Frequently Asked Questions
Understanding Small Employers health Insurance Coalitions
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?
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
(B) an employee who is covered under another health benefit plan
Are there other requirements to join?
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?
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?
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. 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?
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?
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, call 512-447-9853, or fill out appropriate form on the Contact Us page.