CONSUMER’S GUIDE
TO GETTING AND KEEPING HEALTH INSURANCE
IN TEXAS

Download from the following link

http://www.healthinsuranceinfo.net/tx00.html

Pay special attention to chapter 3

Consumer's Guide to Getting and Keeping Health Insurance in Texas

If you do not have access to employer-sponsored group health plan, you may want to buy  an individual policy from a private health insurer.  However, in Texas – as in most other states –  you have limited guaranteed access to individual health insurance in the private market.  There    are some alternatives to private individual health insurance  – such as COBRA coverage, state  continuation  coverage,  and  Texas  Health  Insurance  Risk  Pool  coverage.    This  chapter  summarizes your protections under different kinds of health plan coverage.

INDIVIDUAL HEALTH INSURANCE SOLD BY PRIVATE INSURERS

WHEN DO INDIVIDUAL HEALTH INSURERS HAVE TO SELL ME A POLICY? 

In  Texas,  your  ability  to  buy  an  individual  health  insurance  policy  from  a  private  insurance company depends on your health status.

In general, companies that sell individual health insurance in Texas are free to turn  you  down  because  of  your  health  status  and  other  factors.    When  applying  for  individual health insurance, you will be asked questions about health conditions you  have now or had in the past.  Depending on your health status, insurers might refuse    to sell you coverage or offer to sell you a policy that has special limitations on what      it covers.  If you are turned down or offered a policy with reductions or restrictions,  you may be eligible for coverage from the Texas Health Insurance Risk Pool (See    page 21). 

In  Texas,  newborns,  adopted  children,  and  children  placed  for  adoption  are  automatically covered under the parents’ individual health insurance for the first 31  days, if the plan provides coverage for dependents. The health plan may require that  the parent enroll the child within the 31 days in order to continue coverage beyond    the 31 days. 

Under  Texas  law,  your  grandchild  may  be  covered  under  your  individual  health  insurance policy. In order for your grandchild to qualify for coverage, your policy     must cover dependents and your grandchild must be under 25 years old, unmarried,    and dependent on you.

Under Texas law, your disabled child may remain covered under your fully insured  group  plan  into  adulthood.    This  applies  if  your  child  was  already  disabled  and  covered  under  the  plan  before  he  or  she  reached  the  limiting  age  for  dependent

.  You will be required to submit proof of your child’s continued incapacity  and dependency within 31 days following the date your child reaches the limiting     age and periodically thereafter.

WHAT WILL MY INDIVIDUAL HEALTH INSURANCE POLICY COVER?

 

It depends on what you buy.  Texas does not require health insurers in the individual  market to sell standardized policies.  Health plans can design different policies and  you  will  have  to  read  and  compare  them  carefully.    Health  plans  are  required  to  provide you with written descriptions of their products so that you can compare the  differences.   

 

Make  sure  that  the  policy  that  you  purchase  covers  all  your  needs.  By  law,  all  insurers  in  Texas  must  offer  at  least  one  plan  that  includes  coverage  for  many  required state mandated benefits, such as childhood immunizations and     mammograms.    However,    Texas  does  permit  insurers  that  sell  individual  health  insurance to  offer one or more Consumer Choice Benefits Plans, which are lower-  cost plans that do not include  all of mandated benefits normally covered in other  insurance  plans  (for  example,  chemical  dependency  treatment  or  osteoporosis  screening).  

WHAT ABOUT COVERAGE FOR MY PRE-EXISTING CONDITION?

 

If you buy an individual health insurance policy from an HMO, you will not face a  pre-existing exclusion period.  HMOs in Texas cannot impose pre-existing exclusion  periods.

If you are buying a non-HMO individual health insurance policy in Texas, there are  different ways insurers are allowed, at the time you purchase the policy, to exclude  coverage for your pre-existing conditions.

The insurer can impose an elimination rider.  An elimination rider is an amendment  to your health insurance contract that temporarily or permanently excludes coverage  for a health condition, body part, or body system.

An  individual  health  insurer  may  also  impose  a  pre-existing  condition  exclusion  period.    Pre-existing  condition  exclusion  periods  cannot  exceed  24  months.   However,  if  the  individual  health  insurer  does  not  ask  you  questions  about  your  health or medical treatment history when you apply for health coverage and it does      not exclude a condition by name on your policy, it can only exclude pre-existing  conditions for 12 months.

When  determining  if  a  condition  is  pre-existing,  an  individual  health  insurer  is  allowed to look back 5 years to see if you actually received care for a condition.  In  addition, the insurer can look for evidence of symptoms for which most people, in     the insurer’s opinion, would have sought care.  This is called the prudent person  standard.

