Your Health Care Coverage
Getting sick can be expensive, especially if the illness is an emergency or is serious. Even minor illnesses and injuries can cost thousands of dollars to diagnose and treat. Health insurance helps you get the care you need and protects you and your family from financial losses if you get sick or injured.
This publication provides information about health care coverage in Texas. You can also visit www.TexasHealthOptions.com to learn more about health coverage. TexasHealthOptions.com is a free service of the Texas Department of Insurance.
Federal law requires most people to have a health insurance plan that meets minimum federal coverage standards or pay a tax penalty. Health benefit plans provided by your employer and most state or federal government health plans (Medicare, Medicaid, CHIP, TRICARE, and some veterans' health programs) will usually satisfy the requirement.
Federal law exempts some people from the requirement to have insurance or pay a tax penalty. You might be exempt from the penalty if:
- You were uninsured for fewer than three months of the year.
- You qualify for a hardship exemption from the marketplace.
- The only coverage you can get would cost more than 8 percent of your household income.
- You have a household income below the tax-filing threshold ($10,000 for an individual).
There are also exemptions if you are in prison; are in the U.S. illegally; or are a member of certain religious sects, American Indian tribes, or health care sharing ministries.
If you don't have access to employer- or government-sponsored health coverage, you can buy an individual plan to cover yourself, or yourself and your family, during open enrollment from November 1 to January 31 of each year. February 15.You generally may buy only individual coverage during the open-enrollment period, unless you get married or divorced, have a baby, or experience another qualifying life event.
Health insurance companies must sell a plan to anyone who applies during the open enrollment period. Companies may not deny you coverage or charge you more because of a preexisting condition or disability.
When deciding your premium, insurance companies may consider only your age, where you live, whether you smoke or use tobacco, and whether the coverage you're buying is for an individual or a family. They may not consider your health status, medical condition or history, claims experience, genetic information, gender, disability, or other health factors.
You can buy directly from companies and insurance agents or brokers. You can also buy coverage through the federally operated online insurance marketplace at HealthCare.gov or by calling the marketplace toll-free at 1-800-318-2596.
If you don’t have insurance in 2015, you will pay a tax penalty of either $325 or 2 percent of your yearly household taxable income, whichever is more. When calculating the penalty, use only the amount of income above the tax filing threshold ($10,000 for an individual). If you’re using the taxable income calculation, the maximum penalty amount is the cost of the national average bronze plan.
The following table shows the tax penalty and the family maximum for each year.
Tax penalty (whichever is higher):
|For each uninsured adult||+||For each uninsured child||Up to a family max of||or||Percent of income over filing threshold|
|Future||$695 x cost of living adjustment||+||50% x adult penalty||300% x adult penalty||or||2.5%|
You might qualify for a subsidy to help pay for coverage if your income is between 100 percent and 400 percent of the federal poverty level. For 2015, this is $11,670 to $46,680 for an individual and $23,850 to $95,400 for a family of four.
If your income is below 100 percent of the poverty level, you aren't eligible for a subsidy. However, you won't have to pay the tax penalty if you don't have health insurance.
Subsidies are available only when you buy a health plan through the marketplace. You can't get a subsidy if you buy directly from an insurance company or if you can get affordable health coverage at work.
You can take the subsidy as an advance tax credit to lower the cost of your monthly premiums or wait until tax time for a bigger refund. Make sure you tell the marketplace if your income goes up or down or if your family size changes.
For more information about the Affordable Care Act and the insurance marketplaces, visit HealthCare.gov or call 1-800-318-2596.
Health Plan Basics
To get the most out of your health plan, it's important that you understand what the plan covers and how it works. State and federal laws require plans to cover specified benefits, but each plan works a little differently.
Health plans are legal contracts between you and an insurance company or health maintenance organization (HMO). A plan issued by a health insurance company is called a policy, while a plan issued by an HMO is called an evidence of coverage. Both types of health plans are commonly called "comprehensive" or "major medical" coverage.
Health plans pay only for covered services, so it's important that you understand exactly what your plan covers. Also make sure you understand the costs you will be responsible for paying yourself, such as deductibles, copays, and coinsurance. Carefully review the Summary of Benefits and Coverage that comes with your health plan.
Types of Plans
There are three major types of health plans: health maintenance organizations (HMOs), preferred provider benefit plans (PPOs), and exclusive provider benefit plans (EPOs).
