Your Health Care Coverage

(En Español)

(September 2011)

Getting sick can be expensive, especially if the illness is serious. Even minor illnesses and injuries can cost thousands of dollars to diagnose and treat. Adequate health care coverage not only helps ensure that you’ll get the care you need, but also helps protect you and your family from large financial losses in the event of an illness or injury.

This publication provides information about health care coverage in Texas. You can also visit www.TexasHealthOptions.com to learn more about health coverage and the choices available to you. TexasHealthOptions.com is a complete online resource about health care and is a free service of the Texas Department of Insurance (TDI).

Note: President Obama signed the Patient Protection and Affordable Care Act – the federal health care reform law – on March 23, 2010. The act requires insurance carriers to provide significant additional coverages and strengthens consumer protections beginning with health insurance policies issued or renewed after September 23, 2010. For more information and regular updates, visit TDI’s Federal Health Care Reform Resource Page at: www.tdi.texas.gov/consumer/cpmhealthcare.html.

Health Plan Basics

Health care plans pay for most, and sometimes all, of the treatment costs for illnesses and injuries. They are generally classified as either:

indemnity
fee for service
managed care

Indemnity Plans

With an indemnity plan, you can go to any doctor or hospital you want, but you will have to pay for the entire cost of the service when you receive it. You must then seek reimbursement from your insurance company.

If the provider charges more than the amount stipulated in your insurance policy, you will be responsible for the excess charges.

For example, if your plan covers an office visit at $20 and your doctor charges $25, you will pay $25 out-of-pocket and then submit the receipt to your carrier. Once the claim is approved and processed, your carrier should pay you back $20 and the additional $5 will be remain an out-of-pocket expense.

Fee-for-Service Health Plans

With a fee-for-service plan, you can go to any doctor you want. The doctor will usually bill your insurance company directly for its share of the costs of your care. Your insurance company pays a percentage of the cost of covered health services, rather than a set dollar amount. For instance, your carrier may agree to pay 70 percent of the cost of a covered health care service, and you would pay the remaining 30 percent. The percentage the insurance company will pay varies by plan, but fee-for-service plans are required to pay at least 50 percent of the cost of covered services after any deductible has been met.

Managed Care Health Plans

Managed care plans provide health services to the plan members through contracted networks of doctors and hospitals. Some managed care plans require you to use doctors and hospitals within the plan’s network for all routine care. Others pay for care from any provider, but offer financial incentives for you to use doctors and hospitals within the network.

In general, the trade-off with a managed care plan is that your choice of doctors and hospitals is limited in exchange for lower out-of-pocket costs. Managed care networks provide a built-in clientele for network doctors and hospitals, allowing the doctors and hospitals to charge lower rates. In addition, managed care plans control costs by focusing on preventive care in an attempt to avoid serious medical conditions that would later require more expensive treatment.

Managed care plans will only pay for covered services deemed to be medically necessary. If the plan covers prescription drugs, it may have a list – called a formulary – of drugs it will cover.

There are four types of managed care plans, each with a different level of provider choice:

Health maintenance organizations (HMO) plans usually require you to use doctors and hospitals within the HMO’s network. There are exceptions for medical emergencies, as well as for medically necessary services that can only be found outside your network.

Your primary care physician (PCP) will oversee your general medical care needs and provide referrals to specialists. HMOs may pay PCPs a set monthly fee for each member, no matter how many covered services they perform.
Preferred provider plan (PPP) plans are similar to HMOs but are more flexible. PPPs offer financial incentives for you to use doctors in their networks. Although you don’t have to go to doctors and hospitals in the PPP’s network, your costs will be lower if you do. PPPs don’t require you to select a primary care physician, and you don’t have to get a referral to see an out-of-network doctor or specialist.
Point-of-service (POS) plans are a combination of HMOs and PPPs. You will be required to choose a primary care physician, but you may visit out-of-network doctors without a referral. If you use doctors and hospitals outside the network, you’ll have to pay more for your health care. A POS plan may exclude the option for out-of-network care for certain medical conditions. POS coverage is usually offered as an add-on to the plan – called a rider – for an additional fee.
Exclusive provider organization plans (EPO) are offered by health insurance companies. They operate like HMOs. Except for emergency care, you must use doctors and hospitals in the plan's network.

