UHC – TX – Health Insurance FAQs

UnitedHealthcare is the second-largest small group insurer in the state with more than 70,000 members and about 10% market share. UHC offers three network options (PPO, EPO, HMO) and a total of __ plans, and these plans are offered in every county in Texas. The network is large, and they have a number of rich-benefit (platinum-level) plans that might appeal to some clients. Unfortunately, UHC is rarely competitive with either BCBSTX or Baylor Scott & White (BSW). The closest they come to competing is on their platinum-level PPO plans in select markets, partly because BSW does not offer platinum-level coverage. UHC is focused on selling level-funded plans, and Texas is the biggest market for this product line. While UHC does not sell a lot of fully-insured small group health plans, their ancillary products (dental and vision) are popular.

Service Area

UHC offers coverage in every county in the state (all 254 counties and 27 rating areas). They have a state-wide HMO, so their are no restrictions for members who live in Texas. Employees who live out of Texas will need to select a PPO or EPO plan.

Plan Options

Available Plans: There are a total of XX plans available with the same offering in every market area and every county. These consist of XX PPO plans, XX EPO plans, and XX HMO plans. Many of the plan designs are repeated across all three networks, making it easy to compare the rate differences for the three different network options. The plans are all have a four-character name that is a combination of letters and numbers. These names don’t mean anything to anyone who does not work for UHC.
Plan Offerings: Employers can offer up to X plan options to employees, including “ghost” plans with no current enrollment. This allows for a mixture of copay and HSA plans utilizing different networks, and plans with different deductibles and out-of-pocket limits.

Provider Network

UHChas three provider networks: Choice Plus PPO network, Choice EPO network, and Navigate HMO network. All three networks are available statewide.

PPO Network: The “PPO” plans are actually filed as Point-of-Service (POS) plans, but even the UHC sales reps refer to them as PPOs. The network includes most major hospital systems.
EPO Network: The EPO network is exactly the same as the PPO network, but the EPO palns have no out-of-network benefits.
HMO Network: The XX HMO network is a statewide HMO and the largest in the state. Members who select the HMO will have to choose a primary care physician and get referrals to see a specialist.

Eligibility, Participation, and Contribution

Small Group Market: 2-50 total employees (including owners, full-time employees, and part-time employees, whether eligible for benefits or not. This is known as ATNE (Average Total Number of Employees).
Full-Time Status: An employee averaging 30 or more hours per week is considered full-time and eligible for benefits in Texas. BCBSTX follows this standard. Part-time employees are not eligible for coverage.
Effective Dates: Coverage can start on the 1st or 15th of any month.
Eligibility: Like every carrier in Texas, any group with 2 eligible people qualifies for small group coverage. BCBSTX will accept owner-only groups with no W-2 employees as long as the group is set up as a partnership or an LLC filing as a partnership. This includes husband-and-wife groups.
Owner Eligibility: With BCBSTX, there is no requirement that the owners work full-time in the business. This is more lenient than state law, which says that owners do not have to work full-time hours to be eligible for coverage as long as the group can stand on its own without the part-time owner (in other words, as long as there is a combination of two full-time owners and/or employees).
One-Person Groups: BCBSTX will also accept “one-person groups” as long as there are at least two eligible people (owners and/or full-time W-2 employees).
Participation: BCBSTX requires 75% participation among eligible owners/employees after removing those with valid waivers (those with other group, individual, or government coverage).
Contribution: The employer must contribute at least 50% of the employee-only premium for the lowest-priced plan offered, whether the group is age or composite rated.
NPNC Groups: Per ACA rules, the participation and contribution requirements are waived for groups that enroll during the small group open enrollment period. In Texas, this runs from November 1 to December 15 for a January 1 effective date. These groups are often referred to as No Participation No Contribution (NPNC) Groups.

Enrollment Paperwork

Each group applying with BCBSTX must complete the following forms:

Benefit Program Application (BPA): This is the employer application. It’s long, but a lot of the pages are just informational and there’s nothing to complete. There is an optional proxy form because BCBSTX is a mutual legal reserve company. The last two pages are for groups offering an HMO; if no HMO is offered, then the last page does not need to be completed/signed. One section that often confuses people is near the front and asks about the ERISA plan year. In most cases, the plan ERISA plan sponsor is just the employer, so enter the name just as it appears on page 1. The plan year should start with the effective date and end one year later. So, for a March 1 group, the ERISA year would be 3/1/2024 – 2/28/2025, for example.

