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How to Get Self-Insured Health Insurance in Texas?

An employer can begin self-funding their employees’ health coverage by first doing a feasibility study to know if a self-insured plan will be suitable for the company. An insurance broker, consultant, or claims administrator can help with the feasibility study. The study considers the past claims, payrolls, and premiums to estimate potential claim levels in the future. Then, there are three important things that should be done:

  • Obtain all necessary approvals from the Department of Labor and any other federal regulatory body,
  • Choose a third-party administrator,
  • Develop the plan for employees, and
  • Buy stop-loss coverage.

Persons can get enrolled in a self-insured health plan if they are offered through their place of employment or if they are dependent on a person with a self-insured plan. Self-insured plans are usually organized, financed, and administered by companies for their employees and dependents. Most employers offer self-insured health plans to full-time employees and sometimes part-time employees.

Employees cannot buy a self-insured plan online from an insurance company or an insurance agent in Texas.

Do You Need Self-Insured Health Insurance in Texas?

If you are an employer and you are offered self-insured health insurance in Texas, you should get it because there are several benefits in it for you. First, you will have access to affordable health coverage. The cost of most job-based plans is handled by both the employer and employee. For example, in 2021, employers covered 83% of premium costs for their employees. It is no news that healthcare is really expensive, so with a self-insured health plan, you have the weight of cost reduced or taken off your shoulders. Also, many self-insured health plans provide comprehensive coverage, including preventive services and mental health treatments.

Furthermore, self-insured health plans are flexible. They consider your health needs, and your policy is made to cater to those needs. Your employer does most of the work regarding the plan options.

For employers, they need to offer their employees health coverage. This may be in the form of a fully-insured plan or a self-insured plan. A self-insured plan can help an employer effectively manage benefits, control costs, and save money.

How to Pick or Shop for Self-Insured Health Insurance in Texas?

Employees cannot pick or shop for self-insured health insurance in Texas. They can only sign up for a self-insured health plan if their employer offers it. A person can also get health coverage through a self-insured plan if they are the dependent of a person enrolled under a self-insured plan.

An employer can pick the plan administrator from the list of currently licensed TPAs in Texas. They can also get recommendations from other employers or speak to an insurance agent with self-insured insurance knowledge.

What are My Self-Insured Health Insurance Options?

There are four main plans that employers use to offer their self-insured plans in Texas:

  1. Health Maintenance Organization (HMO) plan: This plant usually restricts your coverage to care from doctors who work for or contract with the HMO.
  2. High-Deductible Health Plan (HDHP): This plan with a higher deductible and low premiums. Thus, you cover more health care costs out-of-pocket yourself before your plan begins to pay its share.
  3. Point-Of-Service (POS) plan: This is a type of plan where you pay less if you receive services from doctors, hospitals, and other healthcare providers in the plan’s network. To see a specialist, POS plans demand a referral from your primary care physician.
  4. Preferred Provider Organization (PPO) plan: This type of health plan creates a network of participating providers by contracting with medical providers such as hospitals and doctors. You can seek treatment outside your network, but in-network providers are less expensive.

How to Qualify for Self-Insured Health Insurance?

All employers (small and large businesses) qualify for and can offer their employees self-insured plans.

For employees, to qualify for self-insured health insurance, your employer must offer you the plan. Most employers in Texas offer self-insured health coverage to all their full-time employees. For health insurance purposes, a full-time employee is a person that works 30 hours or more every week for more than 120 days a year.

Some employers also extend the offer to part-time employees. For health insurance purposes, a part-time employee is a person that works less than 30 hours every week for more than 120 days a year. An employer that offers self-insured health coverage to any part-term employee must offer the coverage to all part-time employees.

Furthermore, former employees have the right under federal law to remain on their employer’s health insurance for a period of time after leaving their employment, at their own expense.

Health coverage offered to these persons usually extends to their dependents. They include the employee’s spouse, children, and in certain circumstances, unmarried domestic partners. These dependents cannot sign up for coverage unless the beneficiary employee has enrolled.

The following persons usually do not qualify for self-insured health plans:

  • Employees covered under a collective bargaining agreement
  • Employees of unrelated organizations
  • Independent contractors
  • Non-employee directors of the company
  • Retirees
  • Seasonal employees
  • Temporary employees.

Where to Buy Self-Insured Health Insurance?

In Texas, self-insured health insurance is not available online, from an insurance company, or from an insurance agent. It is made available by companies or entities for their employees and their dependents only.

Where to Get Self-Insured Health Insurance?

You can only get self-insured health insurance from your workplace in Texas.