Group vs. Individual Health Plans

Most people obtain health coverage as part of a group – such as an employer, professional association, or other organization – that offers health coverage to its employees or members. Others buy individual health coverage directly from an agent or insurance company. Individual plans usually cost more and may cover fewer conditions than plans offered through employers or other group plans. Group plans are typically less expensive because they spread the risk of claims over a larger number of people.

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.

Common Types of Individual Health Plans

HMO plans pay for covered health services within the HMO’s network of doctors and hospitals. You may need to receive pre-authorization (permission in advance) before obtaining care outside the network.
Major medical policies cover hospital stays and physician services, both, in and out of the hospital. They may also be offered as PPP plans.
Hospital surgical policies cover only expenses directly related to hospital and surgical services, such as daily room rates, surgery, and doctor charges.
Hospital indemnity policies pay up to a maximum limit for each day you are in the hospital.
Specified or dread disease policies only cover specific illnesses listed in the policy, such as cancer or HIV/AIDS. This coverage may also be offered as a rider to individual coverage.
Short-term policies are generally used to offer you medical and financial protection when you are between traditional health insurance plans. Short-term coverage is typically less expensive than traditional coverage and usually does not limit which doctors or hospitals you may visit.

Insurance companies will evaluate your medical history and other health factors when making a decision to offer individual plans. They may deny your application or only offer a plan with an exclusionary rider that limits your benefits by eliminating coverage for certain conditions.

Group Health Plans

Most Texans with health care coverage are members of an employer-sponsored plan. Employers commonly offer group plans as part of an employee benefits package. Some trade unions, professional associations, churches, and other organizations also offer them.

Employers and groups aren’t required to offer health coverage to their employees and members. Those that do offer health coverage are not required to contribute toward plan premiums. Some insurance companies, however, may require participating employers to pay 50 percent or more of an employee’s premiums.

Common Types of Group Plans

The state and federal laws for group plans are somewhat different depending on the size and nature of the group. Texas law requires large-employer plans to provide certain benefits that small-employer plans are not required to provide.

Following is a brief description of the most common types of group health plans:

Small-employer plans are provided by businesses with two to 50 eligible employees. Eligible employees are full-time employees who usually work at least 30 hours a week. They may not have another health plan and must not be seasonal, part-time, or substitute workers. If a small employer offers a plan, it must be made available to all eligible employees equally.

State law prohibits small employer plan rates from increasing more than 15 percent per year due to members’ health status. State law also requires guaranteed issue for small employer health plans. This means that an insurer cannot refuse to sell a policy to a small employer solely because of the employees’ health status.
Large-employer or other group plans are offered by businesses that don’t meet the small employer requirements and don’t self-fund. Other groups -- such as churches, trade unions, and professional associations -- may also offer the plans. If a large employer offers only an HMO plan, the law requires the HMO to offer a POS option.

Large employers may offer coverage to a specific class of employees – such as executives – and not offer coverage to everyone else. However, if employers offer coverage to a certain class, they must offer it to all employees in the class equally. They are also prohibited from using health status as a reason for not offering coverage to a particular group or excluding an employee from plan membership.
Self-funded plans are governed by the federal Employee Retirement Income Security Act (ERISA). They are often called ERISA plans. Employers who self-fund their health plans pay the costs of their employee’s health care themselves, rather than purchasing coverage from an insurance company or HMO. Coverages may vary by plan and employer, but are generally more inclusive and extensive than other plans.

Self-funded plans are regulated by the U.S. Department of Labor, but there are only a few federal requirements. TDI has very limited authority over self-funded plans. These plans have their own procedures for complaints and dispute resolution, so it’s important to read your benefits handbook carefully. Questions and unresolved complaints should be directed to the DOL's Employee Benefits Security Administration (EBSA). For more information, call

1-866-444-EBSA (3272)
972-850-4500

A Multiple Employer Welfare Arrangement (MEWA) is a plan offered by employers from a group of businesses that have joined together to offer medical coverage. Self-funded MEWAs are regulated by the U.S. Department of Labor and TDI. They must obtain a license from TDI unless an authorized carrier has assumed 100 percent of the MEWA’s liabilities.