Employer Group Information (EGI) Form: This page asks about group size this year and last year to determine if the group is subject to certain laws, like COBRA or Medicare Secondary Payer. On the front page, be sure to enter the current year as the Effective Year – the question is on the right side of the page and easy to miss.

Texas Supplemental Employment Verification (TSEV) Form: This form needs to be completed if there are any owners or new employees who are not listed on the group’s Texas Workforce Commission (TWC) report, also known as the wage & tax report. Employees who are on the TWC report do not need to be listed on the TSEV, and this form does not need to be completed at all if all eligible employees/owners are listed on the TWC.

Employee Apps and Waivers: An app or waiver must be completed and signed for each eligible employee and owner. Electronic signatures are permissible, but BCBSTX does not accept spreadsheet enrollments. If a husband and wife both work for the same company, they could enroll together as a family, with one as the primary member and the other as the dependent spouse. In that case, the dependent spouse would complete a waiver form and indicate that he/she has other group coverage through BCBSTX. Here is the employee app in Spanish.

Documentation Requirements

In addition to the BCBSTX group paperwork, the employer will need to provide documentation tying every eligible owner and full-time (30+ hours/week) employee to the business.

Wage and Tax Statement: For most small employers, the wage & tax statement is the best evidence of an employer-employee ralationship. That’s why every carrier in every state will ask for the wage & tax report, when available, when a company is applying for group health insurance benefits. In Texas, the wage & tax statement is called the Texas Workforce Commission Report, or TWC Report. This report will need to be “reconciled” by indicating next to each employee’s name whether they are Full-Time (FT), Part-Time (PT), or Termed (along with the date of termination). Other documentation can be provided for owners and employees who do not appear on the wage & tax report.

New Employees: If a new employee W-2 employee is not on the latest TWC report, then the carrier will want a copy of the employee’s W-4. BCBSTX also asks for a copy of at least one pay stub showing Federal Income Tax as well As FICA (Social Security and Medicare) taxes being withheld. From experience, it seems that even though BCBSTX asks for the copy of a pay stub, they will often approve a group with just the W-4 and no pay stub, so it’s worth submitting without the pay stub if it’s unavailable and seeing if they ask for it.

Owners: For businesses that are not set up as C-Corps (and most small businesses are not C-Corps), the business owner usually is not on the wage & tax report. For that reason, other documentation will be required tying them to the business. For estabilished businesses, the carrier will want the most recent tax return for the business or business owner (the schedule C for a proprietorship or single-member LLC, the 1065 and K-1’s for a partnership or LLC filing as a partnership, and the 1120S and K-1s for an S-Corp or an LLC filing as an S-Corp).

New Businesses: New businesses that have not yet filed a tax return will need to provide other documentation tying the owner to the business.

Certificate of Formation: The vast majority of small businesses are set up as Limited Liability Companies, or LLCs. To set up an LLC, the company must file a Certificate of Formation with the Texas Secretary of State. The Certificate of Formation lists the initial members (or owners) of the company.
Certificate of Filing: After the Certificate of Formation is filed with the Secretary of State’s office, the SOS provides the new business with a Certificate of Filing. It confirms that the Certificate of Formation was received and has been filed with the state.
EIN Letter: Most businesses also apply for a taxpayer ID number, also called an Employer Identification Number (EIN). When approved (instantly), the company can download their EIN letter. This letter, obviously, shows the company’s EIN. But it serves a more important role: it shows whether the LLC has chosen to be treated as a single-member LLC, partnership, or S-Corp by stating which tax form the business will be required to file. For an LLC filing as a partnership, it will state that the company needs to file form 1065; for an S-Corp, it will state that the company needs to file form 1120S. NOTE that an LLC filing as a partnership does not need any W-2 employees; the two (or more) partners can sign up for coverage if they work full-time in the business, and the requirements are even more relaxed with BCBSTX, which does not require the owners to work full-time and will accept a “one-person group” as long as there are two owners or an owner and full-time employee.
Partnership Agreement Addendum/Exhibit: Becasue a business owner must own at least 2% of the business in order to be eligible for coverage, and because the percentage ownership is not shown on the Certificate of Formation, it might be necessary to submit the partnership agreement or at least the addendum or exhibit from the partnership agreement showing the percentage ownership for each partner/owner. Click here for an example.