Short answer: Yes, if it is the carrier’s usual and customary practice for all its employer plans in Texas, is stated in the contract and is applied the same way to every large employer. Participation can be measured only against eligible employees, not dependents, and each employee who declines must sign a written waiver.
Texas Insurance Code 1501.605 lets a large employer carrier make minimum contribution or participation a condition of issuing or renewing coverage. Limits on that:
- The requirement must follow the carrier’s usual and customary practice for all its employer plans in the state.
- It must be written in the contract and applied uniformly to every large employer the carrier covers in Texas.
- Participation is the percentage of eligible employees who enroll; it cannot be applied to dependents.
Related rules: each eligible employee who declines must sign a written waiver confirming they were not pressured to decline because of their health (1501.604), and the carrier and agent may not encourage the employer to leave anyone off (1501.612).
At renewal, watch participation when an employer raises employee contributions or moves some employees to another arrangement. A drop below the carrier’s requirement can put the renewal itself at risk, so check the contract’s numbers before recommending a contribution change.