Covering Dependents

Children and grandchildren covered by a plan as dependents are eligible for dependent health care coverage until the age of 25. The plan may not require that the child live with the parent or within the geographical service area. Children with mental or physical disabilities who cannot financially support themselves may continue to be covered beyond the age of 25.

Large-employer plans that include dependent coverage must also provide coverage for children up to age 25. Except for emergency care and authorized referrals, an HMO plan can require dependent students to return to the plan’s service area to receive health care services.

Self-funded plans may offer dependent coverage, but it’s not required by state law.

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. However, if that parent’s plan reaches its benefits maximum, the second parent’s plan can take effect. In the event of a divorce, a court usually determines which parent’s plan is a dependent’s primary coverage.

The federal health care reform law requires plans to provide coverage up to age 26.

Preexisting Conditions

If you currently have a medical problem or have had one in the recent past, it may meet a plan’s definition of a preexisting condition. You must disclose any preexisting conditions in your application for any health plan.

Plans may require you to wait months, or sometimes years, before paying benefits for treatment related to a pre-existing condition. An individual carrier may decline to cover you because of the condition or may insist on a policy rider that excludes treatment for the condition. Except for association plans, group carriers may not insist on a policy rider that excludes treatments for certain conditions.

The federal health reform law prohibits health plans from denying coverage or applying preexisting condition exclusions to coverage for children under age 19.

Waiting Periods

The maximum preexisting waiting period for an individual health plan is two years. The maximum waiting period for employer-sponsored health plans is one year.

Some plans may require a standard waiting period before new members are eligible to receive any benefits, regardless of whether they have a preexisting condition. If this is the case, your preexisting condition waiting period begins with the start of the standard waiting period.

If you’re switching from one health plan to another or have recently had health coverage, you may have a shorter waiting period before your preexisting conditions are covered as long as there is not a gap in coverage greater than 63 days. Prior coverage reduces your coverage on a month-for-month basis.

The following table summarizes how health plans handle preexisting conditions:

	Group Plan	Individual Plan
Definition of a preexisting condition	You received diagnosis, care, or treatment within six months prior to joining an employer-sponsored plan, or one year prior to joining a non-employer group plan	You had symptoms likely to cause you to seek medical advice, diagnosis, care, or treatment, or a condition for which you received medical advice, diagnosis, care, or treatment, within five years prior to joining the individual plan.
Waiting period before a preexisting condition is covered	12 months for plans offered by employers; up to 24 months for non-employer plans (from churches, unions, associations, etc). Carrier may also impose a general waiting period for up to 90 days for all coverage.	Up to 18 months (12 months for those 65 or older).
Prior coverage	Your waiting period is reduced on a month-for-month basis. If previous coverage lasted 12 months, there is no waiting period for an employer group plan. However, coverage is only required at the level of the prior plan. Carrier may not include a rider specific to the employee that eliminates coverage for the preexisting condition.	Prior coverage is credited on a month-for-month basis. Carrier may refuse to accept you because of a preexisting condition or may include a rider eliminating coverage for the condition.

Health Plan Costs

With any type of health plan, you’ll have out-of-pocket costs. The costs will vary by the type of plan you have. The following are some of the costs you may have to pay:

Premiums. A premium is a fee you pay to participate in a health plan. Employers who offer health plans usually contribute 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 covered medical service or medication before your plan will begin to pay your costs. 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 amount you pay once you have met the deductible. 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.