Where Can I Buy Affordable Self-Insured Health Insurance?

Self-insured health plans are not sold to interested members of the public in Texas. They are offered by employers, companies, or organizations to their staff and dependents of their staff.

How to Apply for Self-Insured Health Insurance in Texas?

For employees, you can sign up for health benefits when you are first hired. Most employers also have an annual open enrollment period, or open season, when you can sign up for coverage or (if your employer offers a choice of plans) change your enrollment to a different health plan.

If you are already hired and your employer just wants to start offering employees self-insured coverage, you will be given instructions on how to enroll. Your employer will provide you with forms where you will provide all necessary personal and health-related information.

Unlike other types of health insurance, employees cannot use the services of an insurance agent in Texas to sign up for a self-insured plan. However, an insurance agent may be helpful to you in many other ways. Employers can use the services of an insurance agent to know more about how self-insured plans work.

Who Can Help With Application for Self-Insured Health Insurance?

If you are an employer seeking self-insured coverage, you can speak to a licensed insurance agent or broker in Texas to examine the possibility of setting up a plan.

For employees, the plan administrator can assist you with your self-insured health insurance application. You can also seek the help of a licensed insurance agent in Texas or a helper around your neighborhood.

Note that an insurance agent is an experienced professional in insurance, while a helper is someone who knows about self-insured health insurance and lives around you. The knowledge of a helper may be from being a beneficiary or enrollee to a number of self-funded plans in the past.

Should I Use an Insurance Agent to Buy Self-Insured Health Insurance?

You cannot use an insurance agent to buy a self-insured health plan. However, an agent can help you review your policy. This can be helpful because they can help you confirm if your self-insured plan provides benefits that fit your health needs. If your plan does not benefit you, an insurance agent in Texas can recommend a health plan that will suit you.

An employer can use the services of an insurance broker in Texas to know about how self-insured insurance works.

Can You Purchase Self-Insured Health Insurance Through an Agent?

No. You cannot purchase self-insured health insurance through an agent in Texas. However, an agent can help an employee to review their applications and policy terms. They can also explain how self-insured health plans work to employers and recommend TPAs.

Can I Buy Self-Insured Health Coverage Online?

No. You cannot buy self-insured health coverage online in Texas.

Can Anyone Get Self-Insured Health Insurance?

For employers, any employer (small or large business) can get self-insured health coverage for their employees. However, this coverage is open only to employees (and their dependents) of the company, firm, or organization that is offering it in Texas. It is not open to the public.

Can You Obtain Self-Insured Health Insurance at Any Time?

It depends on the company offering the health plan. Some companies in Texas do not have enrollment periods, which in effect means that you can join the plan at any time. However, some companies have an open enrollment period (usually between November to January), and you cannot join the plan outside that period.

Can I Over Insure My Self-Insured Health Plan?

It is possible to over-insure your self-insured health coverage in Texas. Over-insurance is the product of buying more coverage than you need. As a result, your health coverage is more than your health or medical needs. For example, when you provide information about needing medical treatments or services that are not necessary. Over-insurance leads to a waste of money and resources because when you over-insure, you never actually get the full value of the coverage. Also, you lose money that you could have saved or put into a profitable venture when you over-insure.

Consult a licensed health insurance agent in Texas to know what your medical needs are and how you can prevent possible over-insurance.

What Happens if I Over Insure My Self-Insured Health Insurance?

The idea behind insurance is to put you back in the position you were in before you incurred the loss. Insurance is not supposed to leave you in a better position. So when you over-insure your self-insured health insurance, you pay more than you need your policy, and you will not get any benefits from it. Instead, it leads to a waste of your financial resources since you do not need that level of insurance protection. You could save the money or invest it in more profitable ventures.

Should I Over Insure My Self-Insured Health Insurance?

No. You should not over-insure your self-insured health plan or any other type of health insurance.

Is Buying too Much Self-Insured Health Insurance a Smart Decision?

No, buying too much self-insured health coverage or any health coverage at all is not a smart idea. Because buying too much health coverage may lead to a waste of financial resources on services or benefits that will not be used. You can talk to a licensed insurance agent in Texas to know more about why it is not a smart decision.

How Do I Renew My Self-Insured Health Insurance?

Your summary plan description (SPD) and summary benefits and coverage (SBC) will provide you with instructions on how you can renew your plan. Most self-insured health plans in Texas are automatically renewed. If this is not the case with yours, you may get a renewal letter that provides you with the steps you have to take to renew your plan.

What Kind of Self-Insured Health Insurance is Best?

