State RegulationsTX specificDifficulty 1/5
Under the Texas small group eligibility rule, what determines whether an employer may purchase a small employer health benefit plan?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under 28 TAC 26.8, small group eligibility is a question of whether the employer satisfies the rule's definition of a small employer, and that definition is keyed to the number of eligible employees the employer employs. Payroll size, the employer's line of business and any history of prior group coverage are not the eligibility test, so an agent cannot treat a low-payroll or previously uninsured employer as automatically eligible or ineligible.
Why the other options are wrong
- A) Whether the employer previously carried group coverage is not part of the eligibility definition.
- C) Payroll is not the eligibility test under the rule; the eligible-employee count is.
- D) The rule does not sort employers by industry, so the line of business does not determine small group eligibility.
Memory hook
Small group eligibility is a headcount test, not a payroll or industry test.