Plan comparisons
	Fee for Service	Preferred Provider Plan (PPP)	Point of Service (POS)	Health Maintenance Organization (HMO)	Exclusive Provider Organization (EPO)
	Fee for Service	Managed Care
More choice, may be more expensive … << >> … Less choice, may be less expensive
Summary	Total choice of doctors and hospitals	Choice of doctors and hospitals, but you pay less if you use doctors and hospitals in the network	Choice of doctors and hospitals, but you pay less if you use doctors and hospitals in the network	Choice of doctors and hospitals usually limited to network	Choice of doctors and hospitals in the plan’s network, but will exclude benefits to doctors and hospitals outside the network
Primary care physician	No	No	Yes, for in-network services	Yes	No
Geographic restrictions	Coverage available anywhere you live or travel in the U.S.	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	Doctors and hospitals often bills insurers each time you receive care; at times, however, you will have to pay 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 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	Generally highest of four options	Usually lower than fee for service	Usually lower than PPP	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	Yes	Yes	Usually only for out-of-network care	Depends on plan	Could be required or offered for a lower premium
Copayments	Possibly	Possibly	Yes, if in network	Yes	Could be required or offered for a lower premium
Coinsurance	Often required, or often offered for lower premium	Often required, or often offered for lower premium	Yes	Possibly	Could be required or offered for a lower premium

Health Plan Benefits

Health plans are classified as either state-mandated plans or consumer choice plans.

State-mandated plans provide certain required minimum features and coverages. To make health coverage more affordable, Texas law allows insurance companies to also offer consumer choice plans that do not include all of the state-mandated benefits.

Consumer choice plans are required to provide members with a disclosure statement and a list describing the benefits that are not covered. To be certain of the coverages you have with any plan, refer to your policy or explanation of coverage.

The Minimum Required Benefits chart lists the minimum required benefits for consumer choice and state-mandated health plans for PPP and HMO plans. The requirements are different for individual, small-employer, large-employer plans, and association plans.

Note: SMP denotes a state-mandated plan and CCP denotes a consumer choice plan. Benefits labeled "yes" must be included as part of the plan; benefits labeled "no" are not required; and benefits labeled "offer" must be offered, but you may decline any or all of them.

Visit the Mandated Benefits page for more information.

Your Rights and Protections

Appealing a Denial

Most plans have a process for members to appeal denied claims. After you’ve used your appeal rights, you can request that the denial be reviewed by an Independent Review Organization (IRO), an independent third-party certified by TDI. The insurance company is required to accept the IRO’s decision and to pay for the review.

Insurance companies are required to give you an independent review request form when they deny a treatment and again if they deny your appeal. You can bypass 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

treatment that the plan considers not to be medically necessary
treatment that is considered experimental or investigational
medications that are not on the carrier’s formulary that your provider believes are medically necessary

An independent review is not available if the denied service or treatment is not covered by your plan or if your plan is not required to participate in the IRO review process.

For questions or more information about IROs, call TDI’s Health and Workers’ Compensation Network Certification and Quality Assurance (HWCN) Division

1-866-554-4926
322-4266 in Austin

Your Rights in an HMO

Texas law requires HMOs to make covered health care services available within a certain mileage from any point in the HMO’s service area. Under certain circumstances, HMOs must allow members with ongoing, disabling, or life-threatening illnesses to use specialists as their PCPs.

HMOs and PPPs also must

have adequate personnel and facilities
allow members to continue seeing doctors and hospitals no longer with the network for specified periods of time under special circumstances -- such as a terminal illness, disability, life-threatening condition, or pregnancy -- as long as the provider agrees to continue treatment at the contracted rate
pay for emergency care to stabilize medical conditions that are serious enough for immediate medical care, including the care of a fetus if you’re pregnant. If emergency treatment is provided by a facility outside the HMO’s network, the member may be transferred to a network facility and physician once the patient’s condition is stabilized
allow the use of out-of-network doctors and hospitals when medically necessary covered services are not available within the network
prohibit their network doctors and hospitals from balance billing.

Your Rights in a Group Plan

Insurance companies generally may not cancel or refuse to renew a plan based on the health of its insured; however health factors may be used to determine the plan’s premium rates.

Insurance companies also may not offer or deny coverage to select employees in a group or charge different rates to employees in the same group. Companies must offer employers at least 60 days advance notice before premium increases take effect and 90 days notice before discontinuing a plan.