Health Maintenance Organizations
An HMO will usually pay only if you use doctors and hospitals in its network. There are exceptions for medical emergencies and for medically necessary services that aren't available in the HMO's network.
You must choose a doctor from the HMO's network to oversee all of your health care. This doctor is called your primary care physician. You must usually get a referral from your primary care physician if you want to see a specialist. One exception is that women don’t need a referral for a routine OB/GYN appointment if the doctor is in their network.
Some HMOs offer a point-of-service (POS) option that gives you more flexibility to choose your doctors. You will still be required to choose a primary care physician, but you may go to out-of-network doctors without a referral. However, if you use doctors and hospitals that aren't in your HMO's network, you'll have to pay more out-of-pocket for your health care. A point-of-service plan may exclude the option for out-of-network care for some medical conditions. Point-of-service coverage is usually offered as an add-on to the plan - called a rider - for an additional fee.
Preferred Provider Benefit Plans
A PPO is a network health plan offered by an insurance company. Although you can usually go to any doctor you choose, your out-of-pocket costs will be lower if you use doctors in the PPO's network.
Doctors and hospitals in the network have agreed to charge a discounted price for services to the PPO's members. Out-of-network doctors and hospitals haven't agreed to the discounted prices and often charge more than what your PPO plan will pay for your care. You'll usually have to pay this extra amount yourself. In addition, you'll probably have to pay a separate deductible and higher copayments and coinsurance for any care you received outside of the network.
Exclusive Provider Benefit Plans
EPO plans are similar to PPOs. They negotiate agreements with doctors and hospitals to provide care to their members at a discounted rate. You must use doctors and hospitals in the EPO's network.
The primary difference between EPOs and PPOs is that PPOs will typically pay some of the cost of your care if you go to doctors or hospitals outside of their networks, while EPOs will not. There are exceptions for medical emergencies and for medically necessary services that are only available outside the EPO network.
Other Types of Health Insurance
There are other types of health insurance that don't meet minimum federal coverage standards. If you have one of these types of plans, you might have to pay a tax penalty for not having comprehensive health coverage. These plans aren’t required to comply with some key provisions of federal law. For instance, these plans can still deny you coverage or charge you more if you have a preexisting condition.
- Specified disease plans pay only if you are diagnosed with the illness or condition named in the policy. Policy provisions are very specific. For instance, a cancer policy will typically pay only for services medically necessary to treat cancer. It won't pay to treat other illnesses.
- Hospital surgical policies only cover expenses directly related to hospital and surgical services, such as daily room rates, surgery, and doctor charges.
- Short-term policies provide coverage for a limited period of time, usually six to 12 months. Most people who buy short-term policies do so to protect themselves while they're in between jobs or waiting for other health coverage to start.
Health Plan Costs
With any type of health plan, you'll have to pay some of the costs of your health care yourself. This is called cost sharing. The costs will vary by the type of plan you have. The following are some of the costs you might have to pay:
- Premiums. A premium is a fee you pay to participate in a health plan. Employers who offer health plans usually pay some or all of the employee's premium costs, but they aren't required to do so.
- Deductibles. A deductible is an amount that you must pay for a covered medical service before your plan will begin to pay. You'll usually have to meet a deductible each year.
- Copayments. Copayments are amounts you pay each time you go to the doctor, fill a prescription, or receive a covered health service. Some managed care plans cap the amount of your out-of-pocket costs for copays and deductibles over a certain period, usually a year. When you reach this amount, your plan will pay 100 percent of the costs for the remainder of the period.
- Coinsurance. Coinsurance is the percentage of the cost of a health care service that you pay once you have met the deductible. For instance, your health plan might pay 80 percent of the cost of a covered service, leaving you to pay the remaining 20 percent in coinsurance. The coinsurance will vary by plan. In Texas, health plans generally must pay at least 50 percent of the cost of covered services after the deductible has been met. As with deductibles, the higher the amount you pay in coinsurance, the lower your premium will be.
