If your coverage is through a licensed insurance company, and the company becomes insolvent, valid claims are covered by a state guaranty association up to a certain amount. The guaranty association does not cover claims against HMOs, MEWAs, valid self-funded ERISA health benefit plans, and fraternal benefit societies.
HMOs must keep cash and securities on deposit with the state to pay claims if they become insolvent. 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.
Individual health carrier plans that cover hospital, medical, and surgical expenses are “guaranteed renewable.” This means your carrier cannot arbitrarily deny renewal of your policy, including on the grounds of health-related factors. However, a carrier can legally cancel your coverage for various reasons, including but not limited to
- failure to pay premiums
- intentionally misrepresenting personal information in your policy application
- filing a false claim or otherwise committing fraud against the carrier.
A carrier may discontinue a particular plan as long as it drops the plan for all policyholders. However, in this case the carrier must offer the policyholders who lose coverage the right to purchase any other plan the carrier offers. If a carrier withdraws from the Texas market entirely, it may not re-enter the market for five years.
Late payment of premiums on an individual policy could cause you to lose your coverage and benefits. Some carriers may accept late payments. However, many carriers will require that you reapply for the coverage before you can be reinstated. If you must reapply, the carrier may again consider your health history before deciding to accept you.
Reinstated coverage will only cover health expenses due to an accident if the accident occurs after reinstatement. It will only cover expenses due to illness if the illness begins more than 10 days after reinstatement. When a carrier reinstates a policy, it may also attach riders excluding certain coverage. The exclusions may be permanent or for a specified period of time.
Under an individual policy, death of an insured spouse does not necessarily terminate coverage. The surviving spouse becomes the insured. If you lose coverage due to a change in marital status, you are entitled to your own individual policy. You don’t have to prove you’re in good health to receive the new policy.
If you have a group health plan, you can lose your coverage for various reasons, including but not limited to
- 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 termination of coverage is due to death, retirement, or divorce. To qualify, a dependent must have been covered by the group policy for one year or be an infant 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 keep your coverage for a limited time, although your employer will no longer continue any contribution toward your premium.
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that gives employees, and in some cases retired employees, the right to continue group health coverage for a specified period. You may extend coverage for yourself for up to18 months, and for your spouse or any dependent children for up to 36 months. COBRA generally only applies to employees who lose their coverage because of reduced work hours or lose their job for reasons other than “gross misconduct.”
COBRA applies to all employer health benefit plans with 20 or more employees, except plans sponsored by the federal government and certain church-related organizations.
COBRA also enables a spouse and dependent children to continue coverage when an employee is entitled to Medicare, divorces, or dies. An employee’s children qualify for continued coverage under COBRA if they lose “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 take it. If accepted, the cost to the employee, spouse, or dependent child is the full premium, plus a 2 percent administrative fee. Depending on the situation, coverage may continue for 18 to 36 months, but may be slightly longer in some situations.
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, call the Dallas office of the U.S. Department of Labor’s Employee Benefits Security Administration
If you meet certain criteria, Texas law requires your group plan to allow you to continue coverage for six months. The six-month “continuation period” begins after any federal COBRA extension period ends, or begins immediately if COBRA coverage does not apply. Therefore, if you are eligible and opt for COBRA coverage, you may have a total of 24 months to find new health care coverage.
Before the Texas continuation period ends, your group plan is also required to provide you with information on how to enroll in the Texas Health Insurance Risk Pool.
State continuation of group coverage
Health carriers are required to provide a group continuation privilege for certain members whose coverage under the group contract has been terminated for any reason except involuntary termination for cause. To be eligible, the member must have been continuously covered under the group contract and under any group contract providing similar services and benefits which it replaces for at least three consecutive months immediately prior to termination. State continuation of group coverage may not terminate until the earliest of the six months after the date the election is made, the date on which the failure to make timely premium payments would terminate coverage, the date the covered person is covered by another similar health care coverage, or the date the group coverage terminates in its entirety.
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 some other options. 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 criteria for accepting policyholders.
- Look into professional organizations, churches, or trade unions that offer group plans. You may be able to get coverage if you join. If you have a health condition, check with state and national non-profit groups for people with similar conditions.
- If you are denied coverage based on your medical history, verify that the information the carrier has is current and correct. Many carriers 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
617-426-3660
www.mib.com
Texas Health Insurance Risk Pool (Health Pool)
The Health Pool offers health insurance to Texans who can’t find coverage because of their medical condition 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 are determined by 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, call the Health Pool or visit its website
1-888-398-3927
(TDD 1-800-735-2989)
www.txhealthpool.com
In addition to the Health Pool, there several federal, state, and local groups and agencies that offer help with health coverage or low-cost care. If you cannot afford the Health Pool, cannot qualify, or if the Pool is not able to fully meet your needs, the following agencies and programs may be able to help:
| Other Health Care Coverage/Care Options |
| |
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
(1-800-633-4227)
www.medicare.gov |
| TRICARE |
Health plan for active duty and certain retired U.S. military personnel |
1-800-538-9552
www.tricareonline.com |
| Veteran’s Administration |
Offers health care for veterans |
1-877-222-VETS
(1-877-222-8377)
www.va.gov |
| State |
Medicaid |
State/federal health insurance program for low-income Texans |
877-267-2323
TTY: 866-226-1819
www.cms.hhs.gov/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
(1-877-847-8377)
www.tdh.state.tx.us/thsteps/ |
| 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 |
1-800-647-6558
www.hhsc.state.tx.us/chip/ |
| Department of Assistive and Rehabilitative Services |
Provides rehabilitative services, including vocational training, for Texans with disabilities |
512-377-0500
TTY: 512-407-3251
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/osp/ |
| Indigent Health Insurance |
Health care for some indigent Texas |
Local |