Large employers may establish rules that determine which groups of employees are eligible for enrollment but may not base the rules on employee health factors. A large employer insurance provider must accept or reject the entire group of individuals who meet the employer’s criteria and who choose coverage.

Insurance companies must allow new employees at least 31 days from the first day of employment to decide if they want to enroll in a plan, as well as 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 loss of other coverage because of divorce or death -- may enroll before the next annual enrollment period.

Shopping for Coverage

Determine what coverage you want and need in a health plan. Choose the plan based on your health insurance needs. The higher a plan’s deductibles, copays, and coinsurance, the more you can usually save on premiums. However, you’ll also have to pay more out of pocket for claims.
Consider factors other than cost. An insurance company’s financial rating and history of consumer complaints are other important considerations.
Make sure your carrier is licensed by TDI. Guaranty associations pay the claims of licensed insurance companies that become financially unstable or become bankrupt. If your company isn’t licensed, your claims could go unpaid. You can learn a company’s financial rating from an independent rating organization, its complaints history, and its license status by calling TDI’s Consumer Help Line or by viewing company profiles on our website

1-800-252-3439
463-6515 in Austin
www.tdi.texas.gov
Get several quotes and compare policies. Ask several companies and agents for price quotes and compare the rates and coverage packages. When comparing prices, be sure you understand the benefits each policy provides.
Visit TexasHealthOptions.com when shopping for coverage to learn about your options and to help you locate agents and companies selling insurance in your area.
Take your time. Do not be pressured into buying a policy. Ethical agents will not pressure you into buying a policy before you know what you want and need.
Ask your friends, family, and physician for health plan recommendations. Be sure to ask these questions before buying a health plan:
- Will the plan allow you to visit your choice of physicians 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 is the procedure for out-of-network emergency care?
- Does the plan have annual or lifetime maximums?
Examine any policy for the following limitations:
- Coverage. Does the plan exclude important medical conditions?
- Coinsurance. Does the plan require you to pay a high percentage of any claims?
- Deductible. Does the plan require you to pay a high fixed amount (deductible) before the carrier pays anything?
- Annual and lifetime maximums. Does the plan have maximum amounts that it will pay?
Note: The federal health reform law prohibits health plans from imposing lifetime dollar limits on essential benefits. Annual dollar limits on health insurance coverage are restricted, and may not be less than $750,000 unless the plan receives a waiver.

Additional Precautions

Fill out all applications accurately and completely. If you knowingly provide incorrect, incomplete, or misleading information, especially about a preexisting condition, your coverage could be canceled or your benefits denied. Never sign a blank policy application, and verify any information the agent fills in the form. Make payments by check or money order payable directly to the insurance company or HMO, not the agent, and insist on a signed receipt on the carrier’s letterhead.
Make sure you have the full name, address, and phone number for both your agent and your insurance company. You can verify an agent’s or insurance company’s license status by calling the Consumer Help Line or visiting our website.
Never pay more than two month’s premiums until you have received a copy of your policy, HMO certificate, or group membership certificate.
Use the state required 10-day free-look to evaluate an individual policy, during which you can change your mind and receive a refund. If you return a policy, send it by certified mail and request a return receipt.

Health Plan Rates

Insurance companies set their own premiums. TDI does not have the authority to regulate or approve health plan rates. Small-employer and large-employer plans are required to give their policyholders 60 days notice before any increase takes effect.

