Healthy Texas, a statewide public/private partnership established by the 81st Legislature, provides a new health insurance option for small employers in Texas. Eligible employers that purchase coverage for employees and their dependents through an approved participating private health plan can save, on average, up to one-third on premiums.

Private plans began enrollment in the Healthy Texas partnership in September. To enroll, interested employers will apply directly to participating health plans Celtic Insurance Company or United Healthcare, or apply through an insurance agent. Employers may also apply through 3-Share Programs that participate in Healthy Texas.

Healthy Texas was created by Senate Bill (SB) 78. The bill was written by Sen. Jane Nelson and co-sponsored by Rep. John Smithee. It passed the 81st Legislature and became law in June 2009. Sen. Robert Duncan and Rep. John Zerwas were among key supporters for SB 78 to address the concerns of Texas small businesses who do not offer health insurance coverage for employees because of the cost.

Thirty-two percent of Texas small businesses offer health insurance, as opposed to 89 percent of Texas large employers. A majority of the estimated six million Texans who lack health insurance are employed. Healthy Texas provides eligible small employers with the option of purchasing an affordable benefit plan that is compliant with the benefit requirements of federal health insurance reform.

The Texas Department of Insurance (TDI) will oversee program administration, while participating health plans and 3-Share Programs will administer Healthy Texas benefit plans and provide all other health plan services for participating employers. An additional $4.9 million a year in federal funds have been provided for a five-year grant period, from 2009-2013, under a State Health Access Program (SHAP) grant from the federal Health Resources and Services Administration (HRSA).

Healthy Texas does not provide a premium subsidy. Instead, it leverages both public and private funds to address health care claims costs. It uses a state-funded pool to pay participating health insurers for claims costs within a defined range. Healthy Texas reimbursement is available to pay for 80 percent of an enrolled individual’s total paid claims costs between $5,000 and $75,000 in a calendar year. This public-funded reimbursement approach, which has been successfully implemented in other states, allows Texas to pursue the best use of both public and private funds. Funding approved by the Legislature to share part of the cost associated with risk incurred by the participating health plans allows for the plans to charge lower premiums.

For the employer, there will be no difference between Healthy Texas and any other private market health insurance plan they might purchase. Healthy Texas builds on the existing employer-based health insurance model, minimizing additional administrative costs. Healthy Texas also creates an infrastructure compatible with an insurance exchange model.

In conjunction with Healthy Texas, additional opportunities exist for Texas small employers to save money on the cost of health care coverage through the small business health care tax credits available through federal health reform.

Source: Texas Department of Insurance