|Primary care physician||No||Yes, for in-network services||Yes||No|
|Geographic restrictions||Network coverage may be limited to a specific service area in the state||In-network coverage is limited to a specific service area in the state; limited benefits while traveling||Coverage is limited to a specific service area in the state; limited benefits while traveling||Coverage is limited to a specific service area in the state; limited benefits while traveling|
|Filing claims||You usually don't have to file in-network claims; you may have to pay out-of-network doctors and hospitals in full and file for reimbursement||You usually don't have to file in-network claims; you may have to pay out-of-network doctors and hospitals in full and file for reimbursement||You usually don't have to file claims||You usually don't have to file claims|
|Average annual premiums||Usually higher than HMO||Usually lower than PPO||Generally lowest of all options, but may depend on employer plan||Could be lowest of the options, but may be more or the same as an HMO option|
|Deductibles||Consider a higher deductible for a lower premium||Consider a higher deductible for a lower premium||Consider a higher deductible for a lower premium||Consider a higher deductible for a lower premium|
|Copayments||Consider a higher copayment for a lower premium||Consider a higher copayment for a lower premium||Consider a higher copayment for a lower premium||Consider a higher copayment for a lower premium|
Health Plan Benefits
State law requires plans sold in Texas to provide specific benefits. These are often called state-mandated benefits or mandates. The mandates that apply to plans in each market (individual, small group, and large group) are different. Most state mandates are included in the minimum package of essential health benefits defined under federal law. Learn more about what Texas law requires at www.tdi.texas.gov/hmo/hmmanben.html.
Federal law requires individual and small-group plans to offer a certain package of items and services, known as essential health benefits. The specific essential health benefits are based on a benchmark plan that represents coverage offered by a typical small employer plan in Texas. The essential health benefits include coverage for health care services in the following categories:
- ambulatory patient services (outpatient care you get without being admitted to a hospital),
- emergency services,
- hospitalization (including surgery),
- maternity and newborn care,
- mental health and substance use disorder services, including behavioral health treatment (including counseling and psychotherapy),
- prescription drugs,
- rehabilitative and habilitative services and devices (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.
Plans may offer more items or services than the law requires. You can compare plans side by side on HealthCare.gov to see which benefits they offer.
Individual vs. Group Health Plans
Most people get health coverage as part of a group - such as an employer that offers health coverage to its members. If you don’t have group coverage, you can buy an individual plan from an insurance company, an agent or broker, or the marketplace.
Individual and group plans are subject to different legal requirements. This affects not only the coverage you have, but also how much you must pay and how you get help if you have a dispute.
Individual Health Plans
Insurance companies and HMOs sometimes sell coverage directly to individuals. These policies can cover the individual only or can include a spouse and dependents.
Typically, you can only buy an individual health plan during an open-enrollment period. This means you might not be able to buy insurance year round and shouldn't wait to buy coverage until you need it.
Health insurance companies have to sell a plan to anyone who applies during the open enrollment period. Companies may not deny you coverage or charge you more because of a preexisting condition, disability, other health factor, or your gender. When deciding what to charge you, they are only allowed to consider your age, where you live, whether you smoke or use tobacco, and whether the coverage you're buying is for one person or a family. Under state and federal laws, all health plans must offer a certain set of benefits, called state-mandated benefits and federal essential health benefits. Federal essential health benefits apply to plans with an effective date on or after January 1, 2014. If you were enrolled in a plan on October 1, 2013, health insurance companies may choose to renew a plan that doesn't have the essential health benefits.
Individual plans are categorized as either bronze, silver, gold, or platinum. These categories refer to the average amount of your coverage the plan pays. A bronze plan pays, on average, at least 60 percent of your overall health care costs. You will pay the remaining 40 percent. A silver plan pays 70 percent, a gold plan pays 80 percent, and a platinum plan pays 90 percent. The percentages are based on plan payouts as a whole and may not necessarily reflect your exact responsibility. Federal law limits the amount you have to pay out-of-pocket to $6,600 for an individual or $13,200 for a family in 2015.
Group Health Plans
Most Texans with health care coverage have an employer-sponsored plan. Employers often offer group health plans as part of an employee benefits package. Employers and groups that offer health coverage aren't required to contribute toward plan premiums, but many do. Some insurance companies require employers to pay at least 50 percent of an employee's premiums.
State and federal laws for group plans differ depending on the size and nature of the group.
Small-employer plans are provided by businesses with between two and 50 employees. Federal law doesn't require small employers - those with fewer than 50 full-time employees - to offer health plans to employees.
A small employer may decide to offer coverage to only full-time employees (those who work 30 hours or more per week) or to both full-time and part-time employees. Employers may not discriminate when deciding who they want to consider eligible for coverage.
State law prohibits small-employer plan rates from increasing more than 15 percent per year due to members' health status. State law also prohibits companies and HMOs from refusing to sell a policy to a small employer solely because of the employees' health status. Federal law prohibits companies from basing premium rates on members' health status. Companies may only base rates on age, geography, and tobacco use.