In general, health plan rates are determined by

Coverages. The more conditions your plan covers, the greater the financial risk to the insurance company. Premium rates increase accordingly.
Deductibles. Plans with higher deductibles typically have lower premiums.
Number of covered dependents. Adding a spouse or dependent children to your plan will raise your premiums due to the increased financial risk to the insurance company
Number of group plan participants. Group plans are usually less expensive than individual plans. As group size increases, administrative costs per plan member decline. Also, smaller groups and individuals tend to buy health coverage based on participants’ targeted needs, increasing the likelihood of claims. This type of custom tailoring is less likely as claims risk is distributed across a larger population.
Claims experience. You can expect to pay more if you’ve filed claims in the past.
Age. Older people can reasonably be expected to require more frequent, and more expensive, health care. Your premium will reflect your age or the ages of the members in your group plan.
Gender. Young males typically incur lower medical costs than young females, particularly during childbearing years. This changes with age until medical costs for males begin to exceed those for females in the late 50s and early 60s. Plans with a large number of young females or older males generally have higher rates.
Geography. Health costs vary by region due to differences in cost of living, medical practices, and the amount of medical competition in the area.
Industry. If you are in an employer-sponsored plan, your rates may be affected by the nature of your profession. Industries with more dangerous jobs and a higher number of accidents will have higher medical claims costs than others. High employee turnover in some industries can also result in higher administrative costs for the insurance company.

Handling Rate Increases

Premiums tend to rise quicker for individual plans since there is no employer or other plan sponsor to help bear the cost. If your premiums are increasing beyond your ability to pay, you may be able to save money by asking your insurance company to revise your plan.

Options to reduce your individual plan’s premiums may include raising your deductibles or copays, increasing your maximum out-of-pocket payment, or changing your coverage. Make sure that you don’t drop coverage that is essential for your health concerns. Work with your insurance company to create a plan that takes any current or anticipated medical concerns into consideration.

Important! When switching health insurance companies, be aware of the effective date of your policy. Most companies do not begin coverage until they approve your application and deliver your policy. A lapse in coverage may leave you vulnerable if you become sick or injured and can result in longer waiting periods before preexisting conditions are covered by a new plan.

Fees and Charges

If you are concerned about physician fees or hospital charges, check with your plan to see if the provider’s treatment cost estimate is within the usual and customary range. Be sure to keep records of whom you talk to and when.

Your costs will increase in a managed care plan when you visit an out-of-network provider. There are some protections in cases where PPP enrollees at network hospitals are balance billed by out-of-network hospital physicians.

Balance billing happens when a physician who does not contract with the managed care plan bills you for the difference between the amount the health plan pays and the amount the physician charges. Texas has protections for consumers who have been balanced billed. For more information visit TDI’s Consumer Guide to Health Care Billing web page at www.tdi.texas.gov/consumer/cpmbalancebilling.html.

Filing Claims

State law requires insurance companies and HMOs (in the case of claims filed for out-of-area or emergency care) to pay claims promptly and fairly and subjects them to penalties if they don’t. The prompt-payment law does not apply to self-funded ERISA plans even though they may use an insurance company or HMO to administer the health plan.

If a carrier denies your claim for benefits for any reason, it must provide a written explanation.

If you are not satisfied:

ask them to show you the policy language they used to deny the claim
ask the physician or provider 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. Insurance companies can refuse payment for portions of approved treatment if they are found to be unnecessary expenses.

Handling Complaints

To limit the chances of your claim being denied, study the coverage details of your policy carefully. Ask questions about limitations or exclusions before seeking and receiving medical treatment. Verify that all benefits that an agent or anyone else describes to you are in the written policy. Your health plan covers only the medical care specifically described in the policy or HMO contract.

It's unlikely your plan will reimburse 100 percent of your bill. You will usually have to pay deductibles, coinsurance, and copayments.

Your insurance company may have grounds for denying or limiting the size of your claim if a provider’s fees exceed usual and customary charges. Usual and customary charges may be based on fees charged by other doctors and hospitals in your area, or typical fees compiled by an independent rating service or an insurance company.

Most insurance companies maintain a toll-free telephone information and complaint line, and some companies and HMOs provide special mediation or arbitration procedures for handling complaints.

