Texas Senate Bill 51 (SB51) is extending employers’ responsibility for paying premiums for members of group medical and/or dental maintenance organization (DMO) plans after an employee’s employment has been terminated. Under the new law, employers are responsible for paying a terminated member’s premium until the end of the month in which the employer notifies the insurer of the eligibility change. For example, if an employee terminates January 15, and you do not take that employee off the medical plan until February 2nd, the employer must continue and pay for the coverage through the end of February.
This law applies to fully insured Texas based HMOs, PPOs, and DMO plans. Plans are subject to this new ruling when they renew on or after January 1, 2006. What it boils down to is make sure you remove terminated employees from your plan in a timely manner!