Large-employer or Other Large Group Plans
Large-employer plans are offered by businesses with more than 50 employees. If a large employer offers only an HMO plan, the law requires the HMO to make a point-of-service option available. The point-of-service option allows members to see out-of-network doctors in exchange for paying more out of pocket.
Federal law exempts large-group plans from the essential health benefits and rating requirements that apply to individual and small-group plans. Like other comprehensive health plans, however, large-employer plans must provide free preventive services. Depending on your age and gender, you may get check-ups, blood pressure and diabetes testing, contraceptives, mammograms, cancer screenings, and flu shots.
They may not have lifetime or annual dollar limits on coverage, and they can't deny coverage because of preexisting conditions or health history.
Large Business Requirement
Large businesses that don't offer a plan that pays at least 60 percent of the cost of covered services will have to pay a penalty if any of their full-time employees get a subsidy through the health insurance marketplace.
Large businesses are those with 50 or more full-time and full-time equivalent employees. Every 120 hours worked by part-time and seasonal employees in a month counts as a full-time equivalent for the purpose of determining whether a business has more than 50 full-time employees.
The penalty for failing to offer appropriate coverage is $2,000 per year for each full-time employee beyond the first 30 full-time employees. For employers that offer coverage for part of a year, the penalty will be calculated on a monthly basis.
Employers who offer coverage may still have to pay a penalty if the coverage costs more than 9.5 percent of an employee's taxable income. The penalty will be the lesser of $3,000 per year for each full-time employee that gets a health insurance subsidy, or $2,000 per year per full-time employee beyond the first 30 employees.
Beginning in 2015, businesses with more than 200 employees must automatically enroll employees in a health plan. Employees may opt out of the automatic enrollment, but they must have comprehensive health coverage to avoid a tax penalty. People who are eligible for affordable comprehensive coverage through an employer plan aren't eligible for subsidies in the health insurance marketplace.
Self-funded plans are governed by the federal Employee Retirement Income Security Act (ERISA). They are often called self-insured plans or ERISA plans. Employers who self-fund their health plans pay the costs of their employee's health care themselves, rather than buying coverage from an insurance company or HMO. Coverages may vary by plan and employer. Employers who self-fund their health plans may require employees to contribute to the cost of the plan.
The U.S. Department of Labor regulates self-funded plans, so TDI has very limited authority over them. These plans have their own procedures for complaints and dispute resolution. It's important to read your benefits handbook carefully. Questions and unresolved complaints should be directed to the Labor Department's Employee Benefits Security Administration (EBSA). For more information, call EBSA at 1-866-444-EBSA (3272) or 972-850-4500.
Self-funded plans often use insurance companies to help administer the plan. For example, the plan may use an insurance company’s provider network or claims processing system. To know if your health plan is self-funded and governed by ERISA or fully insured and regulated by TDI, check your insurance card. Fully insured plans must include “TDI” or “DOI” somewhere on the insurance card. You won’t see this if your plan is self-funded.
Multiple Employer Welfare Arrangement Plans
A Multiple Employer Welfare Arrangement (MEWA) is a plan offered by a group of employers that have joined together to offer health coverage. Self-funded MEWAs are regulated by both the U.S. Department of Labor and TDI. MEWAs must be licensed by TDI unless an authorized insurance company has assumed 100 percent of the MEWA's liabilities.
Adult children may stay on their parents' plans until age 26. They don't have to live at home, be enrolled in school, or be claimed as a dependent on their parents’ tax return. If they're married, their spouse and children aren’t required to be covered.
Children with mental or physical disabilities who can't financially support themselves may continue to get coverage after age 26. Except for emergency care and authorized referrals, HMOs can require dependent students to return to the plan's service area to receive health care services.
If two spouses are covered by separate health plans and both plans cover their dependents, the parent whose birthday occurs first during the calendar year pays first. In the event of a divorce, a court usually determines which parent's plan is a dependent's primary coverage.
Texas law requires insurers to provide coverage for dependent grandchildren up to age 25.
Your Rights and Protections
Appealing a Denial
Most plans have a process for you to appeal a plan's decision if it denies a claim. If you appealed your claim denial with your health plan, and you're still not satisfied, you may be able to have an independent review organization (IRO) consider the denial. An IRO is an independent third party certified by TDI. The insurance company or HMO must pay for the review, and it must follow the IRO's decision.