If you are unable to resolve the matter, file a formal insurance-related complaint with TDI. You may file several ways:

on our website at www.tdi.texas.gov/consumer/complfrm.html
by e-mail at ConsumerProtection@tdi.state.tx.us
by fax at 512-475-1771
by mail at
Texas Department of Insurance
Consumer Protection (111-1A)
P.O. Box 149091
Austin, TX 78714-9091

If your complaint is about an HMO, please send it to

Texas Department of Insurance
HMO Quality Assurance (103-6A)
P.O. Box 149091
Austin, TX 78714-9091
Fax: 512-490-1012

For complaints against physicians, physician's assistants, or acupuncturists, contact the Texas Medical Board

1-800-201-9353 (Complaint Hotline)
www.tmb.state.tx.us/consumers/

For complaints about health care facilities, contact the Texas Department of State Health Services

1-888-973-0022 (Complaint Hotline)
www.dshs.state.tx.us/hfp/

For complaints against pharmacists and pharmacies, contact the Texas State Board of Pharmacy

1-800-821-3205
305-8000 (in Austin)
www.tsbp.state.tx.us/

Losing Coverage

Losing Individual Coverage

Insolvency

An insurance company may become insolvent or financially unstable if its liabilities (debts) exceed its assets (income and holdings) and is no longer able to pay policyholder claims or requests for reimbursement.

Most valid claims against licensed insurance companies that become insolvent are paid up to a certain amount by the Texas Life, Accident, Health, and Hospital Service Insurance Guaranty Association.

The guaranty association does not cover claims against HMOs, MEWAs, self-funded ERISA health benefit plans, and fraternal benefit societies. In the event an HMO becomes 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.

Cancellation

Individual health carrier plans that cover hospital, medical, and surgical expenses are guaranteed renewable. This means your insurance company cannot deny renewal of your policy without reason or just cause, even on the grounds of health-related factors. An insurance company can legally cancel your coverage for other reasons, including

failure to pay premiums or late premium payment
intentionally misrepresenting personal information in your policy application
filing a false claim or otherwise committing fraud against the carrier.

An insurance company may discontinue a particular plan as long as it drops the plan for all policyholders. If the insurance company does drop the plan, it must offer the policyholders who lose coverage the right to purchase another plan that it offers. If an insurance company withdraws from the Texas market entirely, it may not re-enter the market for five years.

The federal health reform law prohibits health plans from cancelling policies after they’re issued, unless the policyholder committed fraud or made intentional misrepresentations.

Losing Group Coverage

If you have a group health plan, you may lose your coverage for various reasons, including

losing your job
reduction to part-time status
terminating your membership in the association or group sponsoring the plan.

Continuation of group coverage is required for certain dependents for up to three years if loss of coverage is 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 1 year old. Dependent benefits are the same as those provided by the group health plan. Continuation of coverage will end early if dependents obtain new coverage, premiums are not paid, or the group policy is terminated.

COBRA Protection

If you lose your group coverage for employment-related reasons, 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 specified period of time. COBRA coverage can end early if your employer stops offering a group health plan.

COBRA affects employers who employ 20 or more individuals and is applied to all employer health benefit plans they offer, except plans sponsored by the federal government and certain church-related organizations. Employees are not eligible for COBRA benefits if they lose their coverage because of involuntary termination for cause. Employees who stay at a job, but lose coverage eligibility because of a reduction in the number of hours they work, are also usually eligible.

An employee’s spouse qualifies for COBRA coverage when the employee becomes eligible for COBRA or Medicare, or divorces or dies. An employee’s children qualify for COBRA if the employee becomes eligible for COBRA or the child loses dependent child status under the rules of the health benefit plan.

An employee, spouse, or dependent child has 60 days after qualifying for COBRA coverage to decide whether to enroll. If they accept, 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.

Your COBRA coverage will be the same as the coverage you had with your employer’s plan before you left. For instance, if your employer plan covered medical, dental, and vision, you will receive the same benefits with your COBRA policy. However, you must pay the full price of COBRA coverage yourself.

If you elect continuation of HMO coverage through COBRA and move out of the service area, you will be covered only for emergency services. For more information, contact the EBSA.

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 prior to 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 (direct employee)	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

Note: State continuation applies only to group health benefit plans issued by insurance companies and HMOs that are subject to the Texas Insurance Code. State continuation does not apply to employer self-funded (ERISA) health care plans, which are exempt from state insurance laws.

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.

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.

