June 02, 2015
On May 26, 2015, the TDI posted a new FAQ regarding guaranteed renewability for small groups. The FAQ was posted in response to reports that insurance carriers were non-renewing husband and wife small groups, citing federal law (which defines a small group as employing at least one common law employee).
In the FAQ, TDI clarifies that Texas considers a group of two eligible employees to be a small group, regardless of marital status. Further, the Texas Insurance Code does not exclude spouses from the definition of “eligible employee,” nor does it exclude such employees in its definition of “small employer”. Further, employers are entitled to renew coverage under a group health plan unless the employer fails to otherwise comply with the terms of the plan.
In summary, small group insurance carriers may not non-renew coverage for an existing small group policy holder, even if the small group policy holder consists only of a husband and wife. Small employers in Texas may find this FAQ to be helpful in the event the insurance carrier has informed them of the intent to non-renew coverage.