After you purchase your individual health insurance policy, insurers can still exclude  coverage for a pre-existing condition, even if it wasn’t specifically excluded by the  terms of your individual health insurance policy.  If you make a claim during the     first 2 years of coverage, your individual health insurer can look back 5 years from    the time of your application to see if the claim is for a condition that would have     been  considered  a  pre-existing  condition.    If  the  insurer  determines,  using  the  prudent person standard, that the condition is a pre-existing condition, it can refuse to  pay for related expenses. 

Pregnancy  may  be  considered  a  pre-existing  condition  in  an  individual  health  insurance policy.  However, genetic information cannot be used as a basis for a pre- existing condition.

Individual health insurers have to give you credit for your prior continuous coverage 

if your most recent coverage was under a group, government, or church plan.  The      same types of coverage that are creditable in fully insured group health plans are also  considered  creditable  in  individual  health  insurance.    Coverage  is  considered  continuous  if  the  gap  between  health  plans  is  less  than  63  days.    If  you  have  18  months of continuous creditable coverage, you will not face a pre-existing condition  exclusion period.

If your gap in health coverage was 63 days or more and your most recent coverage      was under a group, government, or church plan, you must be given credit for any  creditable  coverage  in  effect  at  any  time  during  the  18  months  preceding  your  application  for  coverage.    This  means  that  although  you  will  have  a  pre-existing  condition exclusion period, it will be shorter than it would otherwise be.

WHAT CAN I BE CHARGED FOR MY INDIVIDUAL HEALTH INSURANCE POLICY?

Generally, in Texas, there are no limits on how much individual premiums can vary  due to age, gender, health status, family size, and other factors.

In  addition,  when  you  renew  your  individual  health  insurance,  an  insurer  can  increase  your  premiums.    However,  premium  increases  must  be  applied  to  all  persons in your class and not on an individual basis.  A class may be grouped by age,  sex, or by each individual health insurance product.

CAN MY INDIVIDUAL HEALTH INSURANCE POLICY BE CANCELED?

Your coverage cannot be canceled because you get sick.  This is called guaranteed  renewability. You have this protection provided that you pay the premiums, do not  defraud the company, and, in the case of managed care plans, continue to live in the  plan  service  area.    However,  guaranteed  renewability  does  not  protect  you  from  having  your  premiums  go  up  at  renewal,  and  premiums  can  also  increase  within  limits as you age or your health declines.

Some  insurance  companies  sell  temporary  health  insurance  policies.    Temporary  policies are not guaranteed renewable.  They will only cover you for a limited time,  such as 6 months.  If you want to renew coverage under a temporary policy after it  expires, you will have to reapply and there is no guarantee that the health plan will  be-reissued at all or at the same price.  

COBRA AND STATE CONTINUATION COVERAGE

WHEN DO I HAVE TO BE OFFERED COBRA COVERAGE?

If you are leaving your job and you had group health plan, you may be able to stay in   your group health plan for an extended time through COBRA and/or state continuation coverage.

The information presented below was taken from publications prepared by the U.S. Department  of Labor.  You should contact it for more information about your rights under COBRA.

To qualify for COBRA continuation coverage, you must meet 3 criteria:

First, you must work for an employer with 20 or more employees.  If you work for    an employer with 2-19 employees, you may qualify for state continuation coverage.   (See below.)

Second, you must be covered under the employer’s group health plan as an employee  or as the spouse or dependent child of an employee.

Finally, you must have a qualifying event that would cause you to lose your group  health plan.

COBRA QUALIFYING EVENTS

For employees 

Voluntary or involuntary termination of employment for reasons other than gross

misconduct 

Reduction in numbers of hours worked

For spouses 

Loss of coverage by the employee because of one of the qualifying events listed

above 

Covered employee becomes eligible for Medicare  

Divorce or legal separation of the covered employee  � Death of the covered employee

For dependent children 

Loss of coverage because of any of the qualifying events listed for spouses  � Loss of status as a dependent child under the plan rules

Each person who is eligible for COBRA continuation can make their own decision. If  your dependents were covered under your employer plan, they may independently  elect COBRA coverage as well.

You must be notified of your COBRA rights when you join the group health plan, and  again  if  you  qualify  for  COBRA  coverage.    The  notice  rules  are  somewhat  complicated  and  you  should  contact  the  U.S.  Department  of  Labor  for  more  information.

In general, if the event that qualifies you for COBRA coverage involves the death,  termination, reduction in hours worked, or Medicare eligibility of a covered worker,  the employer has 30 days to notify the group health plan of this event.  However, if   the qualifying event involves divorce or legal separation or loss of dependent status,  YOU have 60 days to notify the group health plan.  Once it has been notified of the  qualifying event, the group health plan has 14 days to send you a notice about how to  elect COBRA coverage. Each member of your family eligible for COBRA coverage  then has 60 days to make this election.  

