Health Coalitions in Texas

[Guest atexan]

In 2003, the Texas Legislature passed HB897 to permit small employers (2 - 50) to join together to form larger groups "coalitions" (2 - 50 total employees) specifically to purchase group health insurance.

Is anyone aware of this? Setting up these coalitions?

Thanks.

[GBurns]

Did it ever become law? Check with your Dept of insurance anyhow.

Anyhow, I thought that Texas already had such purchasing groups. Purchasing groups are not the same as Coalitions.

For example Texas Association of Business www.txbiz.org

Many area Chambers of Commerce

Whereas Coalitions are like :

Dallas-Fort Worth Business Group on Health http://www.dfwbgh.org/

[Don Levit]

It did become law.

The only reason I know that, though, is that I live in the Lone Star state.

As far as the Tx Insurance code, you can check out Subchapter B, Articles 26.11 through 26.16.

One provision, specifically in Article 26.12 says a cooperative may not self-insure or self-fund any health benefit plan or portion of a plan. I wonder if that is a legal prohibition.

I wonder why this was added, for MEWAs are allowed in TX, and the self funding reserves are fairly reasonable.

Don Levit

[GBurns]

From the website of your own Texas DOI:

http://www.tdi.state.tx.us/company/lhcoop_lst_incl.html

The reason why Purchasing groups were probably authorized was because of the difficulty of setting up a MEWA. High set up expenses, ongoing regulatory reporting, expensive operating costs etc. All of which would have been prohibitive for small employers even in a group.

[Guest texascoalitions]

Yes, HB 897 are available now in Texas. Currently my office is the first and only firm that is issuing cases. Information is availble at this site. www.texascoalitions.com (just in case url is stripped - site is texascoalitions with a www before and dot com after)

[Guest pbayl10]

So, as a small business owner what kind of hoops would I have to jump through? I was involved in an association plan some years back and it was a bad deal. The questions I would have before considering anything like an association or cooperative would be:

Who handles the premium, can it be mailed directly to the carrier?

What carrier or carriers are offered, I'm gonna get burned insurance company or some names I recognize?

What all do I have to sign and be committed to if I want to become a member of the association?

In the lone star state just like everwhere else if it sounds too good to be true it probably is. But maybe not.

P. Baylor

[Guest texascoalitions]

The hoops are just like appling for any coverage in Texas. The carriers are any currently offering small group plans in Texas. The most difficult concept that people have with Coalitions, as defined by HB 897 is they think it is 'association' insurance and it is not. All HB 897 is about is allowing several small employers to join together and purchase group insurance as a 'larger' small group. All the the laws that govern a 2-50 insured group apply exactly to a coalition group.

This is explained in greater detail with links to the Texas Dept of Insurance website (showing the actual rules) at this website> www.texascoalitions.com

Sounds to good to be true? No, it is actually Texas Legisitlature taking a proactive approach to reducing premiums for the small employer and it works. Not everytime for everyone but for most. According to the Dept of Labor, over 80% of small businesses have fewer than 10 employees and that is the employer that this law benefits the most.

[Don Levit]

GBurns:

Thanks for providing the link, which listed the various coalitions. I saw nothing about your posting about the expenses of operating a MEWA.

Texas Coalitions:

Do you know why self funding was expressly prohibited?

I really don't see a huge advantage, particularly over the long run, with this type of an arrangement. I can provide the link to TDI, for the average price of small group insurance, if anyone is interested.

Don Levit