Short answer: No. In Texas a large group carrier may not adjust premium rates for individual employees or dependents because of health or how long they have been covered, and it may not exclude an eligible employee or dependent. It can, however, raise the whole group’s rates based on the group’s claims.
The large employer sections of Texas Insurance Code Chapter 1501 say:
- 1501.610: no rate adjustment for individual employees or dependents for health status or duration of coverage; any adjustment must apply uniformly to all employees and dependents, though the amount the employer pays overall is not limited.
- 1501.603: the carrier may not exclude an employee who meets the participation criteria, or an eligible dependent, including a late enrollee.
- 1501.601: the employer’s own eligibility rules may not be based on health factors.
- 1501.612: neither the carrier nor the agent may encourage the employer to leave an eligible employee off the plan.
- 1501.604: an employee who declines must sign a written waiver confirming they were not pressured to decline because of their health.
So the cost of a high claimant shows up across the whole group’s renewal, which is why pooling and credibility matter. Stop-loss for a self-funded plan works differently: a stop-loss carrier can set a higher deductible (a “laser”) for one person, though the plan’s benefits for that employee cannot be cut because of health.