Once  you  elect  COBRA,  coverage  will  begin  retroactive  to  the  qualifying  event.   You will have to pay premiums dating back to this period.

SPECIAL SECOND CHANCE TO ELECT COBRA FOR TRADE- DISLOCATED WORKERS

A second COBRA election period may be available for TAA eligible people who     did not elect cobra when it was first offered. The second election period can be  exercised 60 days from the 1st day of TAA eligibility, but in no case later than 6  months following loss of coverage.  Coverage elected during this second election  begins retroactive to the beginning  of the special election period  – not back to  qualifying event.

Certain people who lost their job-based health coverage because of the impact of  imports  on  their  employers  have  a  limited  second  chance  to  elect  COBRA.   People who are receiving benefits from the Trade Adjustment Assistance (TAA)  Program  are  eligible  for  a  federal  income  tax  credit  (the  Health  Coverage  Tax  Credit, or HCTC) that will pay 65% of their premiums. 

For some laid off workers, TAA benefits begin after their 60-day period to elect   COBRA continuation coverage has  expired.  In this circumstance,  TAA-eligible  people have a second 60-day period, starting on the date of their TAA eligibility, 

to  elect  COBRA.  (However,  in  no  case  can  COBRA  be  elected  more  than  6- months following the original qualifying event (i.e. layoff) that caused the loss of  group health plan coverage.) 

When  COBRA  is  elected  during  this  special,  second  election  period,  coverage  starts on the first date of the special election period.  Any time that has elapsed  between  the  original  qualifying  event  and  the  first  date  of  the  special  election  period is not counted as a lapse in coverage in determining continuous coverage  history.

 

To  qualify  as  HIPAA  eligible,  you  must  choose  and  use  up  any  COBRA  or  state  continuation coverage available to you.

WHAT WILL COBRA COVER?

 

Your covered health benefits under COBRA will be the same as those you had before   you  qualified  for  COBRA.    For  example,  if  you  had  coverage  for  medical,  hospitalization,  dental,  vision,  and  prescription  drug  benefits  before  COBRA,  you  can continue coverage for all of these benefits under COBRA.  If these benefits were  covered  under  more  than  one  plan  (for  example,  a  separate  health  insurance  and  dental insurance plan) you can choose to continue coverage under any or all of the   plans.  Life insurance is not covered by COBRA.

If your employer changes the health benefits package after your qualifying event,  you must be offered coverage identical to that available to other active employees  who are covered under the plan. 

WHAT ABOUT COVERAGE FOR MY PRE-EXISTING CONDITION?

 

Because your group coverage is continuing, you will not have a new pre-existing  condition exclusion period under COBRA.  However, if you were in the middle of a  pre-existing  condition  exclusion  period  when  your  qualifying  event  occurred,  you  will have to finish it.

WHAT CAN I BE CHARGED FOR COBRA COVERAGE?

 

You  must  pay  the  entire  premium  (employer  and  employee  share,  plus  a  2%  administrative fee) for COBRA continuation coverage.  The first premium must be  paid within 45 days of electing COBRA coverage.  

 

If you elect the 11-month disability extension, the premium will increase to 150% of     the  total  cost  of  coverage.    See  below  for  more  information  about  the  disability  extension.

 

If  you  lost  your  group  health  plan  and  are  receiving  benefits  from  the  Trade  Adjustment Assistance (TAA) Program, you may be eligible for a federal income tax  credit  to  help  you  pay  for  COBRA  coverage.    This  credit  is  called  the  Health  Coverage Tax Credit (HCTC), and is equal to 65% of the cost of qualified coverage,  including COBRA (see page 31).

 

If  you  are  a  retiree  aged  55-65  and  receiving  benefits  from  Pension  Benefit  Guarantee Corporation (PBGC), then you may be eligible for the HCTC (see page  31).

HOW LONG DOES COBRA COVERAGE LAST?

 

COBRA coverage generally lasts up to 18 months and cannot be renewed.  However,  certain disabled people can opt for coverage up to 29 months, and dependents are  sometimes  eligible  for  up  to  36  months  of  COBRA  continuation  coverage,  depending on their qualifying event.

HOW LONG CAN COBRA COVERAGE LAST?

Qualifying event(s)

Eligible person(s)

Coverage

Termination

Employee

18 months *

Reduced hours

Spouse

Dependent child

Employee enrolls in Medicare

Spouse

36 months

Divorce or legal separation

Dependent child

Death of covered employee

Loss of “dependent child” status Dependent child

36 months

*  Certain  disabled  persons  and  their  eligible  family  members  can  extend  coverage  an

additional 11 months, for a total of up to 29 months.

