Small-Business Coverage
Small-Business Coverage Eligibility
Texas businesses with two to 50 eligible employees may obtain small-employer coverage from either a traditional insurance company or a health maintenance organization (HMO). Eligible employees are defined as those who usually work at least 30 hours per week; are not classified as temporary, part-time, or seasonal; and are not already covered by another group health plan. A business owners count toward the employee total.
The number of eligible employees -- not total employees -- determines whether a business is considered a small employer under Texas insurance law. For example, if your business has 60 total employees, it could still qualify if six of the workers are part-time and four have coverage through some other source, such as a spouses plan.
Group Plan Equality
If you decide to offer a group health plan to your employees, you must make it equally available to all of your eligible employees and their dependents.
Coverage is available under a small employer health benefit plan if at least 75 percent of a small employers eligible employees elect to be covered. Carriers must always "round up" when calculating the percentage. For example, a five-person business with only three employees wanting to participate satisfies a 75 percent requirement by rounding up.
However, in the case of a business with only two eligible employees, the law requires 100 percent participation. A husband and wife working in a business must be counted as two separate employees. Neither of the employees is eligible for coverage as a dependent of the other.
If you provide a health plan, state regulations and a federal law called COBRA (Consolidated Omnibus Budget Reconciliation Act) allow employees to maintain benefits for a period of time after separation from the job. It is your legal responsibility to inform employees of their rights to continue coverage. Former employees who choose to continue their coverage through COBRA or state continuation must pay the full cost of the plan. You are not obligated to contribute toward their premiums, even if you previously paid a share. Ask your carrier for details about your responsibility toward former employees.
