State RegulationsTX specificDifficulty 2/5
A small employer in Texas applies to a carrier for a small employer health benefit plan. What is the carrier's obligation under the Texas small employer health benefit plan law?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Texas Insurance Code Chapter 1501 requires guaranteed issue for small employer health benefit plans: a carrier must offer and accept for coverage every small employer that applies, subject only to requirements such as minimum participation and employer contribution that the carrier applies uniformly to all employers in the class. Health-status underwriting of the group or of individual employees is unavailable, so an agent can tell a small employer with an unhealthy member that the group cannot be turned down for that reason.
Why the other options are wrong
- A) TIC 1501 does not allow the carrier to pick industries; availability is driven by uniform, filed requirements, not by line of business selection.
- B) Individual or owner medical history is a health-status factor; under TIC 1501 the carrier may not use it to refuse the group.
- C) Individual medical underwriting of employees is inconsistent with the guaranteed-issue requirement of TIC 1501 for small employer plans.
Memory hook
Small employers: guaranteed issue, uniform rules only.