Most of the types of self-insured health plans are good because they provide a good balance of cost and coverage for their enrollees. However, the PPO is the most common type in Texas. One of the major reasons is its features. PPOs provide you with access to in-network health providers. They do not make it impossible or too costly to use a provider outside the network. Also, most self-insured PPO plans have reasonable costs for deductibles, maximum out-of-pocket liability, co-pays, and premiums.

What is the Best Self-Insured Health Insurance for the Employees of a Small Company?

Self-insured PPO health plans in Texas are most suitable for employees of small firms. They are somewhat flexible, as they cover certain costs from medical procedures or treatments from out-of-network health providers. Because of this balance, the overall cost of PPO plans is usually lower than other types of self-insured plans while providing almost the same benefits.

What Kind of Self-Insured Health Insurance Plans are Available in Texas?

There are four kinds of self-insured health plans that companies use to provide health benefits for their employees in Texas:

  1. Health Maintenance Organization (HMO) plan
  2. High-Deductible Health Plan (HDHP)
  3. Point-Of-Service (POS) plan
  4. Preferred Provider Organization (PPO) plan.

Can I Bundle Self-Insured Health and Travel Insurance?

Depending on the nature of your job and plan, your self-insured health plan may not cover you when you travel outside the U.S. If this happens, you may want to get a travel insurance plan when you want to travel outside the country. You can speak to a licensed insurance agent in Texas to help you find a good plan.

How to Reinstate Self-Insured Health Insurance that You Stopped Paying?

You can simply contact the plan administrator or the employee benefits administrator in your employer’s Human Resources department.

How to Find Out What Self-Insured Health Insurance I Have?

You can find out the self-insured health insurance you have by reviewing your summary plan description (SPD) and summary benefits and coverage (SBC). These documents provide a comprehensive overview of the program’s benefits and how it operates. Employers in Texas are required to give these documents to their employees that are covered by their health benefit plans.

How Do I Find Out My Self-Insured Health Insurance?

Your plan will provide you with documents like SPD and SBC. These documents will provide you with the information that you need to know your type of self-insured coverage. The information includes the type of plan, plan benefits, claims procedure, and cost-sharing information.

How Do I Know if I Have Self-Insured Health Insurance?

To know if you have a self-insured health plan, you can simply check your health plan ID card. It will not have “TDI” or “DOI”. Those words are on the health plan ID cards of enrollees of fully-insured health plans in Texas.

Other ways that you can tell that you have a self-insured plan include:

  • Your employer, directly or through a third-party administrator, collects or funds pools of premiums and handles the payment of claims from the company’s assets.
  • Your employer or the plan administrator pay your medical providers
  • Your employer pays the plan administrator a fee on a periodic basis to manage the self-funded program.
  • Your plan is regulated by federal laws through the Department of Labor.

If you are still unsure, you can contact the employee benefits administrator in your employer’s Human Resources department.

Can Self-Insured Health Insurance Be Combined With Other Insurance to Become More Affordable?

Yes, you can combine your self-insured health insurance with another health insurance plan in Texas. In some circumstances, a person can have two (or sometimes three) plans simultaneously providing them with coverage. For example, a married couple with health insurance from both their employers. If this happens, it does not mean that both coverages will reimburse them twice when they receive treatment. Instead, the plans will cover a portion of the cost according to the policy. The principle of “coordination of benefits” is used to determine which plan pays first and which plan covers the rest of the bill. The plan that pays first is the primary insurance, and the plan that pays second is the secondary insurance. They both cover costs up to their coverage limits.

You can also combine self-insured health insurance with supplemental or stand-alone insurance plans like accident, travel, dental, or vision insurance. You can use these plans to cover risks that are not covered by your self-insured health plan.

If you are in search of different means to save on your monthly health insurance expenses, particularly by combining alternative and supplemental Texas health insurance plans, you should consult a competent Texas-licensed agent. They can provide you with recommendations that fit your needs.

Is Self-Insured Health Insurance a Good Deal in Texas?

Yes, being enrolled in a self-insured health plan is a good deal in Texas. Most self-insured plans provide their enrollees with numerous benefits, making it a very comprehensive coverage. As an employee of the company or organization offering self-insured health coverage, you cannot be denied access because of your medical history. Thus, your pre-existing conditions do not prevent you from signing up for a self-insured health plan in Texas. Furthermore, there are no lifetime or annual dollar limits on the health benefits of your plan.

On the cost, your employer is mandated by law to offer you coverage that costs less than 10% of your annual household income. Also, your employer contributes a major portion to the payment of your monthly premiums.