Texas (TX)
Individual Health Insurance Regulations

Learn more about Texas Individual Health Insurance

Health insurance is mandatory when it comes to your family’s physical well-being. In the event of unanticipated circumstances, suitable health coverage can save a great deal of money due to huge medical bills. Getting a health insurance policy can be quite confusing. You should evaluate your family’s medical needs and finances, before selecting a policy. If you are resident of Texas, you can choose from wide range of health insurance alternatives. The Texas Department of Insurance supervises the regulations under which the Texas health insurers can sell private health insurance to individuals and families.

Insurance regulations for the state of Texas permit the use of medical underwriting on all individual health insurance products. This allows health insurance carriers an opportunity to review past and present medical history for all applicants. Based upon the information obtained during this review, insurance carriers may opt to provide health insurance coverage under the terms of the health plan; or provide modified coverage, citing specific limitations, exclusionary periods or the attachment of an elimination rider, or even deny coverage. When issuing non-HMO individual health insurance products to individuals lacking prior creditable coverage, the state of Texas permits carriers a 60-month look-back period and 24-month exclusionary period limit on pre-existing conditions. Elimination riders, which may exclude coverage for a specific medical condition or ailment, are permitted to be used with both HMO and non-HMO individual health products. HMO plans are exempt from the use of pre-existing condition exclusionary periods. Texas insurance regulations allow grandparents to include their grandchildren on their policy as dependents, as long as the grandchildren reside with the grandparents and are under the age of 25.

Texas (TX)
Small Group Health Insurance Regulations

Pursuant to the Health Insurance Portability and Accountability Act of 1996, all small group health insurance within the state of Texas is offered on a guarantee issue basis if offered to employee groups of 2 – 50 people. Guarantee issue coverage provides that no employer group or individual employee may be declined coverage due to past or current medical history. For enrollees lacking prior creditable medical coverage, insurance carriers are permitted to exercise a 6-month look-back, 12-month exclusionary period on pre-existing conditions. Exclusionary periods may not exceed the 12-month period. Insurance companies may charge different premiums to small groups based on certain underwriting criteria, but the small group premium rates may vary no more than plus or minus 25 percent of the indexed rate. Standard rates are based on industry classification, the number of enrolled members, health status and geographic location. An affiliation or waiting period may be imposed upon applicants seeking an HMO policy. With the exception of late enrollees, an affiliation period may not exceed 2 months. Small group health plans in Texas are also guaranteed renewable, so the insurance company may not refuse to renew your coverage based on excessive claims from the members of the group plan.

COBRA and Continuation Coverage

Groups with 20 or more employees must abide by federal COBRA regulations which state that a departing employee is entitled to remain on the group health plan for a period of 18 months, provided that group health plan remains in existence. An employee who has left work on his own or was terminated from the job is eligible to be covered by COBRA, unless the former employer was fired for gross misconduct.

Texas has a mini-COBRA law that applies to groups that are not subject to federal COBRA regulations because they have fewer than 20 employees. Under this state COBRA rule, small groups must provide allow qualified beneficiaries to remain on the group health plan for up to 6 months after the termination date of employment. Any person accepting their COBRA option will be responsible for the monthly payment of the insurance premium, as well as a 2% administration fee. To qualify, an employee must have been insured under the group plan for at least 3 months and must accept their COBRA option within 31 days of termination of coverage under the group plan. For groups of 20 or more, COBRA is available for up to 18 months under federal laws. Once a person has exhausted their 18 month federal COBRA option, they may apply for an additional 6 months of coverage under state COBRA, providing them with a combined 24 months of COBRA continuation coverage. The Texas Health Insurance Risk Pool provides guaranteed issue individual health insurance for persons that have exhausted their COBRA options and are not qualified for standard issue individual coverage.