Insurance companies and HMOs must give you an independent review request form when they first deny a treatment and again if they deny your appeal. You can skip the appeal process if you or your doctor believes your condition is life threatening.
You have a right to an independent review for denials of
- treatments that the plan doesn't consider medically necessary,
- treatments that the plan considers experimental or investigational, and
- medications that aren't on the carrier's formulary that your doctor says are medically necessary.
You can't get an independent review if the plan denies your treatment or service because it's not covered. The appeal process may be different if your plan is a self-insured plan, which must follow the federal appeal and review process.
For questions or more information about IROs, call TDI's Managed Care Quality Assurance Office at 1-866-554-4926.
Fees and Charges
For most health plans, you will pay more if you use out-of-network doctors and hospitals. In some cases, an out-of-network doctor or hospital may bill you for the difference between what the doctor or hospital charges and what your health plan pays. This is called balance billing.
To avoid being balance-billed, make sure in advance that your health care providers - including hospitals, clinics, other facilities, and doctors who practice at the facilities - are in your health plan's network.
If you get a bill from an out-of-network provider, ask the provider to give you an itemized statement of the charges. In most cases, Texas law requires providers to give you an itemized statement if you ask for one. Review the charges carefully.
Consider asking your provider to negotiate the charges. You can compare your charges to the average cost of the procedure using the TDI’s Health Insurance Reimbursement Rates Consumer Information Guide. Websites -- such as www.guroo.com, www.fairhealthconsumer.org, and www.txpricepoint.org -- can also help you estimate the prices of various procedures. TDI’s guide and www.guroo.com list average amounts insurers pay for common medical procedures, while www.fairhealthconsumer.org and www.txpricepoint.org list average amounts providers charge, before any discounts.
Also discuss the issue with your health plan. Your health plan contract must describe the methodology the plan will use to determine payments to out-of-network providers. Some plans pay more generously than others, but plans that pay less put you at greater risk of balance billing. For care you receive out-of-network due to an emergency, or if an in-network provider isn’t available, plans must pay out-of-network providers at the usual or customary charge. Usual and customary charges are based on the customary charge for a service billed by other doctors and hospitals in your area.
If you think you've been overcharged or that your health plan didn't pay the appropriate amount, file a complaint with TDI. You can file a complaint online at www.tdi.texas.gov/consumer/complfrm.html.
In some instances, you can require your provider and your health plan to go to mediation to try to work out the claim. If the mediation is unsuccessful, you might be able to require that they resolve the dispute with you in court.
For more information and to determine whether your dispute is eligible for mediation, visit www.tdi.texas.gov/consumer/cpmmediation.htm.
For more information, visit TDI's Consumer Guide to Health Care Billing web page at www.tdi.texas.gov/consumer/cpmbalancebilling.html.
Your Rights under the Affordable Care Act
Preventive services. You can get some preventive services free (with no copayments or deductibles) if you have a comprehensive health plan. Depending on your age and gender, you may get check-ups, blood pressure and diabetes testing, contraceptives, mammograms, cancer screenings, and flu shots. See the full list of preventive services at www.healthcare.gov/preventive-care-benefits/. Plans that existed on or before March 23, 2010, may be grandfathered and may not have to provide the free preventive services.
No dollar limits. Insurance companies may no longer put dollar limits on the amount they will pay for the covered health care you receive in a year or over your lifetime. Previously, insurance companies could set limits on the amount they would pay. When you reached the limit, the company would no longer pay for your health care.
No rescissions. Insurance companies may not rescind your policy because you made a mistake on your application. Companies now may rescind a policy only if you commit fraud or intentionally misrepresent a material fact. “Rescind” means to cancel a policy back to the effective date as if it had never been issued.
Your Rights to an Adequate Network of Health Care Providers
Texas law requires HMOs, PPOs, and EPOs to make covered health care services available within a certain distance of your home or office. Health plans also must:
- have enough personnel and facilities to meet the needs of their members,
- allow members to continue seeing doctors and hospitals that are no longer in the network for a certain period under special circumstances -- such as a terminal illness, disability, a life-threatening condition, or pregnancy -- as long as the doctor or hospital agrees to continue treatment at the contracted rate,
- pay for emergency care to stabilize medical conditions that are serious enough for immediate medical care. If a facility outside the plan’s network provides the emergency treatment, the member may be transferred to a network hospital and doctor after the patient's condition is stabilized, and
- allow the use of out-of-network doctors and hospitals when medically necessary covered services aren't available within the network.
