Texas insurance law allows a wide array of small employer health care coverage plans and packages. This means that finding the right employee health plan at the right price can be challenging. But it also means that small employers who take the time to search carefully can find plans that suit their – and their employees’ – needs. When choosing a health plan for your small business, it pays to shop around. In Texas, the term “small employer” as it relates to insurance means a business 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, the law provides several ways to maintain benefits after leaving a job and limits the waiting period before a health plan will cover pre-existing conditions. Beyond these requirements, small-employer carriers may offer a wide variety of plans, with virtually any combination of features and benefits. Texas Department of Insurance 1-2008	Small-Employer 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 those who usually work at least 30 hours per week; are not temporary, part-time, or seasonal; and are not already covered by another group health plan. Sole proprietors, partners, and independent contractors are also eligible employees if they are included as employees under a small employer’s coverage. A business’ owners count toward the employee total. Learn More Types of Plans 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. You will generally have a lower premium for consumer choice plans. Learn More Shopping for Coverage Because premiums, deductibles, copayments, and coinsurance levels can vary widely from plan to plan, it pays to shop around. When shopping for coverage, keep these guidelines in mind: w 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. w 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. Learn more Employee Signup and Waiting Periods 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. Learn more 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 your 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: wAge of employees wGender  wNumber of plan participants  wIndustry wGeographic area  Learn More

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