The Lone Star State is trying to stop employers and insurers from using health coverage purchased through the individual market to escape group health plan requirements.
Even if employers simply give workers cash that the workers can use to buy their own coverage, Texas may treat those arrangements as employer health benefit plans, according to Texas Commissioner’s Bulletin #B-0028-06.
The bulletin applies to Texas health maintenance organizations, benefit plan administrators and agents as well as to insurers.
Texas law defines a health insurance arrangement as a small group health benefit plan if it provides health care benefits covering 2 or more employees at a small employer and it meets 1 of 3 other requirements, Jennifer Ahrens, Texas associate commissioner for life, health and licensing, writes in the bulletins.
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In Texas, Ahrens writes, a health insurance arrangement covering 2 or more eligible employees at a small business is a small group plan if the employer pays a portion of the premium or benefits; the employer or a covered individual treats the health benefit plan as part of a plan or program for purposes of Section 106 or Section 162 of the Internal Revenue Code, or the health benefit plan is an employee welfare benefit plan under Section 2510.3-1(j) in Section 29 of the Code of Federal Regulations.
Texas insurance law includes similar rules for a large employer, Ahrens writes.
“A number of individual health benefit plan coverage arrangements meet 1 or more of the conditions listed in these 3 paragraphs,” Ahrens writes.