Under certain circumstances, HMOs must allow members with ongoing, disabling, or life-threatening illnesses to use specialists as their primary care physicians.
Your Rights in a Group Plan
Insurance companies and HMOs may not cancel or refuse to renew a plan based on the health of the group's members. In a large group plan, they may use health factors to set premiums, however.
Insurance companies and HMOs may not offer or deny coverage to select employees in a group or charge different rates to employees in the same group. They must give employers at least 60 days' notice before premium increases take effect and 90 days' notice before discontinuing a plan.
Insurance companies and HMOs must allow new employees at least 31 days from the first day of employment to decide if they want to enroll in a plan. They must also offer a 31-day open enrollment period each year to allow existing employees to join the plan. Employees experiencing a life-changing event -- such as a birth, adoption, marriage, or divorce -- may enroll before the next annual enrollment period.
Shopping for Coverage
- Determine the coverage you want and need in a health plan. Choose the plan based on your needs. The higher a plan's deductibles, copays, and coinsurance, the lower the premiums but the more you'll have to pay out of your own pocket if you use benefits under the plan.
- Consider factors other than cost. A carrier's financial rating, network of providers, and history of consumer complaints are other important considerations.
- Make sure any person or organization you're using to buy insurance is either federally regulated or licensed in Texas. To ask about a navigator, assister, or counselor, call the federal health insurance marketplace at 1-800-318-2596. Make sure your agent or broker is licensed by TDI. Guaranty associations pay the claims of licensed insurance companies - but not HMOs -- that go bankrupt or become insolvent. If your carrier isn't licensed, your claims could go unpaid. You can learn a carrier's financial rating from an independent rating organization, its complaints history, and its license status by calling TDI's Consumer Help Line at1-800-252-3439or by viewing company profiles on our website at www.tdi.texas.gov. Make sure you have the full name, address, and phone number of your agent and insurance company or HMO.
- Get several quotes and compare policies. When comparing prices, make sure you understand the benefits of each policy.
- Visit TexasHealthOptions.com to find agents and carriers selling insurance in your area.
- Visit HealthCare.gov to learn about the health insurance marketplace and to buy a marketplace plan. To get a subsidy that can help you pay for coverage, you have to buy your plan through the marketplace.
- Fill out all applications accurately and completely. If you knowingly provide incorrect, incomplete, or misleading information, , the carrier could cancel your coverage or deny benefits. Never sign a blank policy application, and check any information the agent fills in on the form. Make payments by check or money order payable directly to the insurance company or HMO, not the agent, and ask for a signed receipt on the carrier's letterhead
- Beware of fake health insurance websites that might collect your personal information to commit identity theft.
- Take your time. Don't be pressured into buying a policy. Ethical agents will not pressure you into buying a policy before you know what you want and need.
- Be aware that while there will be a federal tax penalty for most people who don't have health insurance, no one should bill you for the tax penalty or try to collect it from you. If you owe a penalty, you'll pay it when you file your federal income taxes. You can't go to jail for not having insurance.
- Ask your friends, family, and doctor for health plan recommendations. Ask these questions before buying a health plan:
- Will the plan allow you to visit your choice of doctors and hospitals?
- Are there limits on medications, referrals to specialists, or treatments and surgeries?
- Are there benefit limits per person, family, illness, treatment, or hospital stay?
- What are the rules for out-of-network care and emergency care?
- Never pay more than two month's premiums until you have received a copy of your policy, HMO certificate, or group membership certificate.
Premiums for individual plans are locked in for one year, but may increase when the plan is renewed. During the enrollment period, you can shop around for a new plan. If your premiums are increasing beyond your ability to pay, you may be able to save money by looking for a different plan.
Choosing a plan with higher deductibles and copays will likely reduce your monthly premium. But you'll have to pay more out of your own pocket if you need health care. If you choose a higher deductible in exchange for a lower premium, consider setting aside the money you save to ensure you can afford the premium. Some plans offer health savings accounts for this purpose.
Important! When switching health insurance companies, be aware of the effective date of your policy. Most carriers don't begin coverage until they approve your application and deliver your policy. A lapse in coverage may leave you vulnerable if you're sick or injured.
Federal law requires companies to justify rate increases of 10 percent or more before the increase takes effect. For more information about rate increases, visit wwwapps.tdi.state.tx.us/inter/asproot/life/aca/index.asp.
State law requires carriers to pay claims promptly and penalizes them if they don't. The prompt-payment law doesn't apply to self-funded ERISA plans.