Other Coverage Options

If you don’t work for an employer that offers a health plan and cannot afford or qualify for an individual plan, there are other options such as the Texas Health Insurance Pool and the Pre-existing Condition Insurance Plan. However, this coverage generally is either very limited, very expensive, or both. Before considering these options, there are a few things you should do:

Make sure you apply with multiple insurance companies and HMOs. Each has its own set of rules and guidelines for accepting policyholders.
Look into professional organizations, churches, or trade unions that offer group plans. If you have a health condition, check with state and national nonprofit groups for people with similar conditions.
If you are denied coverage based on your medical history, verify that the information the insurance company has is current and correct. Many insurance companies use the Medical Information Bureau (MIB) to verify medical history. MIB provides its member carriers with brief coded reports of applicants’ medical history. For more information, contact MIB or visit its website

1-866-692-6901
www.mib.com

Texas Health Insurance Pool (Health Pool)

The Health offers health insurance to Texans who can’t find coverage because of their preexisting medical conditions and to certain individuals who have recently lost their employer-sponsored health coverage.

The Health Pool is generally the most comprehensive option you will find if you can’t get traditional coverage. The policy offers major medical coverage similar to coverage offered in the commercial individual market. Premium rates vary based on the member’s age, gender, tobacco use, and residential ZIP code, without regard to health status. Premium rates may be up to twice the standard rate in the individual health insurance market.
For more information, including eligibility requirements and benefits information, contact the Health Pool or visit its website

1-888-398-3927
1-800-735-2989 (TDD)
www.txhealthpool.org

Pre-Existing Condition Insurance Plan (PCIP)

The Pre-Existing Condition Insurance Plan (PCIP) (also called the federal high-risk pool) is another option for Texans who are unable to obtain health insurance. To qualify, an individual must have been without coverage for at least six months and must have a preexisting condition. PCIP is a temporary federal program that runs until exchanges become effective in 2014. Premium costs for participants will be comparable to what an individual without preexisting conditions would pay to purchase insurance.

For more information, contact PCIP or visit its website

1-866-717-5826
www.pcip.gov/

You can also contact TDI's Consumer Health Assistance Program (CHAP)

1-855-TEX-CHAP (839-2427)
www.TexasHealthOptions.com

There are also 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) www.medicare.gov
	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) www.humana-military.com
	U.S. Department of Veterans Affairs	Offers health care for veterans	1-877-222-VETS (8387) www.va.gov
State	Medicaid (administered by the Texas Health and Human Services Commission)	State/federal health insurance program for low-income Texans	1-800-252-8263 www.hhsc.state.tx.us/medicaid/
	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) www.dshs.state.tx.us/thsteps/default.shtm
	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) www.chipmedicaid.com/
	Texas Department of Assistive and Rehabilitative Services	Provides rehabilitative services, including vocational training, for Texans with disabilities	1-800-628-5115 1-866-581-9328 (TTY) www.dars.state.tx.us
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 www.hrsa.gov/hillburton
	2-1-1	Provides free information about services in your area	2-1-1 www.211texas.org/211/
	Indigent Health Insurance	Health care for some indigent Texas	Local county courthouse

For More Information or Assistance

For answers to general insurance questions or for information on filing an insurance-related complaint, call the Consumer Help Line between 8 a.m. and 5 p.m., Central time, Monday-Friday, or visit our website

1-800-252-3439
463-6515 in Austin
www.tdi.texas.gov

You can also visit HelpInsure.com to help you shop for automobile, homeowners, condo, and renters insurance, and TexasHealthOptions.com to learn more about health care coverage and your options.

For printed copies of consumer publications, call the 24-hour Publications Order Line

1-800-599-SHOP (7467)
305-7211 in Austin

Help us prevent insurance fraud. To report suspected fraud, call our toll-free Fraud Hot Line

1-888-327-8818

To report suspected arson or suspicious activity involving fires, call the State Fire Marshal’s 24-hour Arson Hot Line

1-877-4FIRE45 (434-7345)

For more information contact:

Insurance & HMOs

Information Center Menu

Quick Start Menu