time employee, as defined by the Federal law, is one who works a minimum of 30 hours per week and the law considers every 120 hours worked by a part time employee, during a month, as equal to one full time employee.
Per Federal law, an employer must give new hire a minimum of 31 days from the day their employment begins to enroll in a Texas health insurance plan. Once this time passes, an employee could possibly be required to wait as much as one year to join the employer’s group health insurance plan during the next open enrollment period for that particular plan. By law, an insurance carrier must offer an open enrollment period once per year for each group health insurance policy.
An employer, at its discretion, may require its employees to wait for up to 90 days after they enroll in a health plan for their insurance coverage to begin and the insurance carrier is not allowed to charge a premium for the health insurance policy during this period. Remember, per the Affordable Care Act, an insurance carrier cannot decline or otherwise limit coverage to any employees with pre-existing conditions.
Referred to as COBRA or continuation of coverage, employees generally have the option to keep their existing policy for a length of time after leaving their old job. The old employer must inform its employees about their continuation of coverage rights. This can be a very expensive option for the employee as they must pay the full premium of the plan without any contribution from the former employer. It is not mandated that employers pay premiums for former employees even if they previously paid a portion.
While current law does not require the employer to pay all or part of an employee’s health insurance premiums, the insurance companies generally require the employer to pay a minimum of 50% of the annual premium of the employee, though an employer, at its discretion, can choose to pay a larger percentage of the premium.
Always a bone of contention, an insurance carrier may increase the insurance policy premium due to both general increases in the cost of healthcare or as a result of the aging of the members of the small group health insurance policy. The insurance carrier is prohibited from a premium raise simply due to adverse health issues of the individual insureds of the group. In addition, if the insurance company decides to discontinue that policy at the end of the policy year, it must, by law, offer a replacement policy to the employer.
An insurance carrier will base the premium amount employers pay for the insurance coverage on both the benefits and the cost sharing that the employer chooses to offer his employees. Because of the ACA, the health condition of an insured no longer is a consideration when determining the premium rate. The three main factors that a Texas health insurance carrier will use to determine the rates are 1) Age of the Employees, 2) Tobacco use and 3) the geographic area of the insureds.