If an insurance company denies your claim for any reason, it must provide a written explanation. If you're not satisfied with the explanation:
- ask the company to show you the policy language it used to deny the claim, and
- ask the doctor or hospital to send a letter explaining anything unusual about the procedure or the amount charged.
Approval of treatment is not the same as approval for payment. You may still need to file a claim after the procedure. Carriers can refuse payment for portions of approved treatment if they are unnecessary expenses.
Your health plan covers only the medical care specifically described in the policy or HMO contract. Make sure you understand what your policy covers and what it doesn't. Also make sure you understand any limitations or exclusions in your policy before receiving treatment.
It's unlikely your plan will reimburse 100 percent of your bill. You will usually have to pay deductibles, coinsurance, and copayments. If you use out-of-network services, you will also be responsible for any amount your provider bills that exceeds your health plan’s allowed amount.
Most carriers have a toll-free telephone information and complaint line, and some carriers provide special mediation or arbitration procedures for handling complaints. If you have a complaint against a plan sold on the insurance marketplace, call the health insurance marketplace at 1-800-318-2596.
If you're unable to resolve a matter, you may file a complaint against an insurance company or HMO with TDI. You may file several ways:
- on our website at www.tdi.texas.gov/consumer/complfrm.html
- by email at ConsumerProtection@tdi.texas.gov
- by fax at 512-490-1007
- by mail at
Mail Code 111-1A
Texas Department of Insurance
P.O. Box 149091
Austin, TX 78714-9091
- in person or by delivery service at
Texas Department of Insurance
Consumer Protection (111-1A)
333 Guadalupe St.
Austin, Texas 78701
For complaints against doctors, physician's assistants, or acupuncturists, contact the Texas Medical Board at 1-800-201-9353 (Complaint Hotline) or online at www.tmb.state.tx.us/page/consumer.
For complaints about health care facilities, contact the Texas Department of State Health Services at 1-888-973-0022 (Complaint Hotline) or online at www.dshs.state.tx.us/hfp/.
For complaints against pharmacists and pharmacies, contact the Texas State Board of Pharmacy at 1-800-821-3205 or online at www.pharmacy.texas.gov.
Losing Your Insurance
An insurance company may become insolvent if it can't pay its policyholders' claims.
Guaranty associations pay claims for insolvent companies up to certain limits specified in state law. The Texas Life and Health Insurance Guaranty Association pays claims for life insurance, health insurance, and annuities.
The guaranty association doesn't cover claims against HMOs, MEWAs, self-funded ERISA plans, or fraternal benefit societies. If an HMO is unable to pay its claims, state law authorizes the commissioner of insurance to assign the HMO's members to another licensed HMO in the area.
Individual health plans that cover hospital, medical, and surgical expenses are guaranteed renewable. This means your insurance company can't decline to renew your policy without reason or just cause, even for health-related factors. However, a plan can legally cancel your coverage for other reasons, including:
- failure to pay your premiums or paying late,
- intentional misrepresentation of personal information in your policy application, or
- filing a false claim or committing fraud against the plan.
Insurance companies may discontinue a particular plan as long as it drops the plan for all policyholders. If an insurer drops a plan, it must offer the policyholders who lose coverage the right to buy another plan that it offers. If an insurer withdraws from the Texas market entirely, it may not reenter the market for five years.
Federal law prohibits health plans from cancelling policies after they've been issued, unless you commit fraud or made intentional misrepresentations.
Losing Group Coverage
If you have a group health plan, you may lose your coverage if you
- lose your job,
- reduce to part-time status, or
- terminate your membership in the association or group sponsoring the plan.
Group plans must continue to offer coverage to dependents for up to three years if the loss of coverage was caused by death, retirement, or divorce. To qualify, a dependent must have been covered by the group policy for one year or be less than a year old. Dependent benefits are the same as those provided by the group health plan. Continuation of coverage will end early if dependents get new coverage, premiums are not paid, or the group policy is terminated.
If you lose your group coverage, you may be able to continue your coverage under COBRA (Consolidated Omnibus Budget Reconciliation Act). COBRA is a federal law that gives employees - and some retired employees - the right to continue group health coverage for a certain period. COBRA coverage can end early if your employer stops offering a group health plan.
