To address the serious concern that 6 million Texans have no health care coverage, the Texas Department of Insurance has unveiled HealthyTexas, a new Texas health insurance plan for small business owners, the majority of whom are not able to offer coverage to employees because of the high cost of health insurance.
HealthyTexas allows state dollars to be targeted to uninsured low-income employees of small businesses.
Enrollees will have a slate of private insurance plans to choose from, and the program will in many ways seem like any other private insurance plan.
Implementation is scheduled to begin in summer 2010.
If an individual's total claims in a single calendar year are under $5,000 or over $75,000, the private insurer chosen by the enrollee will cover 100% of the costs.
If the total claims are between $5,000 and $75,000 HealthyTexas will pay 80% of the costs and the insurer will pay the other 20%.
The plan is administratively cost efficient because it is constructed on an effective existing model for employer-based health benefits.
Under this Texas health insurance plan, insurance carriers are protected against losses from a higher-than-expected volume of claims or claim costs.
This system of reinsurance will keep HealthyTexas premiums affordable.
This Texas health insurance plan was developed after six years of study and research by the TDI.
To qualify for participation, a business must have at least two but no more than 50 employees and must not have provided any group insurance in the 12 months immediately prior to applying for participation in HealthyTexas.
Additionally, wages for 30 percent of the small business' employees must be at or below 300% of the federal poverty limit and 60% or more must opt in to the program.
Employers in the plan will be required to pay 50% or more of the employee premium costs.
Funding for HealthyTexas was appropriated by the 81st Legislature which approved annual funding $17.
4 million for the Texas health insurance plan, as well as $171,000 for administrative costs, development and outreach.
TDI is responsible for administration of the plan and oversight of the Small Employer Premium Stabilization Fund to protect the insurance carriers.
The Legislature decided to limit participation in HealthyTexas to small businesses so that larger companies with access to more cost-effective group programs don't drop their existing plans in order to take part in the state program.
Employers will have to provide proof every year that they are still eligible.