In Texas, small groups health insurance rules apply to companies that employ 1 – 50 full-time employees, including Full Time Equivalent (FTE) employees. Health insurance in general, and small group health insurance specifically, has become much more complex since the passage of the ACA, but Sheley Benefits, LLC is here to help you. We have years of experience dealing with small group plans and we can help you too. Below are some of the most frequently asked questions that we hear on a daily basis.
How do I determine if an employee is full-time or not?
All employees that work 30 or more hours per week on average are considered full-time.
What is a Full Time Equivalent employee and why does it matter?
The only reason to calculate your FTE’s is to determine if you are a group that is under or over 50 employees. An employer determines its number of full-time-equivalent employees for a month in the two steps that follow:
- Combine the number of hours of service of all non-full-time employees for the month but do not include more than 120 hours of service per employee, and
- Divide the total by 120.
You then add the number of FTE’s calculated to the number of your full-time employee count. If the result is less than 50, then you are considered a small group in Texas. If the result is more than 50, then you are a large group employer and other rules will apply to you – See Large Group Health Insurance.
Am I required to have a health plan for my employees if my business has less than 50 employees, including FTE’s?
Companies with less than 50 employees are not required to provide a health insurance plan to employees, but many do. Small Group Health Insurance (companies with 1-50 employees) is complex and changing all the time. There has never been a time when an experienced broker has been more critical. Group health insurance is an excellent tool to show your employees that you care. It also helps attract and retain quality employees.
How are rates determined?
All insurance companies doing business in Texas files rates with the Department of Insurance. Rates for small group health insurance plans are non-negotiable. As a result, if you give the same employee census information to more than one broker, they will, in fact, come back to you with the exact same rate for the same plan. You need a broker who you can trust and will partner with you when it comes to your employee benefits. Sheley Benefits, LLC is the broker and partner you need.
Will I have to pay more if one or more of my employees has ongoing medical issues?
No. Plans are now “guarantee issued.” The health status of employees will not affect rates. Insurance companies will consider:
- Age of employees. Older people usually have more expensive and more frequent health-related claims. Generally, the older the workforce, the more the plan will cost.
- Tobacco use. Federal law allows health plans to charge tobacco users up to 50 percent more. Texas law requires that rating factors related to health status be spread across the employer group. A group with more tobacco users will pay higher rates than a group with fewer tobacco users. At this point, most small group insurance companies are not rating due to smoking. However, they can and may in the future.
- Geographic area. Health care costs vary by region because of differences in the cost of living and the number of providers in the area. Most plans use either the county or ZIP code of the employer’s business address to base rates.
Am I required to pay some or all of the premium for my employees?
The law does not require employers to pay any part of an employee’s health plan premiums. However, many insurance companies require employers to pay at least 50 percent of their employees’ premiums. As of now, this requirement is waived during the Open Enrollment Period (OEP) from November 1st through January 31st.
Will the government subsidize rates?
In certain situations, businesses with 25 or fewer full-time equivalent employees that pay at least 50 percent of premiums and pay average annual wages less than $50,000 may be eligible for a tax credit. To get the tax credit, the business has to buy coverage through the federal Small Business Health Options Program. Sometimes it makes sense to do this and at other time it does not. Sheley Benefits, LLC will analyze this for you to determine if this is a good option.
What percentage of employees need to enroll in the plan?
Generally, insurance companies require at least 75% participation of employees. However, if the employee has coverage elsewhere, you can eliminate them from the calculation so they will not be counted against you when determining your participation rate. As of now, the 75% participation rate is waived during the Open Enrollment Period (OEP) from November 1st through January 31st. This is very beneficial for employers that traditionally have participation issues.
If I offer a plan, how do I know that it will be compliant with the ACA?
Insurance companies only offer compliant plans at this time. Compliant plans offer Essential Benefits as mandated by the ACA. These are:
- outpatient care without being admitted to a hospital;
- emergency services;
- hospitalization and surgery;
- maternity and newborn care;
- mental health and substance abuse services, including counseling and psychotherapy;
- prescription drugs;
- services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills;
- laboratory services;
- preventive and wellness services and chronic disease management; and
- pediatric services, including oral and vision care.
Why should I choose Sheley Benefits, LLC to handle our small group health insurance plan?
Sheley Benefits, LLC has been helping businesses throughout Texas obtain the best coverage at the best price for over 20 years. We know everything you need to know about the ACA. We truly are your benefits partner. We handle all aspects of providing a health insurance plan including:
- Searching the market to find the best plan for you and your employees.
- Implementing the plan in a timely and efficient manner.
- Providing meetings with the employees to inform them of the plan.
- Providing ongoing service that includes new employee additions, employee terminations and claims issues.
- Each year, at least two months prior to renewal, Sheley Benefits, LLC will take your updated employee census information back to the market and obtain competitive quotes to ensure you continue to provide the best benefits for your employees.
Let Sheley Benefits, LLC be your Benefits Partner!