COBRA affects employers who employ 20 or more people and applies to all health plans they offer, except plans sponsored by the federal government and certain church-related organizations. Employees aren't eligible for COBRA benefits if they're fired for cause. Employees who lose coverage because of a reduction in the number of hours they work are usually eligible. An employee's spouse qualifies for COBRA coverage when the employee becomes eligible for COBRA or Medicare, or when the employee divorces or dies. An employee's children qualify for COBRA if the employee is eligible or if the child loses dependent child status under the rules of the health plan.
An employee, spouse, or dependent child has 60 days after qualifying for COBRA coverage to decide whether to enroll. If they decide to enroll, they must pay the full premium and a 2 percent administrative fee. Coverage may continue for a minimum of 18 months and up to 42 months, depending on the situation. If you have a disability that meets the standards of the Social Security Administration, your coverage period may be extended by an additional 11 months. Your COBRA coverage will be the same as the coverage you had with your employer's plan. If you continue HMO coverage through COBRA and move out of the service area, you will be covered only for emergency services. For more information about COBRA, contact EBSA at 1-866-444-EBSA (3272).
State Continuation of Group Coverage
Texas law requires some group plans to continue coverage for an additional six months after your COBRA coverage ends. For state continuation to apply, your plan must have been issued by an insurance company or HMO subject to Texas insurance laws and rules.
In addition, you must have been continuously covered under the group contract for at least three consecutive months immediately before the end of your employment. Your termination may be for any reason except involuntary termination for cause.
If you're not eligible for COBRA coverage, you can continue your group coverage for nine months. The continuation period begins immediately after your termination.
|If you are eligible for COBRA as a…||COBRA applies for...||Texas continuation applies for...||For a total continuation period of…|
|Primary plan member
|18 months||+||6 months||24 months|
|Secondary plan member
(spouse, ex-spouse or dependent child)
|36 months||+||6 months||42 months|
|If you are not eligible for COBRA as a…|
|Primary or secondary plan member||0 months||+||9 months||9 months|
State continuation applies only to group health plans issued by insurance companies and HMOs that are subject to the Texas Insurance Code. State continuation does not apply to ERISA plans, which are exempt from state insurance laws. State and federal law requires employers to tell you about continuation of coverage within 30 days from the end of your employment. If you want to continue your insurance coverage, you must notify your employer in writing no later than the 60th day after coverage was terminated.
There are several federal, state, and local groups and agencies that offer help with health coverage or low-cost care. The following agencies and programs may be able to help:
|Agency / Program||Description||Contact|
|Federal||Medicare||Federal health insurance program for people 65 and older and certain people under age 65 with disabilities||1-800-MEDICARE (633-4227)
|TRICARE||Health plan for active duty and certain retired U.S. military personnel||1-800-403-3950 (families and doctors and hospitals) www.mytricare.com
1-800-444-5445 (Humana Military Tricare South)
|U.S. Department of Veterans Affairs||Offers health care for veterans||1-877-222-VETS (8387)
|State||State Medicaid (administered by the Texas Health and Human Services Commission)||State/federal health insurance program for low-income Texans||1-800-252-8263
|Texas Health Steps||Provides medical and dental checkups and care to children from birth to age 21 who are on Medicaid||1-877-THSTEPS (847-8377)
|Children's Health Insurance Program (CHIP)||Provides health care to children of families who earn too much money for Medicaid but can't afford health insurance||1-877-KIDS-NOW (543-7669)
|Texas Department of Assistive and Rehabilitative Services||Provides rehabilitative services, including vocational training, for Texans with disabilities||1-800-628-5115
|Local||Hill-Burton Program||Federally funded program that contracts with local hospitals, clinics, and nursing homes to provide free or low-cost care to individuals eligible because of income. Services vary by provider and may not be available in all areas||1-800-638-0742
|2-1-1||Provides free information about services in your area||2-1-1
For answers to general insurance questions, for information about filing an insurance-related complaint, or to report suspected insurance fraud, call the Consumer Help Line at 1-800-252-3439 between 8 a.m. and 5 p.m., Central time, Monday-Friday, or visit our website at www.tdi.texas.gov.
For printed copies of consumer publications, call the Consumer Help Line.
To report suspected arson or suspicious activity involving fires, call the State Fire Marshal's 24-hour Arson Hotline at 1-877-4FIRE45 (434-7345).
The information in this publication is current as of the revision date. Changes in laws and agency administrative rules made after the revision date may affect the content. View current information on our website. TDI distributes this publication for educational purposes only. This publication is not an endorsement by TDI of any service, product, or company.
For more information contact:
Last updated: 10/22/2015