Texas Regulator Attacks Small Group Discrimination

Similarly, efforts to offer composite rate options or other special rate options to larger small groups are out of bounds, Stokes writes.

If the same rate options are not available to small employers of all sizes, “access to the same coverage is effectively denied,” Stokes concludes.

–Coalitions: Texas now lets small employers to join in small groups to buy health coverage.

The Texas department “has received reports that some carriers are not treating small employer health coalitions in the same manner as a single small employer,” Stokes writes.

Some insurers are quoting excessively high premium rates or demanding excessive documentation, Stokes writes.

But Texas law requires small group carriers to offer the coalitions all the products and guaranteed-issuance features that they would have to offer a single small employer, Stokes writes.

–Guaranteed renewability: A small group carrier can make changes in rates and benefits changes required by state or federal law. Otherwise, a small group carrier that stays in the Texas market must get employer approval for any plan changes, Stokes writes.

“This includes changes of substance, such as eliminating covered benefits, as well as seemingly minor changes, such as co-payment or deductible amounts,” Stokes writes.

–Continuation coverage: Stokes notes that, in some cases, Texas continuation policy rules are tougher than the federal rules. If, for example, an employer completely eliminates health coverage for a class of employees, it might not trigger federal COBRA coverage continuation requirements, but it would have to offer the continuation benefits required by the Texas coverage continuation law, Stokes writes.

Reproduced from National Underwriter Edition, November 24, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.