 

Usually,  COBRA  continuation  coverage  ends  when  you  join  a  new  health  plan.  However, if your new plan has a waiting period or a pre-existing condition exclusion  period, you can keep whatever COBRA continuation coverage you have left during  that period. For specifics, ask your former employer or contact the U.S. Department    of Labor.

 

COBRA coverage also ends if your employer stops offering health benefits to other  employees.   

 

COBRA coverage might end if you are in a managed care plan that is available only    to  people  living  in  a  limited  geographic  area  and  you  move  out  of  that  area.   However, if you are eligible for COBRA and are moving out of your current health  plan’s service area, your employer must provide you with the opportunity to switch    to  a  different  plan,  but  only  if  the  employer  already  offers  other  plans  to  its  employees.    Examples  of  the  other  plans  your  employer  may  offer  you  are  a  managed  care  plan  whose  service  area  includes  the  area  you  are  moving  to,  or  another plan that does not have a limited service area.

WHAT ABOUT STATE CONTINUATION COVERAGE

 

If your employer, regardless of size, offers a fully insured group health plan, you  may  also  be  eligible  for  continuation  coverage  under  some  Texas  laws  that  are  similar  to  COBRA.    Eligibility  requirements  for  state  continuation  coverage  are  similar to those for COBRA.  However, in most cases, state continuation coverage    does not last as long as COBRA would otherwise last.  To get state continuation  coverage, you must have been covered under your fully insured group health plan for a  minimum  length  of  time  and  you  must  request  state  continuation  coverage  and  make  your  first  premium  payment  within  a  certain  time  limit.    Ask  your  former  employer or the Texas Department of Insurance about state continuation coverage if    you think it applies to you

HEALTH INSURANCE RISK POOL (THE HEALTH POOL)

Texas has a risk pool program, called the Texas Health Insurance Risk Pool that offers  health  coverage  for  persons  who  are  HIPAA  eligible  and  for  people  with  expensive  health  conditions who are unable to buy individual coverage.

WHEN CAN I GET COVERAGE FROM THE TEXAS HEALTH INSURACE RISK POOL?

 

If you are HIPAA eligible, you can buy health insurance from the Health Pool. 

To be HIPAA eligible, you must meet certain criteria 

No matter where you live in the U.S., if you are HIPAA eligible you are guaranteed  the  right  to  buy  individual  health  insurance  of  some  kind  with  no  pre-existing  condition exclusion periods. In Texas, you are guaranteed the right to buy coverage  only from the Health Pool.  To be HIPAA eligible, you must meet all of the following:      

 

You  must have had  18  months of continuous creditable coverage, at least the  last day of which was under a group health plan.

 

You  also  must  have  used  up  any  COBRA  or  state  continuation  coverage  for  which you were eligible.

 

You must not be eligible for Medicare, Medicaid or a group health plan.

 

You  must  not have  health  insurance.  (Note, however, if you know your group  coverage  is  about  to  end,  you  can  apply  for  coverage  for  which  you  will  be  HIPAA eligible.)

 

You must apply for health insurance for which you are HIPAA eligible within 63  days of losing your prior coverage. HIPAA eligibility ends when you enroll in an individual plan, because the last day of  your continuous health coverage must have been in a group plan.  You can become  HIPAA  eligible  again  by  maintaining  continuous  coverage  and  rejoining  a  group  health plan.

If you are not HIPAA eligible, there are many different ways to qualify for coverage  through the Health Pool.  You are eligible if: 

o You are eligible for the Health Coverage Tax Credit (HCTC) (see page 31).

o You were turned down for coverage by an insurer or HMO because of your  health;

o You  received  a  certificate  from  an  agent  saying  that  the  agent  would  be  unable to find coverage for you because of your health;

o You were offered coverage by an insurer, but the health plan contained an  elimination  rider  that  would  have  reduced  the  benefits  you  would  receive  from the health plan;

o You were offered coverage by an insurer or HMO, but it would have been  more expensive than buying coverage from the Health Pool; or

o You  have  been  diagnosed  with  a  serious  health  condition,  for  example,  cancer, epilepsy, or AIDS.

o You only need to show that you are eligible in one of these ways in order to     get Health Pool coverage.  The Texas Health Insurance Risk Pool requires 

that  you  not  be  eligible  for  other,  similar  employer-based  coverage  before  you can get coverage from the Health Pool.  

 

You may not be eligible for the Health Pool if you were offered COBRA or state  continuation coverage and didn’t elect the coverage or didn’t exhaust the coverage.  The Health Pool can deny eligibility until the time that you would have otherwise  exhausted COBRA or state continuation coverage had you elected it